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.
Does Section Four prevent Congress from refusing to raise the debt ceiling? Does it authorize the President to keep paying debts regardless of what Congress does?
This essay does not attempt to answer these questions in detail; I leave that to a future discussion. My goal here is to offer a basic account of the legislative history of Section 4. This discussion, I hope, will be of interest both to originalists and to non-originalists who believe that text, structure and history matter, even if they are not always dispositive of current constitutional questions.
The original purpose of Section Four, which is reflected in its text, was to prevent political disruption and party wrangling over the public debt following the Civil War. However, the language of the Amendment went beyond this particular historical concern. It was stated in broad terms in order to prevent future majorities in Congress from repudiating the federal debt to gain political advantage, to seek political revenge, or to try to disavow previous financial obligations because of changed policy priorities.
Section Four has its origins in section 3 of the proposal brought before the Senate by the Joint House-Senate Committee on Reconstruction, the famous "Committee of Fifteen." As presented to the Senate on May 23, 1866, the original version of section 3 provided that:
Neither the United States nor any State shall assume or pay any debt or obligation already incurred, or which may hereafter be incurred, in aid of insurrection or of war against the United States, or any claim for compensation for loss of involuntary service or labor.Congressional Globe, 39th Cong., 1st session 2764 (May 23, 1866).
In a famous speech introducing the Fourteenth Amendment before the Senate, Senator Jacob Howard, the floor manager of the amendment, argued that the Union had no obligation to pay the Confederate debt, which had been contracted to support a "wicked war" to destroy the Union. Equally important, if the issue of whether to pay the Confederate debt was left to ordinary politics, it would become a perpetual "subject of political squabbling and party wrangling. . . . It is necessary to act, to extinguish this debt, to put it beyond the pale of party controversy, to put it out of sight, and to bury it so deep that it can never again be raised to life in such manner as to become a theme of party discussion." Id. at 2768.
Howard noted that the Confederate government had issued various obligations which stated that they would be paid in full upon the signing of a peace treaty with the Union; moreover, he argued that foreign creditors would very likely lobby Congress repeatedly for payment of Confederate debts.
Unless Confederate obligations were firmly rejected in the Constitution, Howard explained, former rebels, rebel sympathizers, and foreign investors who speculated by betting on the Confederacy would continually press for these debts to be recognized, disrupting American politics for years to come. "I do not believe in paying traitors, nor do I believe in indemnifying men abroad who, with their eyes open and a malignity in their heart beyond all parallel, gave them aid and comfort. Nor do I see the propriety of keeping this question open before the country, and enabling the foreign holders of cotton bonds to keep the political atmosphere of this country in a turmoil for the future with a view ultimately of getting their pay from somebody. It is time for us to put our hands upon this whole thing and to extinguish all hope."
Id. at 2768.
Senator Benjamin Wade of Ohio was a leader of the Radical Republicans and the President pro tempore of the Senate. He agreed with Howard's reasons for why the Confederate debt should be repudiated, but he argued that if the concern was to avoid future disruption of American politics, the current proposal did not go far enough. It was also necessary to guarantee the Union debt, because former rebels or rebel sympathizers who returned to Congress after the war might, out of selfish or malicious motives, seek to prevent Union soliders and their widows from being compensated. Moreover, there was no guarantee of what a later Congress, motivated by different priorities, might do. Shifting majorities in a future Congress might be willing to sacrifice the public debt or the interests of pensioners in the name of political expediency. Thus, it was as important to guarantee the Union debt as it was to repudiate the Confederate debt.
Wade's proposed language, which eventually became the basis of the current section 4, read as follows:
The public debt of the United States, including all debts or obligations which have been or may hereafter be incurred in suppressing the insurrection or in carrying on war in defense of the Union, or for payment of bounties or pensions incident to such war and provided for by law, shall be inviolable. But debts or obligations which have been or may hereafter be incurred in aid of insurrection of of war against the United States, and claims of compensation for loss of involuntary service or labor, shall not be assumed or paid by any State nor by the United States.
Id. at 2768.
Senator Wade's explanation of his proposal is the most extended account of why section 4 protects the federal debt as well as repudating the Confederate debt:
[The proposed amendment] puts the debt incurred in the civil war on our part under the guardianship of the Constitution of the United States, so that a Congress cannot repudiate it. I believe that to do this wil give great confidence to capitalists and will be of incalculable pecuniary benefit to the United States, for I have no doubt that every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress. I consider that a very benficial proposition, which is not in the original proposition.
This section of my amendment goes further, and secures the pensioners of the country. We ought to do something to protect those wounded patriots who have been stricken down in the cause of their country, and to put the securty of their pensions and their means of support beyond the power of wavering majorities in Congress, who may, at some time, perhaps, be hostile to the soldier. . . . I am anxious to put the pensions of our soldiers and their widows and children under the guardianship of the Constitution of the United States. They ought to be there, along with your public debt. [That is] especially when we are now prosecuting a doubtful war with your Executive [President Andrew Johnson] as to whether open and hostile rebels shall not have seats in Congress. If they are admitted here to act with their sympathizers at the North, who have constantly opposed every policy that looked to the renumeration of those engaged in the war on our part . . . what will be the result? Under the dictation of such a policy, should it prevail, who can guaranty that the debts of the Goverment will be paid, or that your soldiers and the widows of your soldiers will not lose their pensions?
Id. at 2769.
On June 4th, in response to the Wade proposal, Senator Howard offered a new section 4 to accompany then-section 3, which repudiated the Confederate debt: "The obligations of the United States, incurred in suppressing insurrection, or in defense of the Union, or for payment of bounties or pensions incident thereto, shall remain inviolable." Id. at 2938.
On its face, the language of Howard's proposed section 4 was narrower than Wade's proposal, because it guaranteed only that part of the public debt incurred in defense of the Union.
Senator Hendricks, an opponent of the Fourteenth Amendment, spoke against this provision as well. His speech is relevant because he pointed to the fact that Howard's proposal seemed to protect only part of the federal debt: "Who has asked us to change the Constitution for the benefit of the bond-holders? Are they so much more meritorious than all other classes that they must be specifically provided for in the Constitution? Or, indeed, do we distrust ourselves, and fear that we will all become repudiators? A provision like this, I should think, would excite distrust, and cast a shade on public credit."
Hendricks then went on to speculate that perhaps the real motive was to prevent taxation on federal bond-holders, although there was nothing in the language that suggested this. Finally, he argued that a specific guarantee was unnecessary. "[H]ow shall we uphold our credit and secure our creditors? By just laws, by equal taxation, by distributing equally over the entire nation the burdens of Government, that they may rest upon the shoulders of all sections and interests." Id. at 2941. Howard's amendment to the existing proposal was accepted, see id., and sections 3 and 4 were eventually renumbered as sections 4 and 5.
The two sections on Confederate and Union debt were then combined on June 8th, the last day of Senate debate. Senator Clark proposed a substitute which is essentially identical to the current language: "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." Id. at 3040. (I believe that this is Senator Daniel Clark of New Hampshire, who was chairman of the Committee on Claims.)
Clark's formulation protected the public debt generally, and singled out those debts incurred for the defense of the Union as a prominent example. Clark's proposal was thus closer to the spirit of Wade's original proposal. Even so, the Senators did not appear to think that the change from Wade's proposal to Howard's to Clark's made much of a difference. Senator Johnson noted "I do not understand that this changes at all the effect of the fourth and fifth sections. The result is the same." Senator Clark repsonded: "The result is the same." The Senate then adopted the substituted version of section 4. (p. 3040).
Senator Davis then sought to add specific protection for "obligations of the United States to pay for private property taken for public use." Davis explained that he wanted to secure payment of bounties that the government had offered "to the loyal owners of slaves" whose slaves had fought in the Union Army. This proposal was voted down, id., at 3041, and the final language of section 4 was adopted. Id. at 3042.
No changes were made to Section 4 in the House of Representatives. Representative Thaddeus Stevens, in introducing the measure to the House, remarked on it only briefly: "The fourth section, which renders inviolable the public debt and repudiates the rebel debt, will secure the approbation of all but traitors." Id. at 3148. The House passed the final version on June 13. Id. at 3149.
What do we learn from this history? If Wade's speech offers the central rationale for Section Four, the goal was to remove threats of default on federal debts from partisan struggle. Reconstruction Republicans feared that Democrats, once admitted to Congress would use their majorities to default on obligations they did disliked politically. More generally, as Wade explained, "every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress."
Like most inquiries into original understanding, this one does not resolve many of the most interesting questions. What it does suggest is an important structural principle. The threat of defaulting on government obligations is a powerful weapon, especially in a complex, interconnected world economy. Devoted partisans can use it to disrupt government, to roil ordinary politics, to undermine policies they do not like, even to seek political revenge. Section Four was placed in the Constitution to remove this weapon from ordinary politics.
Read other posts on the debt ceiling crisis