The 14th Amendment: a solution to the debt ceiling impasse? by Marjorie Arons-Barron

The entry below was originally posted on Marjorie Arons-Barron’s own blog on July 4. You can find Marjorie’s blog here.

What better day than Independence Day to contemplate the meaning of the U. S. Constitution? What better issue to use as context than the current debate about raising the debt ceiling?

Three groups of politicians, Republicans, Democrats and 59 Tea Party Congressmen, are at loggerheads. Sensible people among Republicans and Democrats know the debt ceiling must be raised to avoid a first-ever U.S.default on its financial obligations. But those sensible Republicans – Speaker John Boehner, for example – feel they can’t cut a deal with Democrats because the Tea Party stands ready to oppose them in the 2012 primary if they do the responsible thing.

A new discussion is getting some traction: the question of whether it is even Constitutional for Congress to refuse to pay debts that it has already authorized the government to incur through borrowing. Most of us know the 14th Amendment guarantee of equal rights under the law. Less known is the Amendment’s Section Four, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

In other words, refusing to lift the debt ceilng may be impermissible and the ceiling itself could be unconstitutional. With that line of thinking, the President could simply raise the debt ceiling without Congressional approval. MSNBC reporter Chuck Todd asked President Obama at his press conference this past week his opinion on using the 14th Amendment’s requirement to avoid default looming from Congressional obstinacy. The President did a tap dance, refusing to “put on my constitutional law professor hat.”

Senator Chuck Schumer (D-NY) says the 14th Amendment strategy is worth considering during the next debt crisis but this time around “it’s probably not ripe.” More tap dance.
MA Congressman Bill Keating was similarly dismissive at a meeting this week of the New England Council.

Senator John Cornyn, on Fox News Sunday, dismissed this as “crazy talk.”
The Republican alternative, prioritizing payments, would, according to Treasury Secretary Tim Geithner, be a de facto default. This is not a solution. (As one blogger put it, “if you had friends that were drowning in debt, would you tell them to immediately start defaulting on their mortgage, their car loans and their credit cards?”) So why not go the 14th Amendment route?

Default, for our first time in history, would, in today’s global economy , be a financial disaster. And a dysfunctional Congress, prepared to paralyze the government and risk a second great recession, needs something to save it from itself.

Failing to raise the debt ceiling and causing the nation to lose its excellent bond rating could be viewed as a national security matter. If the deficit is serious now, driving interest rates to double digit levels would make our bad economic situation exponentially worse.

Some scholars like (e.g. Garret Epps and Bruce Bartlett -) ) observe that invoking the 14th Amendment to prevent default is “no less justified than using American military power to protect against an armed invasion without a Congressional declaration of war.”
Jack Balkin traced the legislative history of the 14th amendment. His review, as Jonathan Chait points out in The New Republic, notes that the goal was to remove political opponents from using debt default as a way to extract revenge. “Section Four was placed in the Constitution to remove this weapon from ordinary politics”.

Isn’t this just such a situation?

To be sure, it could trigger a Constitutional showdown. Some of the Congressional Tea Party financial illiterates could bring suit to allow the U.S. to default on its obligations. If they won, the ensuing default crisis could be catastrophic . But would a majority of Supreme Court justices, (especially swing vote Anthony Kennedy,) none of whom has to face a Tea Party primary opponent, really ratify the Constitutionality of the US defaulting on its debts and turning the world economy on its head?
The 14th Amendment solution may even be a way out for Speaker Boehner and other similarly inclined Republicans. Taking the matter out of their hands would permit them to get the result they ultimately want while still posturing for those in their pitchfork-toting primary base.

Maybe Obama and Boehner talked about this when they played golf recently.

Please let me know your thoughts in the comments section below.

3 Responses to The 14th Amendment: a solution to the debt ceiling impasse? by Marjorie Arons-Barron

  1. Long Island Patriot says:

    How would the Congressional Tea Party illiterates bring suit on their own? It’s a constitutional question, just like if the Commander in Chief really can make military chain of command decisions.

    Would not the Constitutional challenge have to be made by the “Congress” – i.e. both the House and the Senate acting as the legislative branch to assert their role in the government as being impaired by actions of the executive Branch? Assuming the Senate would not go along, how would any such question be brought before the SC?

  2. Arthur says:

    A cynic might ask whether this discussion isn’t ginned up by Wall Street – to impact the markets in Credit Default Swaps and the like .

  3. J, Nail says:

    I am going to approach this Constitutional debate from another angle. That President Obama would risk impeachment by NOT acting under the 14th Amendment to prevent default.

    Whether any of us like it or not it this debt ceiling debate is all about the “obligations” that Congress over time has signed into law, not the bonds.

    The ceiling raise has nothing to do with future spending, only that which has already been committed to by this and prior sessions of Congress over out history.

    We elected them, they act via their Constitutional responsibility passes laws/funding programs, we own it and has the “full faith and credit” of the US behind it. These are all laws that then need to be upheld, ie honored.

    The Constitution is by definition the original document plus any and all Amendments to it so trying to separate the two is a specious argument as well.

    In PERRY V. UNITED STATES, 294 U. S. 330 (1935)SCOTUS addreses the larger context of debt as “obligations” that further supports the notion that default would be unconstitutional and thus stopping it would be required of the President:

    “…The government’s contention thus raises a question of far greater importance than the particular claim of the plaintiff. On that reasoning, if the terms of the government’s bond as to the standard of payment can be repudiated, it inevitably follows that the obligation as to the amount to be paid may also be repudiated. The contention necessarily imports that the Congress can disregard the obligations of the government at its discretion, and that, when the government borrows money, the credit of the United States is an illusory pledge.

    We do not so read the Constitution….To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court has given no sanction to such a conception of the obligations of our government.

    The Fourteenth Amendment, in its fourth section, explicitly declares: ‘The validity of the public debt of the United States, authorized by law, * * * shall not be questioned.’ While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression ‘the validity of the public debt’ as embracing whatever concerns the integrity of the public obligations.”

    The office of the President as “Chief Executive” is empowered by the Constitution that “he shall take Care that the Laws be faithfully executed”.

    He is also Constitutionally bound by his oath of office:

    “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”

    This creates a slippery slope for any President. In other words he has no choice in acting per the Constitution lest he violate his oath and for that could be subject to impeachment.

    A secondary argument, slightly less compelling, is that in his job as Commander in Chief to protect the nation against any threats could be cited here. A default that plunges the nation into another recession and costs the taxpayers hundreds of billions in additional Federal interest payments and billions more in higher credit card, mortgage and consumer loans threatens the nation as much as any war or attack does. Not acting would weaken the nation considerably and his failure to protect the nation from this sort of “attack” would also be seen as a failure to fulfill his oath.

    So the 14th/PERRY V. UNITED STATES makes it clear on the debt’s validity and the fact that it cannot be abrogated in anyway that diminishes the full faith and credit of the nation and its trust with any one owed money via a statute approved by Congress, be it your mom on SS, a cleaning contractor for a federal building or foreign nations holding bonds. All are equally valid and must be honored.

    So no action by Congress is illegal and the Debt Ceiling law in any dispute is trumped by the Constitution. In “Perry” Chief Justice Hughes wrote the majority opinion: “We do not so read the Constitution…the Congress has not been vested with authority to alter or destroy those obligations.”

    Altering those obligations means that the terms of meeting them cannot be changed in anyway so even a default of a few days or a program to pay bills in some order with revenues is not allowed. So inaction that allows any sort of modification is out of the question as well.

    If Obama does not act to avert the crisis if negotiations fail that is a more compelling reason to Impeach than trying to claim that he exceeds his Constitutional power in resolving the crisis using the 14th.