Is The Debt Ceiling Unconstitutional?
Does a little known provision in the 14th Amendment make the entire debt ceiling debate irrelevant?
There’s a new idea floating out there that the entire debate about raising the debt ceiling is irrelevant, because the very idea of a debt ceiling is unconstitutional:
Growing increasingly pessimistic about the prospects for a deal that would raise the debt ceiling, Democratic senators are revisiting a solution to the crisis that rests on a simple proposition: The debt ceiling itself is unconstitutional.
“The validity of the public debt of the United States, authorized by law… shall not be questioned,” reads the 14th Amendment.
“This is an issue that’s been raised in some private debate between senators as to whether in fact we can default, or whether that provision of the Constitution can be held up as preventing default,” Sen. Chris Coons (D-Del.), an attorney, told The Huffington Post Tuesday. “I don’t think, as of a couple weeks ago, when this was first raised, it was seen as a pressing option. But I’ll tell you that it’s going to get a pretty strong second look as a way of saying, ‘Is there some way to save us from ourselves?'”
By declaring the debt ceiling unconstitutional, the White House could continue to meet its financial obligations, leaving Tea Party-backed Republicans in the difficult position of arguing against the plain wording of the Constitution. Bipartisan negotiators are debating the size of the cuts, now in the trillions, that will come along with raising the debt ceiling.
Back in April, Bruce Bartlett made pretty much the same argument:
The president would be justified in taking extreme actions to protect against a debt default. In the event that congressional irresponsibility makes default impossible to avoid, he should order the secretary of the Treasury to simply disregard the debt limit and sell whatever securities are necessary to raise cash to pay the nation’s debts. They are protected by the full faith and credit of the United States and preventing default is no less justified than using American military power to protect against an armed invasion without a congressional declaration of war.
Furthermore, it’s worth remembering that the debt limit is statutory law, which is trumped by the Constitution which has a little known provision that relates to this issue. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.” This could easily justify the sort of extraordinary presidential action to avoid default that I am suggesting.
Garrett Epps, a law professor and former reporter, seems to be the first one to write about this idea earlier this year:
Section Four of the Fourteenth Amendment states, at its outset, that “[t]he 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.” This section was inserted into the Amendment because of a very real concern that Southern political leaders, and their Northern allies, would gain the upper hand in Congress in the 1866 or 1868 elections and vote to repudiate the national debt.
The Lincoln administration had borrowed freely to finance the war machine. As Reconstruction dawned, white Southerners complained bitterly that they would now be taxed to repay the funds that had been borrowed to defeat their cause. “What, ruin us, and then make us help pay the cost of our own whipping?” one asked a Northern journalist in 1865. “I reckon not.”
Southerners were used to having their way in Congress–they had dominated the institution from 1787 until secession in 1861–and many believed that when their representatives arrived in House and Senate, they would be able to tear up the nation’s IOUs.
Section Four was the response; its language is extraordinary. First, it does not simply say that the national debt must be paid; it says that its “validity … shall not be questioned.” Only one other section of the Constitution–the Thirteenth Amendment‘s proclamation that “[n]either slavery nor involuntary servitude … shall exist within the United States, or any place subject to their jurisdiction”–is as unqualified and sweeping.
Second, it suggests a broad definition of the national debt: “…including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion.”
From this language, it’s not hard to argue that the Constitution places both payments on the debt and payments owed to groups like Social Security recipients–pensioners, that is–above the vagaries of Congressional politics. These debts have to be paid, the argument would be, in full, on time, without question. If Congress won’t pay them, then the executive must.
Previously, Epps had outlined what he believed Section Four authorized the Executive to do in the form of an imaginary speech by President Obama to a Joint Session of Congress:
It says it “shall not be questioned.” The national debt must be paid in full, on time, regardless of any political division within our Congress. That is what the Framers intended: to set the debt obligations of our country beyond the reach of Congressional meddling. Those obligations will not be questioned as long as I am president of the United States.This action requires me to authorize borrowing that is not in conformity with the debt-limit statute. But no congressional statute can command or permit our government to violate the Constitution. I find the debt limit, to the extent that it could be construed to require national default on any obligation of our nation, to be in the words of the great chief justice John Marshall, repugnant to the Constitution and thus void.
In other words, Epps argues, despite the clear language of the debt ceiling statute that the Federal Government cannot borrow above the statutory limit without Congressional authority, that the President has the authority to order the Treasury Department to issue new debt in order to ensure that the national debt is not repudiated, i.e., that we continue making interest payments on existing bond obligations.
The Supreme Court seems to have ruled on Section Four of the 14th Amendment only once since ratification, in the case Perry v. United States 294 U.S. 330 (1935). In that case, the Court was dealing with a lawsuit filed by the holder of a government bond that, when issued, had provided that principal and interest would be paid “in United States gold coin of the present standard of value.” In 1933, only a month after entering office FDR issued Executive Order 6102, which forbid the “Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States.” The Executive Order also forbid Americans from owning monetary gold, and required the surrender of the same to the U.S. Treasury in exchange for U.S. currency at the exchange rate of $ 20.67 per ounce. Soon after, several lawsuits were filed, including the Perry case.
While the Court ultimately rule in favor of the government, finding Congressional power over money to be plenary, it said the following about Congressional action that impaired U.S. debt obligations:
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.
It’s not much of a statement, admittedly, but it does seem to support Epps’s interpretation of Section Four. The question is, what does it really mean practically?
At the most, I would argue that it means that the United States cannot, constitutionally, default on its debt and that the President would be authorized to take action to prevent that. That doesn’t mean, however, that the President would be authorized to issue new debt without Congressional authorization, because there are other means by which interest on the debt could be paid. For example, the President could tell the Treasury that payment of interest takes priority over all other government obligations and that incoming revenue must be used for that purpose first. If there’s nothing left over for other government expenses, then they won’t be paid. Theoretically, it might authorize incurring new debt, but that authorization would seem to extend only incurring enough debt to pay the interest, and nothing more.
Even if this might be Constitutional, though, I’m not at all sure that it’s financially or politically wise. The financial markets are already getting nervous about the debt ceiling debate, turning it into a Constitutional crisis and potential legal showdown between the Executive and Legislative Branches would only serve to spook them more. Politically, it is such an extraordinary step, and such a unique Constitutional argument, that it would only serve to reinforce the Republican meme that the President has taken it upon himself to ignore Congress when it doesn’t sue him (i.e., Libya). Moreover, the American people are already overwhelmingly opposed to a debt ceiling increase, an action like this would probably not go over well unless the Obama Administration explained it well. That is something that, from the stimulus to health care reform to the action in Libya, they have been exceedingly bad at doing. Therefore, the public is likely to react very negatively to what will seem to many to be an unprecedented Executive Branch power grab.
Hopefully, we won’t need to have this debate beyond the blogosphere. Hopefully, the President and Congress will come to an agreement, probably at the last minute and probably in a form that nobody is going to like. Of course, given how things have gone there’s really no reason to be optimistic is there?
I’d like to see someone from the administration (Geithner?) say something sympathetic about this line of thinking. Just to put the marker down that Obama isn’t ruling out just carrying on as if the debt ceiling doesn’t exist.
Since the Republicans are treating the debt negotiations like a hostage situation, Democrats might as well play by those rules. You lose a lot of leverage if both sides don’t agree that the hostage you’re ransoming actually exists.
You’d need congress to sign off on it, but its possible. The question is if there’s 218 house votes and 60 Senate votes for it.
Admittedly speaking as a layman, the meaning of the phrase “shall not be questioned” doesn’t seem to equate to “the law cannot limit how much debt the government can incur.” In other words, it seems to me that the federal government is allowed to say, “Yes, we owe you the money, we don’t dispute the debt, but we don’t have the cash on hand to pay you right now, sorry. Hopefully, we’ll be able to pay you next… umm… week… erm, month. I mean… umm… soon.”
There are lots of negative ramifications for doing that, of course, but it sure sounds constitutional to me.
Two things happened in the Civil War that bear on the isues. The Republicans issued paper currency (greenbacks) to pay for the war. Jacksonian Democrats traditionally argued that the federal government only had power to issue coin, but some Republicans described these “demand notes” as debt, which Congress clearly had the power to authorize.
Second, the Republicans created the National Banking System. Again, Jacksonian Democrats had long believed Congress did not have authority to do so because bank creation is listed in the enumerated powers. Unlike the bank that had been destroyed by Jackson, this was a system of charters to individual banks.
I see these as two things strict constructionist would have believed to have been invalid.
“bank creation is not listed in the enumerated powers”
@ Chad…
I don’t think Congress has to sign off. Treasury just has to ignore the ceiling. Congress could then try to sue…but I can’t imagine how they could establish standing in a legal sense…how exactly are they harmed by the Constitution????
“…strict constructionist…”
I think based on what I have seen that this is a myth. They don’t exist. The proper term is “strict adherence to my personal interpretation”.
As Matt Yglesias mentioned a couple weeks back, Obama is being directed by law to both spend (i.e. the budget and continuing resolutions) and not spend (the debt limit). Either way he will be breaking the law, so why doesn’t he just choose which law would be most beneficial to break rather than assuming the debt limit is for some reason more important.
Again, where were all these concerns about Federal Debt from 2002 to 2008 when the national debt doubled?
PD Shaw,
I’m guessing “The Creature from Jekyl Island” plays into this somehow.
Again, where were all these concerns about Federal Debt from 2002 to 2008 when the national debt doubled?
IOKYAR.
Come on Mantis,
You’re just falling into the classic East Coast Liberal concept that a responsible government lead by Southern favorites (OK, by fake southern favorites) would never double what took over 200 years of debt to create.
The fact that it did indeed happen is irrelevant. Or so Michelle Bachman tells me.
Do any other countries have debt ceilings akin to ours? My understanding is that ours is an aberration but that understanding may be wrong.
It seems many are ignoring the very important part of the amendment stating “authorized by law”.
Debt ceiling is a law authorizing debt. Any debt that is occured that is not authorized by law would not be legal.
Side note, there seem to more questions as wither the 13-15th amendments are constitutional. The amendments were adopted by Southern States Government that the North imposed on them in addition to illegal threats by the North if the Southern States didn’t ratify them.
Wayne, it’s obvious that any questions about the constitutionality of those amendments don’t come from SCOTUS, meaning they’re pretty clearly constitutional.
The debt ceiling being unconstitutional could be the stupidest argument ever! Article 1, Section 8 reads, The Congress shall have the power “to borrow money on the credit of the United States”. Not the Executive. End of story. But the White House has no respect for the Constitution. Case in point: Lybia.
Libya, even!
Sorry, Tom, I just couldn’t help myself. 🙂
Boyd
SCOTUS determines the Constitutionality of things when a case is brought to them and they choose to accept it.
By your logic it’s obvious that any questions about the constitutionality of debt ceiling laws don’t come from SCOTUS, meaning they’re pretty clearly constitutional.
That is not how it works. IMO debt ceiling laws are constitutional and I stated in part why. Wither the 13-15th amendments are, is just a side note.
Thanks for that correction. Is it Gaddifi, Kadafi, or Qaddafi, by the way?
@Tom: Yes.
@Wayne: Since the Supreme Court has issued myriad decisions based on the 14th Amendment alone, it’s pretty clear the Court considers that Amendment constitutional. That is how it works.
@Wayne,
One could argue that Congress *authorized* whatever borrowing was necessary to fulfill the government’s obligations when it created those obligations, i.e. when it passed the latest budget. Clearly you can’t say that you’re requiring the administration to spend x dollars on this and y dollars on that, but you will only let them use z dollars (z < x+y) to do it. It's kind of a paradox logically.
One way out, as another commenter cited, is for Obama to just say that Congress has given him conflicting mandates and he'll follow the one(s) he wants. Another might be to say that the debt ceiling law takes precedence over the obligations enumerated in the budget, which is what most people apparently expect him to do. A third option is to say that the debt ceiling law doesn't take precedence, perhaps for constitutional reasons. It's not clear that any of those options are unavailable to the administration.
@Boyd
Has anyone contested the constitutionality of the amendments? There is a difference between Courts ruling on how a law applies and wither the law is Constitutional. It is usually up to one of the involved parties to contest the constitutionality of the law being applied. Otherwise the Courts rules on the bases of that law.
@Andyman
Some good points but just because one can argue it doesn’t mean they can argue it successfully. Congress can pass laws saying that say you must spend x and y while having a law saying x and y must be less than Z. It is basic budget principle. One establishes a limit. If that limit can’t or unwilling to be raised then one must go back and cut spending.
When one mandate is design to control other mandates then that controlling mandate takes precedents over the others. A party refusing to follow the controlling mandate would be in the wrong.
@Wayne: So, you really think that there’s the remotest possibility that the Court would rule the 14th Amendment unconstitutional, and thereby throw out all of the decisions they’ve made based on that Amendment?
That sounds more like wishful thinking that rational thought.
@Wayne,
I really don’t know a lot of technical details on this issue so perhaps my ignorance will be exposed. But does the budget say, for instance, “…$1 million is appropriated for [x], *unless* the debt ceiling is hit first…”? I would tend to doubt it. So I think which mandate is controlling is unclear.
If Congress establishes a debt ceiling and then passes a budget that requires the government to exceed the ceiling in order to execute the budget, I’d think you could interpret that as conflicting mandates. And wouldn’t the budget, being passed more recently, supercede the other law? Perhaps there really are clauses in the budget which assert a lower priority. I haven’t heard of any, but that doesn’t mean they don’t exist.
Andyman,
If $1 million is appropriated to X, then with the debt ceiling congress is saying that X is not going to be paid by issuing additional debt (borrowing). The argument being put forth above is that if the congress does not authorize additional borrowing then the executive branch can authorize borrowing. But the executive branch does not have the constitutional authority to authorize borrowing. That authority is given exclusively to the congress. So, if congress will not borrow, then appropriations will have to be paid out of tax revenues. But if there is not enough revenue then congress cannot appropriate funds it does not have.
@Tom,
Some of this seems kind of circular. You’re saying that Congress can’t appropriate money that it doesn’t “have”, either through revenue or borrowing. But in the FY2011 budget it did just that. It appropriated money in excess of the total of revenue and room under the debt ceiling.
I think the (or at least, a) anti-ceiling argument is that the act of passing the FY11 budget nullified the debt ceiling. Congress appropriated the money and it has to come from somewhere. (Certainly they’d insist on being consulted before the President went and sold off Mt Rushmore to raise money; issuing new debt seems to be the least disruptive solution to the dilemma.) So the appropriation of more money than is in the ol’ bank account is an implicit permission to borrow.
I suppose another way to phrase that would be to say that “public debt” as phrased in that clause of the Constitution should be construed to include appropriated money not yet conjured up through T-bill auctions as well as already existent T-bills. Which makes sense if you think that someone who’s expecting their money this August– contractors, pensioners, etc– are entitled to the same full faith and credit in their government’s obligations as someone whose bills came due in June.
Andyman,
You mean The FY2011 budget that was passed 6 months late. 🙂 I don’t see the circular logic. If congress has appropriating money while still under the debt ceiling then it can use a combination of tax revenue and borrowing for spending. But the FY2011 budget didn’t nullify the debt ceiling any more than it nullified the Obama extension of the Bush era tax cuts. Or the FY2011 somehow authorizes tax increases. It does no such thing.
Also, not all appropriate money has to be spent. It would be nice if the government could be run efficiently so that not all appropriations were spent. But the incentive structure is against efficiency in government. But that’s another story. The bottom line is that with a debt ceiling congress will not borrow and, therefore, all funding must be paid out of revenue. If that revenue does not exist, then certain departments and spending program will have to be run without being fully funded.
The alternative to congressional authority to borrow proposed above is an usurpation of the constitution by the executive branch to borrow funds.
@Tom
Good explanations.
@ Boyd
I doubt it. At most they would be quickly resubmitted for ratification if they did. The point was that there is more ground to call those amendments not properly passed than there are grounds to claim the Debt Ceiling is unconstitutional.
Besides it was a side note. I have forgotten all about how those amendments were forced in until I research the 14th amendment reference in this article.
The common mistake I see when people refer to the constitution is they take out the one little part that supports their agenda and ignore the rest as I pointed out in one example above. The Debt Ceiling law is constitutional wither the 14th amendment is constitutional or not.
Obama has no authority to override the debt ceiling both under Art1 Sec8[the taxing clause] and under the 14th Amendmemt..
Under the 14th Amendment,Art4,only Congress has the authority to enforce these articles.Not Obama. So if the public debt is not to be questioned by some unknown law it is for Congress to determine.
Furthermore the 14th Amendment is a Civil War Amendment and this article refers only to the public debt of the Civil War as is easily seen by anyone who reads it fully in its proper context.
That any future debt acquired by the federal government could not be questioned is preposterous on the mere face of it.The States have every right and obligation to its citizens who pay the taxes to question where the money goes and why there is such debts.It is mere conjecture.
The taxing clause covers the public debt and the decision of the SCOTUS in 1935 centralizes more power in the federal government and usurps states’ rights.
The SCOTUS neither cites references to the Framers nor tell us what is the law that is authorized.
The US Government is already in default of 100 trillion dollars so what is this question about default?
The President’s constitutionally based privileges subsume privileges for records that reflect: [1] military, diplomatic, or national security secrets (the state secrets privilege); [2] communications of the President or his advisors (the presidential communications privilege); [3] legal advice or legal work (the attorney-client or attorney work product privileges); and [4] the deliberative processes of the President or his advisors.
And everyone needs to read the following article:
THE 14TH AMENDMENT
AND
QUESTIONING THE NATIONAL DEBT
By Dr Dale Livingston, DLC, JD
The claim that Section 4 in the 14th Amendment denies the questioning of the public debt.
If I am in debt no bank is going to lend me money if they have any integrity which they have demonstrated not to have.
So Congress,in massive unpayable debt,should not be loaned any more money and get by with the taxes it collects.
The Fed is only to willing to lend to the Congress and is irresponsible in doing so.The Fed belongs to the international banking cartel that seeks global control of all financial markets thus destroying economies making them to be what they will.
Furthermore why should we pay anything back to the Fed whether so called loans or interest?This at least should be defaulted.Then this private bank will show its true,or rather false,colors.The Fed,a privately owned bank holding us hostage,will then refuse to loan us money?
The Fed has almost 3 trillion dollars in its coffers.Add this to the world wide banking cartel,which has only one aim,and you have trillions.I doubt if most banks have trillions in their coffers due to their practice of fractional banking which is a criminal enterprise.
And who knows whether the insurance companies and investment firms are not in on this.
As a matter or fact the 14th Amendment has never been ratified.See below:
Search resultsThe Fourteenth Amendment is Unconstitutional – Judge L.H. Perez
The 14th Amendment Is Unconstitutional – Judge L.H. Perez … the positive failure of ratification of the 14th Amendment … in similar cases, on a non …
http://www.sweetliberty.org/fourteenth.amend.htm – Cached
THE UNCONSTITUTIONALITY OF THE 14th AMENDMENT
Faced with the positive failure of ratification of the 14th Amendment, both … the ReconstructionActs, under which the non … in part from the research of Judge L. H. Perez
http://www.barefootsworld.net/14uncon.html – Cache
The Treasury has no authority on its own to pay our debt.
@Wayne:
The debt ceiling is constitutional because it was made by Congress and because it is rational,an ordinance of reason,promulgated by those in authority,for the common good.
Sorry to say they have all but destroyed the common good of this country and one wonders if it is contrived.How is it possible to be in this mess accidentally?
And even if the 14th Amendment has not been ratified the debt ceiling is still constitutional.
The 13th Amendment was meant to keep lawyers out of Congress.
Sec4 of the 14th Amendment is redundant and unnecessary since we have Art1 Sec8 [the taxing clause]. And it is not obvious that the federal debt cannot be questioned in the future as the 1935 ruling of the SCOTUS opines.
And again this section of the 14th Amendment refers only to the Civil War debt. I am still wondering if anything was authorized by any law and what it stated.
Since the federal government is answerable to us it is absolutely impossible that one cannot question the debt and demand an answer.If our representatives will not then the states will question.Do they think they are given this money carte blanc and can use it anyway for anything they want according to their judgement because that were elected and are answerable to no one?Certainly it was never intended to centralize the federal government,usurp states’ rights,and create an out of control bureaucracy that is innumerable.The centralizing of control by the federal government on taxpayers money is a crime of the greatest magnitude.
@Bruce Barron: You’ve twice made the claim that Section 4 of the 14th Amendment refers solely to Civil War debt. The pertinent text is quoted below:
I want to avoid making any type of judgment about you personally, Bruce, so I’ll just say that you’re quite clearly wrong in this claim, and my evidence is quoted above.