Posted by: Schuyler R. Thorpe | July 11, 2011

Obama Could Use 14th Amendment To Bypass Debt Ceiling Requirement

Could Obama ignore Congress if they refuse to raise the debt ceiling? Yes, and he should, some experts say

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.

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Responses

  1. I don’t think Pres. Obama should wait to see whether negotiations fail. I believe he should stop negotiating, simply raise the debt limit, pay the
    bills, and get on to other business. If he’s challenged in court, he can
    deal with that when it happens.

    • That’s what I’m thinking as well–seeing how the Republicans have now quit the debt talks for a second time in less than a month…

      Why negotiate with someone who refuses to compromise?

  2. Strange & unfortunate that George W. Bush illegally had his crooked lawyers rewrite & reinterpret the constitution so he could go to an illegal war in Iraq, among many other Bush family crimes, and Barack Obama won’t even legally use the 14th Amendment to raise the debt cieling. If only Pres Obama had a little bit of George W’s chutzpah


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