October 9, 2013

Obama rejects call to use 14th Amendment to fix debt fight

The idea has been pushed by some scholars who argue that a default on the country’s debt violates the Constitution.

Bloomberg News

WASHINGTON — President Obama poured cold water on calls to invoke the Constitution’s 14th Amendment to skirt congressional approval for issuing new debt, as political scholars and legal experts alike said such a crisis- aversion plan would be risky and potentially illegal.

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President Barack Obama speaks about the budget and the partial government shutdown, Tuesday, Oct. 8, 2013, in the Brady Press Room of the White House in Washington. Amid a deadlocked Congress and shutdown government, Obama poured cold water Wednesday on calls to invoke the Constitution’s 14th Amendment to skirt congressional approval for issuing new debt,

AP Photo/Pablo Martinez Monsivais

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“If you start having a situation in which there’s legal controversy about the U.S. Treasury’s authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn’t be sure,” Obama said in a news conference with reporters Tuesday. “It’d be tied up in litigation for a long time. That’s going to make people nervous.

“There are no magic bullets here,” he said.

The president’s comments further dim the prospect that he could use what amounts to an 11th-hour emergency exit if the White House and Congress are unable to reach a deal to raise the debt ceiling by Oct. 17. His stance places the onus on Congress to strike a deal ending the week-old government shutdown and raising the debt limit, or else risk triggering a U.S. default and global financial crisis.

The rationale for such presidential authority has been pushed by some constitutional scholars who argue that a default on the country’s debt violates the Constitution’s 14th Amendment, which states that the “validity of the public debt of the United States” authorized by law “shall not be questioned.”

A refusal by Congress to approve a new debt limit would be unconstitutional, thereby giving the president no choice other than to act on his own to ensure the country’s bills are paid, Sean Wilentz, a professor of history at Princeton University, wrote in a New York Times op-ed published Tuesday.

Wilentz and others have argued that the president can invoke emergency powers to protect the country – a move that could be necessary in the face of destruction set off by any U.S. default.

“The burden in this crisis rests entirely with the congressional Republicans, who have precipitated it,” Wilentz said in an emailed statement. “If they were to violate the Constitution, it would be their fault, not the president’s. The president needs to make that argument as well.”

The Obama administration has consistently shot down any suggestion that the president would invoke untested powers under the 14th Amendment to bypass the need for Congressional approval, saying that only the Congress has the legal authority to approve more borrowing.

“They seem to have thought that through,” John Podesta, who was White House chief of staff during the Clinton administration and an informal adviser to Obama, said in an interview. “Whether it’s coming from the Justice Department or the White House counsel or a combination of all of the above, they seem to think the 14th amendment doesn’t work for them.”

Carter Phillips, a constitutional lawyer who has argued 76 cases before the U.S. Supreme Court, said previous administrations haven’t read the Constitution to grant such power to the president. The president would have, at the very least, a controversy if he raised the debt ceiling on his own without Congressional authority, he said.

“The framers would be horrified to think that the president could borrow in defiance of an explicit limit imposed by Congress,” said Phillips, a Sidley Austin LLP partner in Washington.

Jack Balkin, a Yale law professor who writes the blog Balkinization, said Obama has a constitutional duty under the 14th Amendment not to place the validity of U.S. debt into question. Such a duty would be breached, Balkin said, if the president sold bonds without congressional authority.

“Issuing unauthorized debt might do precisely this, because bondholders might treat the new debt as invalid or of questionable validity,” Balkin said in an email. “In that case, the exercise of emergency powers would be self-defeating and unjustified.”

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