Constitutional Law

Is debt limit unconstitutional? Answer is yes, some argue, based on the 14th Amendment's public debt clause

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The possibility that the United States will default on its bills has resurrected arguments that the debt limit is unconstitutional under the 14th Amendment.

If Congress doesn’t suspend or raise the limit on the amount of money that the nation may borrow, the United States could be in default by this summer, according to opinion columnist Jamelle Bouie for the New York Times. That puts President Joe Biden in a difficult situation.

Under the Constitution, the president must “take care that the laws be faithfully executed,” which would mean that the president is obligated to fulfill the terms of the budget passed by Congress, Bouie wrote. The public debt clause at Section 4 of the 14th Amendment also applies, according to Bouie and other commentators writing for the New York Times and the New Republic.

The public debt clause reads: “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.”

According to Bouie, when the public debt clause passed, the Union had repudiated Confederate debt. There was a fear that Southern Democrats and allies would retaliate and invalidate Union war debt. The clause was added to the 14th Amendment to guard against the possibility.

Bouie cited articles published in 2013 and 2012 in the Duke Law Journal and the Columbia Law Review, respectively, arguing that the public debt clause applies in any situation when the government threatens to act in a way suggesting that it won’t meet its obligations.

Not everyone agrees with those arguments, however, as the meaning of the clause “is somewhat unsettled,” Bouie said.

Writing at the New Republic, labor lawyer Thomas Geoghegan argued that the public debt clause confirms the original intent of the founders, who gave Congress the power to tax and borrow to pay debts and provide for the common defense and public welfare. Alexander Hamilton wrote in Federalist No. 30 that the power to tax and borrow was established only to ensure payment of debt or to prevent a default, according to Geoghegan.

If Hamilton was right, Geoghegan said, it is wrong to argue that the power to borrow money includes the lesser power of not paying the debt.

“Nothing could be more unconstitutional under the original 1787 Constitution than for Congress to use its powers to willfully default on the debt,” Geoghegan wrote. “Right now, in the name of original intent, the Biden administration should be in a friendly federal court seeking a declaratory judgment that the Debt Limit Statute cannot limit the obligation of the United States to continue borrowing to prevent a gratuitous default on its debt.”

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