The Silver Lining in a Potential Rubio Presidency
by Michael Dorf
As Prof. Buchanan noted on Tuesday, it is still too soon to coronate Marco Rubio as the "establishment" alternative to either the external (Trump) or internal (Cruz) hostile takeover of the Republican party. Before writing off Jeb Bush, Chris Cristie, John Kasich, or their respective superPAC sugar daddies, the notoriously fickle voters of New Hampshire must have their say, and even after that, the notion that the Party elders will quickly corral the three governors into bowing out so as to consolidate the anyone-but-Trump-or-Cruz vote behind Rubio seems fanciful, absent a decisive Rubio victory somewhere. As of late yesterday afternoon, the most reliable number cruncher, Nate Silver, gave Rubio a sixteen percent chance of winning New Hampshire--much better than one might have expected a week ago, but still hardly a lock.
To be sure, if I were betting, I would put my money on Rubio to get the nomination. The Iowa political market has Rubio as a little bit better than a 50-50 chance of winning the nomination, with Trump a fairly distant second at 25%. Looking at the price history, it's clear that Rubio got a substantial bump from his third-place finish in Iowa. Meanwhile, Bernie Sanders did not get a bump from the virtual tie in Iowa on the Democratic side, perhaps because the market already anticipated a strong finish for him there. However, Hillary Clinton remains the overwhelming (roughly 4-1) favorite in the betting for the Democratic nomination.
The same political market that gives Rubio a better than 50-50 shot at capturing the Republican nomination gives the eventual Democratic nominee a better than 60% chance of winning the general election. That percentage has come down a little as Rubio's likelihood of securing the Republican nomination has gone up, and perhaps if one subtracts out the 42% probability of Cruz or Trump getting the nomination, the generic Republican ballot looks a lot better -- but perhaps not. As I said, the generic price didn't move a whole lot in favor of the Republican as Rubio's stock rose and Trump's fell. It thus looks like the people who are putting their money where their mouths are think that the usual sorts of factors (the economy, the Democrats' demographic advantage in presidential years, etc.) are more important than the sorts of factors that are peculiar to particular nominees. Still eight months away from the election, the money seems to be saying that Rubio probably loses to Clinton.
Yet to listen to Rubio on the stump, one would think that if he's the nominee, he begins as the clear favorite to defeat the Democratic nominee, and I'll admit that, were it not for the market numbers, I'd be worried that he might be right. Rubio has several distinct assets. As a Floridian, he puts that crucial state in play. He is an extreme reactionary along just about every policy dimension, which should energize the Republican base in the general. His path to the nomination would run through the "establishment lane," thereby permitting him to appeal to low-information independent voters; simply by not being Trump or Cruz, Rubio will lead a lot of these voters to think that he's not a reactionary madman. And Rubio is a lot younger than either Clinton or Sanders.
Thus, for this lifelong Democrat, the political markets are a kind of anti-anxiety medication. When I worry about the seemingly increasing likelihood of a Rubio presidency, I reassure myself that there's still a better than a coin toss likelihood of a Democratic victory.
Another self-soothing strategy is to look for potential upsides from a Rubio presidency. I think I've found one. Earlier this week, some House Republicans released a report and supporting documents to show that, contrary to prior statements of the Obama administration, in the recent past the Treasury Department has formulated contingency plans to "prioritize" certain spending over other spending in the event that Congress did not raise the debt ceiling in time for the government to meet all of its obligations. What does that have to do with Rubio? Let me explain.
As regular readers of this blog know, Professor Buchanan and I have been pretty much obsessed with the possibility of a debt-ceiling crisis. (I was going to provide links, but there are too many. If you're just tuning in, Google "Buchanan Dorf Debt Ceiling" and go down the rabbit hole.)
The conventional wisdom holds that if Congress fails to raise the debt ceiling as borrowing authority is needed to make payments, the administration would have no choice but to "prioritize" some spending over other spending. We think that conventional wisdom is wrong, because the many decisions about what spending to prioritize would be fundamentally legislative, at least absent any delegation by Congress to the president of the power to make these decisions. In our view, it would be "less unconstitutional" -- because it would usurp less legislative power -- for the president to issue bonds in excess of the debt ceiling.
Seeming to vindicate our view that the president cannot simply pick and choose what authorized spending to cut, the Obama administration had taken the position that it had no plans to prioritize in the event of a failure to raise the debt ceiling. For public consumption, administration officials were also saying that the president couldn't issue debt-ceiling-violating debt, but given that in a real crisis something would have to give, we thought that there was at least a possibility that the administration's real secret plan was to issue such debt. However, the newly released report and documents suggest that the administration's lawyers were actually secretly preparing a prioritization plan.
The Republicans who released the report and documents are making two points, one possibly correct and the other definitely incorrect. The possibly correct point is that the Obama administration was dishonest when it stated publicly that it had no contingency plans to prioritize spending.
The definitely incorrect point is that the documents somehow show that the administration was wrong to say that there is no way to prioritize. Of course it was never the case that it was literally impossible to formulate a prioritization rule. I can think of dozens of such rules. E.g., set aside enough money to make interest payments on bonds coming due for the next three months; if there's excess revenue, then make Social Security payments on a less-than-par basis if necessary; etc. The claim that the administration was formerly making was that existing law provides no basis for prioritizing some spending over others. That was and remains true. The fact that the Treasury Department nonetheless made up its own contingency plans based on its own priorities and an analogy to the quite disanalogous circumstance of a government shutdown in no way demonstrates that prioritization was or is constitutionally possible.
There is a bigger takeaway here, however. Clearly the Republicans who released the report and documents think they show that a failure to raise the debt ceiling would be no big deal, because Treasury could simply set priorities in the way that it does during a government shutdown. That's wrong, but the fact that Republicans believe this makes it more likely that in a future debt-ceiling crisis they would conclude that a Democratic president who says she cannot prioritize spending is bluffing in order to pressure a Republican Congress to raise the debt ceiling cleanly. What Professor Buchanan and I have previously called President Obama's "staredown strategy" won't work if Republicans think they can simply call the bluff of the next president to use it. Thus, the release of the report and supporting documents indicate that in the next debt-ceiling crisis we are more likely to go over the cliff.
Given current revenue projections, the government's borrowing authority will run out (absent a debt ceiling increase or its equivalent) early in the term of the next president. If that president is a Democrat facing a Republican-controlled House, we can expect emboldened brinksmanship, with Republicans now believing that the staredown is a bluff.
However, if the next president is a Republican, then a Republican-led Congress would be very unlikely to confront him. Instead, a Republican Congress would work with a Republican president to adopt a horrible set of spending and tax laws, albeit ones that do not spark a debt-ceiling crisis. That is the silver lining in the possibility of a Rubio presidency.
As Prof. Buchanan noted on Tuesday, it is still too soon to coronate Marco Rubio as the "establishment" alternative to either the external (Trump) or internal (Cruz) hostile takeover of the Republican party. Before writing off Jeb Bush, Chris Cristie, John Kasich, or their respective superPAC sugar daddies, the notoriously fickle voters of New Hampshire must have their say, and even after that, the notion that the Party elders will quickly corral the three governors into bowing out so as to consolidate the anyone-but-Trump-or-Cruz vote behind Rubio seems fanciful, absent a decisive Rubio victory somewhere. As of late yesterday afternoon, the most reliable number cruncher, Nate Silver, gave Rubio a sixteen percent chance of winning New Hampshire--much better than one might have expected a week ago, but still hardly a lock.
To be sure, if I were betting, I would put my money on Rubio to get the nomination. The Iowa political market has Rubio as a little bit better than a 50-50 chance of winning the nomination, with Trump a fairly distant second at 25%. Looking at the price history, it's clear that Rubio got a substantial bump from his third-place finish in Iowa. Meanwhile, Bernie Sanders did not get a bump from the virtual tie in Iowa on the Democratic side, perhaps because the market already anticipated a strong finish for him there. However, Hillary Clinton remains the overwhelming (roughly 4-1) favorite in the betting for the Democratic nomination.
The same political market that gives Rubio a better than 50-50 shot at capturing the Republican nomination gives the eventual Democratic nominee a better than 60% chance of winning the general election. That percentage has come down a little as Rubio's likelihood of securing the Republican nomination has gone up, and perhaps if one subtracts out the 42% probability of Cruz or Trump getting the nomination, the generic Republican ballot looks a lot better -- but perhaps not. As I said, the generic price didn't move a whole lot in favor of the Republican as Rubio's stock rose and Trump's fell. It thus looks like the people who are putting their money where their mouths are think that the usual sorts of factors (the economy, the Democrats' demographic advantage in presidential years, etc.) are more important than the sorts of factors that are peculiar to particular nominees. Still eight months away from the election, the money seems to be saying that Rubio probably loses to Clinton.
Yet to listen to Rubio on the stump, one would think that if he's the nominee, he begins as the clear favorite to defeat the Democratic nominee, and I'll admit that, were it not for the market numbers, I'd be worried that he might be right. Rubio has several distinct assets. As a Floridian, he puts that crucial state in play. He is an extreme reactionary along just about every policy dimension, which should energize the Republican base in the general. His path to the nomination would run through the "establishment lane," thereby permitting him to appeal to low-information independent voters; simply by not being Trump or Cruz, Rubio will lead a lot of these voters to think that he's not a reactionary madman. And Rubio is a lot younger than either Clinton or Sanders.
Thus, for this lifelong Democrat, the political markets are a kind of anti-anxiety medication. When I worry about the seemingly increasing likelihood of a Rubio presidency, I reassure myself that there's still a better than a coin toss likelihood of a Democratic victory.
Another self-soothing strategy is to look for potential upsides from a Rubio presidency. I think I've found one. Earlier this week, some House Republicans released a report and supporting documents to show that, contrary to prior statements of the Obama administration, in the recent past the Treasury Department has formulated contingency plans to "prioritize" certain spending over other spending in the event that Congress did not raise the debt ceiling in time for the government to meet all of its obligations. What does that have to do with Rubio? Let me explain.
As regular readers of this blog know, Professor Buchanan and I have been pretty much obsessed with the possibility of a debt-ceiling crisis. (I was going to provide links, but there are too many. If you're just tuning in, Google "Buchanan Dorf Debt Ceiling" and go down the rabbit hole.)
The conventional wisdom holds that if Congress fails to raise the debt ceiling as borrowing authority is needed to make payments, the administration would have no choice but to "prioritize" some spending over other spending. We think that conventional wisdom is wrong, because the many decisions about what spending to prioritize would be fundamentally legislative, at least absent any delegation by Congress to the president of the power to make these decisions. In our view, it would be "less unconstitutional" -- because it would usurp less legislative power -- for the president to issue bonds in excess of the debt ceiling.
Seeming to vindicate our view that the president cannot simply pick and choose what authorized spending to cut, the Obama administration had taken the position that it had no plans to prioritize in the event of a failure to raise the debt ceiling. For public consumption, administration officials were also saying that the president couldn't issue debt-ceiling-violating debt, but given that in a real crisis something would have to give, we thought that there was at least a possibility that the administration's real secret plan was to issue such debt. However, the newly released report and documents suggest that the administration's lawyers were actually secretly preparing a prioritization plan.
The Republicans who released the report and documents are making two points, one possibly correct and the other definitely incorrect. The possibly correct point is that the Obama administration was dishonest when it stated publicly that it had no contingency plans to prioritize spending.
The definitely incorrect point is that the documents somehow show that the administration was wrong to say that there is no way to prioritize. Of course it was never the case that it was literally impossible to formulate a prioritization rule. I can think of dozens of such rules. E.g., set aside enough money to make interest payments on bonds coming due for the next three months; if there's excess revenue, then make Social Security payments on a less-than-par basis if necessary; etc. The claim that the administration was formerly making was that existing law provides no basis for prioritizing some spending over others. That was and remains true. The fact that the Treasury Department nonetheless made up its own contingency plans based on its own priorities and an analogy to the quite disanalogous circumstance of a government shutdown in no way demonstrates that prioritization was or is constitutionally possible.
There is a bigger takeaway here, however. Clearly the Republicans who released the report and documents think they show that a failure to raise the debt ceiling would be no big deal, because Treasury could simply set priorities in the way that it does during a government shutdown. That's wrong, but the fact that Republicans believe this makes it more likely that in a future debt-ceiling crisis they would conclude that a Democratic president who says she cannot prioritize spending is bluffing in order to pressure a Republican Congress to raise the debt ceiling cleanly. What Professor Buchanan and I have previously called President Obama's "staredown strategy" won't work if Republicans think they can simply call the bluff of the next president to use it. Thus, the release of the report and supporting documents indicate that in the next debt-ceiling crisis we are more likely to go over the cliff.
Given current revenue projections, the government's borrowing authority will run out (absent a debt ceiling increase or its equivalent) early in the term of the next president. If that president is a Democrat facing a Republican-controlled House, we can expect emboldened brinksmanship, with Republicans now believing that the staredown is a bluff.
However, if the next president is a Republican, then a Republican-led Congress would be very unlikely to confront him. Instead, a Republican Congress would work with a Republican president to adopt a horrible set of spending and tax laws, albeit ones that do not spark a debt-ceiling crisis. That is the silver lining in the possibility of a Rubio presidency.