Thursday, June 30, 2011

Is the debt ceiling constitutional?

Yesterday, internet chatter exploded about a potential new solution to the debt ceiling standoff: just calling the debt ceiling unconstitutional and being done with it.

There's more than a whiff of liberal wishful thinking to this approach. If deemed legally sound, it would instantly end the debt ceiling debate, with nary a concession to Republicans. Poof! No more debt ceiling to reckon with, now or ever.

So is it legally sound? The answer is... no one really knows. No one has ever tested anything like the debt ceiling in courts before, so until the Supreme Court issues an opinion, there's simply not a "right" answer.

The argument against the debt ceiling is certainly credible, at least. It arises from Section 4 of the Fourteenth Amendment, which reads "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." This clause was inserted into the Constitution to reassure bondholders after the Civil War that the US government would continue to honor their debts. But it appears to extend beyond that narrow purpose, and create a constitutional bar to intentional default on the public debt that has been "authorized by law."

To a large extent, the strength of the constitutional argument depends on how you view the debt ceiling in the first place. Up until recently, the consensus view was that a failure to raise the debt ceiling would virtually mandate a US default. Essentially, the debt ceiling vote functioned as a big red DEFAULT button atop the federal government. And if that view is correct, well, it's probably unconstitutional, because Congress is constitutionally forbidden to opt for default. The Fourteenth Amendment prohibits big red DEFAULT buttons, and to the extent they exist, they shouldn't have any binding legal effect.

But there's an alternative view of the debt ceiling, espoused by, among others, Michele Bachmann. (I'm not trying to be cute here -- I literally just can't think of anyone else who had this view of the ceiling until recently.) In this conception, the question of whether to raise the ceiling is quite separate from the question of whether to repay our debt. Instead, these people argue that the debt ceiling is simply about the source of federal funding -- i.e., whether the federal government can borrow money for operating costs. If the ceiling doesn't get raised, the obligation to repay debts remains in place -- but in order to pay them, the government must find money elsewhere, by withholding or ripping up checks to military contractors, bureaucrats, soldiers, Social Security beneficiaries, and so on.

Proponents of the Bachmannite view would presumably argue that the Fourteenth Amendment applies only to debt "authorized by law." Since the debt ceiling, on its face, is about granting the government the authority to take on additional debt, the Amendment is inapplicable.

I, of course, prefer the former approach. A legalistic parsing of the Amendment's language might initially suggest that it draws a fine distinction between servicing preexisting debt and authorizing additional debt. More important, however, is the general thrust of the Amendment: "the validity of the public debt shall not be questioned." Rather than only forbidding certain budgetary practices, it appears to proscribe any activities that would call into question the soundness of preexisting loans to the US .

Would a congressional refusal to raise the debt ceiling call into question the soundness of preexisting loans to the US? Absolutely.

There are many, many problems with the Bachmannite understanding of the debt ceiling. Politically, it's devastating: we'd be literally taking money from the nation's grandmothers and turning it over to Chinese bondholders. How long could the government continue to service its debt before political pressure forced it to find some way out of its obligations to bondholders? Even if the government kept up payments on the debt, it's unclear whether US bondholders would be any more at ease. Sure, they're getting paid now -- but how much faith could they have in the US government's ability to make good on its long-term debt, if the government couldn't even make good on its short-term obligations to its own citizens?

Finally, and most importantly, while a failure to raise the debt ceiling may not trigger instantaneous default, hardly anyone believes that the country could avoid default without eventually raising the ceiling. In other words, there might be a timer on that big red DEFAULT button -- three weeks? four months? a year? -- but that doesn't change its nature. If Congress absolutely refuses to raise the debt ceiling, default will occur eventually, almost as assuredly as if it had passed a law announcing the total abrogation of all debtor obligations.

And that, in my view, makes the whole thing unconstitutional.

Nonetheless, Democrats would want to think long and hard before making this case publicly. The politics of doing so are complicated and risky. More on this topic later.

22 comments:

  1. What you term the "Bachmannite" view was my understanding of the provision before I had ever heard the debt ceiling existed (and yes, I realize that it is weird that I had an understanding of this before the debt ceiling became headline news).

    And I definitely recall Megan McArdle bringing this up very early in the discussion (warning to politicians: if you are counting on bondholder freakout to give you political capital, remember that bondholders don't care if gramma gets her social security check on time. Gramma, however, does care, and she votes too) (a paraphrase, since I don't have the exact quote on hand).

    A reading of the amendment that claims it "proscribe[s] any activities that would call into question the soundness of preexisting loans to the US" seems pretty tenuous to me, to put it lightly. It says that the debt shall not be "questioned" not that it shall not be "questionable" -- in fact, it pretty much implies that the debt is already questionable if you have to put this into the constitution (because the Union was disclaiming the debt of the Confederacy, a government it claimed never existed, and was about to send many of the Southern states into default). But even if the amendment did mean that, that effect would clearly not be judicially enforceable.

    What I still find more interesting is, say Obama or Geitner simply says, for plausible-sounding reason or not, that he won't abide by the debt limit and keeps issuing treasuries or federal scrip or whatever, who has standing to sue to stop him?

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  2. Here's the thing: I don't think your understanding is really an understanding of the provision so much as it is an understanding of the debt ceiling. Presumably, whatever the space between our views on the Fourteenth Amendment provision, we both agree that Congress would not be permitted to simply command the US to go into default. And that's what Congress is doing if it refuses to raise the debt ceiling, given our current spending obligations.

    That's why this post focuses more on the mechanics of the debt ceiling than the phrasing of the amendment. I think the only way the debt ceiling becomes constitutional is if Republicans manage to walk back the conventional understanding of what it is: an option to default.

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  3. I kind of regret the "any activities that call into question..." line, which I wrote in a hurry this morning, because it makes it sound like I'm basing my argument on a broad interpretation of the Fourteenth Amendment. While you could certainly imagine the constitutionality of some sort of congressional activity turning on how broadly you read that provision (Congress creates an Office of Debt Restructuring, just in case. Constitutional?) this isn't one of those times. The Constitution doesn't let Congress lead the country directly into default, even if Congress tries to walk us there backwards.

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  4. "I don't think your understanding is really an understanding of the provision so much as it is an understanding of the debt ceiling."

    I was just thinking to myself that, given my understanding of the two laws, I would add that: should Obama/Geitner decide that they wouldn't continue to borrow, but that they wouldn't stop paying gramma, that I dont immediately see what anyone could do to keep the U.S. from going into technical default, and that without reading up on the caselaw (exactly one case, I think) I don't know what an opinion would look like that would stop full default. So, basically, Obama can decide to force a constitutional crisis which will scare the bond markets, if he decides to announce he'll pursue that course.

    But what am I misunderstanding about the debt ceiling? I understood it simply to be that Congress has exercised it's Article I, Section 8, clause 2 power to "borrow money on the credit of the United States" in discreet chunks -- i.e. Treasury is hereby authorized to borrow the next $100 billion it needs in order to fulfill its obligations under law -- and that the current chunk we are on is running out. That is, the ceiling isn't a limit on otherwise authorized borrowing, it is the limit of the authorization to borrow.

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  5. Hmm. Actually, with the post the showed up while I was writing that, I think I get what you are saying: if the debt ceiling is a law that says "you shall not pay under x circumstance" and congress also passes a law causing x circumstance to occur, that's unconstitutional. But I don't think that's how it works. The executive can't borrow dollar one, regardless of it's obligations under law, if Congress doesn't authorize it first.

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  6. That's not what the debt ceiling law says (to the best of my knowledge, anyway) but that's its practical effect. My point is that you have to look at what function the debt ceiling serves above and beyond its nominal purpose as congressional authorization for borrowing.

    I'm not sure that the difference between a "limitation on otherwise authorized borrowing" and "the limit of the authorization to borrow" is anything but purely semantic. If it isn't, though, the debt ceiling is clearly the latter. Congress has already given Treasury separate authority to borrow as necessary to meet spending obligations. It then places a second limit on that borrowing (why? it's not really clear, but I guess it keeps Geithner from borrowing money on the full faith and credit of the United States, and using it to redo his kitchen). Until 1974, every year's budget vote included an increase in that limit to meet the obligations in the budget. In 1974, for reasons that continue to baffle, Congress split off the debt limit question from the vote to increase the deficit.

    So now we have a system in which Congress votes to create a set of spending obligations, fully aware that Treasury does and will borrow funds to meet those spending obligations. It then periodically holds a separate vote to authorize, as you say, an additional chunk of borrowing.

    Authorization to borrow has to come from Congress -- but in a sense, it already has prior to the debt vote, because Congress created the budget and gave Treasury permission to borrow as necessary.

    I know what you're thinking. "The permission only extends as far as the debt ceiling!" And if we were looking no further than the letter of the law, I'd say you were right. But the system we've created has three incompatible rules: Congress can create spending obligations, can restrict borrowing, and can't order a default. Something has to give -- they can't all be true at once.

    In this case, if you step back and look at the functional role of each law, the obvious weak point is the debt ceiling. That's because it doesn't serve any purpose beyond being a rubber stamp on borrowing that Congress has already approved in the budget. Regardless of what Article I clothing it gets dressed up in, its sole institutional function is as a DEFAULT? YES/NO switch. And that's not constitutional.

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  7. By the way --

    Re: the question of standing. It's clearly important from an academic point of view. But:

    A. I think standing is boring to talk about.

    B. Of the long list of factors that might prove important to the judicial resolution of this case, actual standing doctrine probably ranks last, even to the resolution of the standing issue itself.

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  8. I think I see where you are going with the three conflicting laws thing, but try this hypo with me and see where you diverge:

    You can get the same conflict with even fewer laws.

    Hypo 1) Let's say it 1790 and there is no federal debt (not what happened really, but assume for the hypo). Congress appropriates $X which the law says the executive branch is to spend. Congress doesn't exercise it's power to borrow at all. But revenues are $.5X. What happens? The executive must either fail to spend what the law commands, or must borrow without authority. I think it must fail to spend as the law commands.

    Hypo 2) Same as hypo 1, but Congress authorizes $.25X of borrowing. I think the answer is that it fails to spend as the law commands.

    Hypo 3) Same as hypo 2, but in addition to the $X new spending, the law also demands the executive repay $.25X in loans that are due. I think the answer is still that the executive must fail to spend as the law commands, but that baring some preference mechanism the executive can choose whether to fail to spend on new things or fail to spend on servicing debt.

    Hypo 4) Same as hypo 3, but it is 1870 and there is no option to default on the debt. I think the answer is that the executive fails to spend as the law commands, but that the failure must be on new spending, not on debt service.

    Where do you think that goes wrong?

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  9. And actually, looking at Perry v. United States, I have to adjust my answer to Hypo 4. The executive can stil choose whether to fail to spend on new things or to default on the debt, but so long as Congress has waived the U.S.'s sovereign immunity (i.e. through the Claims Court) the bondholders can sue and win a judgment ordering the executive to pay them first.

    Which is to say that, according to Perry, Congress may not constitutionally discharge or invalidate a debt. But that doesn't, in practice, mean that it actually has to make good on that debt. It can make it a virtual dead letter by refusing to be sued for breach of contract. And, according to Perry, even when Congress does consent to suit, the remedy is a breach of contract suit, which may not (and in Perry did not) yield a judgment for full repayment.

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  10. I basically agree with you on 1, 2, and 3.

    I think 4 is a complicated question. That's one of those marginal cases, like creating an Office for Debt Restructuring, that would require a SCOTUS interpretation of the scope of the provision in the Fourteenth Amendment. I could do my best to make one up myself, but what would be the point?

    But I don't think 4 very closely resembles our current situation, for two reasons.

    First, you have to look at all the other mechanisms we currently have for authorizing borrowing and spending. In 1870, Congress authorized borrowing on a piecemeal, statute-by-statute basis. A horrible system, but more to the point, there was no prior acknowledgment that it would fund any given piece of legislation prior to passage. A failure to authorize borrowing could be taken as an explicit signal to defund that particular program or whatever.

    Today, however, the Treasury has broad authority to borrow for whatever it needs. And Congress passes a yearly budget specifically allocating funds to this program, and away from that other program, and what have you. And it does this with the knowledge that Treasury will borrow to meet the spending priorities it has laid out. That changes the character of the debt authorization votes -- as a practical matter, rather than being about spending priorities, they're just Congress saying "Oh, can you continue to use the authority we've already given you to fund the government and service the debt? Well, I suppose you can." Treasury is already authorized to fund any and all aspects of the government with borrowed money; the scope of what Congress is doing with the debt ceiling is very, very narrow.

    Second, and maybe more importantly, your example seems to presuppose that the executive in 1870 actually can service the debt while defunding the government. But that's not the case today. I'd agree that, should the debt ceiling vote fail, the administration might actually have a constitutional obligation to prioritize debt over spending. The problem is that even then, unless the debt ceiling eventually gets raised, the probability of default steadily climbs to one. We know this in advance and most people who aren't Michele Bachmann agree. Saying that a refusal to raise the debt limit isn't tantamount to ordering a default is a bit like saying "Oh, I didn't kill the guy, I just pushed him into the road when I saw a bus happened to be headed this way." It doesn't pass the smell test.

    A narrow, legalistic interpretation of the Constitution leads to contradictions. But when you take a step back, it becomes pretty apparent that, in our situation, the debt ceiling, however justified, is an extraneous, redundant device, little more than a congressional referendum on default. Like I said, something has to give -- preferably before the executive gets stuck with incompatible, constitutionally mandated responsibilities -- and it pretty much has to be the debt ceiling vote itself.

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  11. Your Perry tangent seems kind of wacky to me. Like, in practice, Congress doesn't have to do anything. There are just certain things that they're not supposed to do, and a smaller subset of those things that you can sue the government to force them to do if they don't. But that doesn't really have any bearing on validity or invalidity of a particular constitutional rule.

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  12. Well, we are getting somewhere when you say that the divergence comes at hypo 4, but you are not exactly clear as to why you aren't following.

    As to the supposed differences,

    1) the way we borrow now is not substantially different than the way we did in 1870. Congress gives fewer, larger and less specific authorizations to borrow, but there is no fundamental difference. Treasury still has no authority to borrow except what Congress gives them.

    2) The annual cost of servicing our debt obligations is in the billions. The annual revenue is in the trillions. How is it not possible to service the debt without increasing our debt if we default on other obligations?

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  13. Of all things, I'm not sure why I'm weighing in on this - I know practically nothing about the Constitution and even less about how Constitutional law is argued and defended. So feel free to abuse me with two years’ worth of law school snark.

    Anyway, three points:

    1. Jim, I think your four scenarios (and your second point in the last post) hides an obvious fifth: Congress authorizes $X spending and $0.5X borrowing but the Treasury is obligated to repay $0.75X in interest. Now what happens? Has Congress not called into question the validity of public debts? To me, with no possible fudge for withholding Social Security checks or military pay, it seems obvious that it has. And this is hardly some inconceivable scenario: according to the CBO forecasts – the same doomsday forecasts held up by Paul Ryan and his ilk as direct evidence for why we should not raise the debt ceiling – interest payments will exceed revenue in 2055. In 2054, when a refusal to raise the debt ceiling would clearly, unambiguously cause the United States to fail to pay its public debts, would the law then be unconstitutional? And if then, why not now?

    2. The answer, I suppose, is that the debt ceiling (potentially) doesn’t pose a threat to the current U.S. ability to repay bondholders. But this answer wouldn’t hold up for other laws, so why this one? Imagine a scenario where Congress decides to cap the number of women allowed to vote. Such a law wouldn’t survive a day in court, regardless of the where the cap was set. Would allowing only a billion women to vote ever actually infringe on anyone’s Constitutional right? No, not now, and probably not ever (and certainly not in 54 years). But that’s not the really the point. The point is that Congress simply doesn’t have that authority, even if it’s never applied. Similarly, Congress simply doesn’t have the authority to force a U.S. default, even it such an outcome can be avoided at present. My guess is that because this issue is somewhat more complicated - and requires accountants and math - it gets overlooked somewhat. But that doesn't mean that it should.

    (This probably belongs under point 1, but a refusal to raise the debt ceiling today could also cause a default, even if you subscribe to the Bachmann view. If the debt ceiling isn’t raised, pensions and government paychecks stop going out, over a trillion dollars is immediately yanked from the economy, sending it spiraling into recession. Revenues collapse further but bonds keep coming due. It’s not hard to imagine a scenario where for some short period, revenues can’t match the bonds that need to be rolled over (or would have been rolled over, if the Treasury could borrow). Can you really hang a Constitutional argument on your interpretation of the multiplier or velocity of money?)

    3. Finally, the fact that Congress can tie the Treasury in a knot with even fewer laws seems irrelevant to me. Does that mean that because the debt ceiling just adds to the mess that it gets a pass? Back to the previous example, if Congress passes a law that people must be given approval and a special ID to vote (which they are considering?) and then passes its voting cap law, the cap is suddenly Constitutional? Congress can do contradictory things; no one disputes this. What Congress can’t do is Constitutionally contradictory things; whether or not they are also contradictory to laws that the same dysfunctional lot already passed makes no difference.

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  16. 0) Just to remind, what the Amendment XIV, Section 4 says is "[t]he validity of the public debt . . . shall not be questioned . . . but all [Confederate] debts . . . shall be held illegal and void." I think Will was being fanciful when he changed that to "call into question." Congress isn't required to maintain the public's confidence in the public debt; they are prohibited from altering its validity.

    There is exactly one decision by the Supreme Court interpreting Section 4, which is Perry v. United States, 294 U.S. 330 (1935). In 1933 President Roosevelt banned private ownership of gold, requiring all circulating stock to be sold to the government at its fixed exchange rate. He then changed that fixed exchange rate, devaluing the dollar to allow for expansionist monetary policy. Congress then abrogated all contractual agreements that called for payment in gold. Among those contracts were U.S. debt obligations. Debt holders sued to be paid in gold, or equivalent value. The Court said it was unconstitutional to alter its debt obligations, so that by refusing payment in gold, the U.S. was in breach of contract. But the Court also held (5-4 with the liberals prevailing) that there were no contractual damages.

    From the perspective of law enforceable in a court room, the precedent is actually very clear when it comes to U.S. debt. The court said that Article I, Section 8, Clause 2 ("Congress shall have power to . . . borrow money on the credit of the United States") and Amendment XIV, Section 4 both mean the same thing. Congress cannot discharge a debt by passing a law declaring it no longer legally exists. The government is not required to actually pay that debt, but if it doesn't pay it, you have cause to sue the government. But you need the government's permission to sue it, which Congress can decide not to give. The federal government has never intentionally or permanently defaulted, but many many states, operating under identical constitutional restraints, have. The courts will not help you if they do again.

    But presumably this isn't what Will is talking about. There is a well-known distinction between how the courts enforce the Constitution and what the Constitution really means. Presumably Will means the Constitution-as-members-of-Congress-swear-to-uphold-it, not the Constitution-as-the-Court-will-enforce-it. Will could plausibly say that, regardless of what a court can do, the members of Congress don't just have an obligation to acknowledge that the public debt is legally valid, they have an obligation to actually pay it. For the sake of argument, at least, we should grant that.

    1) As for your hypo: You have inflows of $.5X in taxes and $.5X in new borrowing, and outflows of $.75X in debt being retired plus $X in appropriations — i.e you have lowered the debt ceiling by $.25X. It looks like what happens is that only one quarter of appropriations are actually spent, and the nation debt has been decreased.

    But I'm guessing that wasn't what you wanted to say. Presumably you wanted the math to work out so that interest payments exceed revenue, so that even if not one single penny of appropriations are spent, the U.S. will default on debt if it does not increase the total amount of debt it issues. So, yes, per previous stipulation, it would then be constitutionally required for the Congress to find the money somewhere, for instance by authorizing additional borrowing. But I don't see how that hypothetical possibility renders the current law unconstitutional. Defaulting is unconstitutional, not the possibility of defaulting. (And raising the debt limit doesn't mean people will actually lend that additional money, so there is, in fact, always the factual possibility of default, no matter what the debt ceiling is.)

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  17. 2) The distinction between this and the voter-ceiling example you provide is actually pretty straightforward. There is facial unconstitutionality and as-applied unconstitutionality. If a law generally infringes no constitutional rights, but in a particular circumstance, it does infringe a constitutional right, the law is said to be unconstitutional as applied to that situation. If a law always or mainly infringes a constitutional right in its application, it is facially unconstitutional. It is also facially unconstitutional if its purpose is an illegitimate one.

    So the distinction between the debt ceiling and the voter ceiling is two fold. First, the debt ceiling has a legal effect (specifying the amount of permissible borrowing) that under most circumstances does not infringe any constitutional rights, so it would only be unconstitutional as applied to a situation in which it forced default. By contrast, the voter ceiling has no legal effect until the moment it stops a person from voting, which is the same point that it infringes a constitutional right — all applications of the law are unconstitutional. The voter ceiling is also unconstitutional because it has the purpose of discriminating based on gender, which is an illegitimate purpose.

    Your hypothetical, however, recalls an inauspicious but more applicable historical precedent. The Republican Guarantee Clause of the original Constitution was interpreted to mean that the portion of the population eligible to vote in a state must be reasonably representative of the citizenry of the state. Suffrage, however, was mostly confined to white males. The theory was that white women were adequately represented by white men, and that (free) black citizens were not substantial enough in number for their exclusion to affect the representativeness of the franchise — slaves were not counted as citizens. After the Thirteenth Amendment, however, blacks formed a substantial part of the citizenry in Southern states, so it was determined to be unconstitutional for these Southern states to deny black men the vote. But in Northern states, blacks formed less than 1% of the population, so it was determined to be constitutional to deny them the vote. Thus, at the time the Fifteenth Amendment came into effect, the law already gave most black men in the South the right to vote, but denied the most black men in the North that same right. Those Northern laws were not unconstitutional for their potential to be unrepresentative given possible population, but the Southern laws were because of current population.

    3) The point of the fewer laws thing is that whatever the debt ceiling supposedly does that is unconstitutional, it has to be unconstitutional whenever any combination of law does that same thing. If Will's point were that any set of laws that leads the executive to not be able to fill all appropriations — which he seems to indicate in his last post is not his point — he would have to explain why having debt changes anything. If Will's point is that any set of laws that could potentially force default under some set of circumstances is unconstitutional — and this seems increasingly to be the only remaining possibility — then he has to account for the fact that this was the initial set of affairs. On the day that the Constitution came into effect the Federal Government had millions in debt, and the debt ceiling was zero (the executive had been given no authority to borrow whatsoever, not even to roll over existing debt). Congress didn't give Treasury unlimited authority to borrow. Nor, in the minds of the founders, could it within the limits of the Constitution! So Will has to call that initial situation unconstitutional, he has to say that (despite the Court and historians saying it changed nothing) that the Fourteenth Amendment made it unconstitutional, or he has to stake out some other formulation.

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  18. "If Will's point is that any set of laws that could potentially force default under some set of circumstances is unconstitutional — and this seems increasingly to be the only remaining possibility — then he has to account for the fact that this was the initial set of affairs."

    Really?

    That's not what I' m saying at all, and I've made that quite clear. You and I both agree that Congress can't alter the validity of the debt. What you're missing is that "altering the validity of the debt" isn't quite as cut and dried as you want it to be. The range of actions that can alter the validity of the debt lie on a spectrum, ranging from Congress pronouncing the debt invalid on one end to Congress borrowing additional money on the other. And what I'm saying is that it would be utterly senseless and completely ridiculous for the courts to say that only the far extreme of that spectrum is unconstitutional. What's the point of a law that literally only makes unconstitutional the phrase "We will not repay our bondholders" when even a child could orchestrate a scenario that just as surely prevents our bondholders from being paid -- and without the unseemliness of actually announcing a default? You acknowledge that the Constitution proscribes default and then you immediately strip all the legal weight out of that proscription, by making the rule so easy to circumvent that it's unimaginable that anyone wouldn't circumvent it.

    I think that once you admit the Constitution prevents Congress from altering the validity of the debt, then you also have to admit that there are ways to alter the validity of the debt that don't involve literally stiffing bondholders upfront. One of those ways is to pass an appropriations bill that creates spending obligations for the executive, to authorize the executive to meet those obligations with borrowed cash, and then to create a debt ceiling that's too low for all the obligations to be met. Assuming the President abides by the debt ceiling, it's a scenario that will, if left unchanged by Congress, ultimately result in default. That's not some prospective, notional thing -- it's a fact. It puts the executive at such a fiscal disadvantage, and sets so many forces into motion that lead to default, that no amount of creative accounting can avert that outcome. So how on earth is a refusal to raise the debt ceiling not, for all intents and purposes, Congress altering the validity of the debt? Just because Congress puts the gun in the President's hand and makes him finally pull the trigger doesn't make it any more constitutional.

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  19. ""If Will's point is that any set of laws that could potentially force default under some set of circumstances is unconstitutional..."

    "Assuming the President abides by the debt ceiling, it's a scenario that will, if left unchanged by Congress, ultimately result in default."

    Okay, I think I get it. That's just so stupid that it took me a while. Saying that actually defaulting is unconstitutional: plausible. Saying that that any set of laws that will not, without eventual change or alteration, ensure in perpetuity that there will be no default is unconstitutional: that's insane! Exclamation point, exclamation point, one, exclamation point!

    "You acknowledge that the Constitution proscribes default and then you immediately strip all the legal weight out of that proscription"

    No. As I've made quite clear, that is what the Court has said. That is the law as it will be enforced in a Court of law. The best you can hope to argue here is either that the Court will overturn that precedent (and I will bet you money they won't) or that Congress-critters are violating their Oath of Office. And I've granted you license to argue in terms of what the Constitution really means, not just what a court will do.

    "What's the point of a law that literally only makes unconstitutional the phrase "We will not repay our bondholders""

    For Amend XIV, sec 4, the point of the law was to literally say "We will not repay (certain of) our (arguable) bondholders." For Art I, sec 8, cl 2, is was to say "This is who has the power to make promises to bondholders." In neither one of them is the thing we are talking about at all the primary point. So it's not surprising that it doesn't actually do much.

    * * *

    But alright, Will, put your money where your mouth is and prove that your theory of unconstitutionality is even logically consistent by writing the fix! Starting with the present situation, what is the minimum, legally relevant action that would make a situation you call unconstitutional into a situation you call constitutional?

    It can't just be raising the debt ceiling to a higher number, can it? That just kicks the can down the road, and I hope you're not going to claim that it's unconstitutional one month out, but constitutional 25 months out, or 25 years out. The only reasonable time distinction is defaulting-in-the-future vs. defaulting-now.

    It can't be authorizing the treasury to borrow infinite amounts of money, can it? Borrowing money is a legislative function that can't be delegated to the Executive Branch anymore than the Congress could pass a law saying "the President shall appropriate all funds for whatever purposes he sees fit." Oh, yes, I know, intelligible principles, no teeth to the non-delegation doctrine, blah blah blah. But that's just playing the fiat shuffle, because you're supposedly trying to solve a problem of constitutional under-enforcement yourself, so you can't call it solved by under-enforcing a different provision.

    It can't be that Congress is required to authorize appropriate borrowing as part and parcel with making appropriations, because that doesn't get you where you want to be. It makes the appropriations unconstitutional, so they don't get paid, rather than defaulting on the debt, and in that case none of the debt provisions of the Constitution have a bloody thing to do with any of this.

    So... what? Grace us "narrow, legalistic" types with an answer to the question: what is the pivot point between being constitutional and being unconstitutional?

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  20. Somehow, after about 4000 words of pedantic gobbledygook, you're still missing my point: I'm not saying that any set of laws that eventually leads to default is unconstitutional. Nor am I saying that the line between constitutionality and unconstitutionality is always clear. I'm saying that there's little difference between outright, forthright default, and a failure to raise the debt ceiling, and given the current shape of the appropriations process, what little difference there is should be ignored by a court.

    Does my articulation of this principle then require me to articulate every single other situation in which it would or would not apply? Since you're so fond of ending these posts with homework questions, let me do the same: can you think of any other instance in which the exact contours of a constitutional principle have been left undefined but the broad rules have been applied; any other instance in which a court has said "We don't know what else is necessarily unconstitutional, but this sure is?"

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  21. I can think of plenty of cases a) upholding a law and leaving the test undefined, or b) striking down a law on broad principles, but leaving exact details of what might nonetheless be constitutional to be decided, but c) none that struck down a law without attempting to identify legally relevant features distinguishing it from a constitutionally clear case. I know no majority opinion saying "I know it when I see it."

    But if your point is really "this seems close enough, so it should be unconstitutional" then I have no more questions.

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  22. Stop questioning what shall not be questioned!

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