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Is the debt ceiling constituional?

Alferd_Packer

Philosopher
Alferd_Packer
Joined
Jul 3, 2007
Messages
8,746
"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."

so, if the debts are valid, is having a "ceiling" on them valid? No matter what value they are, the debts will be valid, any arbitrary ceiling notwithstanding.

If the United States can NOT default on its debts, then what's the point of a debt ceiling?
 
I guess it comes down to when it becomes debt, right?

We pass a law saying that we will give everyone 10 dollars next year.

Does it become a debt when I sign it?

Or does it only become debt when the government sells the bonds to pay for it?


Personally, I think it is the second. The debt ceiling is legislation affecting previous legislation objectives for future spending. The debt ceiling would only be unconstitutional if it prevented spending on existing debt.
 
Congress sets the budget. Congress makes the laws. If congress wants to make laws about setting the budget, I see no contradiction.

If you are saying there is no problem with infinite borrowing, you are going to need to explain the point.
 
casebro said:
you are going to need to explain the point.
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The point is thatthe government can not default on its debt obligations irrespective at what level the debt ceiling is at.

If the government is legally obligated to service a debt, then they have to service it.

That obligation can be through a caontract or through a previously enacted law.
 
Alferd_Packer said:
"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."

so, if the debts are valid, is having a "ceiling" on them valid? No matter what value they are, the debts will be valid, any arbitrary ceiling notwithstanding.

If the United States can NOT default on its debts, then what's the point of a debt ceiling?
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I don't see a conflict. The debt ceiling is self-imposed (by Congress). If Congress decided to violate its own rules (which would essentially repeal the debt ceiling, merely by passing appropriations requiring debt in excess of it), then that new debt would still be valid according to the Constitution, but the Constitution also gave Congress the authority to set its own rules, which is essentially what the debt ceiling is: a rule about how they go about passing other legislation.
 
casebro said:
If you are saying there is no problem with infinite borrowing, you are going to need to explain the point.
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I'd say there is no constitutional problem with infinite borrowing.

Nor is there a constitutional problem with Congress imposing a limit on borrowing.

In fact, a limit on borrowing makes the constitutional mandate that all debt is valid easier to abide by.
 
casebro said:
Congress sets the budget. Congress makes the laws. If congress wants to make laws about setting the budget, I see no contradiction.

If you are saying there is no problem with infinite borrowing, you are going to need to explain the point.
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Infinite borrowing is fine, as long as there are an infinite supply of lenders.

Ah...there's the rub...

Gee. I wonder if the politikers really never thought of that. Or did they just not give a rat's ass as long as they, personally, could spend enough to mollify the bribe takers...er, I mean "voters", and keep themselves (the politikers) in power for another election cycle.

I'd hate to think that's really the way politikers are.

The French had a good idea with those guillotines. But that's for another time. After the collapse. When the military has seized control and rounded up all the responsible miscreants from their hidey-holes around the globe.
 
Alferd_Packer said:
If the United States can NOT default on its debts, then what's the point of a debt ceiling?
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I don't think defaulting on debts is at all the same thing as invalidating them. I think the constitutional requirement is essentially saying that the government can't go bankrupt and erase any of its debt.

Basically, if we default on our debts, we'll still owe them (plus more interest, and depending on the terms, probably penalties). But the biggest problem will be a loss of confidence and therefore an inability to borrow in the future. (Also, I would imagine that the various types of federal debt papers would lose value all around as people lose confidence.)

ETA: I'd compare it to private debt. I can default on my credit card debt by failing to make a payment or paying late. That does not invalidate the debt. And the benefit of setting a personal limit should be obvious: it's easier for me to make my payments and still have money for other budgetary items. The difference is that personally, I could declare bankruptcy if I get in way over my head, and my debts might be erased (invalidated).
 
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BenBurch said:
Nope, but default is worse.
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It's not clear if a default would be required. If the goverment goes into shutdown mode slightly before the debt ceiling is reached it should be possible to continue to service the debt.
 
geni said:
It's not clear if a default would be required. If the goverment goes into shutdown mode slightly before the debt ceiling is reached it should be possible to continue to service the debt.
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Disn't Gingrich try that in the 90's and have it blow back in his face?

Why would this be any different?
 
Basically you have congress passing one law to spend money, and another saying the money can’t be spent. Shouldn’t the most recent law (the authorization to spend the money) take precedence?
BenBurch said:
Obama has the nuclear option.

He can literally print money without congressional approval. And he should.
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I don’t think he can. While the treasury can print money but AFAIK it’s only the Fed who has the authority to circulate it, and they are basically autonomous. Congress could replace them and the President can nominate their replacement for congress to authorize, but neither can control the Fed directly
 
lomiller said:
Basically you have congress passing one law to spend money, and another saying the money can’t be spent. Shouldn’t the most recent law (the authorization to spend the money) take precedence?
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I heard someone on NPR say pretty much that. Basically, if Congress approves of a budget that would put us over the debt limit, he said, the President could order that spending to happen just as if the debt ceiling had been eliminated or increased explicitly.
 
Even if it doesn't apply, it would just not apply to borrowing to pay for those things listed in the Constitution as valid debts, like war debt and military pensions, not the other BS government spends money on.
 
Beerina said:
Even if it doesn't apply, it would just not apply to borrowing to pay for those things listed in the Constitution as valid debts, like war debt and military pensions, not the other BS government spends money on.
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That's not the way it's worded. It says all public debts "authorize by law" are valid, "including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion". It definitely did not say it only applies to those kinds of debts.

ETA: And of course, the "authorized by law" part goes back to the point that the Congress can indeed make a debt ceiling for itself as part of the way it determines how much debt is authorized by law. I see no constitutional problem with a debt ceiling, especially since Congress is free to change it.
 
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Here's the essence of the Constitutional argument, as expressed by Bruce Bartlett, as conservative:

it’s worth remembering that the debt limit is statutory law, which is trumped by the Constitution which has a little known provision that relates to this issue. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.”
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http://www.thefiscaltimes.com/Columns/2011/04/29/The-Debt-Limit-Option-President-Obama-Can-Use.aspx

Here's the full clause of the 14th Amendment:

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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
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http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

"The validity of the public debt...shall not be questioned" has an obviously vague meaning with respect to our current issue. Though it does seem like imposing a debt ceiling is, in fact, questioning the validity of the debt. The Republican argument rests on the notion that the accumulation of debt is inappropriate and unless we cut spending, it should not be paid.

I can see an interpretation of that clause that would make a willful default unconstitutional. Of course, the way it would be interpreted by this SCOTUS is anyone's guess. The closest we've come to having a court case over this issue was when Newt shut down the government in the 90's.

Regardless of how it's interpreted, though, it would take precedence over any law passed by Congress, one way or the other.
 
JoeTheJuggler said:
ETA: And of course, the "authorized by law" part goes back to the point that the Congress can indeed make a debt ceiling for itself as part of the way it determines how much debt is authorized by law. I see no constitutional problem with a debt ceiling, especially since Congress is free to change it.
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I don't think I agree with that. The reason the debt ceiling is a problem is that it would cause us to default on existing obligations. Those obligations were "authorized by law" when they were incurred. Certainly the debt ceiling involves new debt moving forward, but a lot of our borrowing right now is to cover past expenses (or the wars we're fighting and the tax cuts).

That provision of the 14th is so vaguely worded that I can certainly see it be interpreted the way you have, but the stronger understanding, which I agree with right now (not knowing a whole hell of a lot about the issue), would indicate that the US can't constitutionally default on obligations by choice.
 
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