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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.
Great post!
ReplyDeleteIf 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.
SCOTUS already settled the issue:
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.
To John Nail, Thanks for taking the time to write such a thoughtful and comprehensive comment. I really hope the President takes this potential strategy seriously. Push is quickly coming to shove.
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