by Jonathan Rauch
Conservatives are responding to the 14th-Amendment option with a dismissiveness ("magical thinking," Ramesh Ponnuru calls it) which suggests to me there's something in it. Here's what I think the Constitution does not require on August 2, or whenever the Treasury's borrowing authority runs out: a major artificial emergency.
As you have probably heard, the 14th Amendment says, "The validity of the public debt of the United States…shall not be questioned." In a post-Civil War context, the amendment's framers sought to prevent some political faction—at that time, the South—from refusing to let the government repay its debts. The basic idea of not letting politics hold the debt hostage is certainly relevant to what's happening today, although obviously the situation is different. In any case, whatever the particulars of the amendment's adoption, it clearly suggests that meeting our debt obligations is a constitutional imperative, not merely a statutory one. Otherwise, of course, the amendment wouldn't be there.
When push comes to shove, therefore, and August 2 or some other drop-dead date comes around, does the 14th Amendment trump the debt-limit statute? I would think so. At a minimum, it gives President Obama a compelling case to keep servicing the debt. After all, in the current environment, even a temporary default could have severe economic consequences. Worse, it might be one of those moments in a country's history that frame a turning point in the narrative. "Deadbeat U.S.A.!" Reversing the damage to the country's psyche and image might take years, or forever. Lemme tell you, China isn't about to default.
"Not so fast," say the dismissers. The 14th Amendment, they argue, may constitutionalize debt-service payments, but it does not authorize the President to continue non-interest spending. So President Obama would have to prioritize interest payments and shut down other spending (almost half of it!) to accommodate debt repayment.
"Not so fast," yourselves. Remember, most federal spending is mandated by statute. That's how spending happens: Congress passes a law. This is particularly true of entitlements, the biggest portion of the budget, which require the government to pay benefits unless the law is changed (but appropriations bills are laws, too). Why would a debt-limit statute trump all those other statutes?
What we have here is a conflict of statutes. Resolving statutory conflicts is exactly what the Constitution is there to do, and the Constitution seems to weigh pretty decisively on the side of meeting obligations.
Of course, this would be a question for the Supreme Court to resolve. It's a stretch, though kind of fun, to imagine Congress going to court to force the country to default on its statutory obligations—to bondholders, to seniors, to whomever. Kind of like suing yourself for going off your diet. It's even more of a stretch to imagine the Supreme Court ordering the country into default, over the President's determination that doing so would profoundly damage the country's interests. Not likely. Almost certainly, the Court would find some other, more reasonable way to square conflicting laws. There are many ways to do it short of creating a national (international?) emergency.
So, if I'm President Obama, and I'm really up against it…no, I don't default. I say, "Sue me."
The Dish 