Friday, July 22, 2011

A Novel Idea - Obama Should Sue Congress Over the Debt Ceiling!

                                       V.

While writing another post about the debt ceiling that I'll post later today or tomorrow, I had an idea that I have not seen raised anywhere else yet - Obama should sue Congress over the debt ceiling, and fast.

Here's the basic problem the Obama administration has vis-à-vis the debt ceiling:
  1. Congress passed a budget ordering the Obama administration to spend X amount of money.
  2. Congress passed a debt ceiling telling the Obama administration that it can't borrow more than Y dollars.
  3. Y is too small to allow the Obama administration to spend X.
  4. Therefore, by passing contradictory laws, Congress is forcing the Obama administration to violate the law - either the law governing the budget or the law governing the debt ceiling.
Some commentators have advocated for Obama to exercise "the constitutional option," i.e. invoking Section 4 of the 14th Amendment, which says that “the validity of the public debt of the United States … shall not be questioned” and simply ignoring the debt ceiling altogether. Bill Clinton has said that this is what he would do, if he were in Obama's situation, though the Obama administration thus far seems to have ruled this option out.

If Obama exercised "the constitutional option," it's not clear what would happen - Congress would be the only party who would have standing to sue the Obama administration, though it's unlikely that a joint resolution to sue the President would pass Congress. Even if Congress took the Obama administration to the Supreme Court, I rather doubt that this conservative Court, with its affinity for concentrating power in the hands of the Executive Branch, would rule against the Obama administration. But, there is that possibility - after all, if Obama can overrule Congress's authority to borrow (based on laws it passed through its authority to spend), what's to stop the President from overruling Congress's authority to tax, print money, or sell federal property, if needed? And without question, regardless of the final outcome, exercising "the constitutional option" would inject a lot of uncertainty into the economy and politics until the Supreme Court decided the final outcome.

I think, however, that it is very clear that the Obama administration has standing to sue Congress NOW over putting it into a situation in which it MUST break the law and must choose the law it's going to break. I suspect that the Supreme Court would indeed find that Congress may not put the President into that kind of bind and therefore find the debt ceiling unconstitutional.

This approach (Obama suing Congress) has other advantages - it could happen far faster than Congress suing Obama in order to find out who is in the wrong, and it puts the Obama administration on the offensive rather than the defensive.

So, dear readers / lawyers / Constitutional scholars out there - what do you think of this plan?

    30 comments:

    1. OMG! That is exactly what I woke up this morning thinking! And actually I am wondering if we can sue them for dereliction of duty, or some other charges as citizens! I do believe House Republicans are trying to take away our Constitutional Rights and we have to do something to stop it from happening. Can Obama be impeached for raising the debt ceiling without Congressional Support?

      ReplyDelete
      Replies
      1. Oh God, what an idiot you are.

        Delete
      2. Anonymous: Be nice, or I'll delete future comments. If you want to name-call like you're in the second grade without any serious thought or consideration of the facts, go comment on foxnews.com - they can't get enough of those kinds of comments over there.

        -The Angry Bureaucrat

        Delete
    2. That's a thorny question. It's likely that Obama would be impeached for raising/ignoring the debt ceiling on his own - after all, launching an impeachment process against the President only requires a simple majority vote in the House of Representatives. It's almost certain that the Senate would fail to convict him, however, since that would require a 2/3s vote in the Senate, and the Senate is still controlled by Democrats. I suspect that if Obama did simply ignore the debt ceiling, the House would impeach him (knowing that conviction in the Senate would be impossible) and use the impeachment hearings to embarrass him as much as possible, similar to the Clinton impeachment proceedings.

      Personally, I doubt that ignoring the debt ceiling in order to implement a budget passed by Congress itself would rise to the level of "Treason, Bribery, or other High Crimes and Misdemeanors" as required for impeachment in Article 2, Section 4 of the Constitution, but I'm sure the Republicans would do their best to make it appear to be so.

      But, Obama could avoid all of this unpleasantness if he sued Congress first for forcing him to break the law one way or another!

      ReplyDelete
    3. Excellent points! Thank you for the explanation on impeachment :)

      ReplyDelete
    4. Wow - I just came upon this and have a question: given that the outcome of all the debt ceiling shenanigans are observable and that S&P at least partially predicated their downgrade of US debt on a broken political process and that quantifiable damage was inflicted by dereliction of a routine obligation of congress (or at least as quantifiable as similar situations where boards of directors and corporate managers are sued by their shareholders for damaging a company and its stock price), would there be grounds for a suit?

      I mean, it feels like in the corporate world, this type of behavior would probably exceed a threshold of gross negligence, which is often grounds enough (it seems fairly certain that there was a willful attempt to create a situation that no reasonable steward of an organization would see as acceptable).

      Could a party (even if not congress) be sued (maybe by citizens) for engaging in these types of strategies given that very real damages could be calculated and malfeasance, or at least negligence could be demonstrated?

      ReplyDelete
    5. Anonymous,

      I think that if anyone (including the President) tried to sue Congress on the basis of gross negligence over the debt ceiling debacle, they would face two big obstacles, and any court would probably be justified on throwing the suit out on either of these grounds:

      A. No one has standing to sue. The Wikipedia article I link to in the post explains "standing," but in short, here's why no one has standing: (1) The damage caused by this to any one person is indirect and abstract. (2) Even if there were concrete damage to a person, it would be difficult to "prove" that the debt ceiling debacle was the direct cause. (3) Even if you prove 1 & 2, there's nothing a court could do to remedy the situation - a court can't go back in time and make the debacle not happen, force S&P to change its rating, etc. So, I don't think a court would hear a case against Congress over this issue, and it would probably be correct in refusing to hear the case.

      B. We (the body politic) elected Congress to rule us, so the stupid things they do as a body are largely our own fault. I'm not a lawyer, so I don't know what the legal principle is called, but it's analogous to a situation in which you sign over complete power of attorney to someone to manage your finances, and they proceed to lose all your money, but they don't do anything illegal. The court is probably going to look at this situation and say it's your own damn fault - and I bet a court would say the same thing about any US citizen suing Congress over this.

      That's why I said Obama should have sued Congress BEFORE the sh*t hit the fan in the debt ceiling debacle - he would have had standing to sue, since Congress was going to force him to break a law by passing contradictory laws.

      Now that the debt ceiling debacle is over, I don't see what the President (or any of us) can do to fix this situation, other than to speak with our vote in 2012.

      -The Angry Bureaucrat

      ReplyDelete
    6. Appreciate the response - but not exactly what I meant - my real question is could the Republican party (not congress) be sued for basically engaging in tactics that ensure a poor outcome. It's a simple tenant of game theory that appearing credibly crazy can force a certain outcome - like playing a game of chicken against an opponent that has removed the steering wheel from his car and tied his foot to the accelerator. This is an interesting opinion piece that touches on the idea of what Republican strategy is all about: http://www.truth-out.org/goodbye-all-reflections-gop-operative-who-left-cult/1314907779.

      Honestly, the party should really be the primary target - the changes to campaign finance laws, fear of incumbency/term limits basically ensure the primacy of the party in national politics - they are the only organizations capable of sustaining a campaign.

      Point by point:

      I think A1&2 could be easily demonstrated empirically (that's the beauty of statistics).

      As for A3, the question of remedy is not entirely meaningful - damages are assigned in many suits where it is hard to argue plaintiffs are made whole. Another purpose for awarding damages is putative.

      To point B - In your example (and most situations where you have delegated decision making authority and there is a concern of negligence), the threshold is much lower than illegality, it is that the person must have conducted himself as anyone "reasonable" would.

      Anyway, I say this as an armchair political scientist, businessman and someone that usually votes independent (I really do split ballots): The game that the Republican party decided to play in this situation caused real damage to the country and amounted to encouraging reckless behavior (at the least). The party should be held accountable...

      ReplyDelete
    7. Anonymous,

      "could the Republican party (not congress) be sued for basically engaging in tactics that ensure a poor outcome" - I don't know, but I doubt it, since this is a relatively effective negotiating strategy vis-a-vis Obama, it seems - and I'm not sure it's much more than a negotiating strategy. After all, the Republicans did similar things in the 1990s, and no one thought to bring a lawsuit against them then.

      I suspect that, in this case, the people of the US get the government they deserve, and they can't sue the government for governing in a way that's not explicitly illegal. Hell, as of late, the public can't even sue the government for governing illegally (think of warrantless wiretaps, extraordinary rendition, enhanced interrogation, and other illegal acts of the government that have gone unpunished as of late).

      If the public is unhappy with Congress, then the public shouldn't have voted the current Congress into power, and the public will have a chance to toss them out in 2012. I wish there were some way to get more immediate, direct redress/action, but I just don't see how it's possible to do through the legal system. But, I'd be happy to be proven wrong.

      -The Angry Bureaucrat

      ReplyDelete
    8. Here is the official white house petition asking the President to sue Congress over the debt limit... http://wh.gov/UVN7

      ReplyDelete
      Replies
      1. Ian: Well, I signed it, but seeing as I was only the second person to sign it, I think you need a little more publicity before the petition will be taken seriously ;) Good luck!

        -The Angry Bureaucrat

        Delete
    9. I have been discussing this issue for the past few days as well. The problem with the President suing Congress directly is it sets a dangerous precedent if the Court allows him standing. Basically, a President could sue Congress over any legislation he doesn't like (ie, feels it is unconstitutional according to his/her interpretation).
      But a much easier way around that seems to be finding a person of standing to sue the President, such as say a person holding Treasury securities coming due on 2/15 (a day that the Treasury has says there won't be enough revenue available to pay the debt that comes due, assuming they cannot re-issue new debt), basically saying that non-payment,(or the looming threat of nonpayment) brings into question the validity of public US debt, directly in violation of the 14th Amendment.
      And there seems to be several different avenues available for the Court to rule, assuming they take the case. The easiest seems to be to rule that the last law passed, in this case the appropriations bill, supercedes the debt limit bill, because it is the "Last in Time", and is a tacit repudiation by Congress of the debt ceiling. Of course, ruling that debt ceiling laws are unconstitutional is the preferred ruling going forward, but even the ruling outlined above does nearly as well.

      ReplyDelete
      Replies
      1. Davey: I'm not sure it sets a bad precedent - I don't have any particular problem with the President going to the Supreme Court if he/she thinks that Congress has passed an unconstitutional law and saying, "Hey, Supremes, I think this is unconstitutional - tell me whether it is or not." If a law is unconstitutional, it's unconstitutional - and should be struck down, regardless of who brings the suit.

        And I don't think Obama needs to/should sue Congress over the debt ceiling directly per-se; instead, he should go to the Supreme Court and say, "Congress has passed two contradictory laws - the budget, which tells me to spend X amount of money, and the debt ceiling, which tells me I can't borrow enough money to spend X, as directed by Congress. Therefore, Congress has placed me in a situation in which I WILL break the law and can therefore be impeached - which law should I follow, or can I just choose which law I prefer to follow?"

        -The Angry Bureaucrat

        Delete
    10. This country will fall because of the few who believe the government should take care of their ever WHAT! If only those few would be hurt I would say keep on this path, but since those of us who take care of our own ,love this country and believe in the freedom that is being lost I pray you will see the truth before its to late or fail! The truth.... Our freedom is on the line with each step Obama makes... Yours, mine our children and grandchildren. There is no other country that has the freedoms we have ,once gone it will never return.

      ReplyDelete
      Replies
      1. Anonymous: If this country fails, it will be because of ignorance - like the ignorance you demonstrated with this comment. This blog deals in facts and analysis - and there's not one fact or intelligent analysis in your comment. Therefore, you won't be taken seriously by me or anyone else with any brains - you'll only be taken seriously by people who want to manipulate you and profit off of you, like Fox News and the Republican Party.

        -The Angry Bureaucrat

        Delete
    11. Oh you want facts. I didn't notice anyone else giving facts just opinions... But maybe I can give it a try (given my limited brain size) REALLY
      I agree with your statement. It is ignorance that will be the death of our Great Nation!
      The estimated popultation of the US is 314,218,132.00. Each citizen's share of the debt is $52,317.81 Thats every living citizen.... no matter the age,in college, just starting out, older on a fixed income or poor.
      The national debt has increased from $10.6 trillion to $16 trillion, or 50% more since Obama took office. WOW JUST a 50% increase in the 1st 4 years, if he does it again he'll be at 100% increase.... good job. Wait wasn't he the Senator that said Bush was un-American for increasing the Dept ceiling during his time in office?
      Oh by the way if you are of the opinion that the rich should pay more. Anyone who wants to give the government more money (without an act of
      Congress)can simply send money to....
      The Bureau of the Public Debt
      Department G
      P.O. Box 2188
      Parkersburg, West Virginia 26106-2188
      Another interest fact... there are over 4 million words now in our tax code... So we should add more? Dump the tax codes for a Fair and Level tax for all.... even those in this country that are not citizens.
      I also would find it interesting to know who gives the most to charities. That's a big difference between the parties. Democrats believe that the government should give to those in need and Republicans believe that it's their moral responsibility to give of their OWN money.
      When Joe Biden was first running for vice president, his tax returns showed that he had given away just $3690 to charity over the previous TEN years (about 0.2% of his income)
      Mitt Romney on the other hand gave away 30% or $4million of his income away in 2011 ALONE. Oh those evil rich guys!
      If you want more facts just say so I have lots more. And just so you know you can only be manipulated by the news stations like CNN,MSNBC,FOX and others if your to lazy to do your own research on the stories they present. Might I encourage you to dig a little deeper yourself. It is MANDATORY by law for congress to pass a budget every YEAR, yet we have not had one since Obama took office... that one falls on the Senate not the House.
      Theres lots of blame to go around... we need to listen to one another to come up with real solutions!

      ReplyDelete
      Replies
      1. Anonymous: Well, it's true that your new post contains facts - though most of the facts aren't relevant to anything, and you don't explain why any of them are important. So, I'll unpack the facts you laid out:

        1. I didn't say you were stupid or had a small brain size. I said that your comment betrayed ignorance. They're not the same thing.

        2. Yes, that's a lot of debt - though it's not a lot of debt by historical standards for advanced countries. As I explain here - http://www.angrybureaucrat.com/2011/07/why-balanced-budgets-are-stupid-for.html - balanced budgets are a bad idea, and government debt CAN indeed continue to grow FOREVER - it just can't grow faster than the government's ability to service the debt grows. So, the overall amount of debt doesn't matter very much - what matters far more is what the debt costs. As I point out here - http://www.angrybureaucrat.com/2011/08/dumb-decisions-congress-continues-to.html - the U.S. government can actually MAKE money by increasing its debt load right now, because interest rates are so low.

        3. I am not rich, so I'm not going to make a habit of sending checks to the treasury to decrease the debt. However, I would be happy to pay higher taxes - IF everyone else also had to pay higher taxes, especially the rich.

        4. I'm all for a simpler tax code - if it were up to me, I'd eliminate ALL deductions - personal, business, capital gains, etc. (since every deduction is a market distortion of some sort), lower the rates on the poorer members of society, and drastically increase marginal tax rates on the rich.

        However, your point about a fair and level tax for all is ridiculous - a level tax is not a fair tax. Richer people should pay more (and pay more as a percentage of their income) in taxes than poorer people - it's the only fair thing to do, both morally and economically. I think the moral argument is obvious, and the economic argument comes thanks to the marginal utility of money - https://en.wikipedia.org/wiki/Marginal_utility

        Basically, the idea that the 13,000th dollar that a poor person makes (if his income is $13,000/year) is worth a lot more to that poor person than the $13,000,00th dollar that Romney makes (if he makes $13 million/year) is worth to Romney - because for the poor person, that dollar might make the difference between being able to eat a little more or a little less, whereas for Romney, it means having a little more or a little less in his already enormous bank accounts. Therefore, both morally and as a matter of economic efficiency, Romney should pay a much higher tax rate on his 13,000,000th dollar than the poor person pays on his 13,000th dollar.

        Delete
      2. (continued)

        5. I don't see why charitable giving matters when discussing the merits of politicians and public policy. Should Biden have given more to charity? Probably - but I can't say for sure. Perhaps he didn't put all his charitable donations on his tax form - I certainly don't. However, a short overview of his taxes shows that he spends almost 10% of his income on mortgage interest alone - which means he can probably barely afford the house he owns. That's not particularly smart personal finance move, but it probably doesn't leave a lot of room for charitable donations either.

        Romney, on the other hand, earned 36 times as much as Joe Biden in 2011, and paid a much lower tax rate on his income than Biden did, thanks to various tax loopholes. That leaves Romney with a lot more money that he can give away, and still enjoy the lifestyle of a mega-millionare.

        In addition, most of Romney's "charitable giving" is to the Mormon church, which I don't count as charitable giving - the Mormon church uses most of its income to sustain itself and to proselytize - neither of which I view as charitable acts.

        But again, I don't see how any of this matters at all to what we're talking about.

        6. I know plenty of facts - and I understand what the facts mean and how to use them. You have yet to convince me that you understand the meaning of the facts you claim to know.

        7. Obama has proposed a budget every year that he has been President, and Congress has refused to pass any of them. I don't see how that's his fault. And it's not mandatory for Congress to pass a budget - it's just that if they don't the whole government shuts down. Also, budgetary bills must originate in the House, but they must also pass the Senate and the President - which means compromise. In an era were compromise is hard to come by, it's been easier for everyone to just pass continuing resolutions rather than pass a new budget from scratch.

        And as a side note - as a federal employee, I know the federal government better than most. Practically everything that is wrong with the country (and that sucks about my job) is directly the fault of Congress - not the President. So, if you want to know who to blame, it's Congress - but no one ever votes their current Congressman out of office, so nothing changes. And that's the voters' fault.

        8. I actually disagree with the "we need to listen to everyone to come up with real solutions" - it is quite obvious that there are lots of people who have no idea what the hell is going on and whose opinions are worthless. I'm not going to pretend to listen to those people - all they do is waste both my and their time.

        -The Angry Bureaucrat

        Delete
    12. I have been researching the same sentiments as you regarding suing Congress for non payment of debt, but with a slight twist.

      We, the people, citizens of the United States, should sue Congress for non payment of debt, just as we would be sued for the same offense. A percentage of our wages are deducted to pay the owing debt. Since Congress represents all States, then percentage taken would be in accordance with their State Law.

      Congress has been sued before, for claims over $10K

      It's the only way to take back the United States, is if the people of it, stand up, in the right way.

      Sarah

      ReplyDelete
      Replies
      1. Sarah: I definitely agree with the sentiment, but as I explained in greater detail in one of my above comments, I think it would be hard for a random citizen of the U.S. to prove that they have standing to sue Congress. Perhaps a bondholder, a social security recipient, a government contractor, etc. who doesn't get paid IF we hit the debt ceiling might have standing to sue, but by then, it will be too late. But, none of those people will have standing to sue BEFORE we hit the debt ceiling, which is what we desperately need to avoid.

        Fortunately, Obama has drawn a line in the sand so clear and deep that I don't even think he can step over it - and even if more than half of the Republicans in Congress are prepared to lead the U.S. into its first ever default, I don't think that Boehner or the Senate Republicans are quite that stupid. But, I guess we'll find out soon enough.

        -The Angry Bureaucrat

        Delete
    13. Dear Angry Bureaucrat:

      I am an angry bureaucrat as well. I'm wondering if the federal employees that are about to be furloughed due to congressional inaction will be able to sue for lost wages and emotional damages due to a 25% salary reduction... Please let me know your thoughts.

      -JP

      ReplyDelete
      Replies
      1. JP: Oh, I'm sure there will be lawsuits. I have a friend who works in the Pentagon's legal department (she's going to be furloughed too, if the budget cuts hit), and they're currently preparing for an avalanche of suits related to the budget cuts and furloughs - they're looking at about 850,000 civilian furloughs, and every single one of those 850,000 can sue if they want.

        I'm lucky enough that I will almost definitely not be furloughed (yay for working on mandatory spending programs!), but if you're going to be furloughed, you can certainly sue - though it may be more trouble than its worth. If you decide to sue, I'd love to know how it turns out for you!

        -The Angry Bureaucrat

        Delete
    14. I work in Tampa and will likely be getting furloughed. I'm supposed to find out tomorrow. If that's the case, what is the process to sue andwhy would it possibly not be worth it?

      -JW

      ReplyDelete
      Replies
      1. JW: I have no idea what the process for suing over furloughs would be. The reason I say it may be more trouble than its worth is because you'd be spending a lot of time and stress (and perhaps money, in the form of lawyers' fees) for a very uncertain outcome - it's hard to say if you'd win back any of your lost salary.

        It would probably be much better/easier/cheaper to see if someone launches a class action lawsuit over this and to then join the class action - that's what I'd do, anyway, if I were being furloughed.

        However, if you decide to sue over it, let me know how it works out for you - I'd be very curious to hear about it!

        -The Angry Bureaucrat

        Delete
    15. I reached my boiling point with our ineffective Congress, and started researching whether Congress could be sued for negligence, dereliction of duty or violating professional standards of office, and stumbled across this great post. I also looked for class action suits/petitions and found one on change.org that was closed (no doubt due to only 77 signatures). Based on your comments above, would the person filing the class action have to have standing (e.g. be directly affected by shutdown, like furloughed workers)?

      ReplyDelete
      Replies
      1. Anonymous: I think that's correct - to sue Congress (or anyone, really), you have to have standing to sue, which means that you have to be directly affected/impacted by the other party's action or inaction.

        So, if you're a federal worker, you might have standing to sue, but as I said above, I'm not sure it would be worth the time or trouble. Since I'm a federal worker, however, and will likely be furloughed starting tomorrow, I'll be keeping a watch out for a class action lawsuit against the government that I can join ;)

        My best advice for you, if you're sick of Congress, is to call and write (not email) your representative and let them know how sick you are of Congress's antics (especially if you live in a district represented by a Republican) and encourage all your friends and family to do the same.

        -The Angry Bureaucrat

        Delete
    16. Let me rephrase the question under discussion, i.e., sueing Congresss (or the Republican Party). Could it be legal to sue, a class action suit, the individual members of the House who voted to shut down the government for damages in the amount of $24B that is the estimated cost to the nation for the shutdown?

      ReplyDelete
      Replies
      1. I doubt it - I'm sure they'd say that they were acting in their official capacities as members of Congress. Furthermore, it's not clear who would have standing to sue - federal workers got back pay, so that's not an issue. Otherwise, it's hard to see who directly was harmed and could bring a case - citizens can't bring cases against the government for general stupidity; there has to be specific, direct, and definable harm perpetrated by the government on an individual - and I think this harm was probably too diffuse to be actionable.

        Delete
    17. Two great groups with standing for class action those affected by unemployment comps continuation and the youngsters denied food lunches.

      ReplyDelete
      Replies
      1. Norman: I think the problem with that is that both of those are government programs, funded by Congress. If Congress chooses not to fund them, that's within Congress's legal rights to decide, and Congress won't have broken the law (or violated the Constitution) if Congress doesn't pass a law to fund them.

        I get what you're saying, and it's definitely harmful to those two groups, but probably not in a way that would give them standing to sue Congress, unfortunately.

        -The Angry Bureaucrat

        Delete