Eric Posner on Presidential Power and the Debt Ceiling
With the fiscal cliff behind us, we now must look forward to yet another budgetary battle—over the debt ceiling, in a repeat of summer 2011. Is there a way out of the endless stalemate between President Obama and Republicans in Congress? Yes, but it requires the president to assert himself more aggressively than he has so far.
The debt standoff is more ominous than the fiscal cliff because it doesn’t reflect a legitimate dispute over public policy. While reasonable people can disagree about the right level of taxation and spending, no one believes that the United States should default on its debt, not even the most ardent Tea Partiers. So holding the debt ceiling hostage is pure brinkmanship—akin to threatening to set off a nuclear bomb in Manhattan if the president fails to agree to spending cuts.
House Republicans would probably argue that the main effect of maintaining the debt ceiling would be to force President Obama to cut spending while using tax revenues to pay interest on the debt. But cutting government programs to the degree necessary would also create a crisis— most people and institutions won’t want to do business with the government, or work for it, because they won’t trust it to do what it promises. This is a mess and a bad way to run a country. So what can be done?