Debt Ceiling Fight Setting Up Constitutional Crisis

With debt ceiling negotiations apparently dead in the water and the August 2nd deadline fast approaching, those hoping to prevent the potentially devastating consequences of a default have started to look for alternative ways to solve what has become an entrenched partisan battle.  So far, the only answers emerging seem to present equally messy constitutional issues.

The current borrowing limit is a result of a 1939 act (The Second Liberty Bond Act) designed to give Treasury more flexibility to manage the country’s finances.  Conservatives argue that should the government run out of cash, which is what would happen come August 2nd with no deal, then the Treasury Department can simply prioritize payments and have introduced legislation that clarifies that debt payments be at the top of that priority.  In support of this conclusion they cite a 1985 GAO report that “tentatively” suggests Treasury has that power.

These Republicans, like Sen. Pat Toomey (PA) hope this “re-prioritization” can do the less-politically feasible job such as cutting of Social Security and Medicare benefits, ideas a majority of voters squarely oppose but hard-right Republicans adore.

Thank goodness for the 14th Amendment.

Section 4 of the 14th Amendment makes it clear that the United States’ public debt “shall not be questioned,” meaning that public debt (in the form of such things as military pay, veterans benefits and IRS refunds) is guaranteed and insulated from such political hostage-taking.  The legislative history of the Amendment reinforces this clear read.  The sponsor of the 14th Amendment, Benjamin Wade, was unequivocal that the goal was to remove threats of default on federal debts from partisan bickering.

Reconstructionists worried Southern Democrats would use any future congressional majorities to default on obligations they disliked politically (like slave reparations, for example), so they took, in some measure, federal obligations outside of the scope of congressional authority.  More simply, the 14th Amendment was written, and passed, to guard against the exact same thing Congressional Republicans are doing now.

While the 14th Amendment is pretty clear that a forced default could be avoided by the executive branch stepping in and simply ignoring the limit, that answer raises a sticky separation of powers issue since the executive is also obligated to make sure the laws are faithfully executed, including the 1939 act setting the debt limit.

Does the 14th Amendment authorize the Obama administration to ignore the 1939 act and if so, will they invoke such power?  The answer to the first question seems to be likely yes, while the second is much murkier.  Should they take such a position it is all but guaranteed the issue will find its way to the Supreme Court, an outcome neither the administration nor Congressional Republicans, despite their posturing, likely want.


photo courtesy of Thorne Enterprises via Flickr


Laure H.
Laure H6 years ago

Not all Republicans agreed with Bush, first of all.

Secondly, to insist on allowing Bush's mistakes in raising the debt ceiling as an excuse to do the same is sand-box behavior. "He got to do it, so I should too!"

While I do not like to see anyone lose their job "unfairly" (as my father did during an economic downturn that combined with a youth-oriented age-discrimination era in our past), but every government job has, or should have, a sunset if it is not serving its original purpose as it should, if the costs outweigh the benefits. But the mentality is different for conservatives: they don't expect jobs to be provided, they just move forward an meet the challenge for survival, and have usually put some money aside to make the transition. They don't hang onto a lifestyle they can't afford, hoping someone will save them. They don't want the government to be in debt, wasting tax dollars on interest, so they'll suck it up and move on. Just keep the economy healthy by running the government in the black, so that you can do the same work on half the taxes; do that and there will be new jobs to replace the old ones as current and new entrepreneurs sense that it is safe to grow business.

Green Road A.
Eric Straatsma6 years ago

Care to know more about this?

Note Care2 News Story At:

Thank you!

David M.
David M6 years ago

Bush raised the debt ceiling 7 times in 8 years. Two sets of standards. One for Republicans and one, (none), for Democrats.

Richard M.
Past Member 6 years ago



Maureen L.
Maureen Leibich6 years ago

John H--It was Bush and Cheney, with their warlike agendas, that got this country into so much trouble in the first place. Let us not forget that, while Bush was spending all that money on his wars, he was also giving tax breaks to his rich buddies. Let us also not forget that he was not really elected to his first term; he was appointed by the Supreme Court. It was later proven that Gore really won that election.

Vince D.
Vince D6 years ago


We are dealing with economic predators so we do need some “protectionism”. Our corporations are exactly that.

We outlawed slavery and abusive labor practices here, but we aloe businesses to go offshore to hire (virtual) slaves in China for 50c/hr. If slavery is wrong, it’s wrong everywhere, to allow (virtual) slave produced good to be sold here is morally wrong. It’s also economically stupid.

Perhaps some of our wages do need to come down, but let’s start with the CEO’s. This nation has worshiped “Free Trade” and corporate profits way too long. It’s time to start considering our working class. Despite the low cost labor, prices certainly have not come down so “We the people” really have not benefitted for this cheap labor. “Free Trade” needs a major re-think.

Joe L.
Joe Lade6 years ago

John H.; Obama was a senator BEFORE Bush and the GOP put the world into recession in 2008. The economy was hot and they just wanted to finance wars without raising taxes.
Kris Y.; You cannot seriously expect someone living in the US to work for the same wage as someone living in Communist China! Do American workers get free housing? Free food vouchers? Free university education? Free healthcare? Etc, etc. Thousands of Chinese workers die at their jobs every year due to low standards, polluted environments and slave like conditions. The Chinese government has been taking steps in the last few years to prepare for and prevent a major social meltdown over there.
The "global economy" is coming to an end because too few people profit from it. The price of oil and energy will make transporting cheap products too expensive. Working for a starvation wage will force people to look for alternatives.
Check into the "Transitions Towns" movement. It's where the thinking world is headed.

Jean  L. C.
Jean Corcoran6 years ago

Why is it do you suppose that the same Republicans, that voted for the past 30 years to raise the debt limit are willing to sacrifice their re-election, and the good name of this country world-wide? I'll give you a clue, His JOB and INTENT is to see it that This President does not serve a second term. Why do you think there are so many Republicans running for President? Because it takes that many to talk against what Obama has already accomplished.

Rob K.
Rob Keenan6 years ago

Unlike the Fed budget which concerns future expenses,the Public debt is like the electric bill which is for past use,and if that bill isn't payed by the specific date the electricity is disconnected. Likewise if the debt limit isn't increased on time it'll be economic lights out!

kris y.
kris y6 years ago

I think a sad fact that no one really wants to admit is that unless we rely on protectionism and artificially increasing the costs to offshore labor (which has many unpleasant consequences) many things in the US are going to need to change. One obvious one is that precedence aside there is no reason for me to make $50/hr to do the same job that someone in China can do for $10/hr. In the last decade labor prices in the developing world have come up significantly, but if we really want to see more of these jobs come back to the US some of our wages are going to need to come down.

This isn't pleasant, but without huge government intervention it is just an economic fact that can't be ignored.