Monday, July 11, 2011

Is the debt ceiling unconstitutional?

I've never understood the U.S. debt ceiling, because it's not really tied to spending. It's more like your credit card bill. You spend the money, then a bill shows up and you say, "Wait - this is more spending than I'm comfortable with."

The time for that conversation was at the checkout counter, my friend.

At any rate, this Washington Post "5 myths" piece, written by a former Reagan and G.W. Bush adviser who has turned on Reaganomics in more recent years, brought up a point I had not seen elsewhere:
Republicans believe they have the president over a barrel. But their hand may be weaker than they think. A number of legal scholars point to Section 4of the 14th Amendment, which says, “The validity of the public debt of the United States . . . shall not be questioned.”

Some scholars, including Michael Abramowicz of George Washington University Law Schooland Garrett Epps of the University of Baltimore Law School, think this passage may make the debt limit unconstitutional because by definition, the limit calls into question the validity of the public debt. Thus Treasury may be able to just ignore the debt limit.

Other scholars, such as Michael McConnell of Stanford Law School, say the 14th Amendment will force Obama to prioritize debt payments and unilaterally slash spending to pay bondholders. But this would involve the violation of laws requiring government spending.

Either way, a failure to raise the debt limit would force the president to break the law. The only question is which one.
Who knows. Like I said, the concept doesn't make sense to me. What rational entity caps its borrowing, but not its spending?

1 comment:

Amarant said...

Debt ceiling is not a brand new concept, though it is surprising to hear about on a national level. However, we can't do much to resolve the debt crisis because it's a product of capitalism - the very fiber of the US which will never change.

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