The 14th Amendment

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?


The Economist

The New Republic

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2 Responses to The 14th Amendment

  1. John N July 3, 2011 at 10:12 am #

    If 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.

    Here is the case law from SCOTUS which is very clear:

    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.

  2. Neph1 July 6, 2011 at 10:22 am #

    Paying the debt does not equate to the power to barrow unlimited money to pay that debt. The Executive Branch has no authority to barrow more money (increase debt) to pay the existing debt. Rather, it has the duty to pay the debt within existing means.

    This principle is explained and applied to this issue in the following: