The Unstated Constitutional Problems With Obama “Using the 14th”

As about everyone knows by now, the great debate is still ongoing on the issue of the debt ceiling. The frustration of those on the left with the intransigence of the Republican Tea Party, coupled with the neutered Democratic Congress, has led many to call for President Obama to immediately “invoke the 14th”. The common rallying cry is that legal scholars (usually Jack Balkin is cited), Paul Krugman and various members of Congress have said it is the way to go. But neither Krugman nor the criers in Congress are lawyers, or to the extent they are have no Constitutional background. And Balkin’s discussion is relentlessly misrepresented as to what he really has said. “Using the 14th” is a bad meme and here is why.

The Founders, in creating and nurturing our system of governance by and through the Constitution provided separate and distinct branches of government, the Legislative, Executive and Judicial and, further, provided for intentional, established and delineated checks and balances so that power was balanced and not able to be usurped by any one branch tyrannically against the interest of the citizenry. It is summarized by James Madison in Federalist 51 thusly:

First. In a single republic, all the power surrendered by the people is submitted to the administration of a single government; and the usurpations are guarded against by a division of the government into distinct and separate departments.
….
We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other — that the private interest of every individual may be a sentinel over the public rights. These inventions of prudence cannot be less requisite in the distribution of the supreme powers of the State.

which must be read in conjunction with Madison in Federalist 47:

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very definition of tyranny.

This is the essence of the separation of powers and checks and balances thereon that is the very root foundation of our American governance. It may be an abstract thing, but it is very real and critical significance. And it is exactly what is at stake when people blithely clamor to “Use the 14th!”.

Specifically, one of the most fundamental powers given by the Founders to the Article I branch, Congress, was the “power of the purse”. That was accomplished via Article I, Section 8, which provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States…

and

To borrow money on the credit of the United States;

The call to “Use the 14th” is a demand that the President, the embodiment of the Article II Executive Branch, usurp the assigned power of the Article I Congress in relation to “borrow money on the credit of the United States”. This power is what lays behind the debt ceiling law to begin with, and why it is presumptively Constitutional. It is Congress’ power, not the President’s, and “invoking the 14th” means usurping that power. Due to “case and controversy” and “standing” limitations, which would require another treatise to discuss fully, there is literally likely no party that could effectively challenge such a usurpation of power by the Executive Branch and an irretrievable standard set for the future. The fundamental separation and balance of powers between the branches will be altered with a significant shift of power to the Executive Branch.

This is not something to be done lightly or if there is any possible alternative available. Indeed, the only instance in which it could be rationally considered would be if all alternatives were exhausted. That does NOT mean because the GOPTeaers are being mean and selfish. It does NOT mean because you are worried about some etherial interest rate or stock market fluctuation that may, or may not, substantially occur. It does NOT mean because your party’s President and Congressional leadership are terminally lame. That, folks, is just not good enough to carve into the heart of Constitutional Separation of Powers. Sorry.

And for those that are thinking about throwing “experts” such as Jack Balkin in the face of what I have argued, go read them, notably Jack himself, who said before invoking the 14th, first the President would have to prioritize what was paid by existent resources, those that could be liberated and revenues that did still come in:

…certainly payments for future services — would not count and would have to be sacrificed. This might include, for example, Social Security payments.
….
Assume, however, that even a prolonged government shutdown does not move Congress to act. Eventually paying only interest and vested obligations will prove unsustainable — first because tax revenues will decrease as the economy sours, and second, because holders of government debt will conclude that a government that cannot act in a crisis is not trustworthy.

If the president reasonably believes that the public debt will be put in question for either reason, Section 4 comes into play once again. His predicament is caused by the combination of statutes that authorize and limit what he can do: He must pay appropriated monies, but he may not print new currency and he may not float new debt. If this combination of contradictory commands would cause him to violate Section 4, then he has a constitutional duty to treat at least one of the laws as unconstitutional as applied to the current circumstances.

So, contrary to those shouting and clamoring for Obama to “Use the 14th”, it is fraught with peril for long term government stability and function, and is not appropriate to consider until much further down the rabbit hole. It is NOT a quick fix panacea to the fact we, as citizens, have negligently, recklessly and wantonly elected blithering corrupt idiots to represent us. There is no such thing as a free lunch; and the “14th option” is not what you think it is.

As a parting thought for consideration, remember when invasion of privacy and civil liberties by the Executive Branch was just a “necessary and temporary response to emergency” to 9/11? Have you gotten any of your privacies and civil liberties back? Well have ya?

UPDATE: Joberly added this in comments, and a quick perusal of legislative intent materials and the limited case interpretation seems to indicate it is spot on:

Thanks to Bmaz for his post and for his Comments # 3 and # 34. I’m no lawyer, just a history teacher who has taught Civil War & Reconstruction for some time. This is not the time and place for a history essay on the context of Section 4 (“validity of the public debt” clause) of the 14th amendment; instead, let me just point to the so-far-ignored Section 5 of the amendment: “The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.” None of the first dozen amendments to the Constitution had anything like this clause; for the most part, the first dozen limited Congress in what it could enact (think “Congress shall make no law…”). The 13th Amendment, passed by Congress in March 1865 was the first to affirm that Congress had the power to enforce a constitutional right. The 14th amendment repeated that. In short, Section 5 put Congress specifically in charge of making sure of the “validity of the public debt,” and definitely not the president. That was no accident. The Congress that passed the 14th Amendment had zero confidence in the president (Andrew Johnson) in carrying out congressional policy. The last thing they wanted over the winter of 1865-66 was to give Pres. Johnson any more power that he could abuse. But abuse he did and the next House, elected in 1866, impeached him. I’m with Bmaz on this one.

[Note: I actually did this post at the request of our good friend Howie Klein at his blog Down With Tyranny and it is cross posted there as well]

Bmaz is a rather large saguaro cactus in the Southwestern Sonoran desert. A lover of the Constitution, law, family, sports, food and spirits. As you might imagine, a bit prickly occasionally. Bmaz has attended all three state universities in Arizona, with both undergraduate and graduate degrees from Arizona State University, and with significant post-graduate work (in physics and organic chemistry, go figure) at both the University of Colorado in Boulder and the University of Arizona. Married, with both a lovely child and a giant Sasquatch dog. Bmaz has been a participant on the internet since the early 2000’s, including active participation in the precursor to Emptywheel, The Next Hurrah. Formally joined the Emptywheel blog as an original contributing member at its founding in 2007. Bmaz grew up around politics, education, sports and, most significantly, cars; notably around Formula One racing and Concours de Elegance automobile restoration and showing. Currently lives in the Cactus Patch with his lovely wife and beast of a dog, and practices both criminal and civil trial law.
82 replies
  1. CTMET says:

    I’m not a constitutional lawyer, but I think you have some conflicting items in the constitution.

    A. Section 4. 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.

    and

    B. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.

    If congress doesn’t do B (pay debts), the President has to make sure A is taken care of and the debt is not questioned.

    In general given that presidents historically have tried to interpret the constitution favorably for themselves for a lot of really crappy reasons e.g. fighting wars the public doesn’t want, wiretapping etc. etc. I’d be OK with Obama making a favorable interpretation in this case.

    Given how our legal system works he’ll be 4 years into his retirement (after a second term) by the time it gets through the courts.

  2. MadDog says:

    Thanks for delivering some uncommon “common sense” to the matter bmaz!

    Should be required reading for our MSM, its punditry, and not least, our ruling elite!

    My cynic’s bone says they’ll all beg off due to dentists’ appointments, but there you go.

  3. bmaz says:

    @CTMET:

    The conflict is nowhere near as direct or substantial as you infer. First, Article I section 8 is the main body of the Constitution and delineates specific and primary “enumerated powers”. the Section 4 language, however, is a subpart of an amendment, and that subpart was designed and intended to address a certain situation at issue as a result of the Civil War secession and reconstruction. There is NO precedent for the suggested emergency use of the 14th language, and the only time the 14th in general was attempted to be used, Truman got spanked for doing it in relation to railroad seizure at issue in Youngstown decision.

    Secondly, it even if usable, it could and should not be until all other modalities for giving meaning and legitimacy to the debt ceiling law and congressional prerogative have been exhausted.

    Oh, and by the way, both the Office of Legal counsel and General Counsel of the Treasury appear to agree with me (although I have heard their conclusions, I have not seen the path of their logic, but believe it to be similar to mine)

    • bmaz says:

      I have mixed emotions about the “Big Coin”, also formally known as the seigniorage option. On the plus side it is entirely legal and would allow meaning and effect to all statutes; on the negative, it is a gimmick. But it is a gimmick that appears perfectly legal and could arguably later be restricted by Congress if they so desired. As opposed to the fact the “14th” opens a Constitutional can of worms on a lot of Presidential power fronts that could not be easily reeled in without further amendment of the Constitution, which is effectively impossible in modern government.

  4. CTMET says:

    I agree with you on this one.

    Secondly, it even if usable, it could and should not be until all other modalities for giving meaning and legitimacy to the debt ceiling law and congressional prerogative have been exhausted.

    Thats why I’m hoping all of these other ridiculous “comprimises” fail.

    “Oh, and by the way, both the Office of Legal counsel and General Counsel of the Treasury appear to agree with me (although I have heard their conclusions, I have not seen the path of their logic, but believe it to be similar to mine)”

    How “independent” are those guys anyway?

  5. emptywheel says:

    Well, the Ranking Member and former Chair of the House Constitution Subcommittee, who is a lawyer, had this to say.

    “That is why, after the Civil War, when there was a real question whether the United States would make good on our debts, we wrote into the 14th Amendment “The validity of the public debt of the United States, authorized by law . . . shall not be questioned.”

    “The Supreme Court has on only one occasion – in the depths of the Depression – had the opportunity to rule on this section. In that case, Perry v. United States, the Court said, ‘The Constitution gives to the Congress the power to borrow money on the credit of the United States . . . . Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.’

    “That is what is really at issue here. Congress – whether for good or ill, has already spent money we don’t have. We’ve borrowed from the world markets and from average Americans to fund that shortfall. That’s in the past. Republicans may not like that, and they may wish we hadn’t done it, but they voted for two wars that weren’t paid for, crippling tax cuts for the wealthy, and other expenditures that turned record surpluses into record deficits in record time.

    “Now is the time to pay our creditors. We’re already on the hook, and we cannot, as a nation, walk away.

    “If basic economics and simple moral decency aren’t persuasive to the Republican majority, so be it. The Constitution – the Supreme Law of the Land – requires it.

    “So, if Congress chooses to flout our obligations, the President has no choice but to exercise his duty to ‘take Care that the Laws be faithfully executed.’ He is obliged under section 4 of the 14th Amendment to pay this nation’s debts, even if a lawless and irresponsible Republican Congress refuses to do so. The Constitution commands it, our nation’s future demands it, and he must do it.

    “I sincerely hope it will not come to this. Congress has never failed yet to make good on its obligation to pay our debts. But the Constitution trumps recklessness, and reckless determination to place partisan political advantage and a blind dedication to an extreme ideology. Should events necessitate it, I call on the President to fulfill his constitutional duty if Congress will not.”

    • bmaz says:

      @emptywheel:

      The Perry case, which is a plurality opinion by Hughes, does not particularly stand for that proposition in the least. In fact, the language cited both in your stated passage and by those clamoring for the 14th is sheer and complete dicta. In other words, it is an aside, an analogy, that has no precedential value to be relied on here. Indeed, the operative language of Perry is this, and it very arguably supports what I am saying far more the the 14thers:

      n authorizing the Congress to borrow money, the Constitution empowers the Congress to fix the amount to be borrowed and the terms of payment. By virtue of the power to borrow money ‘on the credit of the United States,’ the Congress is authorized to pledge that credit as an assurance of payment as stipulated, as the highest assurance the government can give, its plighted faith. To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court has given no sanction to such a conception of the obligations of our government.

      Secondly, Perry was a gold bug case where the plaintiff was complaining that his bond should be redeemed by payment of gold and not currency and associated argument over the quality and number of grains of gold. It is not particularly analogous or compelling to the instant situation at all.

      Lastly, my argument does NOT say that existing obligations should never be honored, it argues that all other modalities for satisfying them must be exhausted before the Executive seizes the power to issue further debt over the prohibition of Congress. Congress has not prohibited the Executive from paying anything, they have exercised their ability to issue new debt to do so. There are other ways the govt can go about paying existing debt; they may be ugly and painful, but they DO exist. Just because there is some potential pain does not strike me as grounds for violating fundamental power allocations. In fact the real onset of pain would almost certainly cause an immediate remedy to be properly enacted and signed. I do not believe, not do I read the extant Constitution and statutory law to contemplate skirting basic principle because banksters are scared and politicians are lazy and obstreperous.

  6. emptywheel says:

    FWIW, I’m appreciative of your balance of power argument (though of course, the reason why O won’t use the 14th is to force Congress to do what he wants, cut).

    But I will say this–as important as rule of law is to me, we have gotten so far beyond that point.

    We’ll be lucky if the 14th Amendment, and the rest of them, last out this decade. That’s where the more important focus has to be, IMO.

  7. CTMET says:

    @emptywheel:

    I can’t read into what is going on in any persons mind, but I don’t think Obama’s main goal is to cut. Cutting is a goal, but its a secondary one.

    His goal is to be “The guy who came to Washington and became the peacemaker/dealmaker”. He wants to be able to say everyone got something. So to do that he has have some cuts even if he doesn’t even believe they are in the best interest of the country. Like everyone else at his level his ego comes first.

  8. MadDog says:

    “…Due to “case and controversy” and “standing” limitations, which would require another treatise to discuss fully, there is literally likely no party that could effectively challenge such a usurpation of power by the Executive Branch and an irretrievable standard set for the future…”

    IANAL, but one would think that Article 1, Section 8 would give Congress “standing” to challenge if the Executive branch used the 14th Amendment.

    I’m not confident in predicting how the Supreme Court would rule. The tension at play for the Conservative wing would surely be between their supposed support for Constitutional literalism and their increasingly obvious anti-democratic (and anti-Democratic) political thumbs on the scale.

  9. emptywheel says:

    @CTMET: I think that is a generous reading of Obama, though not an impossible one.

    But if true, then he’s stunningly ignorant, bc after this catastrophe pushes us further into a Depression, it’ll make all that meaningless and will likely get Mitt elected.

  10. MadDog says:

    @emptywheel:

    “…will likely get Mitt elected.”

    I’m thinking that Texas Governor Rick Perry is in and will steal all of Michele Bachmann’s fundie thunder (and Crazies), and then kick Mitten’s ass to the curb since 1) he’s a Mormon and much of the Xtian right sees that as heretical cult, and 2) Repugs in general can’t stand all of Mitten’s lies and flip-flops.

    As for TPaw, he might be on somebody’s Repug short-list for Postmaster General or Ambassador to Antartica, but he can’t produce anything but yawns to the Repug firebreather primary voters.

    While TPaw might be a Perry VP selection for geographic voting considerations, I’d bet that Perry believes the after-election role of VP slot is worth no more than a warm bucket of piss spit.

  11. bmaz says:

    @emptywheel:

    Yes, but the reason we have “gotten so far beyond that point” is because of a long series of actions, a great many of which are like this, generated as a lazy and crappy fix in the face of a supposed emergency. The scary drug war has gutted the 4th Amendment in just this fashion through “exceptions”, privacy fell to security, due process fell to muslims, etc etc.

    This is how it happens; this is how we got to the point you complain of. That is why it is important here. More than ever, because we have already given, and lost, so much.

  12. bmaz says:

    @MadDog:

    Ah, good question. Congress is the only party that might have particular standing. The Democratic Senate will never do it. That leaves the House, who might (but I doubt it). Even assuming they do, while it is not totally clear, there appears to be some precedent for them not having standing on such a challenge if the have not formally objected. So, they would have to make that legislative record first. Above and beyond said waiver issue, however, is that, unlike the Gold Bug cases and Youngstown, there is no outside non-governmental party and, therefore, the courts might decline jurisdiction under the guise it is a purely political question. Remember, the Roberts court favors shift of powers to the Executive.

  13. Bill Hicks says:

    It is ironic that on the one side, the GOP is essentially arguing that Congress is incapable of responsible action, e.g., an inability to stop spending “beyond our means,” while on the other side, an invocation of the 14th also gelds Congress-critters. I would think your argument against invoking the 14th also cuts against any so-called Balanced Budget Amendment, as an a priori restraint of Congressional Power of the Purse–since borrowing is part and parcel of governance and always has been

  14. MadDog says:

    @bmaz:

    “…Remember, the Roberts court favors shift of powers to the Executive.”

    Yeah, that was why I threw in the supposed “tension” of the Conservative wing.

    They are all for a literal reading of the Constitution except when they aren’t. *g*

    And when they aren’t amazingly seems to always be when either its the Unitary Executive at issue or when it furthers their crazy Repug politics.

    As to Congressional Standing, I’m guessing the Repug House Majority could easily find itself passing an objection and like with DOMA, jumping into a judicial fray.

  15. Bill Hicks says:

    Doesn’t Gore/Bush kinda set a precedent for the Supremes getting involved in political questions (no matter what they stipulated at the time).

  16. emptywheel says:

    @bmaz: Don’t argue with me, argue w/Nadler. I’m just pointing out that someone with a fairly significant resume item pertaining to the Constitution disagrees with you.

  17. emptywheel says:

    @bmaz: That’s only partly it–and I’m not sure that it’s all that big a part. A bigger part of it is Corporations running the joint, which came about in part through long, concerted effort to stack the courts, partly through the corporatists more disciplined political strategy, and part through the liberal (ha) application of $$.

  18. SaltinWound says:

    What makes the Fed extending trillions in credit Constitutional? Is it because they were empowered by Congress?

  19. bmaz says:

    @emptywheel:

    But, but Nadler’s not here; you are! Stand and deliver!

    Anyway, and not to sell Nadler short, but he is in every respect a politician not a lawyer analyzing free of political fears, forces and motivations. I will stick with my position; which I might note, does not completely disagree with Jerry, just as to when such an invocation could be mad and whether or not Hughes’ dicta has any substantive value.

  20. MadDog says:

    @MadDog: One additional potential candidate to throw in the mix: Michael Bloomberg.

    If he threw his hat in the ring, I’d expect him to draw a fairly nice chunk of votes from Independents as well as Establishment Repugs (the remaining sane ones), and depending on Obama’s moves, Democrats as well.

    I don’t know whether he’d draw sufficient numbers to actually win (too much time between now and Election day to predict), but he could likely draw enough to be a spoiler for either Obama or the Repug candidate.

    I’m not predicting his entry, but I wouldn’t rule it out yet at this time.

  21. HotFlash says:

    Um, I have a question, probably stupid, but anyway…
    re: “The validity of the public debt of the United States, authorized by law . . . shall not be questioned.”

    Passive voice always makes me nervous. Not questioned by whom?

  22. HotFlash says:

    @P J Evans: If it means that Congress shall not question, I’d say chargee em all with treason, but who knows? It just doesn’t seem like very strict legal language to me. How could it be enforceable?

  23. GulfCoastPirate says:

    Interesting discussion. I have a question though. Why would the teabaggers want to give the president the ability to pick and choose which bills get paid? Their argument was there wouldn’t be a default. That the president could pay certain items due while not paying others. They even went so far as to introduce bills that tried to force the president to pay certain bills before others. This seems even more dangerous to future generations than using the 14th Amendment. Should I continue to assume they are just hick dumbasses who didn’t know what they were doing or is there a method to their apparent madness?

    Since there now seems to be an agreement are we going to get a thread on the agreement itself or should we do it here? At this point from what I have heard I think Obama actually did liberals (I hate the word progessive – glad you’re here where I don’t have to see it anymore at the old place. I’m an unabashed liberal) a favor if they are smart enough to take advantage.

  24. GulfCoastPirate says:

    @MadDog:

    How does he get the nomination?

    As an independent? I think he knows he would throw it to the Republicans. He’s not that ignorant.

  25. bmaz says:

    @HotFlash:

    If you are talking about section 4 of the 14th, it was designed to apply to certain extant and potential situations regarding Union versus confederacy payments in relation to the Civil War, not necessarily for broad based application (note there was no stated restriction on it though).

  26. MadDog says:

    @GulfCoastPirate: Yup, as an Independent.

    He has no chance of getting the Repug nod since the folks who make up Repug primary voters tend to skew way, way to the far right.

    As to throwing it to the Repugs, maybe yes, maybe no. It really depends on who the Repug nominee is, how badly Obama does, and what kind of BS Bloomberg sells as his positions.

    If I had to guess now, I’d agree with you that a Bloomberg run generally hurts Obama more than whatever Repug candidate gets the nomination.

    However, if the Repug nominee is too batshit crazy (Perry could easily fit this mold, Bachmann is definitely there, and Romney could be there as well in order to win Repug state primaries), that shifts the herd to someone more centrist where both Obama and Bloomberg would run.

    In that case, does Democratic voter base sleepwalking beat the sane Repugs and Independents that Bloomberg would get?

  27. joberly says:

    Thanks to Bmaz for his post and for his Comments # 3 and # 34. I’m no lawyer, just a history teacher who has taught Civil War & Reconstruction for some time. This is not the time and place for a history essay on the context of Section 4 (“validity of the public debt” clause) of the 14th amendment; instead, let me just point to the so-far-ignored Section 5 of the amendment: “The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.” None of the first dozen amendments to the Constitution had anything like this clause; for the most part, the first dozen limited Congress in what it could enact (think “Congress shall make no law…”). The 13th Amendment, passed by Congress in March 1865 was the first to affirm that Congress had the power to enforce a constitutional right. The 14th amendment repeated that. In short, Section 5 put Congress specifically in charge of making sure of the “validity of the public debt,” and definitely not the president. That was no accident. The Congress that passed the 14th Amendment had zero confidence in the president (Andrew Johnson) in carrying out congressional policy. The last thing they wanted over the winter of 1865-66 was to give Pres. Johnson any more power that he could abuse. But abuse he did and the next House, elected in 1866, impeached him. I’m with Bmaz on this one.

  28. rugger9 says:

    @MadDog:

    Maybe paired with Petraeus, whose upward mobility is mighty convenient, and oppo research in a target rich environment. This may be the wet dream of the AmericaSelect astroturfers.

    Would Bloomberg do the Koch’s bidding? Maybe. Will he survive the Snowpocalypse [a la Lindsey] of NYC last year? Probably since that’s a NYC thing, and may be what makes him shall we say, available?

  29. joberly says:

    One more thing…that graphic of the Constitutional Convention of 1787 doesn’t fit this thread. I suggest a photo of Thaddeus Stevens, who introduced the first version of the 14th Amendment on Dec. 5, 1865 in the House of Representatives. His 14th amendment was short, just the second sentence of what became Section 4, repudiating the rebel debt and denying any payments to slaveholders.

  30. MadDog says:

    @rugger9: On Petraeus, I can’t see him jumping ship from the CIA in the next year.

    As to Bloomberg doing Koch’s bidding, Bloomberg is certainly a corporatist, but I don’t see him generally giving the Koch brothers the time of day.

    And he certainly doesn’t need their money since he’s a billionaire in his own right.

  31. bmaz says:

    @joberly:

    And, by the way, thanks for your comment, that adds a lot. And, frankly, I had no idea. I have been plowing through the Federalist papers on and off for the last couple of days and some various old cases, but never got close to what you delineated. Thanks.

  32. MadDog says:

    @bmaz: But…but…you and the rest of our resident Legal Eagles are the exception (damn, what am I gonna do without my *g*s). :-0

  33. selise says:

    @bmaz:

    if it’s a gimmick, then it’s a well established gimmick. here’s beowulf:

    “The US Mint has used coin seigniorage continuously since the Coinage Act of 1792 (in a legal sense, a single $1 trillion platinum coin is the same as trillion $1 coins but with far less expense and effort).”

    http://traderscrucible.com/2011/07/31/beowulf-responds-to-dave-weigel-of-slate/

    furthermore, it has the added benefit of helping to remove the public veil from our monetary system (you know, the crazy thing i’ve been yelling about for almost 2 years?).

    :)

    • bmaz says:

      @selise:

      No, just those damn yellow smiley faces!! By gimmick, I mean as used expressly for purpose of working around debt ceiling statute. That said, it did appear legal; although I did not fully research it.

  34. GulfCoastPirate says:

    @MadDog:

    ‘In that case, does Democratic voter base sleepwalking beat the sane Repugs and Independents that Bloomberg would get?’

    Interesting question. How many sane Repugs are there? Let’s assume each side has 42.5% of the vote and there is 15% in the middle. I just don’t see how the numbers come out in favor of a third candidacy. How much of that R 42-43% could he pull? I’m guessing not that much.

    Frankly, I think he would have a better chance going into the primaries with Obama; however, I’m still waiting to hear why liberals don’t like this deal and why they would abandon Obama after this deal (and believe me I’m not that enthralled with Obama so far). There are no SS cuts. There are no Medicaid cuts. The Medicare cuts are to providers much of which you can get by eliminating the law that says the government can’t negotiate for wholesale pricing. In return you get defense cuts of up to 50% and get R cover for ending Iraq and Afghanistan. Besides that, all the cuts are backloaded and if liberals get off their asses and win the next election you can rescind any cuts you don’t like.

    Am I missing something here? Since it is defense that is causing the deficits how is this a bad deal? Where will the money come from in the future to continue all the ‘silent’ programs that EW tells us about? Those vultures will be going after each other in a way that will be mesmerizing to watch. I heard Lieberman was against the deal. Frak, that’s good enough for me – I’m for it.

    The country can’t continue on the path of unrestrained budget deficits and trade imbalances. The math is the math whether anyone likes it or not. I know all the details aren’t out but this seems like a pretty good deal given the circumstances to me and gives liberals a chance to get out from under that ‘tax and spend’ label the R’s have been hanging on us, fairly or not, since the 60’s.

  35. Cregan says:

    bmaz, you have a great analysis here, but this would never make it very far for a very practical reason.

    No bond buyer would buy the bonds! The only reason people buy these bonds is that they are absolutely as close to no risk as is practically possible.

    If you introduced ANY risk into the equation, no one would buy. A legal question about them, even a small one would render them useless.

    Picture this, you’re the head of a bond fund. Are you going to risk millions and maybe billions on bonds that might someday in the future be declared illegitimate??

    You want to get sued by your investors? No.

    You’re the Treasurer for some country. Are you going to set yourself up for a potential parlimentary hearing with the lead question being, “What were you thinking?”

    It is a good subject for dinner conversation and college thesis’s. But, not practical in any regard.

    Obama could issue all the bonds he wants. No one would buy, therefore no money comes in, therefore, SS still doesn’t get paid.

    Once ALL legal questions hit a final and complete resolution in favor of a 14th solution, THEN it might work.

    In the mean time, no bond buyer would touch it with a ten foot pole.

  36. Cregan says:

    In case it isn’t understood, the selling of bonds is how the US gets the money to pay for services not covered by tax receipts.

  37. TarheelDem says:

    My understanding of the argument is this. Congress instructs the President as to what to spend through appropriations and provides the ways and means through the laws that establish the revenue stream. A case in the Nixon (? v Howard Phillips) administration found that the President could not rescind funding that Congress appropriated (I think I have that right). So the President is obligated to spend based on the requirements of appropriations bill. And the President is obligated to spend on entitlements and paying off the national debt.

    But, Congress in order to avoid their responsibility passed a debt ceiling law that restricts borrowing.

    We are in a situation that the President will either be in violation of his obligation to spend what Congress has appropriated in the manner that they specify, or the President is in violation of the debt ceiling.

    The 14th amendment forbids the repudiation of Federal debt. If the Congress will not or cannot agree on which one of these statutory requirements takes precedent in case of a Congressional stalemate, the President is forced to decide for himself. Does he (1) try defer spending selectively on items outside the paying of interest on the debt and the principal on debt coming to maturity (unilaterally deciding not to obey Congress’s intent in appropriations), or (2) unilaterally borrow money up to the level needed to finance the appropriations, or (3) unilaterally declare that the debt ceiling is an unconstitutional restriction on his ability to obey Congress’s intent in apprpriations. Or (4) dodge the issue through the use of the federal laws allowing coin seignorage.

    I don’t see how these threaten the separation of powers in that the President is trying to obey contradictory instructions from Congress.

  38. JohnJ says:

    Section 4 “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.”

    Section 5 “The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”

    To a very confused engineering type (we don’t work well with conflicting requirements), this seems that it is all on Congress.

    So I go back to a question that my parents never answered to my satisfaction: who enforces this law?

    All the laws that directly effect us serfs have a very clear (and harsh) detection and punishment mechanisms. I read this that Congress is not allowed to skip out on the debts it incurred, but this is exactly what they are threatening to do.

  39. TarheelDem says:

    @bmaz:

    What is the legal authority of the Treasury to swap classes of assets with the Federal Reserve to hold in reserve?

  40. bmaz says:

    @TarheelDem:

    The point is that the “conflict of laws” you suggest cannot and does not materialize until all options for honoring and giving effect to both of them are exhausted. You have ignored this part of the analysis. And it also ignores Joberly’s point as to Congress being the one with the designated power to enforce the 14th as to debt, not the Executive. I have now taken a look into the history of Section 5 and Joberly is spot on, and that is also consistent with the main Supreme Court cases interpreting Section 5 in 14th application, notably Katzenbach and Boerne; neither of which are close to the fact pattern on the debt issue, but which do confirm that the power of the 14th lies with Congress.

  41. Cregan says:

    @bmaz:

    Again, no one will buy the bonds so issued as long as there is any legal question about them, so it does not matter the theory.

    • bmaz says:

      Don’t know why you are telling me that; a) I do not advocate the use of the 14th unless it is the only thing left, and it never will be. Secondly, if it was the only option, however that played out, then you would have to make the best stab at it you could – because that is all you could do. And I think, on some terms, there would be purchasers because the terms would be made to where they did and someone would take them properly realizing that at some point they will be made good. So, even though I have little to nothing for the 14th Option, I do not buy the absoluteness of your statement.

  42. Cregan says:

    @bmaz:

    No, I know you are not advocating it. But, lots of people are without thinking about the fact no bond buyer is going to buy.

    No promise they will be made good can be depended on since there is some question on whether they are even legitimate. Do you think anyone is going to depend on the statements of a politician? Or, Treasury official who has no authority to make such a promise if the bonds are later ruled to be not constitutionally issued?

    My only point is the the legal analysis doesn’t matter as a practical point. It would be much better–if the proverbial push came to shove–to just prioritize the payments and get some kind of agreement as quick as possible.

    Not only would great acrimony be created by a 14th move, but tremendous confusion and disarray by the questions raised.

    These people investing this kind of money would totally stay clear of the entire thing. They have other places to put their money and have no need to get involved in this.

    Yeah, some moms and pops might buy. But, no professional. Even at the higher rate–unless maybe much higher.

  43. Bob Schacht says:

    @MadDog:
    “…VP slot is worth no more than a warm bucket of piss spit. ”

    Ah, so much to comment on, but this one seizes me first: Who spits piss? Or maybe I should ask, who has piss in mouth to spit? Surely in such a dreadful situation, spitting is the most appropriate response, but the likelihood of gathering an entire bucket of piss spit boggles the mind.

    Most quotations of J. Nance Garner’s phrase allude to a bucket of *warm* spit. Which, since IIRC Garner enjoyed chewing tobacco, was a distinct possibility in his presence.

    Now, on to more important matters.

    Bob in AZ

  44. Bob Schacht says:

    @Bill Hicks:
    “It is ironic that on the one side, the GOP is essentially arguing that Congress is incapable of responsible action, e.g., an inability to stop spending “beyond our means,” while on the other side, an invocation of the 14th also gelds Congress-critters. ”

    What’s really going on here is that the current semi-Republican Congress wants to undo the work of the preceding Democratic Congresses, and sees the way to do this is to take away the money that Congress has already appropriated and authorized. Because of the Senate and President, however, they cannot do that by legislative action. So they attempt to FORCE the issue by cutting up Uncle Sam’s credit card. So the debt ceiling is merely a tool used by the current Congress against a previous Congress. This is also an admission by the Tea Partiers that Congress cannot help itself about spending, so they attempt a structural solution by using the Debt Ceiling as their main weapon. And, by endless repetition, they have almost everyone convinced that “We have a spending problem, not a revenue problem” and that “entitlements must be cut.” Their obvious agenda is to continue Bush’s transfer of wealth from the Middle Class to the Military Industrial Complex and the emerging Oligarchy of 400 families.

    I wish the Democrats would stop looking like a deer facing headlights, and would attack this for what it is– not just once, but every day of the week from now until November 2012.

    Bob in AZ

  45. Bob Schacht says:

    @joberly: But Section 5 says nothing about debt *ceilings,* and since Nixon the Courts have established that the President does NOT have the right or power to pick and choose which bills to pay, and which not to pay. The Constitutionality of the debt ceiling legislation has been challenged (but not yet in court.) If Obama wanted to, and if Congress has not authorized raising the debt ceiling by Tuesday night, Obama could use the 14th section 4 with the argument that the Court has ruled that he MUST spend the money that Congress has authorized, and in doing so, he could challenge the Constitutionality of the debt limit.

    I have also seen it suggested that instead of the 14th amendment, the President should invoke 31 USC 3102:

    “the text of Public Debt Law of 1941 itself, embodied

    in 31 USC 3101, which is what codifies a national debt limit. That law states that

    [Begin quote] The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury) may not be more than [some arbitrary huge number] . . .[End Quote]

    Some observers claim that the “except guaranteed…” phrase means that “By undeniably clear law as passed by Congress, such obligations are NOT constrained by any
    so-called debt limit. ”
    (http://www.peaceteam.net/action/pnum1082.php )

    I will leave it to bmaz, MadDog and the other lawyers here to figure out if this is indeed relevant and probative in this case.

    Bob in AZ

  46. TarheelDem says:

    @bmaz:

    I didn’t ignore the “all options are exhausted” part of the analysis. I don’t think the President can “invoke” anything. And the argument I presented was post the “all options are exhausted stage” in which the President either has to violate a law or default (and if the markets react to the platinum coin idea as if it were a default, it could trigger a default).

    So I guess the first step the President should take is deferring the pay of all elected and appointed officials, the Senior Executive Service and the military brass that exceeds the median family income. Just for symbolism. But I’ll bet that runs afoul of the law too.

  47. emptywheel says:

    @GulfCoastPirate: It’s horrible because it will put us far deeper in a Depression.

    It’s horrible because 12 Members of Congress will do all the things you say haven’t been done–the Catfood Commission came close to cutting those programs and this will have fewer liberals.

    The best way to get out of this Depression is with investment in our manufacturing base. But this deal virtually assures that will never happen.

  48. bmaz says:

    @TarheelDem: Ah, then I misunderstood; sorry.

    As to platinum coin, agreed. Your point about whether markets would accept it as legitimate is well taken. I have no idea how they would react to that. Which, combined with Cregan’s bit on whether the markets would have accepted a 14th play, makes me wonder…which of the two would “markets” have accepted and bought into more? Which would be seen as more legitimate? Thankfully, I guess we will not find out.

    The prioritization order would have been a deadly exercise. I know this, the things prioritized by law include base debt service, Article III judges salaries and, as far as I can tell, unfortunately Congressional salaries. Those kind of thing have basis as being specified in the Constitution; once you get behind those types of items though, holy crap it would be a messy field of landmines to walk through.

  49. Mary says:

    @Cregan: “These people investing this kind of money would totally stay clear of the entire thing. They have other places to put their money and have no need to get involved in this.”

    That’s actually the flaw. There is a lot of cash out there that has to go somewhere. Nothing is absolute. So you pick the the best port in storms. And it would still be a better port than most.

  50. Mary says:

    @GulfCoastPirate: ” Why would the teabaggers want to give the president the ability to pick and choose which bills get paid?” You know, I think most of what comes out of them, other than the general bile, does have some direction. So I think it was because the power to pay some, but not all, bills is a lose/lose/lose. Any group not paid will have a very specific person (and party) for blame attachment. fwiw.

    BTW – I think it’s true that this is definitely not the worst deal that could have been cut at this last moment, but I agree with EW @ 68 as well. It’s not so much this deal in particular that would make me disavow Obamaco – it’s all that precedes and all that it sets up as still to come, with what we know about Obama and the Dems like Reid running things in the still to come that brings the shudders.

    So as a stand alone, no, this isn’t the worst thing in the world. As a puzzle piece in the picture of the Democratic enabled economic abyss – well, it is kind of a border piece.

  51. rugger9 says:

    @MadDog:

    Unfortunately I agree with Jim White, we both see him as a politically protected opportunist who has skated away from some pretty serious stuff on his watch. He lost 9 billion dollars in cash, plus a whole lot of AK-47s in Iraq, and was linked (at least as a general-level officer if not superior) to Abu Ghraib and the Tillman coverup. I still say while Obama thinks he has Petraeus muzzled, Gen P is doing oppo and probably setting up connections to AmericaSelect.

  52. rugger9 says:

    @rugger9:

    I do agree with Mad Dog @41 about whether Bloomberg would be particularly desperate to get Koch $$$. We’ll see in the Faux News whether the Kochs will permit his candidacy, they really don’t like independent thinkers.

  53. JTMinIA says:

    Warning: stupid question from Iowa coming….

    If Article 1, Section 8 says [after snipping] that “The Congress shall have power to … pay the debts … of the United States…” then why is it considered the President’s responsibility to do so? Why were people looking to the Administration to pay our creditors?

  54. charles pierce says:

    Argument’s a dead letter at this point anyway but, simply as an academic exercise, I’m wondering: couldn’t it be argued that, in invoking the 14th amendment in this regard, the president was not violating Article I, Section 8 because, by raising the debt ceiling, he is not in any way raising, levying, or borrowing money. He is simply making it possible for Congress to do so. After all, raising the debt ceiling does not in and of itself raise the debt. Curious about this.

  55. bmaz says:

    @charles pierce: The “debt ceiling”, as I understand it, is kind of a euphemism; what it really refers to is the ability to issue new debt. There is a constant cycle of issuing new debt to pay off old debt that is being redeemed. It is a cycle. But the key to keeping it going is the ability to issue the new debt to pay off the old debt. This may or may not increase or decrease the gross national debt, depending on the relative figures at any one given time. That is my completely rube like and simplistic explanation, so do NOT take it to the bank; so to speak.

    But….there is a huge problem if there is no permission from Congress for the Treasury (i.e. Executive Branch) to actually issue new debt to keep the wheel rolling. So what “using the 14th” contemplated was the head of the Executive Branch, the President, ordering the Treasury to issue new debt instruments without permission from Congress, which would violate Article I, Section 8.

    I think this answers JTMinIA’s question A74 as well. Hopefully. Maybe. Fuck if I know…..

    And, yep, one way or another, it looks (probably) to be a dead letter now. Quite frankly, I think it always was; Obama had to go through at least a fig leaf of alternatives before invoking the 14th or whatever. That exercise was always going to be enough to cause some deal to be cut, even if not a clean debt ceiling bill offered. But it was never going to go to the mat. That is one of the reasons why I did not write on this earlier, it was kind of a theoretical argument; but then the absence of any real inclusion of the separation of powers arguments and implications in the national discussion just finally got me to take my blarney public instead of just behind the scenes to colleagues.

  56. JTMinIA says:

    Do any of the Articles actually say who is allowed to borrow money? I was focusing on paying off debts because that is clearly said to be a Congress issue. But, when you don’t actually have the money to pay off your debts and need to borrow more to do so, I guess the question of who gets to authorize borrowing comes in.

    As to debt ceilings, to me this is one of those “help me to stop doing something” rules that the weak often place on themselves. It’s really quite silly. But if the Congress is responsible for borrowing, then they can pass rules limiting their own ability and then waive it repeatedly. Doesn’t seem to have much to do with the 14th A in my book.

  57. matthew carmody says:

    @bmaz: I think the Court will call it a political issue and defer unless, of course, it provides a chance to further weaken Congress and strengthen the Executive in which case, they’ll go for bulking up the unitary executive.

    I’d like to know how Louis Fisher sees this issue.

  58. GulfCoastPirate says:

    @emptywheel:

    You already know I agree with you on the manufacturing base. We’ve agreed on that for a long time. As for your other remarks, maybe you are correct. I don’t know. You’re assuming the very worst is going to happen from here on out. If your assumptions are not so dire then it doesn’t look as bad. Maybe I was just assuming the very, very worst out of this little charade and am somewhat surprised it isn’t as bad as I thought it was going to be. I sort of figured Obama was going to give them all those thngs now without even worrying about a commission.

  59. GulfCoastPirate says:

    @Mary:

    I agree they have a direction. It’s not the direction I want to go but they have their goals.

    I understand the ‘still to come’ part and Obama’s history. But look, who are you going to get that’s any better at this date? He’s not going to get primaried so he’s it – for better or worse. Think of what this deal would have looked like with a president palin or bachmann.

  60. bmaz says:

    @matthew carmody: Yes, exactly. One of the branches of Congress is about the only party that could have standing; but if it is Congress suing the President, hard to see any court being too excited about accepting jurisdiction.

  61. orionatl says:

    this is an excellent post, bmaz.

    “excellent” for me means i learned a lot from it, and from comments it induced.

    i now have the suspicion that obama resisted this approach precisely because it severely and unconstitutionally encroached on legislative prerogative. it probably didn’t hurt that our hyper-rational calculator of a prez understood he would be overruled by the mitered justices, post haste – think bush v. gore for a time frame.

    liberals, aka progressives, might want to keep in mind that a constitutional short-cut taken in anger or in frustration is, nonetheless, a short-cut and a usurpation.

    it is just such usurpations we liberals have been complaining about for 11 years, viz, signing statements.

    and gov’t spying, and gov’t search and seizure without judicial approval.

    shall we suddenly, in frustration and anger, advocate our equivalent of a bush/obama signing statement – misuse by the prez of the 14th amendment?

    above comments aside, bmaz, this is a fine, thoughtful, major intellectual effort.

    in the sports parlance of our times, you’ve just moved your game up several notches.

    tx

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