The “14th Amendment Option” And The Imperial Presidency
The so-called "14th Amendment option" to fix the debt ceiling crisis is really just a prescription for an even more powerful Presidency.
Michael McConnell, a former Federal Appeals Court Judge who now teaches at Stanford University Law School, takes on the argument that Section Four of the 14th Amendment gives the President the authority to ignore the debt ceiling:
Section Four of the Fourteenth Amendment does not create a back-door method for the Administration to borrow more money without congressional authorization. For Congress to limit the amount of the debt does not “question” the “validity” of the debt that has been “authorized by law.” At most, it means that paying the public debts and pension obligations of the United States, as they become due, has priority over all other spending. Each month, the Treasury takes in about $175 billion in new revenues. These are more than sufficient to pay principal and interest when due, as well as pension obligations. (Social Security, by the way, is not a “pension” obligation within the meaning of this provision. The Supreme Court held in Fleming v. Nestor that Social Security claims are nothing more than promises to pay, not legal obligations to pay.)
If we reach the debt limit, the Treasury will be compelled to reduce spending (other than payments on the public debt and pensions) to bring current expenditures in line with current receipts, just as a family has to do when it has maxed out on its credit cards. Presumably, the executive branch will have to make the tough decisions about priorities. No law exists to guide the process. In theory, essential services and payments will keep flowing, and less essential services and payments will be postponed. In practice, if history is any guide, politicians in the executive branch will find it more in their interest to shutter the most conspicuous and painful services first – this is called “closing the Washington Monument” – to maximize public pressure to increase the limit. It would be a crying shame if the executive stopped funding truly inessential services and programs, and no one (other than the immediate beneficiaries) noticed.
(…)
Thus, the real effect of Section Four of the Fourteenth Amendment is almost the opposite of what hopeful voices in Washington are saying. Section Four puts the onus on the President to reduce spending in order to avoid default on the debt. It does not permit him to borrow more.
Jonathan Adler adds this point:
Another point of McConnell’s worth highlighting is that “legislative control over incurring new debt is a fundamental aspect of separation of powers.” Article I, Section 8 expressly grants Congress the power “to borrow money on the credit of the United States.” Despite this provision, some believe that Section 4 of the 14th Amendment authorizes the President to assume for himself a power expressly enumerated to a coordinate branch before taking more modest steps, such as privileging debt payment over other spending. [Note that the executive branch actually does this sort of thing all the time, as when agencies are given statutory obligations that outstrip their appropriations.] Pause for a moment, then, and think about the implications for executive power of the Section 4 argument: That despite the legislature’s refusal (thus far) to authorize additional debt, the President can unilaterally issue additional debt himself before taking other, less extreme measures. Why, this argument is positively Trumanesque.
Adler links to Youngstown Sheet & Tube Co v. Sawyer, a 1952 case in which the Supreme Court struck down President Truman’s efforts to unilaterally nationalize the steel industry in the wake of a nationwide strike, which he contended threatened the American war effort in Korea as wel as our defenses against the USSR. While the Court’s majority opinion, written by Justice Hugo Black, was qualified to some extent by the five concurring opinions issued in the case, Black’s warnings about the abuse of Executive Branch authority are well taken:
The President’s order does not direct that a congressional policy be executed in a manner prescribed by Congress — it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.
It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution “in the Government of the United States, or any Department or Officer thereof.”
The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.
Adler’s point, and I agree, is that an assertion by the President that he has the authority to ignore the law, and ignore the fact that the Constitution gives Congress the sole authority on this issue, and issue new debt in the name of the United States would be the biggest executive power grab since Harry Truman tried to nationalize the steel industry, and it would just as unconstitutional. Those on the left, such as Katrina vanden Heuvel in today’s Washington Post, calling on the President to exercise this supposed authority, or at least threatening today, are essentially endorsing a lawless, arbitrary act by the President. If the President were a Republican, they’d be rightly screaming about how improper this is. Instead, they seem to be happily following him down a road that only ends in one place.
It’s practice of the same partisan tribalism the Right engages in. The only difference is the Democrats occassionally throw the peasants a bone, while the Republicans seem to delight in the sufferring of others. Both groups ultimately take us to the same place; an elected Imperator governing without effective checks from the legislature or the courts. This is unlikely to reverse itself, as 21st Century Americans have made it pretty clear they are authoritarians at heart.
Except McConnell isn’t taking on the argument, he’s taking on a strawman version of it. The argument is not that the 14th ammendment allows the president to authorize new debt. The argument is that congress authorized new debt when they passed Public Law 112-10 on April 15 with a deficit in it and that the 14th ammendment requires the President pay this debt. If congress want to eliminate the deficit, then they have to pass a new spending bill that eliminates it, not rely on some arbitrary limit.
It’s actually the congressional Republicans who are arguing for new powers to be given to the presidency, since they want him to be able to arbitrarily change the spending designated by congress without that body having any control over it.
@Stormy Dragon: You seem to be ignoring the point made by Michael McConnell, which is the Executive Branch can (and must) pay the government’s debts, and not make payments that aren’t debts.
I guess in this case we need an imperial presidency. What’s worse, an imperial president who pays the bills or an incompetent Congress who racks them up and then refuses to pay them?
In the end all that matters is how the SCOTUS will respond. This is a court that has no problem with an imperial presidency. It is also a court that will look out for the corporate interest . That said I think they would find that the debt limit is unconstitutional.
Which non-debt payments does he not have to make? Can he just arbitraily pick which programs to pay for and which not to pay for? And does this power to unilaterally cut spending only kick in when the debt limit has been reached? Or can a sitting President cut any spending he likes whenever he likes?
I find that far more imperial than “the president must issue debt to cover the spending that was voted on by both houses of congress”.
Seems to me there are two legal questions here:
1) Does section 4 of the 14th amendment give the President the power to unilaterally increase the debt if not doing so would lead to a default?
2) Does section 4 of the 14th amendment render the debt ceiling itself unconstitutional?
On the first question, I’m pretty skeptical. The constitution is pretty clear about who should be controlling the purse strings, and it’s not the President.
But I think the question of whether the debt ceiling itself is constitutional is a fair one. It’s an artificial construct anyway, designed by Congress in order to delegate one of its primary responsibilities to the executive branch. Moreover, it’s incoherent – Congress should not be able to pass spending bills that exceed the debt limit, but then also have to explicitly raise that same debt limit.
Technically, the debt ceiling is a condition of a grant of discretionary power to the treasury to issue bonds and notes. If the condition is unlawful, it draws an immediate question as to whether the grant of discretionary power is unlawful or must be invalidated as well.
Personally, I think that Congress (along with all of the geniuses in the commentariat) should keep on arguing about this well past August 2. But then again, in the spirit of NASCAR fans everywhere, I’m only interested in the car crash part. If you guys decide to act like adults before the end of the month, there won’t be any wreckage and I’ll feel cheated.
There is a chance for the GOP to self-emmolate here and take the more radical elements of the conservative/pseudo-Objectivist/quasi-Libertarian whackerati with them. This may have profound benefits relative to costs. I’m willing to take that chance. Any other takers?
I think if we go back a few months, Prof. Taylor posted on a secret hold Richard Shelby had placed on some nomination in response to the President’s refusal to advance certain projects in Alabama that had been passed by Congress. The President’s response, which I think is correct, was that just because a spending item has been approved, doesn’t mean that he has to spend it the day the law was signed. The President has reasonable amount of discretion to move forward with projects, taking into consideration all of the resources and manpower the federal government has to expend at the moment.
@Stormy Dragon: I’m not taking a position in favor of one action or the other, mostly because my opinion is inconsequential. I’m merely saying that staying within the debt ceiling doesn’t require defaulting on debt.
And the Executive Branch makes these kinds of financial decisions every day. There is nothing new about that. I can’t count the number of times in my own personal experience where the Executive Branch has chosen not to spend money on something authorized by Congress.
@PD Shaw:
Certainly that question should be asked as well. And I imagine some strict constructionists would argue that it is indeed unlawful.
I wouldn’t make that argument myself – as you suggest in your later post, it’s clearly more practical to delegate such a financial management task to the Treasury rather than leave it in the hands of a committee. But if practicality is the goal, then Congress should not be able to pass spending in excess of the limit without increasing the limit at the same time.
I can: zero.
I was born in 1977, and it’s been illegal for the president not to spend money appropriated by Congress since The Budget Act of 1974.
Were I in a snarky mood, I might ask if anyone has checked in with Cheney/ Addington/Yoo regarding their theories of the Unitary Executive.
As I recall, the theory was that in a time of war- excuse me, a TIME OF WAR! the President has nearly unlimited authority to do whatever He feels appropriate to KEEP THE COUNTRY SAFE.
So I suppose Obama can simply declare that funding the National Park Service to keep the Washington Monument open is in the interest of national security and blow through the debt ceiling.
Damn I guess I am in a mood after all.
@Stormy Dragon: @Stormy Dragon: Ironic that Jefferson was the first to resort to impoundment, i.e. refusing to spend funds allocated by Congress.
@Boyd:
The problem starts with the sentence about the Treasury taking in “about $175 billion per month.” What McConnell blows by, dishonestly I think, is the fact that (a) revenues do not come in evenly and (b) neither do the debt obligations. If Treasury revenues are $100 billion, there is $25 billion on hand, and obligations total $130 billion, what does McConnell expect the Treasury to do? Wait until next month? THAT is the problem: for the first time in probably 200 years, we will be in a situation where the Secretary of the Treasury is expected to prioritize paying bills, like a welfare mother at the end of the month or something. Repudiating pension obligations, not paying suppliers . . . why is this acceptable in GOPer eyes? I have to believe that the drafters of the Constitution would never conceive of government having the ability to pay its bills, but half the Congress not being willing to pay its bills.
Yes, but Jefferson (nor any other president who had impoundment power) was not “in my personal experience”.
@Maxwell James:
You wrote “1) Does section 4 of the 14th amendment give the President the power to unilaterally increase the debt if not doing so would lead to a default?”
We are at war. There is not enough cash in the treasury to pay interest, pay off retiring debt, and keep the Army running. Is it your take that the President, as commander in chief and consistent with the responsibilities under the 14th Amendment to make sure the debt is “not questioned”, he is not permitted to issue debt to retire other debt, pay interest and buy fuel for the Army and Navy? Is it your take that one side of the Congress, if they do not get their way on an unrelated issue, can let the entire governmental fisc implode? I simply do not read the Constitution as permitting this, government being held hostage in this way.
@Stormy Dragon: Impoundment was forbidden by that law, but the practical effect is different from what you may believe. There is federal money that goes unspent every. fiscal. year. Every year. No exceptions.
Your position is further undermined by envisioning how Congress might react: “You didn’t spend money we told you to spend, but we didn’t provide by allowing the sale of Treasury bonds! WE IMPEACH YOU!” (I hear that last sentence being spoken by a voice eerily similar to John Cleese)
Regardless, the money would get spent on the authorized programs as soon as the funds are available. Or maybe not, but the point is that the Executive Branch could certainly delay making these payments.
This is only hard if you want to make it hard, SD.
And not that I’m necessarily advocating this approach. I’m just saying it’s legal and, as far as I can tell, reasonable. I’m not sure it’s the best approach, or even a good approach, but it’s certainly justifiable.
I thnk this misses the point. The obligation to pay is incurred when the budget is passed. The president by law must spend the dollars budgeted by congress. The constitution says all debts must be paid. The president must spend the money and must pay the debts. Period. The debt ceiling is bogus.
This whole thing is stupid. Why dont the republicans just pass a budget that does what they want? They control the house. Why all this BS over the deficit ceiling?
Maybe because the republicans dont really want to cut anything? This is a way to seem tough without actually having to cut anything? Are a significant number of republicans hoping that they can be extreme on this, the ceiling will pass anyway or the president will invoke the 14th amendment or whatever because the country by law has to pay its debts and has to spend the money and then they can be pure and clean for the next republican primary but still get all the spending for their special interests?
Anyway, that is the best I can come up.
I would support President Obama arresting the Congressional Republicans for treason, for their hyperpartisan grandstanding is certainly aiding America’s enemies in a time of war.
It’s hard for me to get upset about him doing their jobs for them.
@B-Rob: Obligation ≠ debt. And again, I’m not saying this is preferred, but the idea that every government financial obligation is debt is incorrect.
Really? Dubya having the OLC write him up memos saying that he can suspend the Constitution in times of war is less an executive power grab than this? Really? SMH.
Again, I think the Shelby holds were based upon the administration refusing to spend appropriated money:
It appears clear to me that the administration was dragging it’s feet in spending money appropriated during a prior administration based upon priorirites it didn’t share. It’s 2011 budget rescinded these funds.
Here is the logic as I understand it.
1) The constitution says we must pay all our debts.
2) A 1917 statutory law requires congress authorize an increase in the total debt
3) A 1974 statutory law requires the president to spend all monies budgeted by congress.
Once the debt limit is reached, the president will either have to violate a 1917 statutory law or a 1974 statutory law.
Every one is assuming that the 1917 law trumps the 1974 law but by precedent, newer laws trump older laws. It has to be this way, congress passes contradictory laws all the time, to not assume the new law trumps the old would result in chaos.
So the president has to follow the 1974 law and violate the 1917 law.
Can some one explain to me how it could be any other way? I am honestly looking for a real explanation, not a partisan excuse for whatever your side is currently claiming.
@PD Shaw: Actually, that’s not an example. Most appropriations bills contain two types of spending. General appropriations “Congress appropriates $X to agency Y to be spent in the manner directed by it’s chief” and earmarks “Congress appropriates $X to agency Y to be spent on Z”.
Shelby’s spending was not an earmark, in that there’s nowhere in the 2007 appropriations bill where it says “The FBI will spend $45 million on an explosives lab in Alabama”. The FBI had decided to spend $45 of it’s general appropriations on one, a decision which the new administration reversed. That’s not impoundment though because the FBI still spent it’s full appropriation for that year, just on different things than Shelby was hoping for.
@Liberty60: The Cheney/Addington/Woo theory of executive power only applies to Republicans.
@Stormy Dragon:
“Which non-debt payments does he not have to make? Can he just arbitraily pick which programs to pay for and which not to pay for? ”
If that’s what it comes to, then he would, in effect, be exercising a line item veto, right? And I wonder whose oxen this president would choose to gore? Those of his friends or those of the people who have vowed to destroy him?
@Maxwell James:
Or is the debt ceiling trumped by the 1974 law that requires the president to spend all appropriations. Both the debt ceiling and the 1974 law are statutory so this question specifically is not a constitution question.
The more I see, the more the debt ceiling seems to be untenable. Its fine as long as it is raised but as soon as you refuse to raise, a bunch of other laws are violated. The whole thing should have been scrapped long ago but as with much in DC, no crisis, no action.
If the debt ceiling fails to be raised, then anything the president does is ipso facto a power grab. If the president chooses which programs he wants to fund, he grants himself a line item veto power. Plus another way around things is that the treasury has the legal power to print money. This would be perfectly legal… yet have way more real world consequences than just ignoring the debt ceiling and borrowing the money. this is like when people get in a tizzy about seat belt laws being so intrusive, and then they get in their government registered car, with their government issued license that they can’t operate their car without.
I have to give this post one big ass yawn. The president has to create a policy response on this issue that’s absent any congressional authority, no matter which way he decides to go. So forgive me if I think this post sounds more like hollow academic wailing than some true stand against executive power.
“…Instead, they seem to be happily following him down a road that only ends in one place…”
Let’s be clear here. The President has taken no stand on this publicly. “They” are attempting to lead him down a road that only ends in one place.
I see the 14th Amendment as a nuclear option…the last resort. But if the so-called republicans refuse to compromise on their revenue increase catechism by midnight on August 1st then which is better for the country – a President who folds like a paper tiger, or a President that says I’m not going to allow a poorly concieved ideology to drive this country in bankruptcy? And if he chooses to ignore the debt ceiling then the biggest question is who has standing to bring suit? Can the House argue it alone has been damaged? Because the Senate is unlikely to care.
Jib, I don’t agree with your basic assumption. For laws to be inconsistent and thus authorize invalidating or ignoring one of them, you have to point to statutes that are inconsistent: Here is the debt limit statute (last amended in 2009):
Perhaps someone can point to a law that is inconsistent; I don’t see it. What people seem to be claiming is that the budget is internally inconsistent because spending is inconsistent with income. That points to a problem in the appropriation bill, which I still don’t see. But if the appropriation is inconsistent with revenue, then the appropriation is the problem. The appropriation is impossible to perform and the law does not recognize a duty to perform the impossible.
I think the larger question is who would buy debt that the treasurey was not authorized by the law to issue? If nobody is willing to buy that risk, then nobody will have standing because no debt was created.
I think it’s important to keep in mind just what this is all about.
The so-called republicans are refusing to raise revenues by eliminating loopholes and subsidies to the richest individuals and corporations amongst us. But in the 1-1/2 years since the recession technically ended the real national income has increased by over $500B. Corporate profits captured 88% of this growth while wages and salaries accounted for only slightly more than 1%. (I don’t know where the other 11% went so don’t ask)
The so-called republicans are still preaching supply-side economics. But it doesn’t work, it’s not working, and it never has. They are threatening the country with bankrupcty in order to protect the rich. That’s it. Nothing more. There’s no altruistic motivation here. No Mom. No apple pie. Just pure un-checked greed.
It’s long standing precedent that when two laws are in conflict, the newest law (in this case the appropriations bill) wins.
@PD Shaw:
I did not say the debt limit law is inconsistent, I said it is in conflict with the law that requires the President to spend all money appropriated by congress. The president is now faced with violating a law no matter what he does. He either violates the 1917 debt ceiling law and issue more debt. Or he violates the 1974 law and does not spend the monies appropriated by congress. In this kind of situation I understand that the newer law takes priority. So the legal thing for the president to do would be to issue the new debt and spend the money.
Congress can avoid this by doing one of the following:
1) raising the debt ceiling
2) passing a balanced budget that does not require new debt to be issued
3) rescind the 1974 law that requires the president to spend all monies
4) rescind the 1917 law that sets a debt limit.