The Constitution, Obama and raising the debt ceiling
In an effort to slow down the severe recession as well as the persistently high unemployment rate following the 2007-08 Financial Crisis, the government increased federal spending. As a result, the federal debt reached its limit on multiple occasions from 2008 to 2011 which led to a series of increases of the debt limit. In 2011, the Treasury asked for its borrowing capacity to be extended.
The 2011 U.S. Debt Ceiling Crisis led to a contentious debate in Congress occurring in July 2011 regarding the maximum amount of debt the federal government should be allowed. Congress resolved the debt ceiling crisis by passing the Budget Control Act of 2011, which became law on August 2, 2011.
The following article was written in 2011 when the issue of raising the debt level was being discussed also. The article is taken from the LA times as an Opinion Piece.
“The Constitution, Obama and raising the debt ceiling,” Los Angeles Times, Erwin Chemerinsky, July 2011.
Lately, everywhere I go, people ask the same question: Isn’t there some mechanism for the president to act unilaterally to raise the debt ceiling and avoid financial disaster?
Hopes are usually pinned on an obscure constitutional provision, Section 4 of the 14th Amendment, which says: ‘The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.’
Unfortunately, there is no plausible way to read this provision as providing the president the ability to increase the debt ceiling without congressional action.
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.
The power of the purse — including the authority to tax, spend and borrow — is quintessentially legislative. Not even a dire financial emergency would allow the president to take this over. The Constitution, thankfully, has no provision allowing for its suspension even in times of crisis.
Moreover, the debt ceiling is set by statute. Unless this law is unconstitutional, which it obviously isn’t, the president cannot unilaterally repeal it and replace it with another law setting a higher debt ceiling.
Historical practice also matters in interpreting the Constitution.
On many occasions, the Supreme Court has said that a long, unbroken tradition is given great weight in determining the Constitution’s meaning. As the court often has said, ‘History has placed a gloss on the Constitution.’ Throughout American history, the debt ceiling always has been set and raised by statute, not executive decision-making.
Unilateral presidential action to raise the debt ceiling also would not solve the financial mess caused by congressional inaction. If the president acted on his own to increase the debt ceiling, the bonds that would then be issued would certainly be questioned and challenged in court. During this time, it is unlikely that this questionable borrowing would satisfy credit markets or rating agencies. It is estimated that decreasing the credit rating of the United States from AAA to AA would cost the federal treasury $100 billion a year in additional interest payments, to say nothing of the higher interest rates everyone in the country would pay on loans. It is highly doubtful that unilateral presidential action would provide sufficient confidence to rating agencies to avoid this dire consequence.
I wish it were otherwise and that the president could simply increase the debt ceiling and make this issue go away. It is a financial crisis that could easily be avoided, as it always has been in the past, by Congress routinely increasing the debt ceiling. But there is no reasonable way to interpret the Constitution that allows the president to do this on his own.
This whole mess is so silly and so unnecessary that it almost makes one despair of democracy as a form of government. But as Winston Churchill said:
‘No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.’
We must hope that our democratically elected government will act in the next few days and avoid financial disaster. But under any interpretation of the law, that will take congressional action.
I took the opportunity to follow up with Erwin Chemerinsky. His reply reflects what hesaid in the 2011 article in the LA Times.
I did take the liberty of following up with Erwin on his 2011 article.
My email: “The 14th Amendment has raised its head again. In this instance, it is with regard to Section 4 and the rather arbitrary debt limit. Economically, I can see nothing which would forestall an increase in debt and printing money other than inflation which a platinum coin or copper one would not stop.“
His response; “I want to be wrong, but I think it is tough to see how the president could do this unilaterally.”
A reminder from Obama’s February 2009 speech, Angry Bear, Daniel Becker
A Billion Here, A Billion There… Angry Bear, Ken Houghton
Deficit Hawks Down: The Misconstrued “Facts” Behind Their Hype, Angry Bear, Dan Crawford
To default is clearly unconstitutional. So there cannot be a default. The bills must be paid. End of story.
Y’know, the House (where spending bills arise) has always been very willing to put out the pork, on both sides of the aisle. That’s where fortunes are made, it seems.
But when it comes to finding funds to actually pay the bills, the House is also the last resort to make it difficult to actually find the funds to pay for the Other Party’s ‘obviously wasteful and unnecessary projects.’ Particularly so for the GOP which would much rather ‘save money’ by reducing taxes on the corps and the wealthy. That’s the reality of what is really happening.
As the recent op-ed in the NY Times says, what we are experiencing is what happens when one faction in Congress goes to war with Congress as a whole, since even Mitch McConnell in the Senate beieves there should not be a default.
Mitch is in a position where he can say something. He will not even if he disagrees with defaulting.
Mitch McConnell: “The United States is not going to default. It never has and it never will.”
That ‘never happen’ POV has been walked back, alas.
Biden Woos Republican Moderates in Debt Ceiling Standoff
NY Times – May 10
President Biden sought to drive a wedge among Republicans in their escalating dispute over spending and debt on Wednesday, effectively reaching out to moderates in hopes of convincing them to break away from Speaker Kevin McCarthy rather than risk triggering a national default that could throw the economy into a tailspin.
Appearing in a competitive suburb with a vulnerable House Republican in his sights, Mr. Biden accused Mr. McCarthy of pursuing a radical strategy at the behest of the “extreme” wing of his party loyal to former President Donald J. Trump, putting the country in economic jeopardy in a way that he said reasonable Republicans of his own era in the Senate would not have done.
“They’ve taken control of the House,” Mr. Biden said of this wing to a friendly audience at SUNY Westchester Community College in New York’s Hudson Valley. “They have a speaker who has his job because he yielded to the, quote, MAGA element of the party,” he added.
Those hard-right Republicans, Mr. Biden said, are “literally, not figuratively, holding the economy hostage by threatening to default on our nation’s debt, debt we’ve already incurred, we’ve already incurred over the last couple hundred years, unless we give into their threats and demands.” …
… The president’s trip came a day after he hosted Mr. McCarthy and other congressional leaders at the White House to discuss the crisis. The session produced no breakthroughs, but the leaders agreed to have their staffs meet every day and to reconvene themselves on Friday.
The federal government has reached the $31.4 trillion debt ceiling set by law and the Treasury Department estimates that it will run out of ways to avoid default as soon as June 1. Unless Congress acts by then, the nation will fail to pay its obligations for the first time in history, with potentially devastating consequences for an already fragile economy. Mr. McCarthy insists that any debt ceiling increase be tied to spending cuts, while Mr. Biden rejects linking the two; he has agreed to negotiate deficit controls separately.
The annual deficit reached $1.375 trillion last year, up from $983 billion in 2019, the last year before the Covid-19 pandemic prompted vast relief spending, and is projected to double in the next decade. Even aside from the linkage with the debt ceiling, the two sides are drastically apart on how to address the red ink. Mr. Biden has proposed a budget that would reduce projected deficits by nearly $3 trillion over 10 years by increasing taxes on corporations and the wealthy, while Mr. McCarthy’s plan would scale back deficits by $4.8 trillion over a decade largely through cuts in discretionary programs. …
… Mr. Biden singled out Representative Mike Lawler, a local Republican congressman sitting in the front row in the audience on Wednesday, praising him as a more rational member of his party. “Mike’s on the other team,” Mr. Biden said, “but you know what? Mike is the kind of guy that when I was in the Congress, there was a kind of Republican I was used to dealing with. He’s not one of these MAGA Republicans.” …
In speaking to a swing-voting New York suburb, Mr. Biden seemed to have two audiences — voters outside the capital who may not be paying as much attention to the debate and Mr. Lawler. A 36-year-old former political operative and first-term Republican, Mr. Lawler is an obvious target for the White House to try to sway. He ousted Representative Sean Patrick Maloney, then the chairman of House Democrats’ campaign operation, in a district that Mr. Biden won by 10 percentage points.
In Washington, Mr. Lawler has positioned himself as a serious-minded moderate, breaking with his party on some cultural issues while supporting Mr. McCarthy’s debt ceiling and spending proposal. Both parties view him as one of the most vulnerable Republicans in 2024, and Democrats are already lining up millions of dollars and potential candidates to defeat him.
For now, Mr. Lawler appears to be toeing a careful line between his party’s leaders and the president. When the White House reached out with an invitation to the event that many in the G.O.P. would have shunned, he promptly accepted. In media interviews before and after the speech, Mr. Lawler reiterated he would not support a default. But he also chastised Mr. Biden for not engaging with Mr. McCarthy sooner and insisted on broad spending cuts. …
At this community college just a few hundred feet from his congressional district border, Mr. Lawler nodded politely when the president mentioned him while onstage on Wednesday. “I don’t want to get him in trouble by saying anything nice about him — or negative about him,” Mr. Biden said jokingly. “But thanks for coming, Mike. Thanks for being here. It’s the way we used to do it.
Speaking with reporters after the speech, Mr. Lawler said that he and Mr. Biden had a “very cordial” and “very frank” conversation backstage before the event. “He told me he wants me to know he wasn’t coming here to put pressure on me in any way,” said Mr. Lawler, who seemed to welcome the president’s remarks onstage about him not being a MAGA Republican. “You heard his comments today. I don’t think he put too much pressure on me.”
Mr. Lawler reaffirmed his vote for Mr. McCarthy’s legislation. “We need to get our fiscal house in order,” he said. “And so yes, spending needs to be tied to the debt ceiling. And that is the message I conveyed to the president.” But he repeatedly called for a bipartisan solution. …
What Erwin doesn’t address is the argument that combining Sec. 4 of the 14th Amendment with the act of appropriating money by Congress, the borrowing to meet the obligations is clearly implied and the debt ceiling statute, therefore, is clearly unconstitutional. Ultimately, of course, as Andrew Jackson, as President, and Abraham Lincoln, in the Douglas debates, demonstrated, the Executive has as much of an obligation to judge constitutionality as does the court and can act on that judgment.
He may have been worried I would quote him and was very aware of the back and forth dialogue. I took advantage of an acquaintance although hot often. In both instances, he may have been cautious.