Why Obama Should Violate the Constitution in Debt Ceiling Fight

Section 4 of the 14th Amendment to the U.S. Constitution states that "the validity of the public debt of the United States ... shall not be questioned."

Wait, what? How then is the U.S. government, stalled in a shutdown, facing default?

What is happening in Washington D.C. today is exactly the scenario section 4 of amendment 14 seeks to prevent. After the Civil War, Congress and the States ratified the 14th Amendment to prevent reintegrated Southern politicians from seeking to block payment of debts incurred to fund the Union's war effort. The amendment, in essence, sanctifies in letter and spirit the government's promise to pay its obligations. A U.S. government promise to pay rises above the theater of day-to-day political gesturing.

Well, it does until a rogue subset of House Republicans decide it doesn't.

Tea Party Republicans are willfully and unambiguously violating the 14th Amendment to block the funding of legislation that was legitimately passed into law. 

Obama's debt ceiling options?

Given this predicament, President Obama has a few options -- none of which are particularly palatable.

The best option is to find some way to work with House Majority Leader John Boehner and raise the debt ceiling. Obama has made it clear he has no intention of negotiating. In my view, that does not preclude any back office, behind-the-scenes conversation.

With mid-term elections now just a year away, the GOP is suffering massive damage to its image. This is providing Obama with the leverage to see his hard line negotiation tactics through.

A Quinniapiac poll this week showed that while American's are split about 50/50 on Obamacare itself, over 72% oppose the Tea Party's current tactics to block the law. The same poll reported that 74% of American's disapprove of the job that Congressional Republicans are doing. 

Enter the nuclear option

Yes, Obama may be winning the battle of public opinion, but legally he remains stuck between a rock and a hard place. 

If he does nothing, the Treasury will eventually default on a debt payment and the 14th Amendment will be violated. The problem for Obama with this outcome is that he solemnly swore to uphold the Constitution, as prescribed in Article 2.

How can the U.S. government raise the funds to make the payment and avoid default? There are two ways: via taxes or by borrowing money. The Constitution gives the right to do both to Congress, not to the Executive Branch.

To summarize, if Obama does nothing he is violating the Constitution. If he takes action and authorizes the Treasury to issue debt, he is violating the Constitution. Lose-lose situation if there ever was one.

To Columbia Law School professors Neil Buchanan and Michael Dorf, the answer is for Obama to take the "least unconstitutional" path and ignore the debt ceiling. By going nuclear, Obama would be ignoring the separation of powers between the Congress and Executive branches, and order the Treasury to issue new debt.

They summarize the conclusion by saying:

In short, while unauthorized issuance of debt would hardly be ideal, and would carry with it risks of financial and economic disruption, it would be a more rational and administrable process—to say nothing of a more limited expansion of presidential discretion—than enacting unauthorized spending cuts. For this and other reasons, it would thus be a less unconstitutional course than unilateral presidential spending cuts, because rationality and administrability are not merely practical considerations; they may bear on constitutionality. Other things being equal, a presidential course of action in an area of congressional primacy is on firmer constitutional ground where the president can follow Congress's priorities, rather than having to fashion his own in order to act coherently.

Governing when the government itself is held hostage

The consequences of going nuclear are impossible to predict. We can't know how the financial markets would react to legally unauthorized U.S. bonds (Buchanan and Dorf call them "Presidential Bonds"), and we certainly can not predict public reaction. It seems certain though that the reaction would be quite large, disruptive, and a significant distraction from much more significant issues. 

Lest we forget that our economy remains stuck in first gear (and the engine is sputtering), or that we remain engaged in a global war on terrorism. 

Its time for this debacle to end. We, as a nation, can not afford a nuclear option. Its time for the Tea Party to wake up to the reality of governing. The American people deserve better.

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Read/Post Comments (8) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 10, 2013, at 1:38 PM, TruthfulComment wrote:

    Fool, indeed.

  • Report this Comment On October 10, 2013, at 2:52 PM, distressUS wrote:

    Put it in its proper context M-Fool!!! It has nothing to do with the outrageous spending and unsustainable debt being created. As far as violating the Constitution, the Usuper Pres. is a violation himself, and has violated the Constitution so many times the "People" have lost count.

  • Report this Comment On October 10, 2013, at 3:18 PM, pondee619 wrote:

    This web site: http://treasurydirect.gov/govt/reports/ir/ir_expense.htm shows the Federal monthly interset paymenta at about $35 Billion ($415,688,781,248.40 /12months)

    This site: http://www.shadowstats.com/charts/employment/federal-withhol...

    shows a rolling 4 week (monthly) Federal withholding tax recipts of about $120-$140 Billion.

    There are $120 billion coming into the Federal Government every month to pay a $35 billion interest payment.

    "the validity of the public debt of the United States ... shall not be questioned."

    Other payments may not be made, but the debt service payments can continue to be made.

    There is no Constitutional crisis. Just a financial one. The debt can be paid via income. Maybe not much else, but nothing else is Constitutionally mandated.

  • Report this Comment On October 11, 2013, at 1:00 AM, Clint35 wrote:

    Sure, why not? Him and the other politicians violate the constitution whenever they feel like it anyway. One more time won't hurt.

  • Report this Comment On October 11, 2013, at 9:21 AM, lancescott70 wrote:

    To the Fool that wrote this article: The president might as well ignore the constitution in regards to the debt ceiling. He has been ignoring it and the peoples wishes for about 6 years now. I am a moderate independent that voted for Obama in 2008. I did not vote for him in 2012 because I thought he had done a poor job as president and did not think the prospects were good of him improving. His second term has changed my opinion of him dramatically. I now consider him the worst president since Nixon and that is a close race. The only thing he has done that I would congratulate him for is the auto bailout. Other then that he has done nothing notable and positive to outweigh the negative. I am angry at the GOP for shutting down the Gov. but at least they are standing up for what their contituents want. I can't remember when I could say that about a Democrat.

  • Report this Comment On October 11, 2013, at 10:51 AM, Rockyvnvmc wrote:

    'Tea Party Republicans are willfully and unambiguously violating the 14th Amendment to block the funding of legislation that was legitimately passed into law. '

    You can tell that this article was written by a Liberal 'Progressive', as it's stretching the truth, as they are so wont to do...

    The fact is, that the Republican led House has passed numerous Bills Completely Finding ALL portions of the Government, with the singular exception of the highly unpopular 'Unaffordable Care Act', which in it's later offerings is merely desired to be halted, for the People, for the same amount of time that the Employers were given a break from... one year.

    btw; The Government is Not 'Shut Down' as fully 83% of it is business as usual. The 'Lyin' King' has demanded that those in government employ make it as hard on all of the rest of us, as possible, in order that he get his precious 'Obamacare' upheld, in it's entirety, despite the fact that he is continually granting 'Waivers' to all and sundry, so that all of his friends and supported won't have to enroll in it. Spending More money in his efforts to shut down such open air monuments as the various War Memorials (which are normally mostly unattended) and placing cones on the overlooks of the Mount Rushmore monument, so that drivers can not pull over to take pictures, etc. He's even went so far as trying to close portions of the Ocean, of all things and kicked both business owners and homeowners off of their respective places, due to their lying on federal land, even though the business might even help fund the government\ and the homeowners having lived there for decades. All previous gov't, shutdowns (slowdowns) didn't bother with such trivial, but disruptive, efforts.

    If it's good enough for Us, it should be good enough for Him and his pals as well.

  • Report this Comment On October 11, 2013, at 10:52 AM, richyrich333 wrote:

    The only way the US defaults on any government Treasury Bond is if the President tells the Treasury Secretary not to pay them. The US Treasury on average collects monthly $240 Billion and the interest payment on the Treasury Bonds are $25 Billion a month so there is more than enough money to cover their payment. It's about prioritizing what government pays for not a situation where the President has no choice. If the debt ceiling is not raised the Federal government will be about 6% short of funds to pay all it's obligations and discretionary spending would have to be cut to accommodate.

    Any argument that says the President must evoke Executive Privilege to prevent a default on Treasury Bonds by acting unconstitutionally is not true.

    Those that say the Republicans have shutdown government are incorrect, they have passed every spending bill to keep government open except the ACA and it is not an absolute necessity being law or not. The House of Representatives who have the Constitutional authority to fund or defund any law is well within it's rights and negotiation is in order to find resolution to the impasse. Whether the President disagrees with them or their methods is immaterial his obligations take precedent to his personal beliefs and wants, we expect Obama to act Presidential so far he's falling short of our expectations.

  • Report this Comment On October 11, 2013, at 11:39 AM, henrythe8thiam wrote:

    Seriously? One should never violate the Constitution, EVER!! That's is why we have a government with checks and balances.

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