Constitutional Law - Separation of Powers - Congress Delegates Power to Raise the Debt Ceiling

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CONSTITUTIONAL LAW--SEPARATION OF POWERS--CONGRESS DELEGATES POWER TO RAISE THE DEBT CEILING.--Budget Control Act of 2011, Pub. L. No. 112-25, 125 Stat. 240 (to be codified in scattered sections of the U.S. Code).

The tense weeks leading up to the August 2, 2011, deadline for raising the federal debt ceiling witnessed a protracted partisan standoff with the potential for government default hanging in the balance.(1) Meanwhile, legal scholars and public officials debated whether President Obama could invoke constitutional authority to raise the debt ceiling unilaterally.(2) Ultimately, the President and leaders of Congress averted the impending economic and constitutional crisis by reaching a deal, the Budget Control Act of 2011(3) (BCA), which President Obama signed into law on August 2.(4) In exchange for a promise to hold a vote on a constitutional amendment requiring a balanced budget(5) and to reduce the federal budget deficit by $2.4 trillion over a decade,(6) congressional Republicans agreed to delegate authority to the President to raise the debt ceiling.(7) Although this deal allowed a divided-party government to step back from the brink of default, the BCA's imposition upon the President of responsibility to raise the debt ceiling represents a conspicuous abuse of the permissive nondelegation doctrine. Furthermore, this episode draws attention to an attempt to craft a standard for distinguishing and more skeptically scrutinizing similar accountability-skewing delegations--an effort begun, but left unfinished, by the Supreme Court in Clinton v. City of New York.(8)

In September 1917, forcefully decrying passage of the precursor to the modern debt-limit statute,(9) Senator Robert La Follette, Sr., remarked that "Congress has acquired the habit of divesting itself of all responsibility as to legislation."(10) His remarks came in response to Congress's delegation of authority to the Treasury Secretary to determine the interest rates and lifespan of World War I liberty bonds.(11) Although Congress had historically given the Treasury Department substantial discretion(12) to oversee exercise of the Article I borrowing power,(13) before World War I, the intermittency of the need to incur debt had made possible direct congressional involvement in approving the contours of individual borrowing plans.(14) By 1939, Congress had gone further by adopting the approach still employed today: rather than setting caps on debt incurred by individual borrowing initiatives, it began approving a single limit on total debt obligations.(15)

From the beginning of the summer 2011 negotiations to raise the debt limit, Republican leaders in Congress made three demands: tax increases must not be considered as part of any deficit reduction plan; any increase in the debt ceiling must be accompanied by a plan to slash fiscal outlays; and these spending cuts must offset the increase in the debt limit.(16) The White House soon agreed to Republican demands for significant deficit reduction but set a goal of relying on both tax-revenue increases and spending cuts to reduce the deficit.(17) Against this backdrop, a group of conservative Republicans insisted that they would vote against raising the debt ceiling under virtually any circumstances.(18) In spite of these conflicting agendas, weeks of negotiations between President Obama and House Speaker John Boehner appeared close to yielding a massive deficit reduction package.(19) But on July 22, in a dramatic Friday evening press conference, President Obama announced that Speaker Boehner had abandoned talks due to Democrats' insistence on increasing tax revenue. The President ominously concluded that "[w]e have now run out of time."(20)

Ten days earlier, Republican Senate Minority Leader Mitch McConnell had stymied conventional wisdom by breaking ranks with House Republicans to propose a "last-choice option" delegating authority to President Obama to raise the debt ceiling. …