Barack Obama gave in to debt ceiling blackmail, partly because he probably thought it was a one-off, and partly because he wanted to use it to bring spending back under control. Biden knows that it wasn’t a one-off, and that it has to be stopped. As a result, as with Afghanistan, I expect him to confront the problem directly instead of kicking the can down the road.
If he doesn’t give in, what should he do? Some commentators have suggested minting a $1 trillion platinum coin and using it to pay the nation’s debts. That’s a possibility, but to me, it’s too gimmicky. I favor using the Fourteenth Amendment language regarding the questioning of the validity of the nation’s debts to address the problem.
If I were Biden, I will announce months in advance that the government will continue to pay all of its debts regardless of what happens with the debt ceiling in order to prepare the markets for what is to come. The Fourteenth Amendment route is legally sound and is supported by case law, so the markets should feel at least reasonably comfortable with that approach. When the crisis comes, the GOP will be put in a position of either lifting the ceiling or going to court to try to stop Biden from paying creditors and Social Security recipients. Does that sound like good politics to you?