1970-01-01 02:00:00
rlp
As both major parties debate their conditions for raising the nation's debt
ceiling, some Senate Democrats and constitutional scholars are questioning
whether the limit is constitutional in the first place.
Delaware Sen. Chris Coons told The Huffington Post this week that he's part of
a group of lawmakers now examining whether, in the case that debt negotiations
fail, the Treasury could ignore Congress and continue paying its bills on time.
"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," Coons told Huffington Post
reporters Ryan Grim and Samuel Haass. "[I]t's going to get a pretty strong
second look as a way of saying, 'Is there some way to save us from ourselves?'
"
Critics of the debt limit cite the Fourteenth Amendment to the Constitution,
which states: "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."
(Emphasis ours)
Of course, the Fourteenth Amendment is open to wide, and varying,
interpretation and debate. The most basic question here is, does a limit on
debt "question" the "validity" of the debt?
Legal scholar Garrett Epps, writing in The Atlantic in April, said that a case
could easily made for simply ignoring the congressionally mandated debt limit.
"This provision makes clear that both the monies our nation owes to
bondholders, and the sums promised in legislation to those receiving pensions
set by law from the federal government, must be paid regardless of the
political whims of the current congressional majority," Epps wrote.
In essence, Epps argues that Obama should stand before Congress and say, Tough
luck--the Constitution says we can't default. Epps argued that in the event
that Congress does not act, Obama should (and could) instruct the Treasury
Department to issue "binding debt instruments on the world market sufficient to
cover all the current obligations of the United States government, even in
default of Congressional action to meet those obligations."
President Obama's own views on the subject, however, are unclear. During his
press conference Wednesday, Obama dodged a question about the debt limit's
constitutionality, telling NBC's Chuck Todd: "I'm not a Supreme Court justice,
so I'm not going to put my constitutional law professor hat on."
Obama understandably didn't want to show his cards by hashing out a plan for
how he would act in the event Congress fails to raise the debt ceiling. But
some observers have already outlined how he could--and still get away with it.
Writing in the Financial Times in April, Former Reagan adviser and Treasury
official Bruce Bartlett said the Obama administration could justify ignoring
Congress to ensure the nation pays its debts.
"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," Bartlett wrote. "Under those circumstances,
when default is the only possible alternative, I believe that the president and
the Treasury secretary would be justified in taking extraordinary action to
prevent it, even if it means violating the debt limit."
However, if Obama were to follow that route, it's still unclear how the courts
would rule.
Grim and Saass point to the 1935 Perry v. U.S Supreme Court ruling, which
determined that the language in the Fourteenth Amendment does apply to the
national debt. What's more, they observe, according to the majority opinion on
the case, no act of Congress can undermine promises of debt payment from the
federal government.
"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," wrote Chief Justice Charles
Evans Hughes, who presided over the case.
Even with that precedent, however, the specific debt limit as we know it today
has not yet seen its day in court. Should the White House's negotiations with
Congress on the debt ceiling fail, it will be up to Obama to decide whether he
wants to start that fight, which would no doubt require years-long court
battles to settle.