Now that our leaders in Washington have assured us they have navigated the fiscal cliff, conveniently underplaying the fact that taxes will increase on 77 percent of Americans in the process, the debate has shifted to the debt ceiling. We are once again at the congressionally determined borrowing limit, having racked up an additional $1.2 trillion in debt over the last year.
Republicans are calling for spending cuts as a condition to raise the debt ceiling; the president says he wants an unconditional increase. Given the inertia of the federal budget and the president's exceptional ability to call a bluff, I predict the president will get his way.
But the president also has an ace up his sleeve. Apparently, he can just instruct the Treasury Department to start minting trillion dollar platinum coins. While Congress granted the Federal Reserve control over the vast majority of our money supply, an obscure federal law allows the Treasury Department to issue commemorative platinum coins in any denomination. Policy wonks around the country are drumming up support for just such a "solution" to the debt crisis.
The fact that the trillion-dollar platinum coin idea is even being floated as an option should be deeply disturbing to all of us. Our system of government has endured the last 200-plus years precisely because of the constitutional separation and balancing of powers among the legislative, executive and judicial branches of government. Unfortunately, over the last several decades Congress has chosen to delegate much of its law-making authority to the executive branch by passing complex, often conflicting, legislation and then asking agency bureaucrats to work out the details. Congress no longer writes the laws. The bureaucrats do. Last year federal bureaucrats issued nearly 80,000 pages of new laws on their own. Congress has made itself irrelevant when it comes to making laws.
Congress' last check on the executive branch has been the "power of the purse". But even that power is fading. President Obama has not proposed a viable federal budget in nearly four years (in fact, the Senate voted unanimously to reject the president's 2012 budget). But instead of exercising its constitutional prerogative to hold the purse strings, Congress has allowed the president to take control of the finances and dramatically increase federal spending (we are now borrowing $100 billion each month). And the President has dared Congress to stop him.
Meekly and always under extreme duress, Congress passes "continuing resolutions" to legitimize the president's actions. To add insult to injury, the president has skillfully labeled those who oppose him as "hostage takers".
I am troubled by the trillion-dollar platinum coin proposal not because I think it will be used (imaging trying to get a bank to cash the coin into smaller denominations; it would require all of the paper currency in the entire United States to do so). I am troubled because the very idea undermines the last vestige congressional power. It says to the American people that the president, not Congress, holds the purse strings. It says Congress does not matter.
There are no easy solutions to the problems we face as a country. The brutal reality of our financial situation is not real to most of us now, but will be some day soon. In times like these, we should focus on defending and repairing the balance of political powers as they are so wisely established in our Constitution. We should applaud those leaders in Congress who are intent on gripping the purse strings. Especially when they are maligned for doing so.
Dan Liljenquist is a former state senator and U.S. Senate candidate.
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