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Debate: Obama executive order to raise the debt ceiling

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*[http://www.realclearpolitics.com/video/2011/07/07/schumer_using_14th_amendment_to_raise_debt_limit_should_be_explored_by_obama.html "Schumer: Using 14th Amendment To Raise Debt Limit Should Be 'Explored'." Real Clear Politics. July 7th, 2011] *[http://www.realclearpolitics.com/video/2011/07/07/schumer_using_14th_amendment_to_raise_debt_limit_should_be_explored_by_obama.html "Schumer: Using 14th Amendment To Raise Debt Limit Should Be 'Explored'." Real Clear Politics. July 7th, 2011]
*[http://www.lasvegassun.com/news/2011/jul/31/us-constitution-has-answer-debt-ceiling-issue/ John Sloan. "U.S. Constitution has answer to debt-ceiling issue." Las Vegas Sun. July 31st, 2011] *[http://www.lasvegassun.com/news/2011/jul/31/us-constitution-has-answer-debt-ceiling-issue/ John Sloan. "U.S. Constitution has answer to debt-ceiling issue." Las Vegas Sun. July 31st, 2011]
- +*[http://www.tnr.com/article/john-judis/92958/obama-lincoln-debt-ceiling John Judis. "If Obama Likes Lincoln So Much, He Should Start Acting Like Him." The New Republic. July 30th, 2011]
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Revision as of 19:57, 31 July 2011

Background and context

Section 4 of the 14th amendment reads: “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.”[1]


14th Amendment: Does such an executive order have backing of 14th?

Pro

  • Debt unquestionable under 14th; Obama can raise ceiling In 1935, the Supreme Court held that despite the Civil War context, the amendment clearly referred to all federal debt, providing a justification for Obama acting to uphold US public debt obligations in 2011: "While [the 14th Amendment] was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression 'the validity of the public debt' as embracing whatever concerns the integrity of the public obligations."[2]
The 14th Amendment says that the validity of the U.S. public debt shall not be questioned. This means that Congress is violating the 14th Amendment if it voluntarily defaults on US loans. The President, therefore, pursuant to Section 4 of the 14th Amendment, has the authority to act to override Congressional violations of the Constitution and raise the debt limit.[3]
  • Normal balance of powers can be shirked during crisis. Franklin D. Roosevelt in his first inaugural address in 1933, addressing his plans to confront the economic crisis, he hinted darkly that “it is to be hoped that the normal balance of executive and legislative authority may be wholly equal, wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.”[4]
  • Congress shouldn't have vote on paying appropriated expenditures. Former President Bill Clinton told The National Memo in late July: “I think the Constitution is clear, and I think this idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy. [Raising the ceiling] is necessary to pay for appropriations already made. So you can’t say, ‘Well, we won the last election and we didn’t vote for some of that stuff, so we’re going to throw the whole country’s credit into arrears. [...] The validity of the U.S. public debt shall not be questioned."[5]
  • Debt ceiling unconstitutional; public debt is unquestionable.
  • Former President Clinton would have ordered raising debt ceiling. Former President Bill Clinton said to the National Memo that he would, if in Obama's position, use the 14th “without hesitation, and force the courts to stop me.”[6]
  • Better for Pres to raise ceiling than keep compromising. Liberal commentators like Robert Kuttner, the co-editor of The American Prospect: “Obama’s version of leadership is to implore the Republicans to accept a deal that is already on GOP terms. Now, you may say that the president has no responsible alternative. Since the GOP won’t compromise, Obama must keep compromising, so the United States doesn’t default. ... But you would be wrong. It would be far better for Obama to invoke the 14th Amendment and announce that Washington will make good on its debt while Republicans and Democrats continue to negotiate the budget.”[7]


Con

  • 14th Amendment applies only to Civil War debts. Larry Darter. "Invoking 14th Amendment to Raise Debt Ceiling Would be Unwise." Suite101.com. July 27th, 2011: "One portion of Section 4 of the 14th Amendment is that which some Democrats say authorizes the President to raise the national debt cap by executive order: '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.' The rest of the section, the part that is not being talked about or aired in the media is important in understanding the history and intent behind the portion being bandied about by Democrats: '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.' One need not be a constitutional lawyer to see after reading Section 4 in its entirety that the 14th Amendment was post-Civil War Reconstruction legislation. As a matter of record, the National Archives notes that the amendment was passed by Congress June 13, 1866 and it was ratified July 9, 1868. The section clearly pertains only to public debts incurred during the Civil War, not to all public debts. The section differentiates the validity of debts run up by the Union and any incurred by the Confederacy, making it clear that there was no obligation assumed to pay the latter by either the federal government or any state. It is also worth noting that the section doesn't authorize the president specifically to do anything."
  • Raising debt ceiling violates Const, subject to impeachment. Larry Darter. "Invoking 14th Amendment to Raise Debt Ceiling Would be Unwise." Suite101.com. July 27th, 2011: "Raising the debt ceiling by executive order could provoke impeachment The U.S. Constitution clearly sets out the functions and authorities of the three branches of government. Article 1, Section 8 establishes the powers reserved to Congress. Included among the powers are: 'The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States...to borrow money on the credit of the United States...' Congress alone has the legal authority to extend the borrowing authority of the federal government. If the president chose to raise the debt limit on his own by use of executive order he would be guilty of exceeding the constitutional powers of the executive branch and of usurping the powers reserved to Congress. A historical document about the impeachment process, 'Constitutional Grounds for Presidential Impeachment, Provisions in the Constitution that are Relevant to Impeachment and Past Impeachment Inquiries' provides the details behind presidential impeachment proceedings including that of President Andrew Johnson, the first president to face impeachment."
Republican Congressman Tim Scott (SC) said bypassing Congress on the debt ceiling is an "impeachable offense."[8]
  • Failing to raise debt ceiling would not cause crisis. Michael Kirkland. "Can Obama raise the debt limit by himself." UPI. July 31, 2011: "Another debate developing rather late in the game is whether failing to raise the debt limit by Aug. 2 would really be the catastrophe U.S. Treasury Secretary Timothy Geithner says it would be. Actually, in 1979, Congress briefly failed to raise the debt limit and the government briefly defaulted on a small portion of its bills. Professor Peter Morici of the Robert H. Smith School of Business at the University of Maryland was on SiriusXM radio last Monday and said failing to lift the debt ceiling only would be comparable to a government shutdown. 'There is absolutely no possibility that we have to default on our debt,' he insisted. 'We will only default if Secretary Geithner chooses to default to give the president political advantage.' Morici said the U.S. government takes in $180 billion a month, while interest payments on the national debt are less than $30 billion a month. 'The U.S. would not be insolvent but rather in a political crisis.'"
Sen. Jim DeMint, R-S.C., said on "Fox News Sunday" in early July that Geithner was irresponsibly exaggerating: "There certainly will be disruption, but this is not a deadline we should rush and make a bad deal."[9]


Legal standing: Would Supreme Court see case, uphold order?

Pro

  • Unilateral action would cause no damage; no legal standing. Adam Winkler, a law professor at the University of California, Los Angeles: "To have standing to challenge a governmental action, you must show that you have suffered some injury from that action, and it's hard for someone to show such an injury."[10]
  • Congress wouldn't act jointly to oppose Obama raising debt ceiling. Adam Winkler, a law professor at the University of California, Los Angeles: "If Congress acted as a unified body, and claims that the president has usurped their authority, then it may have some standing. But it would have to be a joint resolution. And this Senate would almost certainly block it."[11]


Con

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Politics: Would an executive order be politically beneficial?

Pro

Con

Representative Barney Frank, a Newton Democrat, said in July of 2011: "For the president now to do this unilaterally, 150 years after it originated during a period when nobody seemed to think it meant that, would severely exacerbate this sense of distrust and anger. It is an unwarranted gift to the irresponsible elements in the Republican Party."[12]

Crisis? Does the risk of default constitute a crisis?

Pro

  • 1979 default resulted in permanently higher interest rates. Terry Zivney, a finance professor at Ball State University, and his partner Dick Marcus found "that the series of defaults [ion 1979] resulted in a permanent increase in interest rates" of more than 0.5 percent. Over time, they found, that meant billions of dollars in increased interest payments on the nation's debt. This cost was eventually paid by taxpayers. A default on over 14 trillion dollars in debt today, versus the 800 billion in 1979, would presumably result in an even greater hike in interest rates and damage to the economy and taxpayers.[13]

Con

Pro/con sources

Pro


Con

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