On the opinion page of the Wall Street Journal, David Rivkin and Lee Casey (alt. free link) -- who were always ready with an argument that whatever George W. Bush wanted to do was constitutional -- take on the argument that Congress can't refuse to raise the debt ceiling because to do so would undermine the ability to service existing debts, which are protected by the 14th Amendment. Their logic is as follows --
The original concern of this provision was to guarantee the integrity of federal debts incurred during and immediately after the Civil War (while the debts of the Confederacy were nullified permanently), and to ensure that a newly "reconstructed" Congress—to which the Southern states were readmitted—would not reverse these decisions. However, the amendment's language was not limited to the Civil War-related debts. In Perry v. United States (1935), the Supreme Court made clear that the provision "indicates a broader connotation" protecting the nation's debts as a whole. This means that a failure to raise the debt ceiling—to prevent new borrowing—does not and cannot put America's current creditors at risk. So long as this government exists, and barring a further constitutional amendment, those creditors must be paid ... If the executive chose to act irresponsibly and unconstitutionally and failed to make any debt payments when they come due, debt-holders would be able to go to the Court of Federal Claims and promptly obtain a money judgment. These basic facts should inform any credible decisions by credit-rating agencies in establishing the government's creditworthiness. Significantly, these agencies have traditionally acted favorably when heavily indebted countries have not defaulted on their debt but cut deeply their public spending.
Leave aside the lawyers suddenly becoming economists and credit rating specialists in the last sentence. The problem is the jump from the Constitutional requirement not to question the "validity" of the public debt to their claim that the President is obliged to service that debt above all other requirements. And it's a specific problem for strict constructionist conservatives, who would be looking to see whether the Constitution precisely spells out whatever power is being claimed. The point is that the US Constitution never sets out any absolute priority for debt service payments -- Rivkin and Casey are simply reading such a priority into the 14th Amendment and the penumbra of the various case law that followed.
How do we know that the Constitution doesn't set a priority for debt service? Because if it did, it would include language like the Constitution of Delaware --
Prior to the beginning of each fiscal year of the State, the General Assembly shall appropriate revenues of the State to pay interest on its debt to which it has pledged its faith and credit and which interest is payable in the year for which such appropriation is made and to pay the principal of such debt, payable in such year, whether at maturity or otherwise. To the extent that insufficient revenues of the State are available to pay principal of and interest on such debt when due and payable, the first public moneys of the State thereafter received shall be set aside and applied to the payment of the principal of and interest on such debt. To make up for such insufficient revenues, the General Assembly may increase the rate of taxes and fees without regard to the limitations of subsection (a) hereof after the failure to pay when due the principal of and interest on such debt.
In other words, the state is explicitly obliged to set aside sufficient money, through tax hikes if necessary, to pay the state debts before any other government business is done. There is no such article in the federal Constitution. Many US state constitutions set similar priorities, and there's considerable effort put into documenting which do and which don't. And for the same reason, the Eurozone debt crisis has prompted interest in including an absolute priority for debt service in national constitutions.
But Rivkin and Casey -- pushing a conservative cause -- simply assert that such priority is already there in the US constitution. Minting the trillion dollar coin would be better founded in the text than that.
UPDATE: Also on the Wall Street Journal opinion pages, James Taranto claims that the 14th Amendment gives priority to debt service:
[In a funding shortfall] The president would be obliged to comply with any laws governing which expenditures take priority under such circumstances, including the 14th Amendment's mandate that servicing of existing debt is at the very top of the list.
The plain language of the Amendment provides absolutely no such priority; there is no Delaware-style ordering in the federal constitution.
The original concern of this provision was to guarantee the integrity of federal debts incurred during and immediately after the Civil War (while the debts of the Confederacy were nullified permanently), and to ensure that a newly "reconstructed" Congress—to which the Southern states were readmitted—would not reverse these decisions. However, the amendment's language was not limited to the Civil War-related debts. In Perry v. United States (1935), the Supreme Court made clear that the provision "indicates a broader connotation" protecting the nation's debts as a whole. This means that a failure to raise the debt ceiling—to prevent new borrowing—does not and cannot put America's current creditors at risk. So long as this government exists, and barring a further constitutional amendment, those creditors must be paid ... If the executive chose to act irresponsibly and unconstitutionally and failed to make any debt payments when they come due, debt-holders would be able to go to the Court of Federal Claims and promptly obtain a money judgment. These basic facts should inform any credible decisions by credit-rating agencies in establishing the government's creditworthiness. Significantly, these agencies have traditionally acted favorably when heavily indebted countries have not defaulted on their debt but cut deeply their public spending.
Leave aside the lawyers suddenly becoming economists and credit rating specialists in the last sentence. The problem is the jump from the Constitutional requirement not to question the "validity" of the public debt to their claim that the President is obliged to service that debt above all other requirements. And it's a specific problem for strict constructionist conservatives, who would be looking to see whether the Constitution precisely spells out whatever power is being claimed. The point is that the US Constitution never sets out any absolute priority for debt service payments -- Rivkin and Casey are simply reading such a priority into the 14th Amendment and the penumbra of the various case law that followed.
How do we know that the Constitution doesn't set a priority for debt service? Because if it did, it would include language like the Constitution of Delaware --
Prior to the beginning of each fiscal year of the State, the General Assembly shall appropriate revenues of the State to pay interest on its debt to which it has pledged its faith and credit and which interest is payable in the year for which such appropriation is made and to pay the principal of such debt, payable in such year, whether at maturity or otherwise. To the extent that insufficient revenues of the State are available to pay principal of and interest on such debt when due and payable, the first public moneys of the State thereafter received shall be set aside and applied to the payment of the principal of and interest on such debt. To make up for such insufficient revenues, the General Assembly may increase the rate of taxes and fees without regard to the limitations of subsection (a) hereof after the failure to pay when due the principal of and interest on such debt.
In other words, the state is explicitly obliged to set aside sufficient money, through tax hikes if necessary, to pay the state debts before any other government business is done. There is no such article in the federal Constitution. Many US state constitutions set similar priorities, and there's considerable effort put into documenting which do and which don't. And for the same reason, the Eurozone debt crisis has prompted interest in including an absolute priority for debt service in national constitutions.
But Rivkin and Casey -- pushing a conservative cause -- simply assert that such priority is already there in the US constitution. Minting the trillion dollar coin would be better founded in the text than that.
UPDATE: Also on the Wall Street Journal opinion pages, James Taranto claims that the 14th Amendment gives priority to debt service:
[In a funding shortfall] The president would be obliged to comply with any laws governing which expenditures take priority under such circumstances, including the 14th Amendment's mandate that servicing of existing debt is at the very top of the list.
The plain language of the Amendment provides absolutely no such priority; there is no Delaware-style ordering in the federal constitution.