Barack Obama won’t unilaterally raise the nation’s debt ceiling through an executive order. Note, however, that I didn’t say “can’t.” Can Obama, in perfectly practical rather than legal terms, issue an executive order that unilaterally raises the debt ceiling in order to avoid a default? Of course. But it won’t work, for two reasons, and it would be a political disaster even if Obama succeeded, for another two reasons.
First, the debt limit is a statutory law — 31 USCS §3101 (link is to 1/3/2007 version). Executive orders do not override statutory law. Presidents could just as well issue executive orders that allow members of his Cabinet to buy jet skis for their children out of the federal budget; it would still be an illegal conversion of public funds to private use, and it would be just as prosecutable with or without the EO. The only way to amend or repeal statutory law is through an act of Congress.
Second, the only reason to issue such an EO would be to protect the “full faith and credit” of the United States, as the 14th Amendment specifies, which in this case means keeping the markets calm so that we don’t have to pay higher interest rates later on our bonds. We can protect the full faith and credit by paying interest first before any other bills even when being unable to borrow to meet other budget obligations, as Eugene Volokh points out at The Corner; we would have a partial government shutdown, not a default. Imagine what would happen to that “full faith and credit,” though, if the Treasury started selling bonds that were almost certainly statutorily invalid. Not only would investors demand a much higher interest rate on new bonds due to the risk, the fact that an American administration took the step of ignoring the law to borrow money would make resales of existing bonds that much more risky, too. The result would be an utter ruin of American credit, the very outcome that those demanding a 14th-Amendment solution purport to avoid.
The political fallout for Obama would be worse. Republicans wouldn’t have the votes to impeach him, even though it would certainly be a provocation of Congress that might justify the attempt. They would take him to to court, though, and courts would waste no time slapping down the White House. That would cement Obama’s burgeoning reputation as the very kind of “imperial President” that his supporters kept accusing George W. Bush of becoming. That conclusion became clear enough with Obama’s refusal to seek Congressional approval of his military adventure in Libya, but issuing an EO to override longstanding precedent and statutory law would finish Obama.
And if that didn’t do the trick, then taking complete ownership of deficit spending certainly would. Obama needs Republicans to take some ownership for a raise in the debt ceiling; it’s why Democrats didn’t do it in December, when the vote would have been almost unremarkable. Otherwise, he knows that the GOP would paint him as a profligate spender in 2012, which they will try anyway; his only defense will be that Republicans hiked the debt ceiling as well. Democratic Congresses added more than 50% to the debt ceiling in three years, after all. In that link above to the January 3, 2007 version of the statute, the debt ceiling from the last Republican Congress was $8,965,000,000,000, more than $5 trillion below what it is today. A unilateral boost of the ceiling would place ownership of the debt, spending, and all of the negative consequences from them onto the shoulders of Barack Obama, and Barack Obama alone.
Would a man who lacks the intestinal fortitude to publish his own written plan of a debt-ceiling compromise take those risks? Not a chance.
