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Obama’s best argument for getting around debt ceiling? Lex posterior derogat priori

There’s an argument that seems more valid than the other two that have recently received more attention.

President Obama has tried to keep the public argument on what you might call the hypocrisy of the Republican position.
REUTERS/Jonathan Ernst

On Friday, House Republicans announced a limited cave-in to President Obama’s demand that they raise the debt ceiling. If their limited/partial/temporary surrender is accepted by the Dem-controlled Senate and Obama, the effect will be to kick the moment of truth down the road a couple of months. But if the two parties and the two branches of government have not reached some kind of agreement by then, the nation will still face the same set of ugly choices.

There’s a legal argument for getting around the crisis that seems more valid to me than the other two that have recently received much more attention: Lex posterior derogat priori. It means that when two laws come into conflict and both cannot be applied, the more recently enacted law trumps the older law.

I couldn’t bring myself to be in favor of the magical-trillion-dollar-platinum-coin trick as a way to end the debt ceiling extortion. In fact, it was really troubling that so many smart people thought such a gimmick could work.

And the idea that section 4 of the 14th Amendment (which states that “The validity of the public debt of the United States, authorized by law … shall not be questioned”) didn’t work for me either (although it was advocated by no less an expert than former President Bill Clinton). It doesn’t strike me that what the Republicans are doing is “questioning” the “validity” of the public debt. And, in fact, if the United States hits the debt ceiling, it doesn’t have to repudiate any of its debt nor stiff any interest payments to bondholders. It can abide by the limit by canceling other scheduled spending.

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Obama has explicitly acknowledged these latter two ideas and said that he won’t utilize either of them. He has tried to keep the public argument on what you might call the hypocrisy of the Republican position. Congress authorized the spending and appropriated the money to cover it. If they want to talk about cutting future spending to bend the fiscal curve toward sustainability, he’s willing to engage on that. But he will not pay a ransom to raise the debt limit to cover appropriations for which Congress – including the Republican-controlled House – already voted.

That works for me as a talking point and as a political position. But I’ve recently become aware that the political argument also contains within it a legal argument that seems less risible than the magic coin.

The argument of Lex posterior derogat priori

Law professor Alex Glashausser of Washburn University in Kansas wrote about this in June for the Huffington Post and a colleague recently brought it to my attention. The current appropriation bills (which tell the executive branch to spend the money) are in conflict with the older law (the debt ceiling law, which tells the president not to borrow more than a certain amount).

Under the doctrine of lex posterior, the newer law trumps the older one. Under this theory, Obama just spends the money and issues the bonds to borrow what he needs to pay for the spending. The message to Congress would be quite consistent with Obama’s public argument: If you want me to stop borrowing money, stop passing spending bills that require me to borrow money to pay for the spending.

“The president would simply announce that Congress had created a ‘Catch-22’ situation requiring him to both borrow and not borrow the money,” Glashausser told me. He would take the position that the appropriation bills amount to an implicit repeal of the debt ceiling. “I wouldn’t say it’s a slam-dunk legal argument,” Glashausser said. “But it’s an argument the president could make with a straight face.”

If the debt limit was in the Constitution, that would change things. The Constitution trumps an ordinary statute, notwithstanding the order in which they were adopted. But it isn’t. The debt limit was created by ordinary statute back during World War I. The appropriation laws under which the the federal government is now engaging in discretionary spending is also a mere congressional enactment, a “continuing resolution” adopted just last year.

Lex posterior is a principle of statutory construction that takes effect when the legal system has to grapple with conflicting statutes. It’s not the only principle. Maybe the congressional Republicans have another one they can invoke to explain why they appropriated money they didn’t intend for the president to spend.

Just issue bonds

Obama wouldn’t have to go to court to do this. Under Glashausser’s theory, Obama would just have the Treasury issue the bonds to borrow the funds to cover what’s already been appropriated and announce he was doing it under lex posterior. It would be up to someone else to take him to court to test his legal theory. And it’s not exactly clear who might have standing to sue.

If someone did have standing, they could possibly ask a court for an injunction to prevent the spending while the case proceeds, although I wouldn’t really want to be the judge who issued such an injunction which, according to current thinking, would compromise the credit rating of the United States, crash the markets and bring about the end of civilization.

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I bounced Glashausser’s idea off of Law professor Dale Carpenter of the University of Minnesota, who has helped me on other similar matters. “It’s an interesting idea and it’s not out of the question,” Carpenter opined.

Mike Steenson, who teaches law at William Mitchell, told me that the Glashausser theory “is at least plausible.”

Steenson referred me to recent scholarly writings by George Washington University Law Professor Neil Buchanan and Cornell University Law Professor Michael Dorf, co-authors of two recent scholarly papers making a similar argument to Glashausser’s. (Buchanan also wrote a version of it for the New York Times.)

The Buchanan-Dorf argument doesn’t invoke lex posterior, but instead invokes the concept of a “trilemma.” That’s a situation in which one is faced with three bad choices. If the debt limit is reached and the federal government isn’t bringing in enough current revenue to cover all the things on which Congress has authorized and appropriated spending, the president must decide to violate the law in one of three ways: He can unilaterally decree a tax increase (that would be crazy); he can pick and choose among all of the things he is obliged by appropriation laws to pay for and not pay for some of them (that would exceed his powers but that is what most writers have assumed Obama would do); or, option three, he could abide by all the appropriation and tax laws and choose to disregard the debt limit by continuing to borrow in order to comply with the other laws. Buchanan and Dorf describe the last one as the “least unconstitutional” of the three options.

Did Friday change anything?

But is it possible that the House Republicans have changed the situation with their decision on Friday? I would say they have, if their decision to push the debt limit crisis down the road two or three months becomes law.

In case you lost track of a key fact, federal discretionary spending is now occurring not under an ordinary two-year budget but under a special measure called a continuing resolution and that continuing resolution expires on March 27. If nothing else happens until March 27, the appropriations that cover about 40 percent of all federal spending (the portion that is so-called “discretionary” spending) will expire and the president will have no legal basis to continue spending on any but the the most emergent functions. That’s the scenario for a so-called government shutdown, as University of Minnesota Congress expert Kathryn Pearson explained to me, which is different from the debt limit crisis.

Suppose the idea floated by the House Repubs on Friday  — a short-term extension of the debt ceiling — goes through. That would kick the debt ceiling crisis back to April or May and the government shutdown deadline would come into view on March 27.

The government shutdown crisis does not lend itself to the lex posterior theory. But, as Glashausser noted in an email to me on Sunday, if the country gets past the government shutdown crisis, it will soon be looking at the next coming of the debt ceiling crisis.

Of course, the big idea of a short postponement of the debt ceiling crisis is, at the moment, nothing more than a Republican talking point. There is no bill to make it happen and in order for such a bill to become law it would have to pass the Dem-controlled Senate and be signed by Obama, neither of which events are guaranteed.