14th Admendment and the Debt Ceiling

[Mehmentum]

There's been a story going around (particularly on Huffington Post) about how Democrats could potentialy use Section 4 of the 14th amendment to deal with a failure to make a deal on the debt ceiling.

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An article that also looks at if Congress could get standing to challenge Obama: http://www.tnr.com/article/politics/90659/debt-ceiling-obama-congress

So what do you guys think?  Is this a legitamate interpretation and could it actually nullify Congres's power to raise or not raise the debt ceiling?

[True Federalist (진정한 연방 주의자)]

No.  Even if section 4 is interpreted as meaning that the the debts of the United States have first claim to Federal funds, all that would allow Obama to do (indeed he would be Constitutionally obligated to do this if that is how it is interpreted) would be to impound other appropriations and spend them on the public debt instead.  In no event could section 4 be interpreted as the President has authority to incur debt not authorized by law above the debt ceiling set by law to pay interest on the existing debt.

[Landslide Lyndon]

No.  Even if section 4 is interpreted as meaning that the the debts of the United States have first claim to Federal funds, all that would allow Obama to do (indeed he would be Constitutionally obligated to do this if that is how it is interpreted) would be to impound other appropriations and spend them on the public debt instead.  In no event could section 4 be interpreted as the President has authority to incur debt not authorized by law above the debt ceiling set by law to pay interest on the existing debt.

So that could mean that Obama can impound funds appropriated for Utah, Alabama, Alaska, Louisiana, and other red states to pay the debt.

[t_host1]

what an irony...

 the court is out teaching in other lands and unknowns supported by a dollar that has it's value being interpreted by the outcome of the insurrection (congress) and rebellion (the people).

interpretation's, gotta lov'm. Is it possible by the continued added precedents, that the above ? can be adequately answered? Law has become a preztel - getting harder to fine the beginning and the end.


debts, pensions, bounties, insurrection, rebellion and slave's - shall be held illegal and void. it's an interpretation.


 

[True Federalist (진정한 연방 주의자)]

No.  Even if section 4 is interpreted as meaning that the the debts of the United States have first claim to Federal funds, all that would allow Obama to do (indeed he would be Constitutionally obligated to do this if that is how it is interpreted) would be to impound other appropriations and spend them on the public debt instead.  In no event could section 4 be interpreted as the President has authority to incur debt not authorized by law above the debt ceiling set by law to pay interest on the existing debt.

So that could mean that Obama can impound funds appropriated for Utah, Alabama, Alaska, Louisiana, and other red states to pay the debt.

There aren't enough earmarks in the budget to do that.  Besides, most such appropriations are authorized in a manner that he wouldn't be able to be that geographically selective.  Impoundment is a blunt tool, and its use is regulated in part by the Impoundment Control Act of 1974.

As written, the Impoundment Control Act of 1974 (2 USC 681-688) requires Obama to send a message to Congress detailing which funds are to be impounded, and unless Congress passes a rescission bill (which has some special rules governing it for House and Senate debate) within 45 days, the money has to again be made available at that time. (Sooner if Congress passes an impoundment resolution telling the President to stop the impoundment.)

If the House wants to play hardball with the debt limit, impoundment is a tool Obama could use to say to Congress, you want the government to suddenly go to a balanced budget, here's what I'm cutting to do it.  If nothing else, Obama could use impoundment to avoid a technical default on August 2, while negotiations drag on, but not without a lot of pain.

[t_host1]

I for one do appreciate your knowledge on this, cuz, play'n hardball is the game that keeps score. I see your options as the bat & ball. How many innings remaining & who's the umpire?

[TomC]

Here's what I don't get- if both the federal budget and the debt limit are statutory law, how can both be legal? It seems they are sending contradictory messages to the executive as to how to administer laws. Spend this amount of money (over what is taken in) but don't borrow more than this amount of money. If the contradictory laws are of equal standing- why, as some claim, is the executive forced to ignore the budget law and heed the debt ceiling law? I don't think "Democrats invoking the 14th" is sound at all, but if the executive has to choose which of the contradictory laws to follow, and the fact that Congress (and the Pres) created a budget that increases borrowing beyond the debt ceiling, does the 14th amendment imply that that debt shall not be questioned. Why does it seem like the debt ceiling congress established is higher law than the budget congress passed?

[True Federalist (진정한 연방 주의자)]

Here's what I don't get- if both the federal budget and the debt limit are statutory law, how can both be legal? It seems they are sending contradictory messages to the executive as to how to administer laws. Spend this amount of money (over what is taken in) but don't borrow more than this amount of money. If the contradictory laws are of equal standing- why, as some claim, is the executive forced to ignore the budget law and heed the debt ceiling law? I don't think "Democrats invoking the 14th" is sound at all, but if the executive has to choose which of the contradictory laws to follow, and the fact that Congress (and the Pres) created a budget that increases borrowing beyond the debt ceiling, does the 14th amendment imply that that debt shall not be questioned. Why does it seem like the debt ceiling congress established is higher law than the budget congress passed?

The Impoundment Act that forces the executive to spend the entirety of an appropriation is itself is of shaky constitutionality. If it is constitutional, it has to invoke the Necessary and Proper Clause.  Prior to the Impoundment Act, could and did refuse to spend sums appropriated from time to time.  Whereas Article I Section 8 Clause 2 makes the authority to borrow money an enumerated power of the Congress.  It is clearly unconstitutional for the Treasury to borrow money that Congress has not authorized it to borrow.  While Congress need not make use of a debt ceiling in its mechanism of authorizing borrowing, it has chosen to do so.

If one asserts that the 14th Amendment requires Obama to preserve the Full Faith and Credit of the United States and the Constitution explicitly bars him from deciding on his own from borrowing money, and he has no guidance from Congress on which bills get paid first then his only choice is to unilaterally decide where he will cut spending.  Additionally, the Full Faith and Credit argument would imply that interest payments and the redemption of bonds get first call on Federal funds when Congress has authorized more to be spent than is actually in the Treasury.

[t_host1]

Here's what I don't get- if both the federal budget and the debt limit are statutory law, how can both be legal? It seems they are sending contradictory messages to the executive as to how to administer laws. Spend this amount of money (over what is taken in) but don't borrow more than this amount of money. If the contradictory laws are of equal standing- why, as some claim, is the executive forced to ignore the budget law and heed the debt ceiling law? I don't think "Democrats invoking the 14th" is sound at all, but if the executive has to choose which of the contradictory laws to follow, and the fact that Congress (and the Pres) created a budget that increases borrowing beyond the debt ceiling, does the 14th amendment imply that that debt shall not be questioned. Why does it seem like the debt ceiling congress established is higher law than the budget congress passed?

Not that it is a higher law, rather, why agree to a budget that the line of credit will not cover? Growth just isn't going to happen with the current rules in place.
My guess is.. the no's on the current bill did not vote for the present budget. I've heard electors say that they are going to give Obama, in legislative form, what True Federalist is speaking of - seems to me at this point that is the next move.

[TheGlobalizer]

A little late to the game, but...

No.  The failure to increase the debt ceiling does not invalidate debts incurred.  The debt ceiling is basically a cap on the amount of Treasury bonds issued, the proceeds of which are used to pay debts.

Without the debt ceiling increase, we'd be legally insolvent, but that would not be the same as an attempt to make the corresponding debts invalid.

Default occurs when you cannot procure the money to make necessary interest payments or to otherwise service issued debt.  That too does not constitute "questioning" the debt, it just means that the government failed to comply with the terms of the debt.

Think of it as a debt that you have incurred and have taken no steps to satisfy payment.  Then you pay your debt with your credit card.  Then you don't pay your credit card bill.  The debt is still there, and is not questioned and there is no attempt to consider such debt invalid.

Default is a BFD but refusal to honor debt would be much, much bigger.