Claiming the Fourteenth
There is a pretty interesting strategy that has been floating around now for several months regarding hitting the debt ceiling limit that involves invoking a section of the fourteenth 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
So it goes like this: hitting the debt ceiling arrives without an agreement being reached in Congress, and Obama simply says, “so what” and just keeps on paying bills as he had done before. Can you imagine the audacity! How can he do this? Simple, he claims that the Fourteenth Amendment requires him to fulfill America’s debt obligations.
Can he do this? Yes. Is it actually legal? Well, that gets a little tricky. Some argue about what actually constitutes a debt versus an obligation, and say that promises of future payments aren’t debts. Personally, I tend to be a plain language kind of guy. If the government has enacted laws and policies which say they will pay a certain amount of money to certain individuals in the future, than that is a debt. Robert Levy of the Cato Institute, also argues this point: “duly enacted appropriations are legally the counterpart of ‘public debt ... authorized by law.’ ”1
There are also arguments that say we won’t actually default; we will still pay the important stuff (interest payments on existing debt), while the rest of our obligations we will still acknowledge exist, we just aren't going to pay them at the moment. One blogger characterizes this inability to pay as scheduled as a “crisis of liquidity”.2 But once again, using a plain language approach, does anyone for one second think they could use a “crisis of liquidity” excuse with someone they owed money? And note that the Fourteenth only says the validity of the debt should not be “questioned”. Does America not paying all of its bills make the validity of its debts questionable? I think so, and suspect most reasonable people would agree.
Some people will argue that, because these future payments are in the future that there are other ways of not defaulting on them—such as canceling them. That may be so, but still, until that actually happens, the President can continue to claim that he is obligated to sign any check that comes across his desk.
The beauty (or horror) of the strategy is that there isn’t really anything that can be done about it. The only possible solution would be to actually sue the President, for whom the only one with potential standing would be the whole of Congress.
Is this the right way to go about things? No, probably not, but at the same time it isn’t right for the Republicans to use the threat of forcing the country into default as a way of altering the debt obligations put into place by previous Congresses. That sort of tactic is EXACTLY the kind of thing this clause of the Fourteenth was intended to prevent. “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.”3 That is the assessment of Professor Jack M. Balkin, from a historical examination of the Fourteenth Amendment, which he concludes by saying, "Section Four was placed in the Constitution to remove this weapon from ordinary politics." That is about as plain as it gets.
Still, using this tactic can’t be considered positive. Rather it could only be seen as the better of two bad options. All sorts of problems would arise from this: separation of power concerns, newly issued debt would be risky, a potential impeachment attempt, and worst of all perhaps is that it would not in any way guarantee the markets wouldn’t be spooked.
1. Levy, Robert A. "Defaults, Debt Ceilings and the 14th Amendment." Cato Institute, 07 jul 2011. Web. 18 Jul 2011. <http://www.cato.org/pub_display.php?pub_id=13297>.
2. From a blog "Rhymes with Right". http://rhymeswithright.mu.nu/archives/318319.php
3. Balkin, Jack M. "The Legislative History of Section Four of the Fourteenth Amendment." Balkanization. N.p., 30 jun 2011. Web. 19 Jul 2011. <http://balkin.blogspot.com/2011/06/legislative-history-of-section-four-of.html>.