Economists and others are discussing the possibility that Obama could invoke the 14 Amendment to stave off the US defaulting on its obligations.
The original purpose of Section Four, which is reflected in its text, was to prevent political disruption and party wrangling over the public debt following the Civil War. However, the language of the Amendment went beyond this particular historical concern. It was stated in broad terms in order to prevent future majorities in Congress from repudiating the federal debt to gain political advantage, to seek political revenge, or to try to disavow previous financial obligations because of changed policy priorities.Senator Benjamin Wade of Ohio was a leader of the Radical Republicans and the President pro tempore of the Senate. He agreed with Howard’s reasons for why the Confederate debt should be repudiated, but he argued that if the concern was to avoid future disruption of American politics, the current proposal did not go far enough. It was also necessary to guarantee the Union debt, because former rebels or rebel sympathizers who returned to Congress after the war might, out of selfish or malicious motives, seek to prevent Union soliders and their widows from being compensated. Moreover, there was no guarantee of what a later Congress, motivated by different priorities, might do. Shifting majorities in a future Congress might be willing to sacrifice the public debt or the interests of pensioners in the name of political expediency. Thus, it was as important to guarantee the Union debt as it was to repudiate the Confederate debt. Jack Balkin
Balkin and others make the argument that Section 4 of the 14th amendment is to ‘protect’ the federal debt (honoring it) against political expediency. This theory says that the President, not Congress, has the obligation to prevent default on ‘obligations.’ One way of doing this is for the treasury to just keep on issuing checks past the default deadline.
Obviously, this action would quickly be considered by the Supreme Court. Would the Court conservatives ever side with Congress over the President and risk another international economic crisis? Or will Congress compromise at the last minute?