Does Congress Have A Constitutional Obligation To Raise The Debt Ceiling?

-Submitted by David Drumm (Nal), Guest Blogger

Section four of the Fourteenth Amendment, known as the public debt clause, states that “the validity of the public debt of the United States, authorized by law … shall not be questioned.” The clause was included to prevent Southerners or their sympathizers from preventing payments owed to Union soldiers or their widows. However, the language goes beyond the narrow issue of Civil War debts.

If Congress does not raise the debt ceiling, the United States will not be able to service its outstanding debt, that is,  pay interest to bondholders. Congress would indicate it is unwilling to pay the public debt. Unwillingness to pay a debt has the same effect as an denial of the debt obligation, effectively a repudiation of the debt.

In the New York Times Professor Laurence Tribe wrote:

The Constitution grants only Congress — not the president — the power “to borrow money on the credit of the United States.”

In response to Professor Tribe’s op-ed, Treasury’s General Counsel George W. Madison wrote “Congress has an obligation to ensure we are able to honor the obligations of the United States.” That obligation is a constitutional obligation.

President Obama, always willing to let a political opportunity slip though his fingers, has not clearly denounced the Republican strategy on constitutional grounds. It is unfathomable that Obama would decry the effects of defaulting on the national debt and then not use every political weapon to ensure such a default doesn’t occur.

The debt issue should be framed as the President defending the Constitution and the Republicans violating the Constitution. That would generate the kind of public pressure that Republicans respond to.

H/T: Jack Balkin.

 

46 thoughts on “Does Congress Have A Constitutional Obligation To Raise The Debt Ceiling?”

  1. “I think you’re on to something, but that you’re giving the administration a little too much credit.”

    Tomdarch,

    We agree, but you stated my position better than I stated my position and added more depth. Your sigh was the perfect ending to your citation of the Cornell study. As I’ve been stating lately in Posts and comments, widely held mythology is hard to dispel with facts alone. When I realize that the Senator
    Bob Taft and then Senator Barry Goldwater of my youth would be moderate Republicans today, I shudder. Eisenhower and Nixon would be left of center today.

  2. Mike Spindell
    1, July 9, 2011 at 10:50 am
    The great irony in this debt limit conversation (blackmail actually) is that the Administration would fail to use, or even threaten, this Constitutional mandate, because they are completely “centrist” in thought.Far from being the “radicals” their opponents suggest, their decision making is mired in an inability to conceptualize beyond “common wisdom” when it comes to negotiating. You can’t effectuate “change” when you can’t look beyond political cant.
    ————————-
    I think you’re on to something, but that you’re giving the administration a little too much credit. The way I parse much of the rhetoric coming out of the White House, is that they simply want to position themselves in “the middle.” They attempt to be mostly apart from both the Democratic and Republican parties. Given the fact that the overwhelming majority of Democrats are only slightly left of center (on the full global/historical spectrum, and also on the spectrum of US politics since 1900) and the current crop of Republicans are way, way off the the right, the mid-point leaves them somewhere well right of center – a tough place to be for the Obama administration.

    They seem to think that if they give in to a bunch of wacko Republican demands, including cutting benefits for Social Security and Medicare, that the undecided middle third of the electorate (the “persuadeables”) will be somehow won over. Fat chance.
    ———————————————

    “Now that I’m on board, let’s pull up the lifeline!” (paraphrase of Roger Ebert’s one-sentence summary of Objectivism – which seems to sum up much of right-wing thinking.)

    http://www.news.cornell.edu/stories/March11/MettlerGov.html

    A recent survey study by a prof at Cornell found that a very large percentage of beneficiaries of government social programs believe that they have not, in fact, benefited from government social programs. As in roughly 45% of Social Security recipients, 40% of Unemployment recipients and 60% of those who claimed home mortgage deductions!

    “Keep your government hands off my Medicare!”

    (sigh)

  3. kderosa,

    “I also agree with Mike Appleton’s statement. Congress is committing bad budgetary practice over something that is essentially meaningless. It only compounds the stupidity of their actions in what is a political ploy rather than sound budgetary practice.”

    The disagreement here is that you advocate that it is good budgetary practice to eliminate mandatory spending before discretionary spending and I say it is not (along with every economics and accounting book I’ve ever read or instructor I have had).

    How you try to poorly rationalize that away is another matter.

  4. @GeneH, Let’s try this from a different angle, you haven’t established that the “mandatory spending” you wish to save from cuts is the equivalent of “mandatory” budget expense like a family’s heating, water, and food expenses, especially since “mandatory spending” isn’t defined that by the federal government.

    @Mike Appleton, I agree that the nature of the expenditure is irrelevant, but GeneH seems to think otherwise.Also, even if a creditor could establish liability Congress could satisfy the judgment by cutting spending, selling federal property, or printing more money,in lieu of or in combination with raising taxes.

  5. I’ve still seen nothing yet that invalidates the basic economic and accounting principle that discretionary spending should be cut before discretionary spending. Kderosa’s arguments are specious. Mandatory expenditures are categorized as mandatory expenditures no matter if it is a legally defined policy that categorizes them as mandatory or necessity that categorizes them as mandatory. No one said that they can’t adjust mandatory spending. What was said was Congress was displaying bad economic and accounting principles regarded budgeting by cutting mandatory expenditures before cutting discretionary expenditures.

    I also agree with Mike Appleton’s statement. Congress is committing bad budgetary practice over something that is essentially meaningless. It only compounds the stupidity of their actions in what is a political ploy rather than sound budgetary practice.

  6. It is not the nature of the expenditure that is important. It is the nature of the debt. Should there be a default on an obligation guaranteed by the full faith and credit of the United States, a creditor’s remedy is a suit to establish liability, followed by an action in mandamus to compel exercise of congressional taxing authority to generate revenue sufficient to pay the debt. It is for that reason that the entire debate over raising the debt ceiling is essentially meaningless.

  7. @Gene H

    Mandatory Spending is spending that is mandated by some law. Congress can’t just defund these programs as far as I know. What they can do is change the eligibility rules and payment rules, whenever they want, if they are looking to reduce or increase spending. For example, they could raise the minimum age to collect social security to age 75 if they wanted to cut expenses. Otherwise there is no distinction between mandatory and discretionary spending. Mandatory spending is not special in any other way. Mandatory spending is not like your gas bill.

  8. kderosa,

    You seem to operate under the impression that categorized expenses operate differently for government budgets than they do for any other budget. They don’t. The details of expense management (say whether you average out your gas bill with the gas company or not) do not change whether the expense is categorized as mandatory or discretionary. That is a discrete type of information in account classification. Congress changing the administrative rules of a mandatory expense do not change the categorization of the expense, only the details of its management, just like averaging out your gas bill. However, it is possible to mismanage your mandatory expense to the point that paid or not they become non-functional. If you decided to only pay for gas every other month for example. As a matter of good budgetary practice – even if you average out your gas bill – you look to cut discretionary spending first before cutting mandatory spending.

    I do just fine without your so-called help, kderosa.

    Save it for someone who takes you seriously.

  9. GeneH, the terms “mandatory spending” and “discretionary spending” have special meanings as applied to the Federal Budget. The dictionary definitions of “mandatory” and “discretionary” have nothing to do with the Federal Budget usage. I’ve been trying to explain this to you and provided a link. There’s not much more I can do to help you help yourself here.

  10. kderosa,

    Congress had the option of making those mandatory expenditures discretionary at the time they formed the establishing legislation. They didn’t so that means they considered the expenditures important enough to classify them as mandatory. According to Webster’s mandatory means “containing or constituting a command : obligatory”. Also according to Webster’s, discretionary means “1: left to discretion : exercised at one’s own discretion 2: available for discretionary use”. Yes, the rules make SSI and Medicare/Medicaid a mandatory expense. Which in turn makes them not a discretionary expense. It is still good budgetary practice to cut discretionary spending before mandatory spending. This leads to the conclusion that either you don’ t know proper budgetary practices or you have some other agenda in wanting to eliminate mandatory spending before eliminating discretionary spending.

    Basic English vocabulary really is beyond your grasp.

  11. Get rid of the 13th, 14th and 15th Amendments. While we are at it shake the 18th as well. That would solve all of the problems we have today.

  12. Bdaman: “Of the new House rule requiring a statement of the constitutional authority …”

    Because the reading was pure theatrics, like the constitutional authority statement thingy which they failed to implement right out of the box and then reduced to some broad, standard language once bills got voted on. How can such theatrics be taken seriously? They can’t.

    “House Republicans Sneak Around “Constitutional Authority Statement”

    http://ohforgoodnesssake.com/?p=16426

  13. Constitutional Nonsense on Debt
    What the 14th Amendment really says about the debt ceiling and debt default

    1 | 2 | 3 | Next >

    Lo and behold! As we celebrated this Fourth of July amid the debt-ceiling fight, the netroots and progressive pundits suddenly discovered the Constitution’s relevance in fiscal matters. It doesn’t seem like that long ago — because it wasn’t that long ago — that they ridiculed the very idea of constitutional limits on Congress in economic policymaking, and even mocked the GOP’s public reading of the Constitution at the beginning of the current session.

    Of the new House rule requiring a statement of the constitutional authority for bills, Ian Millhiser wrote at ThinkProgress that “the constitutional lunatics are now in charge of the GOP’s asylum.” It was completely unnecessary for Congress to cite constitutional justification for its actions, Millhiser proclaimed, because “Article I of the Constitution gives Congress broad authority” and “leaves budgeting decisions almost entirely to the judgment of Congress.”

    http://www.nationalreview.com/articles/271329/constitutional-nonsense-debt-john-berlau

  14. The White House could resort to an little-known line in the US constitution to prevent a ruinous default if Democrats and Republicans do not agree to raise the debt ceiling by August 2, experts say.

    The 143-year-old clause, written to address still-potent divisions after the bloody Civil War, has been dredged up by legal scholars as well as the US Treasury secretary to suggest how a debt debacle might be avoided.

    But resorting to it could spark a constitutional crisis over just who — the Congress or the White House — controls the power of the federal purse, analysts say.

    http://news.yahoo.com/obscure-clause-may-help-us-avert-default-172136367.html

  15. I get that you don’t understand what “mandatory” and “discretionary” means when it comes to expenditures and how to properly run a budget, kderosa.

    That’s cute what you did there, GeneH.

    I understand also what constitutes mandatory programs and discretionary programs under the government budget.

    We shall see.

    That the mandatory items in the budget are not a fixed expense is not relevant to them being mandatory expenses.

    I guess not. One more time, GeneH

    Discretionary spending refers to the portion of the budget which goes through the annual appropriations process each year.

    Mandatory spending includes programs, mostly entitlement programs, which are funded by eligibility rules or payment rules. Unlike discretionary spending, the Congress does not decide each year to increase or decrease the Food Stamp budget; instead, it periodically reviews the eligibility rules and may change them in order to exclude or include more people.

    No one has claimed that the fixed nature of the expenses are relevant.

    What distinguishes mandatory from discretionary spenging is that mandataory spending has rules that, once set, must be followed. Mandatory spending items are not like mandatory budget items like your mortgage or water in that these items are necessary for living.

    Let me try to explain it in terms you might understand. Let’s say that your mommy promises to give you two cookies every day as a treat as long as you are a good boy. This means that it is mandatory that she gives you two cookes when you are a good boy. However, your mommy can decide at any time that you will only get one cookie when you are a good boy or she might only give you your cookies if you are a good boy and take out the trash.

    Now that wasn;t so hard now was it?

    That you don’t like what those programs consist of seems to be your main argument for being backwards and looking to cut mandatory spending first instead of discretionary spending which is simply both bad economics and bad accounting practice.

    I never said I didn’t like them. All I said was that they were fairly up for grabs just like any other discretionary spending because what made these items mandatory was their rules not that they were truly necessary like the ordinary use of the word “mandatory.”

    The rest of your comment relies on your continued confused understanding of the distinction of what is “mandatory spending” under the federal budget and what is “mandatory” under other budgets, like your family budget.

    Why don’t you try again.

  16. I get that you don’t understand what “mandatory” and “discretionary” means when it comes to expenditures and how to properly run a budget, kderosa. I understand also what constitutes mandatory programs and discretionary programs under the government budget. That the mandatory items in the budget are not a fixed expense is not relevant to them being mandatory expenses. Your water bill isn’t a fixed expense either, but if you don’t think it is mandatory, please have your water shut off. You won’t last long neglecting a basic health need like water. Just so, a nation won’t last long neglecting a basic health need like health care.

    That you don’t like what those programs consist of seems to be your main argument for being backwards and looking to cut mandatory spending first instead of discretionary spending which is simply both bad economics and bad accounting practice. Not everyone can run a budget properly and advocating backwards accounting practices are a good indication of that. You are free to be as wrong as you like in both terminology and application and from what I can tell based upon your post, you frequently are.

    Just so, I am free to not take anything you say seriously. Freedom of speech gives you the right to act like a fool and advocate backward accounting practices in the governmental budget, but it does not create an obligation in others to take your foolishness seriously.

    Get it now, kderosa?

  17. @GeneH

    The meanings of the words “mandatory” and “discretionary” and how those types of expenditures apply to good budgetary practice are quite clear.

    Quite clear. They just don’t mean what you think they mean.

    Mandatory spending includes programs, mostly entitlement programs, which are funded by eligibility rules or payment rules. Congress decides to create a program, for example, Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamps program. It then determines who is eligible for the program and any other criteria it may want to lay out. How much is appropriated for the program each year is then determined by estimations of how many people will be eligible and apply for SNAP.

    Unlike discretionary spending, the Congress does not decide each year to increase or decrease the Food Stamp budget; instead, it periodically reviews the eligibility rules and may change them in order to exclude or include more people. This is embodied in the recent overhaul of our nation’s health care system.

    (Source)

    So, mandatory spending is not like paying your mortgage or water bill, as you seem to believe. It’s just another form of spending for programs with eligibility or payment rules that can be altered by the whim of Congress. Mandatory in the sense that they must be paid to those that are eligible according to the rules that are subject to change at the discretion of Congress.

    Get it now, GeneH?

  18. kderosa,

    I don’t see any argument from you worth addressing. The meanings of the words “mandatory” and “discretionary” and how those types of expenditures apply to good budgetary practice are quite clear. That you don’t like what the government considers mandatory and what it considers discretionary is irrelevant to the fact that discretionary spending should always be the first to go when trimming a budget.

Comments are closed.