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Democrats Need to Get Over Their Pathetic Fear of the Supreme Court

On today's X-Date, remembering what Franklin Roosevelt did when faced
with a potential Court decision that would blow up the economy: prepare
to ignore it.

 

Alex Brandon/AP Photo

By Ryan Cooper

**** In the ongoing debate about whether or not President
Biden has the power to sidestep the debt ceiling somehow, advocates of
giving up have one trump card: the Supreme Court. Unilateral executive
branch strategies won't work, Ezra Klein predicts
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at

**The New York Times**, because the Court "has repeatedly entertained
cases that even conservative legal scholars thought farcical just a few
years earlier." Because the downsides of the justices ruling against
them would be high, it's just too risky to chance it.

During a recent press conference in Japan, Biden himself suggested
<[link removed]>
that, while he believes he has the authority under the 14th Amendment to
repudiate the debt ceiling statute, "the question is: Could it be done
and invoked in time that it ... would not be appealed and, as a
consequence, pass the date in question and still default on the debt."
That implies that he believes the Court will, and indeed should, get a
say on his actions, and he'd have to stand by whatever they rule.

This is a terrible position. A sensible president would not be
preemptively conceding the Court's authority in this area. They would
be attacking its legitimacy, and preparing-as Franklin Roosevelt did
in a similarly dire circumstance-to disobey it.

Now, Klein is certainly correct to say that whatever ruling the Court
might produce would have little or nothing to do with the law as
written. This reactionary majority is a de facto super-legislature that
rules in favor of its own partisan policy objectives based on
tendentious up-is-down reasoning or no reasoning at all. As I have
previously written
<[link removed]>, the
Court has been like that for almost its entire history.

But that cuts both ways. If Biden were to take action to avoid default,
and someone were to bring a lawsuit challenging it, then it would be the
Court's

**direct responsibility** for blowing up the world economy. That immense
pressure would surely sway the thinking of the swing votes to some
degree, especially when at the back of their minds they have the
possibility of losing out on their oligarch bribes because of a global
financial crisis they caused. Hurt the man in the street, sure, but a
financial crisis could hurt Harlan Crow.

Speaking of which, the political context here is strengthened by the
fact that the reactionary justices are currently embroiled in an
unprecedented corruption scandal. As I've written before
<[link removed]>,
Clarence Thomas, John Roberts, and Neil Gorsuch (and that's just who
we know about) are all plainly profiting from their high office. Gorsuch
in particular accepted
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hundreds of thousands of dollars from the head of a right-wing law firm,
without disclosing it, that subsequently had business before the Court
on more than 20 occasions.

**Read all of our debt ceiling coverage here**
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Click to Support The American Prospect <[link removed]>

Then there would be practical difficulties with ruling against executive
action. As Matt Bruenig points out
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at the People's Policy Project, the Court would have to face the
thorny question of who gets paid. On its face, upholding the debt
ceiling, and therefore letting the country go over the cliff, would mean
the president has to cut spending somehow. Is Biden supposed to just
pick and choose what gets paid? That would give him a de facto line-item
veto over the entire budget, and the Court has already ruled
<[link removed]> that a law
explicitly giving him that power is unconstitutional.

The Court might tell him to prioritize certain payments, but this may
not be technically possible
<[link removed]>,
and also raises major legal problems. Anyone due a payment according to
law who didn't get one-say, Social Security beneficiaries or
military contractors-would be entirely justified in suing. The Court
might claim that paying them is violating the debt ceiling law, but

**not** paying them is

**also** a violation of the various spending laws. There would be tens
of millions of such potential litigants.

It's hard to describe how maddening it is hearing Biden and
high-profile liberals twisting themselves into knots coming up with
reasons to preemptively give up and lie down in front of the Freedom
Caucus steamroller.

So let me sketch out a strategy that would be all but guaranteed to
prevent default, and defuse the debt ceiling forever. The key would be
to take a page out of the House Republican playbook and categorically
refuse to give an inch. Tell Speaker McCarthy and the half dozen yahoos
who actually run the House, buying each other's Chapstick for $100,000
(this actually happened
<[link removed]>),
to go pound sand. Then, in case the Court should prove troublesome, work
out a legal defense in depth-for instance, if the debt ceiling is hit,
then mint the platinum coin, and if the Court rules against that, then
switch to coupon-free bonds, and if the Court rules against that, then
issue an executive order declaring the debt ceiling unconstitutional
under the 14th Amendment, and then do the same thing again under the
Contracts Clause, and so on.

Incidentally, this is how President Trump got his Muslim ban past the
Court.

All the while, raise holy hell in speeches and the press to make clear
the grotesque irresponsibility of what is happening. Here's an
institution trying to cause a completely pointless national default,
destroying untold jobs, businesses, and the credit rating of the
country, whose elite members are all unelected, where five members of
the majority were appointed by a president who took office after losing
the popular vote, and one of whom occupies a blatantly stolen seat.
Here's an institution that has struck down anti-corruption laws by the
bushel
<[link removed]>
and is openly rolling in oligarch graft like Scrooge McDuck, while
declaring itself
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to be immune from oversight. All that would add to the political
pressure on the justices.

And-this is the key thing-be ready to simply disobey the Court,
should it come to that. President Franklin Roosevelt, whom Biden once
saw as a model, can be the guide, as he was prepared to do this in the
Gold Clause Cases.

[link removed]

As James Ledbetter writes in One Nation Under Gold
<[link removed]>, before the New
Deal, contracts commonly stipulated that payments could be required to
be in gold or its equivalent. This worsened the Great Depression, as
regular waves of bank failures prompted people to start hoarding gold,
draining liquidity out of the banking system (and possibly out of the
country). So after taking office, FDR and his Democrats passed laws
allowing the president to confiscate all gold in private hands, and
voiding all gold clauses in contracts.

That led to a number of lawsuits demanding payment in gold as originally
specified, which were consolidated in one case that got to the Supreme
Court in 1934. Oral arguments did not go well for the administration, so
FDR directed his staff to prepare legal work-arounds, and drew up a
speech explaining why he was going to disobey the ruling. (Luckily, the
Court narrowly ruled in favor of the government, and the resulting
opinion actually uses as precedent
<[link removed]>
the 14th Amendment clause about the validity of the public debt.)

It did involve some risk to contemplate ignoring the Court. But not
doing so would have been far worse. As FDR's draft speech noted,
thanks to deflation during the Depression, creditors would be able to
demand gold worth about 69 percent more than it had been when the
contracts were written. Every payment for a mortgage or business loan
with such a clause would instantly go up by 69 percent; "This decision
will automatically throw every railroad of the United States into
bankruptcy," he wrote. Moreover, there simply was not remotely enough
gold on the planet to actually pay out all the $169 billion in relevant
contracts. "There exists in the United States a total of about eight and
one half billion dollars of gold and in all the rest of the
world-Europe, Asia, Africa, Australasia and the Americas-there is
not more than twelve billions of dollars of gold."

In short, obeying a ruling upholding the gold clauses would have meant
an instant return of the Depression and quite possibly a collapse of
American democracy. Sometimes there are more important things than
finicky legal niceties.

Now, the consequences of giving in to Republican demands would not be

**that** bad in terms of the economics. But they would be worse in terms
of America's democratic institutions. It would establish the principle
that conservatives can win big political victories by making terroristic
threats to American government and society. Elections mean little when a
party controlling just one house of Congress can get what it wants
through extortion and threats. They're certain to ask for more next
time.

And conversely, Roosevelt's action would have been a lot more legally
dubious than any of the executive actions noted above to get around the
debt ceiling. His executive order confiscating private gold, for
instance, was based on a wildly strained reading of the 1917 Trading
with the Enemy Act. Biden, by contrast, would be on firm grounds both
practically and on the obvious plain meaning of the 14th Amendment.

There has to be some line at which Democrats wouldn't obey the Supreme
Court-suppose it simply declared Trump president, for instance? A
possible decree causing national default in utter disregard of common
sense and the Constitution is well over that line. At some point,
Democrats are going to have to stand up to this lawless Court, or they
might as well close up their entire political party and go home.

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