Is the Debt Ceiling Law Unconstitutional?

October 16th, 2013
in Op Ed, syndication

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The existence of a law which can create a situation forcing the executive branch to violate one of more other laws of the United States in order to comply is clearly unconstitutional. Of course, if one of the other laws which would be violated were determined to be unconstitutional and therefore void, the first law could still be valid. However there may be no way that situation might apply to the debt ceiling law. More on that later.


Follow up:

First, where did the debt ceiling law come from?

The first debt ceiling law was passed in 1917 during the Liberty Bond financing of World War I. It was a provision of the Second Liberty Bond Act of 1917. In 1939 congress passed a law which established the first limit on the aggregate value of all federal debt. In 1979 a parliamentary rule was imposed that automatically raised the debt limit when a new budget was passed. This provision, known as the Gephardt Rule, was rescinded by Congress in 1995.

Since 1995 the country has operated under the contradiction that Congress can pass a budget into law and then later refuse to allow the debt to be created to pay for the appropriations.

Should the President Ignore the Debt Ceiling?

Brad Plummer, publisher of The Washington Post, had an article 10 October 2013 which reported that some law professors think that, should the debt ceiling not be raised, the President should simply issue an executive order to the Treasury to issue sufficient new Treasury debt to cover the spending that has been appropriated by legislation passed into law.

These professors agree that the President would be breaking the law.

Certain Impeachment

I would expect the Republican House would impeach the President in short order. In fact some believe that is the strategy of some hard-liners in the Republican Party from the get-go in this current crisis. However the Senate would never vote for removal from office. It is likely a case challenging the constitutionality of the debt ceiling law would be fast-tracked through the Federal Courts for final resolution by the Supreme Court.

The Fourteenth Amendment

At least one law professor (Neil H. Buchanan, Professor of Law at The George Washington University) has written that he thinks the law is unconstitutional because it violates the fourteenth amendment. This provides that the validity of the public debt shall not be questioned. But if the Treasury found a way to meet all debt payment obligations by cutting other spending , I would maintain that the law is still unconstitutional.

That consideration is important because at least one prominent constitutional law expert, Laurence H. Tribe of Harvard, has gone on record with an opinion that the law can not contravened by the President on the basis of the fourteenth amendment. In a New York Times column 07 July 2011, Tribe said that the president would not be justified in issuing additional debt in the event of an unmoved debt ceiling.

Prof. Tribe does not offer an opinion on the constitutionality of the debt ceiling law from an ab initio perspective. And that is where I would like to present a first principles argument.

First Principles Problems

Given a fixed debt ceiling and appropriations approved by Congress that exceed the debt limit, the president has the following choices to avoid exceeding the debt limit:

  • Issue more debt above the debt ceiling;
  • Increase taxes by executive order to cover the appropriations;
  • Make executive decisions on which appropriations will not be funded, breaking any government contracts necessary to do so.

All three possible actions would be unconstitutional usurpation of the authority granted to the Congress.

Thus, failure to raise the debt ceiling will create a situation that cannot be resolved without a constitutional crisis. Since the four specifications involved in this crisis are comprised of three constitutional provisions and a law, there is only one conclusion: The law is unconstitutional from first principles.

The only way a debt ceiling law could satisfy the constitution would be that Congress created, in advance, a resolution which specified what spending would be cut from prior appropriations. And, of course, that resolution would have to be signed into law by the President unless it were passed with a veto-proof majority.

The debt ceiling law is a redundancy that creates contradictions.

As Daniel Alpert and Robert Hockett wrote 10 October 2013 (Reuters): "The budget is its own 'debt ceiling'."

The debt ceiling law is unnecessary as well as unconstitutional. As Martin Wolf says in "The debt-ceiling doomsday devise" in the Financial Times:

"It is an invitation to mischief."

A follow-on article discusses how extraordinary measures by the executive branch might avoid a government shutdown with an unmoved debt ceiling.

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