Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Democrats Call Debt Limit Unconstitutional

Posted by William Byrnes on February 21, 2012


The August 2 debt ceiling drop-dead date is less than a month away, and some Democrats are proposing a radical solution to the problem: Ignore it. They argue that the U.S. Constitution allows the President to simply ignore the debt ceiling and pay the federal government’s bills.

Democrats and commentators in favor of ignoring the limit cite section 4 of the 14th Amendment to the U.S. Constitution, which says, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions…, shall not be questioned.”

They argue that the U.S. government is bound by the Constitution to pay its bills and won’t be able to do so if the debt ceiling is respected. As a result, the law creating the debt ceiling is unconstitutional in this particular scenario because it would force the federal government to violate a provision of the U.S. Constitution. Taking on new debt isn’t just about future spending. A significant amount of any cash generated by a new debt issue is needed to service existing debt.

In short, default is unconstitutional, and the debt ceiling is unconstitutional to the extent it restricts the President from following the Constitution’s requirements.

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