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Reason
Conor Clarke

Why the Debt Limit Is (Still, Really) Constitutional

There is now a deal over the debt limit, but President nevertheless insists that he's still looking at using the 14th Amendment in the future—apparently to decide "whether or not you need to do the debt limit every year." Motivated in part by some friendly disagreement with Michael Dorf, the President's comments seem like a good occasion for me to revisit the absence of a 14th Amendment authority to exceed the limit and respond to a few of Dorf's points.

A brief recap. There are two leading theories by which the President might declare the debt limit unconstitutional. The first leans on the Public Debt Clause of the 14th Amendment, which provides in relevant (if vague) part that "[t]he 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." Applying this Clause as an authority gets most the most press, and it's the one that Biden himself seems to find plausible.

The second view—which I find more intriguing and which the President hasn't addressed—is Neil Buchanan and Michael Dorf's theory that the debt limit can create a kind of trilemma: If the President doesn't have enough money to satisfy spending statutes, he must (so the theory goes) either arrogate Congress's spending power or arrogate one on revenue-side authorities—taxing or borrowing.

My view is that neither theory works. The Public Debt Clause theory doesn't work because the text of the clause gives no hint of a presidential authority—"Congress shall have power to enforce" it, not the president. Using Congress's section 5 enforcement power to take Congress's Article 1 borrowing power would be an ambitious double heist. Second, as my paper recounts at length, legislative limits on executive borrowing were common in the 19th century and never thought to create any conflict with the Clause until very recently. (It is only in the past couple of decades—as partisan polarization has become especially bitter—that anyone looked to the 14th Amendment as a constitutional escape hatch.) Third, the facts. As a practical matter, it is not at all likely that reaching the point where total obligations exceed total revenue means we "default" on the public debt. It has been clear for decades that the United States can roll over the debt and continue paying interest even as it prioritizes other spending.

But Professor Dorf offers a fair rejoinder: The argument I've sketched above works "only if one takes a very narrow view of what constitutes 'debt.'" The idea here is that the "public debt" might be read broadly, to include all manner of payments that the United States is indebted to make.

This is not the best way to read the Clause. The text of the Clause itself defines "public debt" as "including debts incurred for payment of pensions and bounties." If the term "public debt" already included (for example) the pensions, then the "debts incurred for" language would make no sense. The background drafting and ratification history concerns a limited set of debt securities, and the later text of the section (the so-called "Rebel Debt Clause") distinguishes between "debts, obligations and claims"—further evidence that "debt" must have a limited scope. And then we have overwhelming legislative practice since the 19th Century. "Public debt" isn't a term that appears only in the 14th Amendment. The term has appeared in public laws for centuries, and I know of no instance where it has the broad sweep Dorf would give it.

What about the trilemma argument? My basic view, described in more detail in the paper, is this: The idea that spending less than appropriations violates the Spending Clause—especially in situations in which another statute requires that spending—is simply impossible to square with the past 230 years of appropriations law and practice between the branches. A better account of that history is that the Article II Executive Power gives reasonable discretion to prioritize under conditions of limited resources but does not give the President the far more dangerous power to extract additional tax revenue from the people if spending asks (which of course additional borrowing also entails). There is ample precedent for presidential spending discretion going back to George Washington (recounted in considerable detail in Louis Fisher's classic study); I know of no precedent for presidential revenue discretion.

While the Nixon Impoundment controversies and the Impoundment Control Act of 1974 (ICA) clarified some aspects of the constitutional balance, the episode did not deprive the Executive Branch of some commonsense authority to prioritize spending when necessity dictates. This is why the Comptroller General's guide on appropriations law (the delightful "Red Book") has sections on what agencies should do when they run out of funds and must prioritize, or when external factors intervene and make spending impossible. The Comptroller General's advice is not that agency employees should shamefacedly turn themselves in for violating the Spending Clause. And this isn't some self-indulgent executive theory of executive power—this is Congress's own advice we're talking about.

There is plenty of evidence that everyone understood this body of law to apply to the modern debt limit. In 1969, then-Assistant Attorney General Rehnquist—no friend of the Nixon impoundments—concluded that the President possesses no "broad power" to withhold appropriated funds, but conceded that this might not be true in the special case "where to comply with a direction to spend might result in exceeding the debt limit." In 1973, commenting on impoundments in the run-up to the ICA, the Comptroller General's office concluded that presidential withholding of spending was generally not "required by law"—"except in the remote event that an expenditure or obligation would actually exceed the debt limit." I could list more examples, all equally tedious in making the same point: There is a longstanding and shared understanding between the branches that spending prioritization can happen, and that the debt limit is one of those cases.

(Train v. New York and Clinton v. New York, which Dorf cites, have nothing to do with this kind of necessary spending triage. A more appropriate case might be something like Los Angeles v. Adams: "If Congress does not appropriate enough money to meet the needs of a class of beneficiaries prescribed by Congress, and if Congress is silent on how to handle this predicament, the law sensibly allows the administering agency to establish reasonable priorities and classifications.")

I'll conclude by offering a couple of thoughts that are more speculative and general. First, I suspect the account of executive discretion that I've sketched above generalizes: Innumerable statutes say that the Executive Branch "shall" do this or that. But if the "shall" simply isn't feasible—prosecuting every single violation of our immigration laws, for example—we have a body of law that governs how the executive branch exercises discretion with the available resources, not a body of law that gives the executive branch permission to impose extra taxes and prosecute more crimes. Second, I suspect that this framework fits everyday constitutional intuitions about how the executive branch should be restrained. A President that can fiddle at the margins with the dollars Congress has provided is far less dangerous than a President that can take the whole purse. So too with the debt limit.

The post Why the Debt Limit Is (Still, Really) Constitutional appeared first on Reason.com.

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