Are you going to Scar­bor­ough Fair
Pars­ley, sage, rose­mary, and thyme
Remem­ber me to one who lives there
She once was a true love of mine

From Eng­land long ago comes the song “Scar­bor­ough Fair”, more recently pop­u­lar­ized by Simon and Gar­funkel. It struck me as some­what of an alle­gory to the debt ceil­ing. Allow me to explain.

Con­gress tells the Exec­u­tive what taxes may be levied, and on whom. This restricts how much money the gov­ern­ment can col­lect from the cit­i­zens. And there’s noth­ing wrong with this; it’s Congress’s job to lay this out, either with the President’s approval, or over his veto. Ulti­mately, then, Con­gress decides roughly how much money the gov­ern­ment will col­lect to per­form its duties.

Con­gress also tells the Exec­u­tive how much money is to be spent, and on what. Unless explic­itly granted Con­gres­sional approval to do oth­er­wise, the Pres­i­dent must spend the spec­i­fied amount on the spec­i­fied bud­get items. Again, there’s noth­ing wrong with this; it’s Congress’s job to lay this out, either with the President’s approval, or over his veto. Ulti­mately, then, Con­gress decides how much money the gov­ern­ment will spend to per­form its duties.

Tell her to make me a cam­bric shirt
With­out a seam or nee­dle work…

This means that Con­gress can demand that the Pres­i­dent spend more than he takes in. For the past decade, this is exactly what has hap­pened. In some cases, it’s the cur­rent Con­gress that explic­itly makes the demand; in other cases, it’s past Con­gresses who made the demand, and the cur­rent Con­gress hasn’t over­ruled the demands of the pre­vi­ous Congresses.

The upshot is the same, regard­less. More money is spent than is col­lected. In order to achieve this, the Trea­sury, as part of the Exec­u­tive Branch, issues debt. The only alter­na­tive would be to devalue the cur­rency, allow­ing the gov­ern­ment to pay the nom­i­nal bills, albeit by effec­tively reduc­ing the real amount paid.

So what hap­pens if Con­gress also puts restric­tions on debt issuance? Until 1917, Con­gress explic­itly autho­rized each debt issuance indi­vid­u­ally. This slowed the process, but the out­come was always the same. Con­gress had already autho­rized the spend­ing, and had estab­lished the tax pol­icy, so any excess spend­ing was cov­ered by debt issuance, with Congress’s explicit approval. In essence, it made issu­ing the debt a for­mal­ity. Because of this, Con­gress changed the process in 1917 with the Sec­ond Lib­erty Bond Act, which paid for part of World War I by insti­tut­ing an early form of debt ceil­ing. Specif­i­cally, Con­gress autho­rized debt to be issued up to a spe­cific amount. The mod­ern imple­men­ta­tion, with a gen­eral debt ceil­ing, was estab­lished by the Pub­lic Debt Acts of 1939 and 1941, whereby the Trea­sury is autho­rized to issue debt on an as-​​needed basis to fund gov­ern­ment oper­a­tions, pro­vided the total debt does not exceed the limit.

The goal here was to main­tain Con­gres­sional over­sight of debt, as is their Con­sti­tu­tional role.

Tell her to find me an acre of land
Between the salt water and the sea strand

The Exec­u­tive is lim­ited in how much can be col­lected, lim­ited in how lit­tle can be spent, and lim­ited in how much debt can be issued. With the pas­sage of the 14th Amend­ment, this makes it pos­si­ble for Con­gress to put the Exec­u­tive in an impos­si­ble situation.

By virtue of Con­gress stip­u­lat­ing both tax­a­tion and spend­ing, Con­gress already tac­itly approves the debt. Adding a sec­ond layer serves only to reduce clar­ity of intent. Since the Pres­i­dent can­not choose what required spend­ing is to be ignored, and the Pres­i­dent can­not choose to uni­lat­er­ally col­lect more taxes, there is no “cor­rect” action. So what is the Pres­i­dent sup­posed to do?

Once Con­gress sets up the tax­a­tion and spend­ing poli­cies, the die has been cast. The debt ceil­ing itself serves no pur­pose other than pro­vid­ing oppor­tu­nity for Con­sti­tu­tional crises. It’s time for it to go.

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