NEW YORK (MainStreet)  A government default is probably illegal.

That's not to say it isn't going to happen. The government does potentially illegal things all the time, that's why we have a Supreme Court. Yet for all our talk of platinum coins and presidential fiat, we in the media have missed the easiest solution of all to the debt limit showdown: the Treasury should ignore it and keep right on borrowing, because that's what the Constitution demands.

This comes from the Fourteenth Amendment. As others have pointed out, Section 4 of the this amendment reads in relevant part that:

"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."

A growing chorus is urging President Barack Obama to exercise this clause unilaterally and solve the problem of American default. This faction argues that default would tautologically call the validity of government debt into question, since it would raise doubt about if and when America will pay its bills. The Fourteenth Amendment specifically says that can't happen. As such, the President can act on his own authority enforce the Constitution and prevent any default.

The problem is that this line of reasoning skips a step. If the validity clause of the Fourteenth Amendment does apply to the debt ceiling and "shall not be questioned" means "shall not default," then the debt ceiling itself violates the Constitution. It is, after all, a creation of statute not of nature. If we default, it's because Congress required the Treasury to do so. That may be beyond its power to demand.

We've just never been in a position to find out.

What this means as a practical matter is that this crisis doesn't need a special order from the President or any other form of extraordinary resolution. The Treasury should simply carry on business as usual and ignore any Congressional mandate that it do otherwise. Congress legally established the Treasury's borrowing authority when it spent the money. The rest, as they say, is history.

The question is whether the validity clause actually applies to our debt ceiling. Unfortunately, we don't have an easy roadmap to a solution. The Supreme Court has never weighed in on the issue, and it won't this time either, so we're left on our own to figure out the meaning of a deceptively plainly worded document.

A little history is in order. The Fourteenth Amendment was passed shortly after the Civil War, mostly to give us its now celebrated Equal Protection and Due Process clauses. Section 4 has largely become a historical footnote, a few sentences stuck in at the end to settle up the question of wartime debts. Essentially it resolved three then-critical but now irrelevant matters of finance:

1. All debts owed by the legitimate U.S. Government would be honored in full.

2. No debts incurred by the Confederacy and its supporting states would be paid.

3. No former slaveholders could seek repayment for freed slaves.

Why were these three issues enshrined in the Constitution? In part, because it protects private contracts from government interference. This protection isn't ironclad but does warrant consideration.

In greater part, however, it was to extinguish the possibility of ever repaying Confederate debt. The Union Congress wanted to make sure that reintegrated Southern representatives couldn't use U.S. funds to repay rebel bonds. Only a constitutional amendment, Congress decided, could protect this issue from politics and shifting majorities.

More relevant today, Congress also included language about honoring the debts of the U.S. government, in order to make sure that future representatives from former Confederate states couldn't play politics with Union debts. During debates over the amendment, Senator Benjamin Wade said, in relevant part, that the validity language

"will be of incalculable pecuniary benefit to the United States, for I have no doubt that every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.



...

"I am anxious to put the pensions of our soldiers and their widows and children under the guardianship of the Constitution of the United States. They ought to be there, along with your public debt."

Wade's argument was framed around the United States after the Civil War, and his concerns were specifically that former Confederate sympathizers would attempt to use the Union's debts and its soldiers as political bargaining chips. This context is useful to our analysis, since the validity clause of the Fourteenth Amendment was passed by Congress specifically to prevent a political faction from threatening government debt for leverage.

A historical artifact, maybe, but that's only because until recently there'd never again been a party seemingly willing to force nonpayment of existing debts. (As I noted in a previous article, the debt ceiling is about raising cash to pay existing debts, not creating new ones. It's like paying a $60 cable bill with a credit card; you still walk away owing $60.)

Had earlier versions of the Fourteenth Amendment passed, we wouldn't be having this discussion today. Several drafts of the validity clause specified that it applied to all U.S. debt incurred during the war or in putting down rebellion. Those versions were rejected, which for a lawyer is surprisingly meaningful. It means that Congress specifically considered a narrower version of the clause and expanded it.

When we're searching for meaning, that's a bright red clue. Congress had the chance to pass a version of the Fourteenth Amendment that only safeguarded Civil War debt, considered language to that effect, and chose to go with a much broader version. Indeed, the language of the first sentence ("...including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion...") suggests that the rest of the passage includes all debts beyond just those.

The Supreme Court seems to agree.

In Perry v. United States (the only Supreme Court case I'm aware of dealing with this clause), the Court wrote that the validity clause "is confirmatory of a fundamental principle, applying as well to bonds issued after, as to those issued before, the adoption of the Amendment, and the expression 'validity of the public debt' embraces whatever concerns the integrity of the public obligations."

What's (relatively) clear is that the clause applies to more than just Civil War debt.

What's not is how broad the reach of that language really is.

Without having to necessarily decide the boundaries of this amendment, however, we can see that this is a case where the Fourteenth Amendment should apply. It was written to address our exact problem: a faction (any faction) of Congress holding the debts of the United States hostage to exert their political will. Some 150 years ago, that would have been over an effort to repay Confederate obligations. Today, it's a debate regarding Obamacare, but the principle remains the same.

Congress's solution to this problem was to place federal debts "under the guardianship of the Constitution of the United States" where they "shall not be questioned."

In short, we have a compelling piece of law. The Constitution forbids Congress from choosing not to pay debts it lawfully incurred. The clause doesn't have escape hatches, and the history of this amendment specifically concerns playing politics with federal debt. It's simply illegal for Congress to refuse to pay our bills. It doesn't have the authority.

This isn't to say that the concept of a limit on the debt ceiling is itself unconstitutional; it's not. If the statute is used as it was originally intended in 1917, to free Congress from constantly approving new bond issuances, then it's by all means legitimate.

Congress can set how much it wants to spend, then authorize the Treasury up to that amount.

As used today, however, the law has taken on a different form. The debt ceiling is a problem not because the Treasury wants to wrack up more spending, but because it needs money to pay the bills it already has, the ones that Congress has already authorized.

In this context the debt ceiling is, and must be, unconstitutional. It cannot be used to put a cap on the government's ability to pay already-existing obligations. The entire statute doesn't have to go, but insofar as it allows Congress to refuse to pay our bills, it does. The validity clause automatically gives the Treasury the power to raise the money that Congress has spent.

In fact, Congress is arguably already in breach of the clause just by floating the idea of default in the first place. Remember, the amendment doesn't say "shall be paid"; it says "shall not be questioned." Our Constitution brooks no foolishness when it comes to the public debt. It may seem like a small difference, but lawyers live in the details, and here that difference matters.

An amendment that said "shall be paid" could mean that temporary default is quite alright, as long as Congress gets around to honoring government debts sooner or later. "Shall not be questioned" is another matter. This is a stronger wording that allows no leeway in paying government bills on time, as the document's history suggests.

Happily for President Obama, this means that the debt ceiling is like that old Simpsons Halloween episode. The monsters are only scary when you look at them. To solve the debt ceiling crisis, Obama needs merely to do nothing. Tell the Treasury it's business as usual, that this problem's already been solved.

For those folks worried about confidence in the marketplace, what could be more inspiring than confirming that America's creditworthiness is actually enshrined in the Constitution?

And let's all be grateful for the one time our Civil War era politics came in handy.

--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.