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The 14th Amendment and the Debt Ceiling

2011 July 30
by sonicsuns

The United States is currently facing a fiscal crisis. We need to borrow large amounts of money in order to finance everything that legally must be financed, but a legal debt ceiling currently prohibits us from borrowing any more money. As of August 2, we will be forced to withhold payments that would otherwise be demanded by law. Hopefully Congress will soon pass legislation to resolve the crisis.

I have heard it argued that the President can resolve the crisis on his own, simply by declaring the debt ceiling unconstitutional under the 14th amendment and ordering the Treasury to take on more debt. This is absurd. Here is the relevant text from the 14th amendment:

Section 4. 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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

The text clearly states that “the public debt of the United States, authorized by law [...] shall not be questioned.” This prevents the United States from defaulting on its debts, but that is all. The amendment does not prohibit Congress from instituting a debt ceiling, and it does not give the President (or anyone else for that matter) any authority to incur new debts by fiat.

The power to incur debt is granted to Congress by Article I; it is not granted to any other entity. Of course, Congress may delegate its power to whatever entity it chooses, and indeed it has done so. But it has placed a legal limit on the amount of debt that may be incurred, and nothing but new legislation (or a constitutional amendment) can erase the legal limit.

So why do so many believe that this amendment grants the President to void the debt ceiling and/or incur new debts under his own authority? (These two actions are nearly the same thing, for of course the only reason to void the debt ceiling is to incur new debts beyond what Congress has allowed.) The text does not even mention the President, or even the executive branch. If you’re going to conclude that the 14th amendment grants any sort of borrowing power to the President, then you can equally conclude that this same power is granted to the Vice-President, or the Secretary of Education, or some random guy at the Post Office. All of these people receive exactly the same prominence in the relevant text of the amendment: none at all.

I think this theory is fueled in part by confusion over the word “default”. It has often been said that we will “default” on August 3rd if no deal is struck by Congress. However, this does not mean we will default on our debts. Roughly speaking, the government is obliged to spend in three areas:

  1. Debt payments (interest on the debt etc.)
  2. Entitlement programs (Social Security, Medicare)
  3. Discretionary spending (Military, Education, FBI, etc. etc.)

The 14th amendment provides that the government shall not default on the first category; it says nothing about the other two. (You could try to take a very broad definition of the word “debt” within the amendment, such that it simply requires “payment” rather than “payment in return for earlier borrowing”, but that’s absurd. I believe that the constitution is subject to interpretation, but this is going too far.) As of August 3rd, we will not have enough money to pay for all programs in all categories, but we will have enough money to pay for the first category in full (along with some left over to split between the other two categories). Therefore, compliance with the 14th amendment does not rely upon raising the debt ceiling. If we were in such a situation, then perhaps this argument would make more sense.

I’ve also heard that there’s “room for interpretation” on this, so the President can go ahead and void the debt ceiling and then let the Supreme Court sort it out later whether he overreached or not. But the amendment is quite clear, so this just seems like a fancy way of saying “Let’s just violate the constitution until we get caught.”

Another argument, not necessarily related to the 14th amendment, is that “because Congress already appropriated the funds in question, it is the executive branch’s duty to enact those appropriations”. That’s true, but just because the executive branch is obligated by law to make certain appropriations does not mean that the executive branch has been given the resources to carry out that task, and it does not mean that the executive branch can acquire resources via additional debts or any other method. Suppose that congress passed a law hiring a construction company to build a bridge, but then failed to provide the money to finance the operation. Would the construction company then have the implicit authority to incur new debts on the credit of the United States, so as to pay for the operation and complete the bridge? No, nor would they have the implicit authority to raise taxes, transfer funds from other government projects, or simply steal the money from a bank somewhere. Simply because the company has been ordered to build a bridge does not give it the power to appropriate the necessary resources by any particular method. Similarly, just because the executive branch has been ordered to make certain payments does not mean he has the power to appropriate the necessary funds by any particular method.

Michael Stern, Senior Counsel to the U.S. House of Representatives from 1996 to 2004, has stated that “the President’s duty to safeguard the national debt no more enables him to assume Congress’s power of the purse than it would enable him to assume the judicial power when (in his opinion) the Supreme Court acts in an unconstitutional manner.” I agree.

None of this makes sense. We must find another way.