Debt Ceiling Law Unconstitutional

Debt Ceiling Law UnconstitutionalIn less than two weeks the United States of America will default on its debt unless someone in authority, the President, the Congress or both, do something. The Congress is paralyzed, and the President has said he will not negotiate on the debt ceiling law. So Mr. President, there is only one option: Declare the debt ceiling law unconstitutional and order the Secretary of the Treasury to continue to pay all debts of the United States as they become due.

On July 3, 2011, I published in LAProgressive an article entitled “The Day the GOP Shot Ol’ America Down“, arguing this very point. I am restating this point today, as we again are facing a potential self-created default on our debt, brought about by the Republican Congressional intransigence which has led to the shutdown of the federal government and by mid-October, the potential default on the debt.

The answer to the debt default dilemma, as I argued over two years ago, is for the President to rely on a clause in the Fourteenth Amendment to the Constitution that “The validity of the public debt of the United States, authorized by law…shall not be questioned.” This clause was interpreted by the U.S. Supreme Court in 1935, in Perry v United States, 294 U.S. 330, as follows:

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 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. (294 U.S. at p. 354)

On page 351 of the opinion, Chief Justice Charles Evans Hughes, stated, for the Court, that:

In authorizing Congress to borrow money, the Constitution empowers the Congress to fix the amount to be borrowed and the terms of payment.
By virtue of the power to borrow money ‘on the credit of the United States’, the Congress is authorized to pledge that credit as an assurance of payment as stipulated, as the highest assurance the government can give, its plighted faith. To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution constitutes a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court has given no sanction to such a conception of the obligations of our government. (Emphasis added)

Strangely, the President has stated, through his press secretary, that “We do not believe that the 14th Amendment provides that authority to the president.” Nonsense. A Presidential Finding that the debt ceiling law is unconstitutional and will be disregarded and that all valid debts of the U.S. will continue to be paid as they become due is necessary, unless the Republicans withdraw their misguided effort to plunge the country and perhaps the world into a severe financial crisis if the U.S. defaults on its debt.

If the President acts in this fashion, Congress could bring suit against the President requiring him to reverse his finding and stop paying the debts of the U.S. Government, which would take many months or even years to reach the Supreme Court. However, the Supreme Court has shied away from injecting itself into “political questions” involving disputes between the other two branches of government. And who has “standing” to say that they have been harmed by the continued payment by the United States of its debts and obligations?

Or the Republicans in Congress could seek to impeach the President for disobeying an Act of Congress. It take a majority of the members of the House to impeach. as was done with President Clinton, but two-thirds of the Senate to convict and remove the President from office, which will never happen with a Democratic majority (as the Republicans also found with President Clinton).

ted vaillAnd what position would the Republicans in Congress be taking? They would assert that the President should be removed from office for protecting the full faith and credit of the United States and preventing a worldwide economic collapse. They would look even more ridiculous than they already look. And President Obama is well into his second term, and does not have to face reelection again.

Do it, Mr. President, if it becomes necessary. Professor Eric Posner of the University of Chicago Law School (from which I also graduated, and where President Obama taught constitutional law) agrees that the meaning if not the words of the 14th Amendment give the President room to act in this fashion.

Ted Vaill

Friday, 4 October 2013

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Comments

  1. afnariman says

    Mr. Vaill, are you able to take your theory before the US Supreme Court. I was in the process of writing an on-line petition, when a Constitutional lawyer, David Rifkin appeared on Fox News (yes, I track the opposition) and stated that while the Supreme Court ruled in (1935) Perry v. United States that the Bond debts of the US must be paid, he also said that the Court also ruled in (1960) Nestor v. Fleming that the Trust funds do not have the same legal requirement under the Constitution.
    If the GOP takes this to the limit, and millions of seniors, veterans and Medicare Bills are not paid to Physicians and Hospitals, legal or otherwise, we will have an economic shut down.
    I am not a lawyer. I believe you are one. Do you have standing to adjudicate this case (call for the “debt ceiling” to be deemed “illegal”, and a requirement that the debt ceiling increase must be passed with each budget.)
    Would you kindly contact me at: afnariman@gmail.com

  2. JoeWeinstein says

    I don’t always agree with Vaill, but here he’s stated a plain and powerful principle. The problem is not the principle but the man he would have uphold it. That man does not believe in action that actually DOES uphold principle. Rather, he substitutes preachments that we SHOULD uphold principle, and then he ducks.

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