As we wrestle with the national debt and as Congress debates over whether to raise the debt limit or risk default, we should consider what the Constitution says about the issue. First, Congress does have the right to borrow money:
‘The Congress shall have power … To borrow money on the credit of the United States.’ Article I, Section 8
But read on to the 14th Amendment and you find this:
‘The validity of the public debt of the United States … shall not be questioned.’ 14th Amendment, Section 4
The 14th Amendment deals with the wreckage of the Civil War, giving citizenship to former slaves by virtue of their having been born here (another controversial issue in the immigration debate, though clearly addressed in the Constitution) among other things. Article 4 repudiated the debt of the Confederacy, but in doing so it affirmed that the United States will always honor its debts.
This was a brilliant addition, serving as the basis for the idea that U.S. bonds are backed by the “full faith and credit” of the United States of America, meaning they are a rock solid investment. It isn’t just our full faith and credit that backs them but the Constitution itself. It would be unconstitutional to default on our loans.
But, as some experts are saying now in the midst of the debt ceiling negotiations in Congress, the 14th Amendment would render all of that moot. There is no need to raise the debt ceiling because the Constitution provides that all debt that we incur must be paid. The money that our lawmakers are squabbling over has already been spent and has been authorized by statute. According to the 14th Amendment, that debt has to be honored.
Debt can certainly be too high and need to be controlled. But the 14th Amendment means that whatever we borrow must be paid back. According to some attorneys, if the current negotiations to raise the debt ceiling break down, to prevent the country from going into default, the President simply needs to sign an executive order invoking the 14th Amendment and keep borrowing money to pay our obligations, despite what Congress does.
Do you see any flaws in this legal reasoning?
HT: Jimmy Veith