Saturday, July 30, 2011

Debt Ceiling and the Fourteenth Amendment Redux and Round-Up

There has been a flurry of discussion about the "debt ceiling" and the Fourteenth Amendment since we posted about it last month here.  Essentially, the arguments revolve around whether President Obama has constitutional power to raise the debt ceiling, without Congressional approval, under the Constitution.

The provision at issue is the usually neglected section 4 of the Fourteenth Amendment:

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.

 The United States Supreme Court interpreted this provision in 1935 in one of the so-called "Gold Bond Cases," Perry v. United States, 294 U.S. 330 (1935). At issue was a Joint Resolution by Congress that arguably changed the terms of gold bonds: provisions requiring "payment in gold or a particular kind of coin or currency" were "against public policy," and provided that "every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein," shall be discharged "upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts."

The Court declared the Joint Resolution unconstitutional, based on the Fourteenth Amendment:

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.

We conclude that the Joint Resolution of June 5, 1933, insofar as it attempted to override the obligation created by the bond in suit, went beyond the congressional power.

However, the bond holder did not necessarily prevail, given other acts by Congress - - - and FDR - - - regarding the "adjustment of the internal economy to the single measure of value as established by the legislation of the Congress," so that "the payment to the plaintiff of the amount which he demands would appear to constitute not a recoupment of loss in any proper sense, but an unjustified enrichment."

As for the present situation involving Obama's options under the Fourteenth Amendment, ConLawProfs articulate various views. 

Barack_Obama_in_in_a_shaft_of_light_in_the_Oval_Office_at_the_sunset In addition to Garrett Epps original discussion a few months ago, earlier this month Larry Tribe argued that the debt ceiling statute was constitutional and Obama had little power.  In the past few days, several others have weighed in.

Ronald Dworkin, writing in the New York Review of Books, notes that the 

“debt shall not be questioned” clause was added to the Fourteenth Amendment for a specific and immediate purpose: to prevent the new Southern members of Congress, should they gain a majority, from cancelling the debt the Union had incurred in the war. But constitutional interpretation is not a catalogue of historical anecdotes; it is a matter of principle and we are therefore required to identify the principle on which the authors of the clause had to rely.

Dworkin quotes the 1935 precedent (obviously referring to Perry, although it was not a unanimous opinion, as he states, for whatever that is worth), and concludes "I believe the best, principled, interpretation of the clause gives the president authority to ignore that blackmail and to borrow enough to meet the nation’s standing legal obligations."   Whether or not this would be "politically wise" is another question, as Dworkin discusses.

Jeffrey Rosen attempts to predict the outcome of a challenge to a possible Obama debt ceiling raise and a possible case before the present Supreme Court Justices.  Rosen notes that the Court might not hear the case.

Indeed, Darren Hutchinson writes that precedent weighs heavily against lawmakers (or presumably any one else) have standing to challenge Obama's possible act.

Be that as it may, Rosen predicts that the Court would rule for Obama by a "lopsided margin," assuming the Justices were "true" to their constitutional philosophies, although "the conservative justices would be torn between their dislike of Obama and their commitment to expanding executive power at all costs."

Erwin Cherminsky takes a different view in an op-ed in the LA Times. 

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.

 

Of course, politics are inextricably interwoven in all of these opinions, just as they were in 1935 when the Depression-era Court was considering government regulation of gold.  Hutchinson recommends that once "the debt ceiling drama has subsided, the nation needs to engage in a very meaningful (i.e., not theatrical and immature) discussion of its priorities."  

RR
[image: Obama and the Oval Office ceiling via]

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Comments

Eric Posner and Adrian Vermeule recently argued that the President's inherent Article 2 authority authorizes him to unilaterally raise the debt ceiling in order to avoid a national catastrophe. Their contention is principally grounded not in section 4 of the 14th Amendment, but in the "take care clause" and the Hamiltonian notion of a robust presidential role, particularly in emergency circumstances which require swift, decisive action.
Such an action would almost certainly place the President's power at it's lowest ebb under Justice Jackson's Youngstown framework but does seem to fit neatly into the original intent/balance-of-powers argument set forth in Justice Vinson's dissenting opinion in that case: "Of course, the Framers created no autocrat capable of arrogating any power unto himself at any time. But neither did they create an automaton impotent to exercise the powers of Government at a time when the survival of the Republic itself may be at stake."
While arguments grounded in article 2 inherent authority appear, at least so far, to have winning force only in times of war, the particular nature of this situation seems to at least warrant discussion of this option. The practical negative consequences of a failure to act would likely be dire and pervasive. The practical cost of acting, conversely, appears to be minimal- the debt ceiling provision has largely procedural import.
In the face of a demonstrably incorrigible Congress and an impending and unnecessary economic disaster, might the President be justified in raising the debt ceiling unilaterally?

http://www.nytimes.com/2011/07/22/opinion/22posner.html?_r=1

Posted by: Ross Drath | Jul 30, 2011 5:37:29 PM

"Edwin Cherminsky" => Erwin Chemerinsky

Posted by: Robert Earle | Jul 31, 2011 9:51:02 PM

Thanks Robert for the typo catch! Fixed it.

Posted by: RR | Aug 1, 2011 1:42:38 PM

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