President Biden is playing a dangerous game. When the federal government’s deficit spending is about to exceed the amount Congress has authorized it to borrow and the Treasury has run out of what are known as “extraordinary measures” to stave off disaster, Congress and the president must negotiate a compromise resolution, or the nation faces the prospect of default.
The House of Representatives has already passed a bill that would raise the nation’s debt limit by $1.5 trillion, coupled with proposed spending cuts, and its Republican leaders have signaled a willingness to negotiate. Mr. Biden instead has demanded that Congress raise the debt ceiling without conditions.
But the House Republicans’ insistence on negotiations and compromise is not “hostage taking.” It is the ordinary stuff of politics. The two sides can posture all they want, but in the end, Congress and the president have to reach an agreement. That is not a bad thing. It is a good thing. The Constitution does not permit a unilateral solution on either side.
Begin with constitutional basics. Article I, Section 8 lists the powers of Congress. The first clause of Section 8 provides that Congress may “lay and collect taxes.” The second clause provides that Congress has the power “to borrow money on the credit of the United States.” These clauses are absolute. The executive branch cannot impose taxes or borrow funds on its own authority. Together with the power over spending, these powers are known as the “power of the purse,” which belongs entirely to the legislative branch.
These provisions have pride of place among Congress’s powers for a reason. Before the Glorious Revolution of 1688 and the English Civil War, the Stuart monarchs asserted the power to tax and to borrow without parliamentary approval, which effectively meant the power to rule without Parliament. The result was not just autocratic rule at home but also periodic defaults on the royal debt, astronomical interest rates for government borrowing and ultimately civil war. Our framers did not wish to recreate the Stuart monarchy, and first two clauses of Section 8 reflect that aversion. The power of the purse may be the most fundamental element in our system of checks and balances.
The debt limit is nothing more than an authorization from Congress to borrow a certain amount, up to a certain limit. The debt ceiling is not a restriction on what would otherwise be the president’s ability to borrow; it is an authorization for the executive branch to borrow up to that ceiling. Above that, the president may not go.
Nonetheless, President Biden’s advisers reportedly are contemplating violating the congressional debt limit based on a far-fetched interpretation of Section 4 of the 14th Amendment propounded by some academics. Previous administrations have flirted with this idea, but all have rejected it. Mr. Biden should do the same. It would twist the words of the 14th Amendment, ignore its history and send the markets into turmoil.
Section 4 of the 14th Amendment, enacted in the wake of the Civil War, says: “The validity of the public debt of the United States, authorized by law … shall not be questioned.” The immediate purpose was to prevent future Congresses (if controlled by pro-Confederate Democrats) from repudiating pension obligations and other debts incurred to win the Civil War. No doubt it applies beyond those narrow circumstances. But by its terms it does not authorize the president to borrow more money in violation of Article I, Section 8, Clause 2. Nor does it authorize the president to impose taxes in violation of Article I, Section 8, Clause 1. By its terms, it does not augment the president’s powers one iota.
Nor does Section 4 have anything to do with payment of the national debt. It does not make it unconstitutional for the United States to run out of money. Nice idea, but impossible. Section 4 prevents the only institution of government that could deny the “validity” of the debt — namely, Congress — from doing so. For the United States to fail to pay interest or principal on its debt would be financially catastrophic, but it would not affect the “validity” of the debt. When borrowers fail to make payments on lawfully incurred debt, this does not “question” the “validity” of those debts; their debts are just as valid as before. The borrowers are just in default.
Moreover, even if the president were to issue new bonds without congressional authorization, the text of Section 4 makes plain that these bonds would not be constitutionally binding. Only public debt “authorized by law” — meaning by statute — has that status. Were President Biden to issue bonds on his unilateral authority, the bond market would know that those bonds were not backed by the full faith and credit of the United States. Sensible investors would not purchase such bonds or would demand such a high risk premium as to make them uneconomical.
Some people assume that the president’s power to issue new debt would be resolved legally by the Supreme Court, but in fact it would be resolved for practical purposes by the bond markets before the courts could even act. And the resolution would not be a happy one.
President Biden has only one real choice if he wishes to avoid default: He has to negotiate with Congress, the branch of the government with authority over borrowing and spending. If that means agreeing to spending reductions, that is hardly a disaster. That is what previous presidents have done; indeed, as vice president, Mr. Biden negotiated just such a deal between President Barack Obama and Congress. The idea that the 14th Amendment gives the president unilateral power to borrow is dangerous nonsense.
Michael W. McConnell is a professor and the director of the Constitutional Law Center at Stanford Law School and a senior fellow at the Hoover Institution. He was a judge on the U.S. Court of Appeals for the 10th Circuit from 2002 to 2009.
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