With the government still shut down and the debt ceiling limit about to be reached, some have argued that President Obama could invoke Section 4 of the 14th Amendment and order the Treasury Department to continue borrowing despite the statutory debt limit having been reached. Section 4 says:
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.
Historian Sean Wilentz wrote an op-ed in the New York Times arguing that this gives the president the authority to act unilaterally to prevent a default on the debt, but Jack Balkin, one of the preeminent constitutional law scholars in the country, pours some cold water on that theory:
The distinguished historian Sean Wilentz offers his advice to President Obama on the debt ceiling crisis. First, Wilentz argues that the Republicans are acting in violation of Section 4 of the Fourteenth Amendment. On this particular issue, I agree with Wilentz for reasons I’ve explained elsewhere.
Second, analogizing Obama’s actions to those of Lincoln in the early days of the Civil War, Wilentz argues that the President could assume emergency powers and save the Union just as Lincoln did: “he could pledge that, if worse came to worst, he would, once a default occurred, use his emergency powers to end it and save the nation and the world from catastrophe.” Even if impeached, Obama would “undoubtedly earn the gratitude of a relieved people.”
Here I am not so sure. My view is that the President does not have the unilateral power under Section 4 to disregard the debt ceiling. He needs congressional authorization, because only Congress has the power to borrow money on the credit of the United States (Article I, section 8). As I haveexplained elsewhere, in the most dire emergency this authorization might even come after the President acts, as it has in the case of military emergencies, but an authorization is still required.
Third, Wilentz assumes that Obama could stabilize the crisis by acting on his own. But there is good reason to believe that the opposite would occur. If Obama is impeached, then the issue will shift from the constitutionality of what the House has done (using the validity of the debt as hostage) to the legality of what Obama has done. He will lose the higher ground in the debate, and the country’s focus will be taken over by an impeachment trial for months, as the economy spirals ever downward. In the meantime, the validity of debt issued by the President will be repeatedly attacked in the courts by allies of the Republicans–who could purchase the new bonds and then demand a refund in order to create standing for a lawsuit.
President Obama seems to agree with him. When asked about this during his Tuesday press conference, he said:
I know there’s been some discussion, for example, about my powers under the 14th Amendment to go ahead and ignore the debt ceiling law. Setting aside the legal analysis, what matters is — is that if you start having a situation in which there — there’s legal controversy about the U.S. Treasury’s authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn’t be sure. It’d be tied up in litigation for a long time. That’s going to make people nervous.
This seems unlikely to happen. Though it could also be that Obama might do this but doesn’t want to signal to the Republicans that he would do it, since that would give them no reason at all to lift the debt ceiling, knowing that he will prevent the worst outcome and give them a line of attack on him at the same time.