Gerry Canavan

the smartest kid on earth

Cutting the Gordian Knot, Debt Ceiling Edition

with 6 comments

In the event that congressional irresponsibility makes default impossible to avoid, he should order the secretary of the Treasury to simply disregard the debt limit and sell whatever securities are necessary to raise cash to pay the nation’s debts. They are protected by the full faith and credit of the United States and preventing default is no less justified than using American military power to protect against an armed invasion without a congressional declaration of war.

Furthermore, it’s worth remembering that the debt limit is statutory law, which is trumped by the Constitution which has a little known provision that relates to this issue. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.” This could easily justify the sort of extraordinary presidential action to avoid default that I am suggesting.

Garrett Epps, Bruce Bartlett, Jonathan Zasloff, and Matt Yglesias all argue that the administration can just call the GOP’s bluff on the debt ceiling, with Zasloff going so far as to argue no one would have legal standing to challenge Treasury if it did so:

But if the administration takes the position that it must continue to borrow to comply with the Fourteenth Amendment, who would stop it? Put another way, who would have standing to sue? Taxpayers clearly would not. Individual members of Congress? No: the Supreme Court’s 1997 decision in Raines v. Byrd would seem to foreclose that. Congress as a whole? Perhaps; but what would it require for Congress as a whole to bring the lawsuit? A joint resolution would be blocked by Senate Democrats. That leaves the House to bring the lawsuit, and one could easily argue that one house would not have standing any more than individual members of Congress would.

Written by gerrycanavan

May 19, 2011 at 9:03 pm

6 Responses

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  1. […] I really hope someone from the administration was reading the Internet when it solved the debt ceiling crisis weeks ago. […]

  2. […] Mr. President, it’s time for Plan B. […]

  3. […] post-apocalypse blame game.” Regardless of the intent, it’s truly obscene; the right answer to this mess is staring them in the face but they simply refuse to take […]

  4. […] And House Democrats are finally starting to say what I’ve been saying all along. Even if the Republicans are capable of delivering any deal at all—which is by no means […]

  5. […] own debt-ceiling bill, much less a reasonable one, Jack Belkin is talking Plan Bs. In addition to the Fourteenth Amendment option I’ve been hammering for months, there’s also something else a lot of people have suddenly started talking […]

  6. […] Today Biden told House Democrats that Obama would eventually have done the thing he obviously should have done from the start if he had literally no other option left. What a […]

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