an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman marty.lederman at comcast.net
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Alice Ristroph alice.ristroph at shu.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
Now that we are past the fiscal cliff, we can return to what everybody really wants to discuss--the debt ceiling. When Congress and the President sparred over this issue in 2011, there was a lot of debate about whether the President could unilaterally act (to raise taxes, borrow money, or slash spending), if the ceiling was not raised. Less attention was paid (including by me) about the threshold issue--what constitutes a violation of Section 4 of the Fourteenth Amendment, which holds that: "The validity of the public debt of the United States . . . shall not be questioned."
Based on research that I wrote up in an article last year, my conclusion is that hitting the debt ceiling is not, by itself, a violation of Section 4. Why? Consider a hypothetical. Suppose we hit the ceiling and bond payments are suspended. A week later, the ceiling is lifted and Congress provides that the bond holders will be made whole for the missed payments. In that case, I would argue that the public debt has not been questioned in a substantial way and no constitutional violation has occurred.
Why do I add the qualification "in a substantial way?" Because in the years after Section 4 was ratified, Congress made changes to the value of the currency. (Paper money, gold and silver money, just a gold standard.) All of these reforms changed the value of our debts (sometimes to the detriment of the bond holder). Nobody thought, though, that this raised a Section 4 problem. From this, I glean that only a significant or substantial reduction in debt validity is a constitutional violation, not just any modification or reduction.
Of course, it is possible that hitting the debt ceiling could, combined with other factors, present a different situation. If Congress made clear that the bond holders would not be made whole for any suspension, that would raise serious Section 4 questions. Or a suspension that dragged on for months might cross the line. But on Day One or Day 6, the President would not, in my view, be authorized to do anything because the Constitution would not be infringed.
The fact that currency changes can affect the value of debt does not mean that there's an implied "substantiality" qualification to the 14A's bar on "questioning" the "validity" of debt.
When debts are issued, they are issued in a certain currency, and thus it's contemplated and presumed that currency changes will affect the value of the debt. Thus, the currency change doesn't "question" the "validity" of the debt *at all*, whether or not the change is "substantial."
Under your view, however, a sufficiently "substantial" currency change would violate the 14A. That seems quite wrong. If Congress massively inflates its currency, such that our lender's real purchasing power is substantially reduced, that doesn't question the validity of the debt; it just means that our lenders should have pegged the debt to a standard that wasn't solely controlled by the borrower.
Since I am European and the legal termonogy over here is different from yours, my question is: is «validity» the same as «value» or «recoverability within the specified terms»?
According to my understanding, US national debt would be «valid» as long as the US government is legally bound to repay the money to the holder. The breach of this obligation would not make the debt «invalid», but it would only mean that the US government would be subject to the legal consequences of the infringement (payment of interest?).
Besides, changes in the value of the currency would not diminish the bindingness of the obligation of the US government to repay the debt and, therefore, would not affect its validity.
Even if the plurality is right, that at most means that a devaluation can rise to the level of validity-questioning if sufficiently substantial. That does not mean that something that indisputably questions the validity of the debt can be discounted as insubstantial.
In other words, the 14A unambiguously proscribes questioning the validity of the debt, w/o any sort of materiality threshold. The fact that a materiality threshold has been imposed when a devaluation is *analogized* to validity-questioning doesn't justify imposing such an atextual limitation on actions that directly question the debt's validity.
Perhaps I'm cynical, but nowadays I think that if the President and his party decided to get behind the idea, and enough liberal advocates championed it at least a substantial portion of the judiciary could be counted on to rule in favor of it.
I mean, it worked (albeit on the other side) with the 'activity/inactivity distinction' in the ACA case.
I haven't heard the term used recently myself but the last comment brings to mind the "Overton Window."
Yes, if there is another support for an idea, chances are that it will be a credible legal theory. The Constitution sets up certain limits and there is a lot of general agreement with debate being less than one might think.
[e.g., the general public accepts a basic right to own a gun, which in some nations is actually quite controversial]
OTOH, given the controlling majority of the USSC, the window leans a bit more right than it might otherwise.
Might be a mixed metaphor. As to being "cynical," I think its just how the system is set up. Prof. Balkin, for one, wrote a lot about the issue. See also, "Keeping Faith in the Constitution" by Karlan, Liu & Schroeder
The 14A simply states that the US will honor its debt, but does not tell Congress how to raise money to do so and in no way, shape or form grants the President the power to seize Congress' power to raise money. There is no necessity argument for such an executive seizure of power because current tax revenues are far more than needed to continue to service the debt.
The fact that normally reasonable people are even giving credence to suggestions that the President may seize Congress' powers to borrow or coin money shows how close to the Rubicon of dictatorship our fading Republic is moving.
Right, why is the argument never that the 14th amendment, or whatever, authorizes the President to levy new taxes? Or wage a war, and pay the debt by pillage? Why isn't the legislation setting revenue thought to imply spending cuts, instead of the legislation setting spending implying borrowing?
The power to borrow is just the latest planned usupation in a program to gradually transform the US into a dictatorship. A program which has advanced remarkably fast during Obama's time in office, though I don't think he'll have time to finish it.