This is a gifted NYT link so there is no paywall.
All Congress would have done is create economic catastrophe on top of constitutional crisis — and without securing compliance with the debt ceiling that Republican claim to want. The only way out of this forest is through the trees.
Tribe, as usual, is correct. Great link, thank you.
Nah, he’s completely wrong. He’s engaging in the same rhetorical slight of hand that most folks making this argument make - eliding the difference between “debt” and “spending that Congress has authorized.” Nearly everything that the government intends to spend money on in the future isn’t currently “debt,” which means it’s absolutely possible for the government to avoid ‘questioning’ the ‘validity’ of that debt without issuing securities in violation of Congress’ prior statutory enactments.
There are innumerable reasons why that would be catastrophic. But violating the 14th Amendment isn’t one of them.
Albaby
Does the POTUS have the authority to decide if and when to spend money authorized by Congress?
Albaby, with the utmost respect, I disagree.
Let me pick just one example.
In 1935, Congress passed the Social Security Act.
In 1939, Congress passed the Public Debt Acts, which created the debt ceiling (the “stop me before I kill again” act).
Come June 1, 2023 (approximately), the U.S. Treasury runs out cash.
The President has 2 options (let’s ignore the trillion dollar coin option because it’s a gimmick), does the president stop paying Social Security violating the SSA or does he keep borrowing to pay Social Security violating the PDA?
Now remember, I know there are thousands of different programs the president could select from, but they’ve all been legally authorized by Congress. That’s why I’ve chosen just one example.
And, if the president delays paying Social Security, isn’t the president, in reality, just creating more debt (even if it’s just an IOU), violating the PDA.
So Congress has put the president in the position where the president has to violate one law or the other.
Congress legally spends and creates tax laws and now they think someone else should be held accountable to clean up the mess.
I don’t think so.
The president should challenge the Constitutionality of the PDA and just keep paying out what Congress has authorized the Treasury to pay, per the 14th Amendment.
Typically not.
But he’s never required to do the impossible. If Congress passes a law saying he has to achieve a certain goal, but doesn’t pass any spending bills to achieve that goal, he can’t achieve the goal. If Congress passes a spending bill, but doesn’t appropriate any money to spend on what they’ve set out, then he can’t spend the money. Those things happen all the time.
If Congress appropriates money to 10 things, and there’s only enough money in the Treasure for him to fund 9 of those things, then it’s impossible for POTUS to do all 10 things.
I don’t disagree. But that doesn’t mean that the 14th Amendment is involved. Because unless there is a public debt that is being questioned, the provisions of that Amendment don’t come into play.
This happens all the time. It’s not uncommon for Congress to pass a bill establishing a new program, project, or what have you - and then it doesn’t get appropriated any money to fund it. Or for an existing program to get its appropriations slashed down to zero, basically killing it even though the law requiring that the spending be carried out is still on the books. Congress orders the President “Spend X on this program,” then doesn’t appropriate any money for the program - so the President can’t follow the first bill. Because the President can’t do the impossible, and he can’t spend money on a program if Congress hasn’t appropriated the money.
The president should challenge the Constitutionality of the PDA and just keep paying out what Congress has authorized the Treasury to pay, per the 14th Amendment.
Again, the 14th Amendment applies only to “debt,” not “what Congress has authorized the Treasury to pay.”
Albaby
If a legal Congressional authorization for the Treasury to pay isn’t a debt, what is?
How you pay your debt (cash or borrow the money) is irrelevant.
Debt is debt. When you borrow money, you incur a debt. If you issue a bond, that’s a debt.
If Congress today passed a spending and appropriations bill authorizing the Federal government to solicit bids for 10 autos and buy those automobiles in August, no debt is presently created. The federal government hasn’t spent the money. It only plans to spend the money. It’s been authorized by Congress to spend the money - but it hasn’t spent the money yet. It hasn’t even entered into a binding contract to spend the money yet. It’s not debt.
That’s where folks like Tribe are engaging in a little rhetorical slight of hand. They conflate “debt” and “spending that the government plans to do but hasn’t done yet.” The 14th Amendment doesn’t speak to the latter. The government almost certainly takes in enough money through regular tax payments to cover things that involve debt from this point going forward (servicing existing bonds and other debt instruments, making payments on bills for services and goods that have already been tendered, etc.). It’s only future spending that government has neither actually made or contractually bound itself to make that tip us over the edge. Which is why the 14A argument is a pretty poor one.
I don’t think that’s universally correct. There are about 2.5 million federal employees. Their employment agreements say they should be paid next month for work they did this month. If come June 1 and there is no paycheck, the government has broken the contract.
It is easy to come up with lots of other scenarios, like a contractor delivering weapons to Ukraine, but then not getting paid because there is no money.
Sure - which is why all you need to do is tell them to stop working before you run out of money. That’s what happens during the rare (but still too frequent) government shutdowns that have happened because Congress didn’t pass an appropriations bill. Employees were told not to report to work, because funds had not been appropriated to pay them. No one argued that their employment contracts rendered their future earnings “debt” such that the 14th Amendment allowed the Administration to just pay them anyway, without Congressional appropriations. The government just shut down - or parts of it, anyway.
If you don’t have the money in the Treasury to cover future spending, one avenue of recourse that’s open to the Administration is to just not incur the future spending, rather than borrowing money without statutory authorization to do so.
That assumes the government can just cut its contractual liabilities immediately, or on short notice.
Did the shutdown void or suspend their employees’ employment contracts? Without any compensation paid once the shutdown was over?
Or did, in reality, government debt continue to grow, irrespective of salary payments being temporarily suspended?
I think that’s a good assumption, since that’s what happened during the last two government shutdowns. Furloughed employees were not paid during the time they weren’t working - it caused considerable hardship for them.
If you tell the workers not to report for work, then you don’t need to borrow without statutory authorization to cover their salaries. They’re just not paid.
Now - the federal government did go back and pay those folks, once funding was available. Government shutdowns aren’t necessarily a spending-control mechanism. But because you don’t actually need to make the salary outlays during the time when funding isn’t available, shutting down the government and not paying those salaries is not “questioning” a “debt” of the government in a way that would contravene the 14th Amendment. Or at least, no one claimed it was the last two times it happened…
Does that mean they shouldn’t have?
Yes, they shouldn’t have made that claim. Because it didn’t violate the 14th Amendment. These employees don’t have “guaranteed” contracts, obligating the government to pay them regardless of whether they work or not. The government has the ability to fire and furlough people, and if they do then they aren’t owed their salaries. Those aren’t debts that require repayment.
If an employee is furloughed for the month of July due to a debt standoff, the government isn’t obligated to pay them during the month of July. So failure to pay them during the month of July isn’t “questioning” a “debt” of the United States. So the 14th Amendment doesn’t require the Administration to issue debt to pay those salaries.
As soon as the furlough ended, they were paid for the entire period. See Government Employee Fair Treatment Act of 2019 (Public Law 116-1, January 16, 2019). They essentially got some additional paid vacation days.
Which I noted - but that’s not really relevant for this discussion. The federal government was perfectly capable of not paying them during the time they weren’t being asked to come in to work, and instead delaying all payments until such time as the funds were available. Those shutdowns were caused by lack of appropriations - but the same would apply to non-payment due to lack of funds in the Treasury. The government has the ability to just not have them work, and therefore not incur any present obligation to pay them. And thus not create any “default” (or “questioning”) of any “debt” because of that hiatus in payment, regardless of whether Congress chooses later to pay them for the time they missed.
So to sum up all your posts the only solution is shutting down the government and defaulting on payments. Or have I missed something?
Hang on there Cochise. Unless/until the trust fund is exhausted, ZERO additional debt is incurred to pay SS benefits. The government would replace existing Treasury bonds in the fund, with bonds sold to the public, for the same amount.
All this talk about stopping SS payments is nothing but hype, hysteria, and brinkmanship. People should not be hoodwinked by these theatrics after all these years.
Steve
Oh, no. I mean, most obviously the most responsible “solution” is for the Congress to pass a bill authorizing more borrowing in order to avoid the ridiculous outcomes that would accompany any attempt to kludge around this. But also, shutting down the government means you don’t default on payments (probably).
But there are other “solutions,” of course. If we’re not going to have enough money to cover future spending, Biden could just raise taxes. Bump up the gas tax! Raise the corporate tax! Increase personal income taxes! Just have the IRS raise 'em up, until you’ve covered spending!
But wait, I hear you cry! Biden can’t just raise taxes! Those are set by statute! Sure. But remember, we’re in a world where anything Biden does is going to violate some statute. If he exercises the “14th Amendment solution” and just borrows more money, he’s going to violate a Congressional statute. Having the IRS raise people’s taxes doesn’t violate a Congressional statute any less. So if the 14th Amendment authorizes Treasury to issue debt in violation of statute, that same argument could be used to justify the IRS to raise taxes in violation of statute as well.
Or to sell off property - the U.S. government has trillions of dollars in property. You only need a few hundred billion per month in order to keep the budget afloat. Of course, most of it can’t be sold without authorization from Congress. But remember, we’re in a world where some statute has to be violated - why not that one, instead of the debt statute?
Ultimately, that’s the problem with the 14th Amendment solution. Issuing more debt isn’t the only way to match Treasury resources to future spending. You can sell assets, raise taxes, or decline to spend money that Congress has directed. All of those “solutions” are equally prohibited by current statute - but if the 14th gives license to start violating statute, there’s nothing magical about breaking the debt limit as opposed to ripping up the Tax Code.