Are there no living constitutionalists in foxholes? Actually, what would living constitutionalism mean here?
Which gets me, sort of, to the merits. What does it mean to say that Section 4 makes a debt ceiling unconstitutional? Something like this, I think: The Treasury must continue to make interest payments on already incurred debt. Fine, as the Republicans have said (and so, they say, they aren't questioning the public debt). The government's collecting taxes, and the Section 4 argument means that the United States has to use those taxes to pay the interest. But, the Treasury responds, Congress has required us to spend money on a bunch of other things, and the Take Care Clause requires that we make those payments as well. But, the Treasury continues, the taxes that are coming in aren't enough to do both. Section 4 doesn't have priority over the Take Care Clause (at least not in the versions of the Section 4 argument I've seen).
So, what to do? Obviously, ask people to lend the Treasury the money to pay both the debt and the cost of existing statutes. But, one might think, the Treasury lacks statutory authority to incur debts for the United States beyond the limit set by the debt-ceiling legislation. After all, the Constitution also says that "no money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law," and borrowing money commits the government as a whole to appropriating money to repay it. This means, one might think, that Section 4 protects existing debt but has no bearing on limitations the debt-ceiling statute places on future borrowing.
But, the "Section 4" argument has to continue, that's not quite right. We know that the Executive Branch does have the power to impose an obligation on Congress to appropriate money -- when it engages in an unconstitutional taking of private property, the Executive Branch implicitly commits Congress to appropriating the constitutionally required just compensation. (Jacobs v. United States, if anyone cares.) So, the co-existence and equal status of Section 4 and the Take Care Clause authorize the Treasury to go on to the markets and borrow enough money to pay the debts and the cost of existing statutes.
Now, what are lenders going to require as the interest rate? I think people are assuming that the interest rate demanded will be quite high. But, if the Section 4/Take Care argument is right, it shouldn't be.***
Living constitutionalism, anyone?
* Brad DeLong, citing Bruce Bartlett, says that it's not only liberals who refer to Section 4. On these matters, though, Bartlett's an apostate conservative.
** The dictum plays the role United States v. Miller played in Heller.
*** DeLong's recounting of discussions within the Treasury Department indicates, correctly, that the interest rate question depends on uncertainty about the legal status of what I'm now calling the Section 4/Take Care argument. Yet, if that argument takes hold, uncertainty ought to dissipate (to the level associated with anything predicated on future legislative action -- "political risks," as I understand the jargon).