Saturday, April 9, 2016

Three reasons the debt ceiling is constitutional, and the President is bound to obey it

A few years ago, Republicans in Congress threatened to let the government shut down rather than raise the debt ceiling, unless certain concessions were met.  This has happened several times, actually, and is likely to happen again.  I wrote the bulk of the argument below during the most recent of these occasions, but never got around to finishing it.  It is wildly out of synch with current events here in an election year, but I am posting it now anyway so I will have it ready when this debate inevitably resurfaces.

Many liberals have argued that if the debt ceiling is not raised, the President could constitutionally just ignore it.  The root of the controversy is that in that scenario, Congress will have given the president incompatible instructions: they’ve ordered him to spend a certain amount, while only providing him a lesser amount in revenues, and prohibiting him from borrowing the disparity between.  Something has to give, and the president would have to decide which of those instructions to break.  Since ordering the IRS to raise tax revenues isn’t a politically feasible option (yet…you never know what some creative lawyer might come up with…), the debate comes down to the other two laws: federal appropriations, and the debt ceiling.  If Obama obeys the debt ceiling and stops borrowing additional money, he will be ignoring federal instructions to spend X amount.  If he borrows the additional money necessary to spend X amount, he will be ignoring congressional instructions not to borrow additional money.  Which of these laws should trump the other?

Many from the left (most recently this lady) have put forth the argument that federal appropriations should win out, because the 14th amendment would render the debt ceiling unconstitutional.  Section 4 of the 14th amendment reads:

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.”
This view argues that this makes the debt ceiling unconstitutional; because the debt ceiling would prevent federal appropriations “authorized by law” from being paid, it would “question” the “validity” of those debts.

Others, such as legal scholar Garrett Epps, fiscal expert Bruce Bartlett, Treasury Secretary Timothy Geithner, and House Minority leader Nancy Pelosi, have argued that a debt ceiling may be unconstitutional and void if it interferes with the duty of the government to pay interest on outstanding bonds or make payments owed to Social Security recipients. 

The aforementioned article explains:

"Even if the President thinks the history of the public debt clause isn’t clear, it still seems preferable to set aside the debt ceiling than to ignore Congress’s mandate to pay the nation’s bills.  At minimum, the Fourteenth Amendment suggests a constitutional basis for ignoring the debt ceiling; nothing in the Constitution provides reason not to follow Congress’s mandate that the nation’s bills be paid."

This is a bad argument for several reasons.  I have explained the first one previously on this blog, in an entry responding to Nancy Pelosi’s argument that Obama should just ignore it.  As I argued then, there is a difference between the people we’ve promised to pay, and the people we’ve promised to pay back:

“...due to the 14th amendment, the validity of the existing debt of the US cannot be questioned.  But that is very different from saying that the amount of debt the US is allowed to accrue moving forward cannot be limited.  Debt is created when money is borrowed, not when it is agreed that money shall be spent.  A congressional apportionment saying that X amount of money shall be spent on certain programs is not the same as actually borrowing the money necessary to make those expenditures.  The actual borrowing happens gradually over the course of the year as the money is needed.  The 14th amendment does not say that projected increases to the debt cannot be preemptively limited; it refers only to the existing debt.

Democrats seem to be confusing two different types of legal obligations here.  If Congress passes a law that says “We will employ 10,000 postal service workers this year,” then what Pelosi is arguing is that Congress has incurred a “debt” due to its legal obligation to pay those people.  Since this “debt” cannot be questioned, she claims that any law which calls into question the government’s ability to pay those recipients (such as a debt ceiling) is unconstitutional.  But those pending outlays are not the kind of “debt” the 14th amendment refers to.  The 14th amendment was passed at a time when the federal government had just borrowed enormous amounts of money to pay for a war, and needed to pay back its creditors.  It’s reasonable to assume from this that “debt” refers to the debt the government incurs when individual lenders actually give their money to the government (often through federal bonds), with the understanding that this money will one day be repaid.  To put it another way, they’re confusing the people we’ve promised to pay with the people we’ve promised to pay back.  As the historical context of the 14th amendment reminds us, the debt which cannot be questioned refers to money we have to pay back.”

A second reason the President cannot legally ignore the debt ceiling is that borrowing money is not an enumerated executive power.  In fact, it’s an explicitly enumerated Congressional power, which clearly places it beyond the President’s authority.  Even far-left legal scholar Erwin Chemerinsky acknowledges this:

“Article I, Section 8 of the Constitution says that it is Congress that has the power "to borrow money on the credit of the United States." The Constitution thus could not be clearer that borrowing money requires congressional action.  Nothing in Section 4 of the 14th Amendment takes this power away from Congress or assigns it to the president.  Section 4 of the 14th Amendment says only that the debt of the United States shall not be questioned; it says nothing about who gets to determine the size of the debt or in any way shifts this power from the legislature to the executive.”

Perhaps it will be argued that Congress’s instructions regarding the debt are conflicting, so Obama is just executing one interpretation of their sincere intent.  But that doesn’t pass the laugh test; Congress hasn’t even passed a budget since 2009, whereas the debt ceiling has been renewed as recently as this year.  This is the third reason the debt ceiling is legally binding: the legal principle of lex posterior derogate legi priori states that in cases where two laws passed by the same body conflict, the newest can be assumed to have overruled the oldest.  This is particularly relevant when the party controlling Congress has changed in between the two laws being passed, which it has in between the last budget (passed by a Democrat controlled House and Senate in 2009) and the most recent authorization of the debt ceiling by the current Republican majorities.  The President cannot plausibly claim to be faithfully executing Congress’ instructions regarding how much money to borrow when they have explicitly prohibited him from borrowing so recently.

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