THE BLOG
01/15/2013 02:28 pm ET | Updated Mar 17, 2013

The Hidden Danger in the Platinum Coin Debate

Political scientists have shown that presidential democracies are more prone to collapse than their parliamentary cousins. The enduring success of the United States has been an exception -- arguably until now. As we enter the latest fiscal fight, it is telling that so much talk had been focused on ways for the president to unilaterally bypass Congress, until President Obama ruled out such action on Saturday. Left unsaid is the implication that the continued failure of Congress could lead to a more aggressively unilateral presidency with significant implications for the viability of our constitution.

Commentators from the New Yorker to the Economist had focused considerable attention in recent days on an obscure law that would effectively permit the Secretary of the Treasury to bypass the debt ceiling by minting its own money. While the U.S. maintains an independent central bank exactly to prevent politicians from printing conventional money, this law (originally intended to allow the Treasury to produce ceremonial coins) does nothing to stop the Treasury from minting a single coin with a trillion dollar face value and depositing it at the Federal Reserve -- so long as that coin is made of platinum.

The commentators went to great lengths to explain how this "temporary," "extraordinary" solution would be unwound (the coin would be melted and the money the Treasury withdraws against the trillion dollars repaid once the debt ceiling is raised) with little in the way of inflationary peril. But it wasn't at all clear whether markets would have liked the United States' descent to a third-world embrace of the printing press any more than it would have an outright default.

Others had previously pointed to the Fourteenth Amendment, which states that the "validity of the public debt of the United States, authorized by law ... shall not be questioned ," to argue that the president can simply ignore the debt ceiling. Obama in 2011 went on record saying that he was not persuaded it is a "winning argument;" Bill Clinton, by contrast, had said he would use it "without hesitation" and "force the courts to stop me" -- exactly the same "ends justify the means" dynamic that has and continues to be borne out in the failed presidential democracies of history.

In a seminal 1989 conference paper, Yale professor Juan J. Linz laid bare the weaknesses of presidential democracies. Today, the "vast majority of stable democracies" are parliamentary; most failed democracies have been presidential. This, Luiz writes, is "no accident."

In presidential systems the executive is in permanent competition with their legislatures for the claim to democratic legitimacy. Both presidents and prime ministers can assume power with less than a majority of the vote -- but a prime minister's power rests on the continued support of coalition partners. A president's fixed term means there are only brief periods in which cooperation between branches are possible before the next election. In short, it is a recipe for rigidness, broken often by complete ruptures of the constitutional order.

While parliaments can accommodate and moderate extremist views, a presidential system can function only within a moderate political context. Presidential systems collapse under the stress of high polarization. The American case has been an "exception," but will it necessarily always be so?

As Garry Wills writes in Bomb Power: The Modern Presidency and the National Security State since the dawn of the nuclear age, the United States has witnessed a considerable weakening of congressional influence in national security issues: witness the expansive arguments made during the Bush administration about its wartime powers and the near-reversal of roles in which it preemptively executed often classified orders, putting Congress in the position of retroactively "vetoing" those with which it disapproved when both houses could finally pass a measure of its own, often only after intense public outcry.

On domestic issues, several decades of using special commissions to give political cover for important reforms from entitlements to military base closures led to the so-called deficit "super committee" with unparalleled authority to produce legislation for an up-or-down vote in Congress. The super-committee failed, directly leading to our current predicament, but there is no reason to suggest it will be its last appearance or limited to fiscal issues. And as large as the few bills that get passed by Congress are, thousands more pages of regulatory law are then written by executive agencies. A Congress that must effectively outsource its core function is one reducing itself to merely writing cartes blanches. Can the legislative branch be fixed?

Clearly, more than the modest attempts to reform filibuster rules in the Senate is needed. It is unrealistic to suggest that the United States reinvent itself as a parliamentary democracy, but the states can take decisive steps to eliminate much of the polarization inherent to our electoral process. California, which in recent years has enacted changes to reduce gerrymandered districts and hold open primaries to encourage politicians to compete for the center, shows one way forward. Bolder steps include states having multi-seat districts that would give candidates an incentive to compete for the center and potentially a constitutional amendment allowing for national referenda.

More was at stake in this debt ceiling fight than our fiscal future and the Obama administration nobly recognized it in its decision to rule out use of the platinum coin. Had it come to the "platinum coin" or the Fourteenth Amendment, the letter of the Constitution may not have been violated, but a precedent would have been set wounding its spirit. The continued failure of Congress risks creating newer and more complicated extra-constitutional moments that will test whether America's exceptionalism as a successful presidential democracy can much longer endure unchanged.

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