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Newsletter | Revolving Door Project Newsletter | June 28, 2023

Eighteen Months To Avoid Another X-Date

Government CapacityTreasury Department
Eighteen Months To Avoid Another X-Date

Will the White House squander the opportunity an ongoing lawsuit from 75,000 federal employees presents?

The above photo is a work of the U.S. federal government and in the public domain.

Earlier this month, Politico reported that after Biden secured his debt ceiling deal—a deal whose poison pills we’ll still be unpacking for some time to come—he went quiet on exploring options to permanently get rid of the debt ceiling.

This goes against what the president promised agitated members of his own party who urged him to take any manner of executive branch routes to resolve the crisis without capitulating to Republican demands: that it was his “hope and intention” to “find a rationale to take it to the courts to see whether or not the 14th Amendment is, in fact, something that would be able to stop it.” And it sets us up for another protracted, exhausting, damaging tête-à-tête at the edge of a fiscal cliff in just eighteen months. 

We’ve been here before. Last year, progressives inside and outside of government urged Democrats to raise the debt limit while they still controlled the House. David Dayen pointed out for the Prospect in November that the lame duck session was the perfect time to effectively eliminate the debt limit, and “permanently end the toxic politics that corrodes faith in government.” Democratic leadership failed to do so, and came to regret it later. But of course, it’s the American people who will suffer the real costs of the debt ceiling showdown. 

Now the White House has eighteen months to avoid a reboot of the spring’s disillusioning drama. Progressives are right to worry that if Biden kicks the can too far down the road, it’ll wink out of sight…only to ricochet back and hit the next administration in the face in January 2025. Biden’s obviously hoping it’ll be him running that administration, so that alone should be an incentive not to make those early days a guaranteed catastrophe. 

One Democrat close to the White House told Politico that Biden and his top advisors were “newly confident in their ability to navigate future stalemates” following the passage of the debt ceiling legislation. But if cutting food aid for 750,000 Americans, force-feeding West Viriginians an unnecessary fracked gas pipeline, and letting Republicans re-write America’s bedrock environmental law is what Biden considers successful negotiating, we’re not impressed. 

And as Progressive Caucus Chair Pramila Jayapal (D-WA) pointed out to Politico, “House Republicans’ hopes to write spending bills below the levels McCarthy and Biden agreed to undermine the argument for bipartisan deals.” Reuters reported earlier this month that House Republicans are setting the U.S. up for a government shutdown in the fall by pushing for spending targets $120 billion below the levels negotiated by Biden and McCarthy. It’s bewildering that the White House would consider successful the end result of an avoidable debt ceiling showdown that harmed Americans, alienated core Democratic constituencies, and (according to Republicans) only established a ceiling, not a floor, to government funding. 

75,000 Federal Employees Say “Enough Already”

Politico points out that “even if the administration wanted to test the legal theory around using the 14th Amendment — which says the nation’s debts ‘shall not be questioned’ — there are questions about how to do so without a timely case.” That’s where the timely case brought by the National Association of Government Employees against Biden and Yellen comes in, right? Right?

But Politico writes only of a hypothetical lawsuit “challenging the debt ceiling’s legitimacy,” which “would face the initial hurdle of identifying who is being hurt by the borrowing limit, potentially prompting a court to throw out the case for a lack of standing.”

It’s a mystery why mainstream outlets have chosen to hypothesize rather than analyze the  active lawsuit brought by the bargaining unit of nearly 75,000 federal employees who have “already suffered concrete, individual monetary injury from the extraordinary measures” taken by Treasury Secretary Yellen in the spring to avoid a default, and whose injury “has not disappeared but will occur again, with certainty, under existing law and will be imminent or actual by the time this litigation takes an ordinary period to resolve.” These words outlining individuals who have been hurt by the borrowing limit are taken from the amended complaint filed just last week in NAGE’s lawsuit, which continues to play out in a Massachusetts district court. 

The National Association of Government Employees argues that “its members face the same injury in fact, i.e., losses to their personal savings accounts, and face the same imminent and substantial risk of delay in payment as they did at the time of the initial filing of this action on May 8, 2023,” and so “seeks a declaratory judgment and reserves the right to seek injunctive relief prior to reinstatement of the Debt Limit Statute on January 1, 2025.” 

The case isn’t necessarily a silver bullet, but it is a potent opportunity to sort out the very same legal questions that the White House seemed committed to resolving for good just a couple weeks ago. We’ve written about this case before; my colleagues Dylan and Julian’s Hack Watch piece “Everyone’s So Worried About The President Getting Sued About the Debt Ceiling, No One Seems to Have Noticed He Already Was” remains frustratingly relevant. Dylan and Julian wrote that “the case is being heard in the Massachusetts District Court by a Clinton appointee. That means that the President already has a chance to litigate this very issue in a relatively friendly setting. And yet both Biden and most of the media remain petrified by the threat of having to take the issue to court. We’re still trying to understand why no one is talking about this.” 

Now it’s the end of June, and we’re still trying to understand why this case hasn’t permeated the mainstream media’s consciousness. As far as we can tell, only two outlets have covered the ongoing lawsuit since the passage of the debt ceiling bill: GovExec wrote it up last week, and the Boston Globe wrote about it three weeks ago. And yet the fact that there’s a lawsuit which will force the administration to articulate its legal position on the constitutionality of the debt ceiling is undeniably newsworthy. 

The lawsuit looks set to proceed on an ordinary timeline now, which will feel painfully slow to those who want a decisive end to this route for taking the economy hostage. But it’s still enough time to resolve this matter one way or another before January 2025, provided that the Biden administration uses the case smartly to its advantage, instead of mindlessly opposing the plaintiff’s claims. So far, there’s no evidence at all that the administration is thinking outside of the box with this case. We hope that others will join the chorus pushing for the administration to tread wisely here, and sustain enough pressure that the White House is forced to think strategically about the federal employees’ claims. 

Otherwise, we’re likely set to continue down the same, endlessly looping track of Republican brinkmanship extracting Democratic compromises. Republicans like this loop. It serves their obstructionist goals, keeping public services underfunded and so deepening public distrust in government. But voters have been fed up with these toxic cycles for decades. In order to disrupt this self-defeating pattern, Democratic leadership needs to finally, actually play the long game. 

Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:

The Obscure NIH Official Blocking Lower Drug Prices

Samuel Alito’s Wife Leased Land to an Oil and Gas Firm While The Justice Fought The EPA

Wife’s Oil and Gas Leasing Deal Raises New Ethics Concerns About Justice Alito

Alito Ruled to Curb EPA’s Power After His Wife Leased Land to Oil and Gas Firm

Attacks on Lina Khan’s Ethics Reveal Copious Amounts of Projection

No Labels Staffs Up With Republicans Ahead of 2024 Presidential Plans

Government CapacityTreasury Department

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