Public debt of the United States shall not be questioned: the 14th Amendment and the debt ceiling

Will these men destory the credit of the United States?

The Obama administration does not believe that the 14th Amendment of the U.S. Constitution allows the president to ignore the debt ceiling, White House spokesman Jay Carney said on Thursday. [...] Carney's comments dismissed the possibility that President Barack Obama could have a constitutional option to get around Congress if lawmakers failed to do so. - Reuters

This statement by Carney requires some unpacking, both with regard to legal analysis and political bargaining tactics. First, the legal question.

What are the relevant constitutional and legal provisions? Let's start with the Constitution. Article 1, Section 8 of the Constitution provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

[...] To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures; [...] [Emphasis supplied.]

Article 1 makes clear that it is the Congress that is empowered to "borrow money" and "pay the debts" of the United States. But of course, it is the Executive Branch, through the Treasury Department, that actually executes these functions. Nonetheless, Article 1 makes clear it is the Congress who is empowered to authorize such actions. But this does not end the Constitutional analysis. In 1868, the 14th Amendment to the Constitution was ratified. While the most famous parts of the amendment are well known (the equal protection and due process clauses of Section 1 of the 14th Amendment), Section 4 of the amendment also provided for a constitutional guarantee of the payment of the debt of the United 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. [...]

Thus, while Congress has the power to borrow and pay the debt of the United States, Section 4 of the 14th Amendment imposes on the entire government of the United States the obligation to pay debt authorized by law. In the 1935 case Perry v. United States (in dicta to be sure), the Supreme Court stated:

The Fourteenth Amendment, in its fourth section, explicitly declares: "The validity of the public debt of the United States, authorized by law, . . . shall not be questioned." While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the Government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle, which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the Amendment was adopted. Nor can we perceive any reason for not considering the expression "the validity of the public debt" as embracing whatever concerns the integrity of the public obligations.

This raises two questions in the current situation regarding the debt ceiling, which was first enacted by the United States Congress  during World War I. The first is this: (1) can the statutory debt ceiling trump the constitutional requirement that US debt be paid? The answer is obvious, no. The constitution is supreme to all legislative enactments. The second question is is the debt ceiling, on its face, unconstitutional? I would argue no because the existence of a debt ceiling does not, in and of itself, put into question the validity of US debt. However, as applied in the current circumstances, the debt ceiling does appear to be unconstitutional (a quasi "as applied" analysis you might say).

So what if anything can the President do about this? First, let's consider what he is obligated to do under the Constitution. Article II defines the powers and responsibilities of the President. Beyond vesting the executive power in the President, Article II expressly provides that the President "shall take care that the laws be faithfully executed."

The President's duty to take care that the laws be faithfully executed applies both to the Constitution and duly enacted legislation of the Congress.

The Congress has enacted legislation that will likely be in conflict shortly'the debt ceiling and appropriations that will cause the United States to exceed the debt ceiling. The spending authorizations postdate the debt ceiling enactment.

What leeway if any, does the President have with regard to choosing what laws to "faithfully execute" here? In the normal course, the President would have a great deal of flexibility when faced with conflicting legislative directives. However, whether the President wishes to respect the debt ceiling is not the deciding question on this discrete point: the President does not have, in normal circumstances the power to borrow on behalf of the United States. The Constitution provides that power to the Congress. Thus, looking solely at this discrete issue, the President does not have the practical power to ignore the debt ceiling because he does not have the power to borrow on behalf of the United States. (But see the platinum coin option, and whether this constitutes a Congressional delegation of the borrowing power (and whether such delegation is constitutional) to the President).

But what of Section 4 of the 14th Amendment? Doesn't the President have a duty to "faithfully execute" its provisions? Indeed he does. And, should the debt ceiling violate the 14th Amendment, it is my view that the President would have the duty to abide by Section 4 of the 14th Amendment, even if that requires violating the debt ceiling. And if that requires borrowing on behalf of the United States, it is my view that Section4 of the 14th Amendment would so empower the President. (Would the President be able to do this in a practical sense? To be discussed below the fold.)

However, such duty would only arise when the validity of US debt is imperiled, to wit, when it is time to make debt service payments. And before the President could invoke this 14th Amendment power, he would have to, at least in my opinion, exhaust other remedies, including NOT "faithfully executing" the spending appropriations enacted by Congress, and instead insuring that US debt is timely serviced. That raises interesting legal questions, but more importantly, it raises interesting political bargaining questions.

I'll explore these and other related issues on the flip.