Friday, July 1, 2011

The Debt Limit and the 14th

I've avoided the topic of whether the 14th Amendment makes the statutory debt limit unconstitutional because I really didn't think it was likely that Barack Obama was likely to consider it as an option. However, it looks as if I was dead wrong about that one. Today's news that Treasury Secretary Tim Geithner is a 14th Amendmenter with regard to the debt limit, however -- and that he made a bit point of it way back in May -- changes things.

I agree with Stan Collender: this shows all the signs of White House intent to signal that a constitutional justification for overriding the debt limit is, at the very least, under active consideration.  And I agree, too, with those who argue that the Republican Congressional leadership might not mind at all if they did so; it would get John Boehner out of the dilemma I've been pointing to, which is that sooner or later, before or after catastrophic consequences, he's going to have to vote to raise the debt limit. If the president simply declares that there is no limit, then Boehner gets to skip that vote, and more on to the much happier place of condemning the presidential lawlessness (although it doesn't end budget showdowns -- just puts it off until the threat of a government shutdown over the 2012 appropriations bills).

As far as what would happen...I see no reason to think that the president wouldn't get away with it. It's not clear who would have standing to (formally) complain, and at any rate the only way that the court could take meaningful action would have to involve an almost immediate injunction, right? In their HuffPo story, Ryan Grim and Samuel Haass point to the possibility of impeachment proceedings, but the truth is that Republicans have hardly been as trigger-happy on impeachment as some of us (myself certainly included) expected, so I wouldn't count on that. Regardless, an impeachment in the House followed by acquittal in the Senate would still leave the policy in place.

I'm not, yet, predicting that the administration will actually invoke the 14th and just ignore the debt limit, but it's now a very live possibility.

Oh -- if you're wondering who is "right" about what the Constitution means, then I'll send you to Jack Balkin's legislative history. But, really, what's a lot more important than the proper interpretation are the questions of what the president intends to do, and what remedies, if any, House Republicans might have.


  1. If it gets to the point where the options are:

    1) Default on debt, miss payments to creditors and senior citizens, and cause another catastrophic recession


    2) Declare the debt ceiling unconstitutional

    I have every confidence that the Administration would choose option 2. It would be messy, for sure, but Obama could get through the constitutional question by claiming powerlessness instead. He could say that Congress appropriated the money to be spent, and it's his constitutional duty as President to faithfully execute the laws as they are passed by Congress. He doesn't have the power to decide which programs are funded and which are not; That's Congress's job. If Congress appropriates a trillion dollars, then the Administration has to spend a trillion dollars. He can't decree by fiat that funds not be spent.

  2. Kal is correct on which way Obama chooses. Obama can impound funds (breaking a law) and take a chance that he's violating the 14th Amendment, or he can violate the debt ceiling (breaking a law) with no chance that he's violating the 14th Amendment. If there's no 14th Amendment issue, it's extremely unlikely that the Supreme Court will allow itself to be inserted in this political battle between the other two branches. Moreover, it's a weak impeachment case if he only breaks one of two incompatible laws but does not even arguably violate the 14th Amendment.

  3. If I understand this the Constitution trumps any other law like the debt ceiling.

    The debt ceiling raise is needed not for new spending but that that has been already authorized by Congress, ie by law and thus the President has 2 duties:
    1) Uphold all laws that have been passed
    2) The debt has already been committed to over many years so it is valid and "shall not be questioned.

    That makes using the 14th a no brainer.

    The Presidential oath also requires the President to protect and defend the Constitution. If he does not follow it as laid out above one could argue you could impeach him as well.

    In fact all members of Congress took a similar oath so their inaction to provide the debt ceiling action needed to fund the laws passed by them could be deemed a violation of their oath of office subjecting Boehner in particular to impeachment. Right?

    The other issue here is that failure to protect the nation's financial system from a meltdown is akin to "war" and the President again is bound to protect the nation as well. Keeping the nation from falling into a deeper recession, higher borrowing costs, higher deficits due to a double dip and the world losing faith in the US as a reserve currency makes his inaction on the 14th impeachable to me.

    Failure to act has been estimated to cost the US $50B minimum directly for even a few day default due to increased debt rollover costs and as much as a trillion over a decade not to mention higher borrowing costs for consumers and business as well.

    The President has put forth $2T in cuts and asked for $400B in tax loopholes being closed. Every deficit reduction plan that Reagan, Bush I and Clinton did required a combination. Why can't the Repubs simply negotiate in good faith and get this done?

    If they do not they will get hung out to dry by the President being forced to act under his Constitutional duty. That surely isn't going to help them defeat Obama. It might just sew up his re-election before they even have a primary.

    If they think he isn't tough enough to do this. Just remember the Sunday nite we found about Osama or the Somali pirates that were taken out right after he took office.

    If he needs to he will act and get the job done as he should, no doubt about it.

    Here is the case law to support it:

    PERRY V. UNITED STATES, 294 U. S. 330 (1935)

    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…

    The Constitution gives to the Congress the power to borrow money on the credit of the United States, an unqualified power, a power vital to the government, upon which in an extremity its very life may depend. The binding quality of the promise of the United States is of the essence of the credit which is so pledged. Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.

  4. With all the opinions and rants concerning debt ceiling, i believe that the first step to fixing this problem is to pass a budget that reduces spending. I hope Ed Butowsky will agree on this.


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