Debt Ceiling Politics: The Right Is Getting Scared of the 14th Amendment

Calls are growing from President Obama simply to tell Congress to stuff it when it comes to the debt ceiling.  Section 4 of the 14th Amendment says quite clearly that the “Public debt of the United States, authorized by law . . . shall not be questioned.”  At the very least that would mean that the Treasury must pay off holders of Treasury bills whose notes are coming due. 

And that has the right wing scared.  Their strategy of holding the American economy hostage never took the Constitution into account.  So now they are frantically trying to figure out why the Constitution doesn’t mean what it says.

Consider Andrew Grossman of Heritage, who argues that

unilateral action by the President to borrow money would be an unconstitutional usurpation of the legislative power.  The Constitution vests the power to “to pay the debts and provide for the common defense and general welfare of the United States” and the power “to borrow money on the credit of the United States” in the Congress, not the President.  The President lacks the authority to, on his own accord, make expenditures which have not been authorized by Congress (because Congress has imposed a debt ceiling that supersedes any such authorizations) or to undertake borrowing that has not been authorized by Congress.

That’s a nice try, but it doesn’t work.  Grossman can only reach his conclusion by essentially ignoring the relevant passage, namely, the 14th Amendment, which yet again says that “the public debt authorized by law….shall not be questioned.”  That provision changes, among other things, the provision that Grossman cites.  Merely because Congress has the power to borrow money on the credit of the United States hardly implies that the President doesn’t when failing to do so would result in an unconstitutional default.  The President has the constitutional obligation to “take care that the laws are faithfully executed.”  He can’t avoid this obligation simply because the Republican Tea Party has decided that it doesn’t want to pay the bills. 

Grossman says that his answer must be right; otherwise, the President could impose taxes in order to avoid a default.  Well, yes — what of it?  The Constitution says that the United States cannot default.  Exactly how far the President’s power would go when facing a default is not clear — as is the case with virtually all Presidential power.  Only Congress can declare war — which is why President Obama’s actions regarding the Libyan war are unconscionable.  But Congress’ power in this regard hardly means that the President cannot respond to military emergencies.  The best way to handle this would be to say that the President must use the narrowest reasonable means for forestalling default, which in this case means borrowing.  Of course, that ruling will never come, because as I have argued (and even intellectually honest voices on the right agree), no one would have standing to sue, but it still is the best rule.

In any event, if this is the best that the right wing can do, it’s in trouble.  Grossman’s argument isn’t crazy, but it is wrong.  The question now is whether President Obama will let the Republicans out of their dilemma.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

37 thoughts on “Debt Ceiling Politics: The Right Is Getting Scared of the 14th Amendment”

  1. I don’t think that’s quite accurate: The right isn’t so much scared of the 14th amendment. This presumes that the right agrees with the left’s new ‘understanding’ of the 14th, which it does not. You really do need to get over this bizarre belief that your opponents actually agree with you about things, and just pretend otherwise for tactical reasons.

    Rather, the right is somewhat scared that the President really is going to use the 14th amendment as a pretext for usurping Congress’ power of the purse, confident that enough members of his own party will back him to save him from any consequences. And we’ll take another step away from being a constitutional republic towards being a dictatorship.

    Really, I did rather expect that the left would develop a taste for dictatorship if they lost control of the legislature, but I can’t say I’m happy to be proven right.

  2. The Right’s sudden concern about a march towards dictatorship continues to be a bit rich. I don’t know about Mr. Bellmore, in particular, but the Right as a consensus entity was rather enthusiastic about the Bush administration scrapping Habeas Corpus, search warrants, congressional oversight, etcetera, etcetera. And away from the Bush administration and on a longer-term basis, the Right has been no friend of civil liberties, whether it’s the generations-long campaign to impose state religion or the Right’s desire to scrap Miranda and other rulings that demand the exclusion of improperly obtained evidence.

    On the topical question, I have no idea. I’m not comfortable with the President’s actions on Libya, and I think that even if by some legerdemain there were a plausible legal defense for spending money on Congressionally-mandated obligations without Congress’s permission I don’t think it would be a good idea. But might it be the least worst option?

    The Republicans are committed to total ideological victory – that is, total partisan victory, not even ideological victory, because there is no place in their ideology for some of the absurd tax subsidies they are defending. The Republicans seek to profit politically from legislative inaction amid economic chaos; some with the power to address these problems even admit that continued economic woes work to their electoral benefit. An internal struggle for Party dominance means that the Republicans may be literally unable to come to an agreement – Boehner can’t agree because Cantor would denounce the move as a betrayal and use Tea Party outrage to seize the speakership, and Cantor can’t agree because doing so would require accepting Boehner’s leadership. We are left with the very real prospect that the House is completely broken. Pretty much every expert agrees that the US defaulting on its obligations would shake our economy and perhaps the world’s to its core – and the Republican majority of the House unanimously does not care. Tell me, Brett, as you apparently speak for The Right: what path do you, The Right, see out of this impasse?

  3. “but the Right as a consensus entity was rather enthusiastic about the Bush administration scrapping Habeas Corpus, search warrants, congressional oversight, etcetera, etcetera.”

    And this distinguishes them from the Left how? (Remember, if Bush defines the Right, then Obama defines the Left.)

    The unavoidable fact is that the new ‘understanding’ of the 14th would transfer a huge chunk of the legislative branch’s power to the executive, bringing us that much closer to becoming an elected dictatorship. Democrats have already gladly given the President the power to declare war. Now the power to tax and borrow? What’s next, citing the refusal of Congress to pass laws they like as an excuse to let the President enforce laws Congress didn’t pass? Oh, wait, I understand he’s already beginning to ‘administratively’ enforce gun control laws he couldn’t get through Congress…

    Maybe the Republicans are only concerned about steps towards dictatorship when their guy isn’t in the White House, but I’ll take any reason for opposition to dictatorship I can get, and not be shy about noting the left’s sudden lack of concern about that march breaking into a sprint.

    Do try to remember: Every power you give Obama to deal with your loss of Congress is a power the next Republican President will have. And there WILL be a next Republican President, sooner or later.

  4. Let’s game this out. On Aug 3 or thereabouts, the debt limit is breached. Geithner holds a press conference to announce that the US will continue auctioning US Treasury securities, having secured a legal opinion that the debt limit does not apply because it is unconstitutional. Boehner’s and McConnell’s heads explode. Then they march to the Supreme Court and seek an injunction against the US Treasury. Headline: “GOP Leadership asks Supreme Court to force a default on US debt”.

    The ads (as always, under the assumption Democrats are smart and tough enough to run them) write themselves: “You pay your bills on time every month. But the Republicans actually went to court to say the United States – shouldn’t.” Doesn’t look good, guys, doesn’t look good.

  5. Brett, what nonsense and misdirection. For all your bluster, you can muster no defense of the Right’s record, either with respect to the Bush administration or more generally with respect to civil liberties over the decades. Instead you accuse the Democrats of approving power grabs by the Obama administration – power grabs that, with one exception, do not exist, or at least not yet. That exception is Libya. Libya is bad, I’ll give you that – but every President since at least Ford has committed US troops to acts of war without Acts of Congress (with the possible and amusing exception of Dubya, if you stretch some of the rather vague authorization to use military force to cover Sudan, Pakistan, and points further afield). Reagan and Bush Senior each bombed or invaded two or more countries without Congressional approval (Grenada, Libya, and Lebanon; and Panama and Somalia) – and that’s using US troops; Reagan’s actions using proxies and advisers in Central America probably counted as acts of war in their own right.

    The other powers you name are either hypothetical future actions (“the power to tax and borrow”) or exist only in your own mind so far as I can tell (your notion that every Democrat is lusting to confiscate your guns, and apparently that Obama has somehow started down this road by fiat).

    Mind you, Obama has not made me happy in his refusal to significantly redress Bush’s abuses of civil liberties – unlike Bush, Obama is technically in compliance on issues of Habeas Corpus and warrantless wiretapping, but the latter compliant status is largely because the Congress responded to the revelations by retroactively approving many of the abuses, and on the former, while Obama has pledged not to add new bodies to the Habeas nightmare Bush beqeathed him, progress on solving that nightmare is incredibly slow, and after encountering political opposition to using civilian courts Obama has committed to using deeply flawed, if improved, military commissions – not a good solution. Not that it’s obvious a good solution is even possible.

    Speaking of solutions, you don’t seem to have responded to my request that you explain just what sort of a solution you see coming out of this current budgetary impasse …

  6. “The other powers you name are either hypothetical future actions (“the power to tax and borrow”)”

    Which is only future by a few weeks now, with the Democratic justification machine cranking up as we speak. It’s already pre-ordained, unless either the GOP caves, (Always a possibility) or public reactions to the current feelers are outrageously bad.

    “the actual abuse won or exist only in your own mind so far as I can tell (your notion that every Democrat is lusting to confiscate your guns, and apparently that Obama has somehow started down this road by fiat).”

    I’m supposed to ignore it when the President himself announces they’re working on it under “under the radar”? Though the exposure of Gunwalker before they could manufacture decent ‘evidence’ of a problem on the Mexican border might have pushed back the schedule, I find it best to take people at their word when they promise to attack me.

  7. As for solutions, I don’t see any at this point, that don’t involve considerable sacrifice on the part of the political class, which is a long winded way of saying I don’t expect a solution. We’ve pushed the debt high enough in the last few years that, if interest rates resume normal levels, (As they will if the economy recovers.) we won’t be able to afford debt maintainance. But the Republican ‘draconian’ cuts are barely an 8th of what’s needed, while the Democratic proposals are half that. Nobody in any position to do anything is proposing a solution that’s more than a tiny fraction of what’s needed.

    We’re screwed.

  8. Brett: “Do try to remember: Every power you give Obama to deal with your loss of Congress is a power the next Republican President will have. And there WILL be a next Republican President, sooner or later.”

    (1) That’s pretty rich, because Bush blazed a lot of new territory. The right only very rarely worries about that.

    (2) I’m still waiting on evidence of this ‘constitution’ that you keeping talking about.

  9. The war in Libya is hardly unconscionable. Actually, President Obama’s actions here are relatively similar to those surrounding the constitutional option for the debt ceiling, in that, when Congress fails to act, the President will do so.

    It seems rather silly for progressives who believe in reading the Constitution with some sort of nod to the circumstances of the present day would be such sticklers for language that exist when diplomatic relations were far more formal and followed a very different set of prescribed rules than they do today.

    But once again, Congress has the power to eliminate funding for Libyan operations whenever they want. But they don’t want. So what’s a President to do?

  10. The appropriations clause also carries a strong suggestion in favor of the 14th-amendment argument. “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law” pretty strongly implies to me, at least, that once congress has made appropriations the treasury is authorized to expend money to meet them.

  11. The question now is whether President Obama will let the Republicans out of their dilemma.

    That’s a question? Is anyone going to bet against ‘yes’?

  12. Barry, Brett is entirely correct when he points out that “Every power you give Obama to deal with your loss of Congress is a power the next Republican President will have.” Obama has asserted the absolute right to imprison or kill any American citizen he likes, with no judicial review, if he only utters the magic words “national security.” Democrats should be outraged. People who can think farther ahead than a few months, already are. It’s not just that it would be horrible if a Republican had that power. It would be horrible if a Democrat had that power.

    Brett’s false equivalence, “if Bush defines the Right, then Obama defines the Left,” should not go unchallenged. The terms “Right” and “Left” mean less and less the more we zoom in on a particular subject, e.g., we aren’t going to have a meaningfull discussion of whether Michele Bachmann is to the right of Sarah Palin. But those terms mean nothing at all if Obama is claimed to be Left. By any reasonable definition, a politician who bails out banks at the expense of the middle class, wants to balance the budget during a recession, protects health insurance companies, wants the movie industry to have unchecked power to disconnect you from the Internet for being only accused of copyright violations, gives torturers permanent blanket immunity from prosecution, favors “states’ rights” when it comes to gay marriage, and prosecutes whistleblowers with unprecedented ferocity, belongs on the Right.

    Republicans think Obama is left of center, because he’s to the left of the mainstream of the Republican Party—you know, left of the John Birch Society. Many Democrats think Obama is left of center as well, and I can only guess they have confused the real Obama with the one they have imaginary conversations with.

  13. I knew it would be a sad day, when Brett Bellmore would make perfect sense to me. The Fifth of July.

    Making the President a dictator can have no justification. All the 14th amendment accomplishes is ensuring that, with or without the authority to borrow additional money, the government cannot default on its obligations to existing bondholders. End of story.

    Republican leaders from the beginning of this bit of magician’s theatre have explicitly said that they understood the debt ceiling would have to be raised. Obama just wants cover with his Democratic partisans, as he cooperates with Republicans in enacting a plutocratic agenda. And, obviously, if he’s got Jeffrey Zasloff lending a hand to building the plutocrats’ fascist state, he’s getting what he wants.

    I saw a lovely experiment on (I think) PBS’s Nova the other night, which highlighted an important aspect of how stage magician’s tricks work. The trick was a simple one — a variation on the ancient shell game — in which the magician would make a ball seem to appear or disappear from beneath one or more of three cups on a table. The experiment demonstrated that the facial expression of the magician, and where he apparently directed his attention, was crucial to fooling an observer. If the trick was videotaped, and the view of the the magician’s face was blocked, an observer could then easily see the magician palming a ball into the cup, when he tipped it. Restore the view of the magician’s face, and you cannot “see” what is going on.

    Obama does, indeed, define the Left, if Bush defines the Right. If you think the partisan labels, Democrat and Republican, create the operative definitions of opporing political philosophies, . . . then, enjoy the magic show, folks.

  14. “Merely because Congress has the power to borrow money on the credit of the United States hardly implies that the President doesn’t when failing to do so would result in an unconstitutional default.”

    But, as Grossman argues, this is not the situation we are facing. The government can pay interest on the national debt without exceeding the debt ceiling. I don’t see how arguments based on the 14th Amendment can help the Democrats.

    Grossman is on much more shaky ground when he claims that, “The President lacks the authority to, on his own accord, make expenditures which have not been authorized by Congress (because Congress has imposed a debt ceiling that supersedes any such authorizations).” Unless there is explicit statutory language saying that the debt ceiling supersedes the spending bills passed by Congress, it’s up to Obama to decide what to do when the two conflict.

    The two principles here, both of which follow from the Constitutional structure which gives the power of the purse to Congress rather than the Executive, are:

    1. The President does not have the the power to set spending levels (unless Congress specificly delegates that authority, which it generally doesn’t do).

    2. The President doesn’t have the power to borrow money without authorization of Congress.

    The Republicans who oppose raising the debt ceiling want the President to violate the first of these principles, cutting spending to avoid exceeding the debt ceiling. Other members of Congress–those who support raising the debt ceiling–want the President to adhere to both principles. If I were in Obama’s position, I’d be inclined to give each member of Congress what he or she asked wants. Cut spending, but only in the Congressional districts of the members of Congress who voted against raising the debt ceiling.

  15. “Every power you give Obama to deal with your loss of Congress is a power the next Republican President will have.”

    In this case, it’s the Republican members of Congress who are threatening to cede the power of the purse to the President. My suggestion above (that Obama respond by targeting Republican Congressional districts for cuts) is based on the assumption that it will convince members of Congress that the power of the purse should remain with Congress. I don’t expect a repeat.

  16. Bruce, I agree that those who think “the partisan labels, Democrat and Republican, create the operative definitions of opposing political philosophies” are victims of misdirection.

    The whole point of Section 4 of the 14th Amendment was to simply eliminate the threat of default as a political weapon. Like the Democrats after the Civil War, Republicans today threaten default if their political demands aren’t met, which is precisely what the Amendment was enacted to prevent.

  17. I would think that the Republicans in congress would be secretly ecstatic at the prospect the administration may invoke the fourteenth amendment. They’ll be able to avoid the catastrophe of default, without having to sully themselves by compromising, and they’ll be able to build on the anger that the administration’s overruling of the debt ceiling generate within the tea party.

  18. “Rather, the right is somewhat scared that the President really is going to use the 14th amendment as a pretext for usurping Congress’ power of the purse, confident that enough members of his own party will back him to save him from any consequences. And we’ll take another step away from being a constitutional republic towards being a dictatorship.”

    This is ridiculous. If the administration uses the fourteenth amendment, it will be to raise funds to spend that previously congress has directed them to spend. If congress doesn’t wish the administration to spend this funds, they need only cease to authorize them. As it is, the debt ceiling is political theater that allows congress to have its cake and eat it too–to legislate popular tax cuts and spending, then to be shocked! shocked! when the treasury incurs debt by carrying out the spending congress has directed it to do.

  19. “The President has the constitutional obligation to “take care that the laws are faithfully executed.” He can’t avoid this obligation simply because the Republican Tea Party has decided that it doesn’t want to pay the bills.”

    Progressives’ failure to apply their own precepts with any consistency detracts from their already low credibility. The Obama Administration has announced that not only will it no longer defend DOMA, it wil provide amicus briefs to have the Courts declare it unconstitutional. Now I don’t think DOMA should have been passed, and it would be OK for the President to favor its repeal, but at the current time, it is the law. Constitutionally, the Administration must take care that it is faithfully executed.

    Imagine if, in 2013, President Romney starts out by saying that PPACA will no longer be enforced, without waiting for Congressional repeal. I can already hear the howls from the Left. I also think the Administration’s unilateral determination to delay certain PPACA or DFA regulations beyond their Congressionally mandated dates is of questionable validity.

    Saying that the Bush administration committed similarly unilateral violations only indicts both administrations, without absolving either.

  20. Redwave, the administration has never said it will fail to enforce DOMA. It has said that it is unwilling to defend its constitutionality. Which is not the same thing. Please, criticize them for something they’re actually doing.

    A Republican administration failing to enforce PPACA – or, more pressingly, a Republican House refusing to fund it – are troubling prospects. But there’s no precedent for them in the administration’s refusal to defend in court a law that it concedes it is still bound by, a law that does have its defenders in court. The precedent for such an action would have been set by the Obama administration choosing to scrap DADT by fiat, rather than by law, to name one possible action of questionable constitutionality that Obama was roundly criticized for not taking; there are other, similar examples.

  21. There seems to be plenty of talking around the issue. Section 4 of the 14th Amendment plainly says that the gov’t cannot default on its public debt. It is in the Constitution! Read it!

    Now, if you believe that the language of the Constitution has meaning, then you need to address what this language actually means in terms of the present debate about the “debt ceiling.” Brett Bellmore says it doesn’t mean anything; because if it did, it would inevitably lead to dictatorship. This is almost too ridiculous for words. As Dark Helmet would say, “Ludicrous speed!”

    A Constitutional crisis is being forced by the Republican members of Congress. This is not the President’s doing. He is, according to Bellmore, et al, supposed to ignore the plain meaning of section 4, because — well, because the Republican members of Congress are ignoring it. It seems to me that, in the face of unConstitutional actions on the part of one branch of gov’t, it is the _job_ of the other branches to stop that activity! Apparently, in modern times, the plain mean of “checks and balances” is no longer plain, either.

    The statute that created the “debt ceiling” has been around since the end of WWI. Up to the time the statute became law, Congress voted on every issuance of new debt. The purpose of the statute was to allow the Treasury to issue new bonds without having to come before Congress every time. This rule was created solely to make life easier for legislators.

    It has never been tested before SCOTUS, in large part because there existed between the branches of gov’t sufficient collegiality that they cooperated in the handling of the debt. This collegiality has evaporated. Again, President Obama is not the one banging on the table with his shoe and issuing ultimatums. However, in 1934, Perry vs United States, the SCOTUS in unvarnished language condemned the Congress for trying an end run around paying debt legally entered into. So, if precedent means anything to the current Court (a big ‘if’), Congress is unlikely to fare well before the Court in this altercation.

    If the ‘debt ceiling’ statute were declared or determined to be unConstitutional, a side effect would be that Congress would have to return to the old practice of voting on every issuance of new debt. Besides taking up a lot of their time and thereby eliminating a lot of frivolous legislation renaming bridges and highways and library buildings, such a practice might help restore some sanity to the proceedings. Every dollar appropriated would have to be publicly accounted for by the legislators when the debt issuance vote occurred. I’m not so sure that would be a bad thing.

  22. What Brett Bellmore has explicitly, repeatedly said, is that the Constitution puts default off the table. But that borrowing money Congress has not authorized is not the only way to avoid default. It’s just the one preferred by people who view a balanced budget as the ultimate nightmare scenario.

  23. We had a balanced budget in 2001. Surprise — that budget was left behind by a Democratic President. How quickly we forget, when convenient.

    And what SCOTUS said in Perry was that the Congress cannot simply decide not to pay its bills because it is inconvenient. What we have now is, again, a Congress that has decided not to pay its bills because it is inconvenient. Refusing to issue debt to pay its accumulated bills is, in my view and in the view of some others, an unConstitutional act — an act that plainly abrogates section 4 of the 14th Amendment.

    The Congress should not be allowed to get away with this action. And if that means the President has to take unilateral action, to enforce the Constitution — it’s his job! He put his hand on a Bible and swore he would do it — “uphold the Constitution.”

  24. why can’t the obama administration file an action on an expedited basis to challenge the constitutionality of the debt limit in light of the lawfully enacted budgets authorizing current spending? in fact why hasn’t it already done so? how did the debt limit become a tool to reargue the budget authorization process?

  25. “We had a balanced budget in 2001. Surprise — that budget was left behind by a Democratic President. How quickly we forget, when convenient.”

    Kinda, sorta, which is why the national debt was larger in 2002 than 2001, after a year of the budget being ‘balanced’. But I think we need to remember the context, which included a Republican Congress, Congress trying to impeach the President, the President releasing blackmail files on leaders of Congress, and a stock market bubble artificially boosting revenues.

    I think we’ve got the material for all of that, except I can’t figure out how to engineer another stock market bubble, let alone arrange for it to last for any extended period.

  26. Can’t really see the relevance of the Clinton administration to the topic at hand.

    Either the debt is valid or it’s not. If some future government action is required to make the debt actually payable, then it’s not valid. Amendment 14 Section 4 says, that cannot be. Therefore the debt limit (which creates a need to RAISE the debt limit) can’t be constitutional.

  27. >Obama has asserted the absolute right to imprison or kill any American citizen he likes, with no judicial review, if he only utters the magic words “national security.”

    That was originally done by bush – Obama just continued existing policies, executive orders and gitmo torture center. I was hoping for some change around here, but Obama keeps turning into “bush’s 3rd term”.

  28. “Therefore the debt limit (which creates a need to RAISE the debt limit) can’t be constitutional.”

    Your argument makes no sense at all, in a world where the options are not limited to either going deeper into debt, or cheating your creditors. I understand that you don’t want living within our means to even be on the table, but it is anyway.

    In fact, if our creditors ever do conclude that our only options are either cheating them, or borrowing more, the ultimate crisis will arrive right then, because we will have proven to be running a Ponzi scheme.

  29. The fact that the Constitution says that the debt must be paid has no impact on the question of increasing the debt limit. I am assuming (arithmetically) that revenues are at least equal to the interest on the debt.

    All other disbursements may be subject to the limitation if Congress refuses to scrap the debt limit or authorize an increase in it. So it simply means that budgeted amounts in other areas can’t be spent. In other words, the same things that families, businesses and local governments do all the time.

    As for Democratic (scare) rhetoric that social security checks might be held up as early low hanging fruit to solve the problem, that is unconscionable. Social Security payments should be among the last to be impacted since the Trust Fund is a rare example of a federal surplus(even though its cash flow recently turned negative). The Trust Fund itself is one of Uncle Sam’s large creditors.

  30. I understand revenues are exceeded by debt payments in the short term, actually, but I could have that wrong.

    Not spending money appropriated by Congress is in fact illegal, both a violation of statute (since the Nixon years) and a violation of the Constitution according to the Supreme Court. So sudden spending cuts by the Executive branch aren’t going to be any less illegal than violating the debt ceiling statute.

    But to talk about what the White House could do to work around the debt limit is to miss the point. Section 4 is designed to remove from possibility any political deal which, if it fails, could result in default. The intent of the amendment’s authors was quite clear on that point: they didn’t want anyone to be in a position to get anything in return for not defaulting on the debt. What the Republicans are threatening now is precisely what the Democrats were threatening in the 1860s. If you can see an important difference between the two situations, please point it out.

  31. Don,

    You have a classic case of two statutes in conflict. The appropriations, which you correctly point out “must” be spent (the result of an incredibly stupid and self-serving law passed by Congress to prevent executive impounding) and the debt limitation, perhaps also a stupid Congressional provision but one Congress felt might be necessary to control profligate administrations (such as the current one). How to resolve the conflict? I guess it’s ‘let’s make a deal’ time, which is what seems to be going on.

    The requirement that appropriations be spent tends to expand deficits. For example, what do you do when revenues fall short? Expand debt. When a department overshoots it’s appropriation? Expand debt. Can you obtain any fiscal benefit from a department’s efficiency? No. So this politically driven statute is in my opinion, the culprit. I expect those on the Left to disagree.

    What happens when, as for much of this fiscal year, you have no budget, but expenditures get authorized anyway? Exploding deficits. In short there is no discipline in the system other than that imposed upon the Executive branch to spend everything Congress authorizes. Why would anyone be surprised that we now have a fiscal train wreck?

    And believe me we do. Ignore for now the underperforming GDP growth numbers. Our revenues will soon no longer be able to keep up with our debt service! When that happens we are Greece. And for that to happpen, all that needs to occur is for interest rates to return to normal. And no tax increases, even confiscatory ones, on any segment of our society, will make much difference. So if you can’t or won’t find your way to resolving the conflict in the statutes in a fiscally responsible way, then I suggest we repeal the Nixon era spending requirement pronto. In the endgame, the only solution will be to inflate the currency to the point that Uncle Sam will pay creditors back with Monopoly money. That’s why people are buying the GLD’s 24 X 7.

  32. Redwave, it’s more than two statutes in conflict. It’s a statute (debt limit) in conflict with the Constitution (Amendment 14 Section 4). (Your proposed solution, impoundment, is also unconstitutional, according to the Supremes, so that escape hatch isn’t available.) We both know who wins when a statute conflicts with the Constitution.

    Even if we grant your claim that the Constitution enables bad policy in this case, the remedy isn’t to ignore the Constitution, it’s to amend the Constitution properly. (I’d fight you on a balanced budget amendment, but that’s off topic.)

  33. Don,

    I still disagree. I think you are reading too much into the 14th Amendment to say that it forbids a debt limit law. The government can spend less to assure that it’s debt is serviced and repaid on schedule. That could simply force Congress to reduce appropriations. I agree that the executive branch is presented with a Hobson’s choice when Congress doesn’t so limit appropriations, and that intellighent people can differ about this.

    You are correct that for conservatives, a balanced budget amendment might resolve these conflicts, although I suspect that by your logic, such amendment might have to repeal or modify section 4 of the 14th Amendment to avoid a Consitutional internal inconsistency. Even many of us on the right object to a balanced budget amendment that doesn’t allow economic policy makers the flexibility they might need under various economic conditions.

    The important point I am making is that as a practical, and not as a legal or consitutional matter, there is a finite spending limit out there. Actuarially, we may have passed it already, if a really objective analysis of PPACA’s implications were actually done. The one useful thing about the debt limit kabuki dance is that it gives fiscally responsible legislators on both sides of the aisle some leverage to put the train back on the rails before it’s too late. A deal that trades corporate perqs for a lower corporate rate seems to be on the table that can provide both sides political cover for real spending cuts (not phony reductions in items that would never have been spent anyway, like last time). But so far the cuts are not draconian enough. And I doubt that anything short of a complete reworking of PPACA will help for very long.

    If a deal doesn’t get made, and if the Administration attempts to issue debt without Congressional authorization, that will go to the Courts, and given the current configuration of the High Court, I’d take my chances there that they would correctly resolve the issue in favor of Congress. They might even decide that impoundment is an allowable procedure open to the executive branch, which I would also welcome. This would maintain proper checks and balances while shifting the bias in favor of fiscal restraint.

  34. Making one last point on the constitutional issue, the 14th Amendment was not meant to reverse Article 1 Section 8 and vest anyone but Congress with the power to authorize the issuance of federal debt. it was meant to clarify that debts of the Union would be honored and debts of the Confederacy would not. The Perry case was a special case decided on the narrow grounds that Congress could not subsequently modify the conditions concerning repayment of existing debts. To read more than that into the case is bizarre at best, dishonest at worst.

    At the risk of sounding more pejorative than usual, I would say it is pretty irresponsible of Geithner and others to raise the 14th Amendment as justification for the Administration to flagrantly violate Article 1, reflecting the tendency of the Left to read the Constitution according to what they wish it would say, rather than what it says.

  35. Redwave, I wouldn’t say I’m “reading into it” anything more than the plain language of the amendment

    “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.”

    and the historic rationale for the amendment adopted by the Senate:

    [The proposed amendment] puts the debt incurred in the civil war on our part under the guardianship of the Constitution of the United States, so that a Congress cannot repudiate it. I believe that to do this wil give great confidence to capitalists and will be of incalculable pecuniary benefit to the United States, for I have no doubt that every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress. [Senator Wade]

    I can imagine a balanced budget amendment would not have to repeal Section 4 of the 14th Amendment. It would have to depend on the text. A bonehead absolute rule against short-term borrowing would obviously have to repeal Section 4, but I don’t expect even Republicans to propose that.

    No one dispute that there is a practical, finite spending limit. Nor are liberals proposing that we spend more than we take in, willy nilly, in good times and bad. (Conventional Keynesian economists do propose that we have deficit spending in a recession, when interests rates have hit the zero lower bound, and a budget surplus when times are good.) It’s a topic for another day.

    What I’m pointing out to you is that even if you are right about the deficit, political deal-making to avoid default is explicitly out of bounds. To disagree with that statement you have to look at the 14th Amendment and declare that it doesn’t mean what it says, and that the people who wrote it didn’t mean what they said either, in which case I wonder what you think it means and what they meant.

  36. Don, well it sure as heck doesn’t say that Congress can’t impose a debt limit. That’s an entirely different standard from assuring that existing debts be paid.”

    The amendment was put there to assure creditors that Union debts would be honored AND to disavow the debts of the Confederacy, including those related to the institution of slavery.

    And nowhere does it authorize the executive branch to issue debt without Congressional authorization (required by Article 1). So yes, I can read, and read with comprehension. You want to compare SAT scores some time?

    On this rationalization the Left is desperate, and so is the administration because they perceive the GOP is not in their usual buckling position. To think they would actually go through with a scheme to violate Article 1 is absurd. I would bet a lot of money against that bluff. And if I lost that bet, I’m sure I’d make it all back and then some betting on the Supreme Court to do the right thing, maybe better than 5-4.

    But, as I posted before, the deal is on the table, it’s all but done, we have to go through the Kabuki dance so that the Administration can mollify you guys on the Left. I get that.

  37. If I thought the Administration gave a shit about the Left I would be very happy indeed. Trust me, he neither loves nor fears us. Sadly this, too, is off-topic.

    You’re of course not wrong to point out that the amendment has the function of repudiating Confederate debts including damages to slave holders. Yet you deemphasize the assurances given to creditors about federal debt. It could have simply repudiated Confederate debt, full stop. Why on earth would they need assurances that the winning side in the civil war was solvent? Answer: because either an outright majority in Congress, or a minority in the Senate, might choose to repudiate the federal debt for political gain. There’s no other explanation for that clause being in there.

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