Can Congress Knowingly Default on Appropriations It has Already Approved?

Can Congress Knowingly Default on Appropriations It has Already Approved?

Is a Debt Ceiling Vote Even Necessary or Even Permitted?

“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.” 

The public debt clause of Section 4 of the 14th Amendment to the US Constitution

If you or I go shopping, perhaps for some clothes or even a ballistic missile launcher, take our purchases home, use them with joy, but then refuse to pay the credit card statement from the charge card we used to buy those delightful possessions… What happens? If the vendor sues us, they will almost certainly win. Our little battle with a default will usually result in a very bad hit to our credit rating as well.

For the United States, a true default carries with it many very possible and very grave risks, including a lower international credit rating, which in turn will kick up the interest rate on our $30 trillion+ deficit borrowings – producing quite the opposite result that the gaggle of 21 House GOP rightwing “government spending cutters” say they want – may press other nations to find alternatives to having the dollar remain as the primary global world reserve currency, and play directly into the hands of nations like Russia and China who are trying to subvert de facto US control of the global financial systems. The dollar could plunge in value as well. The net impact on most Americans would probably be much higher prices for almost everything, higher taxes, higher interest rates, rising unemployment and a nasty recession beyond the current risks we face.

But since Congress already authorized the spending that is pushing the debt ceiling higher, why is there a separate congressional vote on raising the debt ceiling to accommodate what they have already approved? Makes no sense. Among other powers, Article 1, section 8 enumerates the congressional power to raise taxes, “borrow money on the credit of the United States,” and spend money. Constitutional pundits have asked the question as to whether Congress has violated the Constitution by not raising the debt ceiling when they approve expenditures… or in not immediately raising taxes to pay for their additional approved costs. But isn’t the debt ceiling issue irrelevant once they’ve approved an expenditure that taxes will not cover?

Our only Supreme Court guidance on this issue comes from a 1935 ruling over whether older federal bonds payable in gold could be superseded by a congressional change in repayment terms. In Perry vs United States, Chief Justice Hughes, interpreting the above cited provision of the 14th Amendment, wrote: “We regard [Section 4] as confirmatory of a fundamental principle, which applies as well to the government bonds in question, and to others duly authorized by 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 public obligations.” Hmm? So, that does seem to say to Congress, “you bought, you pay for it!”

And what’s the President to do in all of this? He is not constitutionally authorized to impose taxes, approve budgetary expenditures or borrow money on the credit of the United States. However, under the Constitution, the President must ‘take care that the laws be faithfully executed,’ which would mean that the president is obligated to fulfill the terms of the budget passed by Congress, according to some scholars, who claim that the public debt clause at Section 4 of the 14th Amendment also applies, as the Perry opinion above suggests.

Bringing the debt ceiling to a Congressional vote, however, has become a ritual that frequently parades across the headlines as fiscal conservatives seek to undo bills that generated spending on projects that they do not like. A second bite at the apple that has already been partially eaten? While some argue “that the public debt clause applies in any situation when the government threatens to act in a way suggesting that it won’t meet its obligations, [others note that] the meaning of the clause ‘is somewhat unsettled’…

“Writing at the New Republic, labor lawyer Thomas Geoghegan argued that the public debt clause confirms the original intent of the founders, who gave Congress the power to tax and borrow to pay debts and provide for the common defense and public welfare. Alexander Hamilton wrote in Federalist No. 30 that the power to tax and borrow was established only to ensure payment of debt or to prevent a default, according to Geoghegan.

“If Hamilton was right, Geoghegan said, it is wrong to argue that the power to borrow money includes the lesser power of not paying the debt… ‘Nothing could be more unconstitutional under the original 1787 Constitution than for Congress to use its powers to willfully default on the debt,’ Geoghegan wrote. ‘Right now, in the name of original intent, the Biden administration should be in a friendly federal court seeking a declaratory judgment that the Debt Limit Statute cannot limit the obligation of the United States to continue borrowing to prevent a gratuitous default on its debt.’” Debra Cassens Weiss in the Journal of the American Bar Assn, January 25th.

As that rightwing gaggle, having made a backroom deal with House Speaker Kevin McCarthy who needed their votes to win his leadership role, is hell-bent on cutting Medicare and Social Security benefits as well as reversing recently passed provisions of recent Biden-sponsored legislation, the obvious stupidity is not lost upon anyone. This appears to be part of the great unraveling of the MAGA GOP that is increasingly on the wrong side of history. We may be able to shift some money around, postpone a few payments, but by this summer… 

I’m Peter Dekom, and that this gaggle of elected representatives, enabled by the House Speaker, is willing to put the entire US economy at significant risk to impose their minority view on everyone else is about as unpatriotic as one can get.