Dear GOP, default is unconstitutional

When the House membership read the Constitution aloud in January, where did it find the part that gives Congress the power to default on the nation’s debts?

Nothing justifies the claim that Congress has the power to cause a default on the national debt — or put a cap on expenditures that Congress duly authorized.


Indeed, Article I, Section 10, prohibits states from impairing the obligation of contracts. Nowhere in Article I does it give Congress the power to do what is forbidden to the states. Congress has never had the power to set a debt ceiling or trigger a default to get out of paying its debts.

If there is even the slightest question, the 14th Amendment denies anyone — including Congress — the power to default on the debt or ruin the credit of the United States.

The tea party usurpation would destroy the original point of the Constitution. The Founders would be shocked — though I suppose they long ago stopped rolling in their graves.

At the beginning, the Constitution of 1787 was a compact of creditors, sharp business types like Abigail Adams, holding state bank notes and fretting that the states might default.

This fear led to Article I, Section 10: “States shall not impair the obligation of contracts” — i.e., the public debt bought up by Adams and her friends. That’s what triggering a default would do. Of course, the Treasury has the discretion to pay the bondholders first — though it would mean stiffing our troops in the field.

Because Article I forbids the states from defaulting by legislative fiat, it is stunning to think Congress might try the same stunt — even worse, to do it by default, as a matter of whim, for no reason but tea party pique.

It would be all the dumber to do so after we ran up this debt to save the credit of Goldman Sachs. Now, having saved Wall Street’s credit, we’re going to destroy the credit of the United States?

“Oh, but Article I expressly gives Congress the right to borrow.” So it does. But it does not give Congress the power to default — which is not a lesser implied power but a vastly greater, doomsday one. Note that in 1787, the Founders expected and planned for a national government that would start with a massive public debt.

Even today, most state constitutions require a balanced budget. It’s no accident that the U.S. Constitution has no such requirement. George Washington’s first big act as president was the bold assumption by the federal government of all state debts — on which Adams and others expected defaults.

This took a lot of nerve from a new government with no tested or established power to tax. A friend of Washington wrote him that the only thing keeping the new nation together was his administration’s guarantee to pay off the public debt of the states.

The Founders’ panic over default on the public debt is recounted in detail in “Unruly Americans and the Origins of the Constitution,” by historian Woody Holton. He picks out Founders who were creditors of the state governments. Like Abigail Adams, they had bought up, at deep discount, the notes issued to desperately poor war veterans, who thought them worthless.

“One of the bonds she purchased,” Holton writes, “ had depreciated to 15 percent of its face value, and she held onto it until it reached 85 percent — more than five times what she had paid.”

The Constitution effectively saved the creditors from default. The preamble might well read: “We the Creditors of the various States.” In the beginning, the Constitution was a document of the creditors, by the creditors and for the creditors.

So it is hard to see whence the tea party types glean the power of Congress to trigger a default on the debt.

But doesn’t the power to borrow in Article I necessarily include the power not to borrow? Sure, Congress does not have to borrow — and can stop Treasury from doing so. But if Congress authorizes the expenditures, Article I has only one other way out: raising taxes.

With federal tax revenues now less than 20 percent of gross domestic product, the U.S. has some of the lowest tax rates in the so-called First World, with plenty of room to go higher.

In Article I, the power to borrow merely complements the power to tax, as a way to pay for the expenses Congress has authorized.

And let’s not forget the Fifth Amendment. Default would essentially be a taking of property — the bondholders’ — without due process of law. No Treasury bond reads “subject to the debt ceiling.” The Fifth Amendment is supposed to be the darling of the Federalist Society. Where is it on this one?

The debt ceiling has always been a superfluous, even nonsensical, statute. By prior authorization of expenditures that create the debt, a dollar at a time, Congress has implicitly amended the debt ceiling it must purportedly lift. The authorization process “amends” the ceiling. Congress cannot set a limit on itself, then exceed it by act of Congress, then claim that a prior act of Congress deprived it of that power.

If Article I or the Fifth Amendment or the canons of statutory interpretation left any question, the 14th Amendment delivers the coup de grâce to the tea party’s imperial claim.

Section 4 of the 14th Amendment states, in part: “The validity of the public debt, authorized by law … 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.”

Some commentators say Section 4 is one way to prohibit the federal government from assuming debts of the defeated Confederate states. The second sentence so states. But the first prohibits Congress from dumping any debt — and not just Treasury bonds or financial instruments.

Under Section 4, as one commentator pointed out, “The government may … not acknowledge that the public debt exists but refuse to pay it.” Of course, the debt is “valid,” whether it exceeds the debt ceiling or not. Indeed, as the text suggests, the validity may not be “questioned” — much less “repudiated.”

That’s exactly what a threat not to raise the debt ceiling does.

Indeed, on the House or Senate floor, any speech containing this threat is a direct violation of the Constitution. Let’s hope any such speech in the weeks ahead is ruled out of order.

Perhaps the speaker will ask the sergeant at arms to make an appropriate arrest.

And why not?

Where the validity of the public debt is concerned, our national security is at stake.

The drafters of the 14th Amendment properly feared that, on readmission to the Union, legislators from the red states — I mean the Confederates — might try to impair the credit of the United States.

Nothing could be more inimical to U.S. national security. Ask any war leader — from Henry II to Winston Churchill. Unless the validity of the public debt is unquestioned, especially by the government’s elected officials, there is great difficulty even in putting an army in the field.

Without our nation’s unimpaired credit, we might have lost to the Confederacy. We might have lost to the Axis in World War II. No, the validity of the public debt should not even be questioned in the weeks ahead.

If none dare call it treason, this Copperhead conspiracy is as close as it comes.

Thomas Geoghegan, a labor lawyer, is the author of “See You in Court: How the Right Made America a Lawsuit Nation.”

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