Wednesday, July 27, 2011

Why it's unconstitutional for Obama to raise the debt ceiling unilaterally

I have been seeing an unusual (and somewhat alarming) Constitutional issue pop up during the last few months' debt ceiling debate: does the Fourteenth Amendment to the Constitution authorize the President to raise the debt ceiling without approval from Congress?

This post will be a little more legalese than you are used to reading here, but please bear with me. Obama admitted recently that his attorneys are not convinced that they could win the argument that the Fourteenth Amendment really does grant him the power to raise the debt ceiling, but the idea keeps resurfacing.

Treasury Secretary Timothy Geitner engaged in a common misinterpretation of the Fourteenth Amendment in a recent Huffington Post interview, we have multiple examples of the current administration's, shall we say creative, view of the law (most recently with the "Fast and Furious" debacle), and now Obama has admitted he sought legal advice on the issue (which means he's thinking about doing it!), I think it's important to discuss the constitutional law issues with as many people as possible so we are prepared if the White House does try this maneuver.

Let's start with the text of Section 4 of the Fourteenth Amendment, the section that has been cited as potentially granting authority to the President to raise the debt ceiling. As you can see, there is nothing in the text that mentions the President or any sort of executive power or rights whatsoever:

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.
Beyond the lack of any express grant of power, there are two strong arguments against interpreting the Fourteenth Amendment in a way to allow President Obama to raise the debt ceiling unilaterally: (1) the historical context in which the Amendment was passed, and (2) a holistic analysis of the language of the Amendment and the Constitution.

First, the historical context shows that Section 4 of the Fourteenth Amendment has nothing to do with granting additional powers to the President, but rather is designed to define how debts would be handled after the Civil War, and to restrict the ability of Congress to repudiate legitimately incurred debts.

There was considerable concern that the newly-reunified United States of America would assert that it was a separate legal entity from the Union states that had borrowed money to fund the war against the Confederacy. The first sentence of Section 4 puts that concern to rest, by prohibiting the "questioning," or denial, of the debt of the United States, and specifically includes the debt incurred during the Civil War ("services in suppressing insurrection or rebellion"). As the United States Supreme Court wrote in Perry v. United States, 294 U.S. 330, 354 (1935), Section 4 "was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War."

The second sentence of Section 4 further illustrates the historical context of this Amendment. By defining the Confederacy as "insurrection or rebellion against the United States," the drafters of the Amendment have dismissed it as an illegitimate action. A long-standing principle of contract law is that a contract based on an illegal act is void ab initio, or void from the beginning, and completely unenforceable. The Confederate Treasury issued war bonds, and several European banks lent money to the Confederacy as well, and the United States refused to pay any of these debts after the Civil War. This was completely consistent with the position of the U.S. government all along, maintaining from the beginning that the Confederacy was an illegal "insurrection," that the states did not have the right to secede, and issuing warnings that diplomatic recognition of the Confederacy would be tantamount to declaring war with the United States.

As you can see, Section 4's function is to define which actions were legal and legitimate (war debts incurred to "suppress the rebellion" of the Confederate states, the emancipation of the slaves), which were illegal and illegitimate (participating in insurrection against the government of the United States), and stating that debts incurred to support the legal and legitimate actions of the United States would be paid, but no other debts.

Second, a common sense analysis of the Fourteenth Amendment and the Constitution as a whole precludes an interpretation that would allow the President to raise the debt limit on his own. Section 4 of the Fourteenth Amendment states that "[t]he validity of the public debt of the United States, authorized by law,...shall not be questioned." Note the italicized phrase, "authorized by law." Who makes the law? Congress does. Accordingly, for a debt to be a legitimate debt of the United States it must be "authorized by law," or in other words, authorized or approved by Congress.

When America was first founded, Congress would authorize each new issuance of debt separately. This changed in 1917, when Congress passed a series of Liberty Bond Acts which authorized an aggregate limit of war bonds, in order to provide a more stable funding source during World War I. Then, in 1939 and 1941, the Public Debt Acts created one single limit for all types of federal debt: the "debt ceiling." Since Congress enacted the debt ceiling, they have raised it again and again through the years, and each time, our debt has grown to met the ceiling.

Note that in the last paragraph it is Congress that is authorizing new debt, passing new laws regarding the debt, and defining the debt ceiling. That is because issuance of debt is a power granted to Congress, and solely to Congress. Further confirmation of this principle lies in Article I, Section 8 of the Constitution, which lists the "enumerated powers" that are exclusively the domain of the Congress, including the power "[t]o borrow Money on the credit of the United States." Additionally, Section 5 of the Fourteenth Amendment states that "Congress shall have power to enforce, by appropriate legislation, the provisions of this article."

In summation, the Constitution grants the power to incur debt on behalf of the United States solely to Congress, Congress has defined a debt ceiling, and Congress alone can pass legislation to alter that debt ceiling. Moreover, any attempt to incur debt in excess of that debt ceiling would be a violation of a law passed by Congress, and therefore that debt would be a debt "authorized by law" that is protected as "not [to] be questioned" by Section 4 of the Fourteenth Amendment.

We will learn within days if the squabbling hordes in Washington can agree on a deal to raise the debt ceiling. If Congress fails to come up with a bill, and the President attempts to act on his own to raise the debt ceiling, he would be taking direct and purposeful action to violate the Constitution. Earlier this month, Representative Tim Scott (R-SC) stated his belief that this would be an impeachable offense, and other conservative pundits have reached similar conclusions.

This morning, I went back and re-read a post I wrote in January about our national debt:
Sunshine State Sarah | Here's what one second of national debt looks like
As far as the debt ceiling goes, my personal opinion is that I understand the arguments that it would be really damaging for the United States to default on payments, which apparently can happen if Congress doesn't raise the debt ceiling. And I am realistic enough to not expect Congress to solve our problems in the first week, so I'm willing to give them a little bit of time to get a handle on how to steer the ship. A small increase in the debt ceiling would give them some flexibility and time to make some real reforms.

My hope is that the newly-elected Republicans play their best game of chicken and wrangle as many spending cuts as they can out of the Democrats...Let's drive this thing right to the edge of the cliff before giving in.
I stand by what I wrote then. We probably do need to raise the debt ceiling one more time, but we desperately need to solve the underlying problem: the out-of-control spending that has created this monstrous, unsustainable debt. As Marco Rubio said recently, our problem isn't the debt ceiling, it's our debt.

Find your Congressional Representatives here and tell them that the priority should be attacking the debt, and any increase in the debt ceiling must be accompanied by real and substantial spending cuts. The Cut, Cap, Balance Act would have been a great place to start, but as we know, the House voted for it and the Senate chickened out and voted to table. Deals are being struck right now as I write, so it is imperative that you contact your Members of Congress and Senators today.

[Cross-posted at The Minority Report, RedState, and Red County]


  1. Excellent analysis!

    wasn't Obama a constitutional law professor? You'd think he'd know better than to try something like this.

  2. thanks for sharing this. very helpful.


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