[The Framers would have never tolerated debt-limit brinkmanship.
It’s time to put this terrible idea on trial.]
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THE CONSTITUTIONAL CASE FOR DISARMING THE DEBT CEILING  
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Thomas Geoghegan
January 6, 2023
The New Republic
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_ The Framers would have never tolerated debt-limit brinkmanship.
It’s time to put this terrible idea on trial. _

Alexander Hamilton stands guard over the U.S. Treasury building in
Washington., Chip Somodevilla / Getty Images

 

For all of Donald Trump’s recent blathering demands to “terminate
the Constitution
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it turns out that he might get his wish—just not the way he wanted
it. A rushed lame duck session
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come and gone, during which time Congress failed to find the resolve
either to raise or abolish the debt ceiling
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Now responsibility for its stewardship passes into the hands of the
House GOP, which is already mired in chaos as it tries to choose a
speaker of the House to lead it. If McCarthy’s woes are a sign of
things to come, it may be that a dramatic termination could come
about in the form of a debt ceiling breach
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While the new House GOP majority prepares for
its _Götterdämmerung,_ it might be time to raise our voices to
speak a good word for original intent
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nothing could be more unconstitutional under the original 1787
Constitution than for Congress to use its powers to willfully default
on the debt. Right now, in the name of original intent, the Biden
administration should be in a friendly federal court seeking a
declaratory judgment that the Debt Limit Statute cannot limit the
obligation of the United States to continue borrowing to prevent a
gratuitous default on its debt.

There is always the chance that the Biden administration will not
prevail in the courts—but that doesn’t mean it can’t win. And
win or lose, there is merit to be had in mounting a powerful case
against debt ceiling brinkmanship, both under the original 1787
Constitution and under the Civil War Amendments. Besides, if it is not
declared unconstitutional by a federal judge, those paychecks that
federal judges currently enjoy may stop flowing into their bank
accounts.

Let’s start not in the usual place: Section 4 of the Fourteenth
Amendment, adopted in 1868, which refers to the validity of the public
debt. Instead, let us start with Article I, Section 8: “The Congress
shall have Power to Lay and Collect Taxes, Duties, Imposts, _to pay
the Debts _and provide for the Common Defence and General Welfare of
the United States; To borrow money on the credit of the United
States.” (Emphasis added.)

For the Framers, the payment of the debt was an important factor in
providing for the “Common Defence and General Welfare.” In
Federalist Number 30, Hamilton explains that the power to tax and
borrow is conferred on the new government only for the purpose of
preventing a default or ensuring the payment of the debt. Article I is
not open-ended but a grant of limited powers for specific purposes. If
Hamilton is right, then it is a mistake to argue—as some legal
scholars have—that the power to “borrow money on the credit of the
United States” includes the “lesser” power of not paying the
debt and willfully ruining the credit.

As with the power to tax, Congress has the power to borrow, only on
the condition of its use to prevent a default. The power to tax and
borrow conferred only to prevent a default cannot logically include a
“lesser” power to then actively engineer a default. It would
nullify the very purpose of Congress’s borrowing powers. As Hamilton
argued in Federalist Number 30, “Who would lend to a government that
would preface its overture for borrowing by an act which demonstrated
that no reliance could be placed on the steadiness of its measure for
paying for it?”

As Hamilton further explains here, the power to borrow of the new
government is based on the power to tax, and both are in the service
of guaranteeing that the debts of the new government would be paid.
Even if taxation came up short, “whatever deficiencies there may be
can with confidence be supplied with loans.” Hamilton writes:
“Foreigners, as well as citizens of America, could then reasonably
repose confidence in its engagements.” Because the new government
had the power to tax, there would be no limit on its power to borrow.

Were Congress to use its power to willfully trigger a debt ceiling
default, it would be no ordinary constitutional violation. It would be
a repudiation of the Constitution in a much more fundamental way, a
betrayal of the very purpose of leaving the Articles of
Confederation—which did not grant borrowing powers to
Congress—behind; that is to say, it rebukes the very thing that
gives our Constitution its legitimacy. From the perspective of
Hamilton in Federalist 30, it would be tantamount to terminating the
Constitution itself.

There are, of course, the opposing views of Charles Beard and others,
who hold that the Framers were simply a clutch of creditors who just
wanted to be sure their bonds were paid. But as other historians note,
some of the Framers were deep in debt. The country desperately needed
foreign capital—as Hamilton said, it was crucial to attract that
capital from “foreigners, as well as citizens of America.”

But business concerns were not the Framers’ only guide star:
Hamilton stresses the need to prevent a default to engage in war. And
though Hamilton does not name the British, or claim an existing war
that needed to be provided for, there was, at the time, a sort of
ongoing shadow war: The British were still trying to get back at
upstart America. And so, to Hamilton’s mind, a default on the debt
would be a mortal wound to the Republic. To destroy the public credit,
he wrote in Federalist Number 30, would be an existential threat to
the country. Suppose a real war had broken out. As Hamilton writes in
Federalist Number 30, “To imagine at such a crisis credit could be
dispensed with would be the extreme of infatuation.” 

A Congress that willfully defaulted on its debt, Hamilton argued,
would expose the country to destruction. But on the off chance that
Hamilton’s word is not enough, the Framers added, in Article I,
Section 10, a prohibition against the states attempting to willfully
default on debts by prohibiting changes “in the obligations of
contracts.”

But that’s the original intent of the 1787 Constitution, as set out
by its principal soothsayers, Hamilton, Madison, and Jay: Congress has
the power to borrow in Article I only on condition of avoiding a
default, not for enacting one. Now let’s turn to the restatement of
the original intent of the “1867 Constitution,” as modified by the
three Civil War amendments, the Thirteenth, the Fourteenth and the
Fifteenth. Under these ratified amendments, the argument for the Debt
Limit Statute becomes a form of treason. 

Section 4 of the Fourteenth Amendment says, in part: “The validity
of the public debt of the United States, _authorized by
law, _including debts incurred for the payment of pensions and
bounties for service in suppressing insurrection or rebellion, shall
not be questioned.” (Emphasis added.) In both the Clinton and Obama
administrations, legal scholars such as Lawrence Tribe argued that
Section 4, so oddly worded, did not directly limit the power of
Congress; it does not _say _a willful default would be
unconstitutional. Professor Tribe said that Section 4 was not enough.
Obama was not sure. Clinton said he did not care, he would keep paying
anyway. 

But this argument over Section 4 misses the point: Its purpose was not
to newly assert that a willful destruction of the public credit was
unconstitutional. _It was already unconstitutional, _under the 1787
Constitution, as explained by Hamilton in Federalist Number 30_._ The
purpose of Section 4 was to amend the Speech and Debate Clause of
Article I, in a ham-fisted way, to prevent returning members of
Congress from the Confederacy even to question the debt limit. For
that purpose, Section 4 has been a bust. It is too clumsy, an act of
an occupying power wary of the enemy. It is not self-executing, and
Congress has never used its authority under Section 5 to punish such a
form of treason. That is hardly surprising, since members of Congress
cherish their immunity under the Speech and Debate Clause, not to
mention the First Amendment.

But Section 4 is not meaningless: It confirms the original intent, and
it reaffirms the understanding that from 1787 on, “We the People”
have conferred the power to tax and borrow only to avoid a default on
the debt. What Section 4 adds is a warning that Congress at least has
the power to enact a criminal law—making advocacy of a debt ceiling
breach a form of treason.

So if the Federalist Papers lack force in divining original intent,
even as we treat it with reverence, Section 4 affirms that a limit on
the power to cause a default is already in the Constitution. As
Justice Jackson has reminded everyone, there is an original intent of
the Fourteenth Amendment that deserves at least the same respect that
we give to Hamilton and Madison in the Federalist Papers.

Under Obama, who like Clinton taught constitutional law at one point
early in his career, the sentiment seemed to be that a legal challenge
to the debt ceiling, even if plausible, could founder. That was a
going concern even back in 2011, when the judicial right still had
only shaky control of the Supreme Court—as Justice Anthony Kennedy
was so notoriously difficult to pin down on big constitutional
questions. Of course, the right has strengthened its grip on the
levers of judicial power since then, and has devoted itself to
transforming the courts into an ideological body with a distinct
political agenda. So what would be the point of bringing a legal
challenge against the debt ceiling as things currently stand?

The short answer: Even with the current Supreme Court, this strategy
may prove to be more effective than it seems at first blush. First of
all, at least some federal courts in some of the judicial circuits
would find the case to be “justiciable,” in the legal jargon.
There are tens, if not hundreds, of millions of people who have the
concrete injury necessary for standing to sue to challenge the Debt
Limit Statute. It is sometimes assumed that only a bondholder could
launch such a suit and that a bondholder has no standing, because the
United States could hold up other payments to pay off its bonds. But
the only thing Article III requires for standing to challenge
invasions of constitutional rights is a concrete injury. The elderly,
especially the poorest widows, may need those small Social Security
checks in order to survive; countless people might perish if hospitals
hold off health or nursing care for which they may never be paid.  

Suppose one such plaintiff were to sue and win a declaratory judgment,
or even a preliminary injunction, from a district court. Would this
case move on to the Supreme Court? Only if the Biden administration
were to appeal the decision. It could, alternatively, accept the
decision, and let the legal controversy end.

Could a member of Congress, like Jim Jordan, appeal such a decision?
As it happens, the law is abundantly clear that members of Congress
have no standing either as a plaintiff or as a defendant to sue to
vindicate the interest of Congress in enforcing a law. For at least 20
or more years, federal courts have washed out these claims by members
of Congress on standing grounds.

This point is set out by the Supreme Court in _Byrd v. Raines, _a
1997 case brought by the late Senator Robert Byrd, whose protégé was
Senator Manchin. Byrd was an inveterate advocate of the institutional
power of Congress. On behalf of Congress, in his official capacity,
and not because of any injury to him, Byrd, along with others,
challenged the Line Item Veto Act. That law allowed the president to
cancel spending and tax measures in a bill even after the president
signed it into law. The court held that individual members of Congress
had no standing to challenge an injury to Congress as an institution:
Rather, it was up to Congress to take away the president’s authority
expressly. Here too, if Congress did not like the amount of debt that
Congress had incurred, there is a simple institutional remedy—pass a
law, admittedly over the president’s veto, to slash Social Security
or anything else it likes. After all, Congress can shut down the
funding of the federal government. What it cannot do is to challenge
the validity of the public debt.

The question arises: To what extent does the Biden administration, or
the Democrats in Congress, really want to stop the GOP from
engineering a default? Give some rope to the GOP to hang the
Constitution, and it may end up hanging the GOP instead. Let the
public see that the House Republican caucus is ready to destroy the
public credit in order to slash Social Security and Medicare, which
could be the price it demands from Biden. Republicans’ intransigence
would leave them on the hook for all the chaos in the financial
markets that a debt ceiling breach would unleash. On that issue alone,
the Democrats might bring about the destruction of the GOP. It may
seem appealing to let the House ruin the public debt if it destroys
the GOP.

But the cost is too high. Debt has been the country’s greatest
asset, as Hamilton knew it would be. Debt let us grow. Debt let us win
World Wars I and II. In this century, debt saved us from the financial
crisis. Debt let us survive Covid. A fine recent book, _In Defense of
Public Debt, _by four distinguished economists, explains how much we
owe to debt. We have an obligation to save it for crises ahead and use
every means, legal or political, that may help to do so. It is typical
of the GOP to treat the country’s debts as dishonorably as Trump
treats his own. Default is his business model. The Framers would be
horrified if we made it the country’s model too.

_THOMAS GEOGHEGAN is a Chicago labor lawyer. He is the author of Only
One Thing Can Save Us: Why America Needs a New Kind of Labor
Movement and The History of Democracy Has Yet to Be Written
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_THE NEW REPUBLIC was founded in 1914 as an intellectual call to arms
for public-minded intellectuals advocating liberal reform in a new
industrial age. Now, two decades into a new century, TNR remains, if
anything, more committed than ever to its first principles—and most
of all, to the need to rethink outworn assumptions and political
superstitions as radically changing conditions demand. Visit the TNR
website to subscribe. [[link removed]]_

* Debt Ceiling
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* U.S. Constitution
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* GOP
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* Congress
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* Alexander Hamilton
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* Joe Biden
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* Federal Courts;
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