Suddenly, without warning, after months of debate and recrimination over the issue of raising the debt ceiling, a radical new possibility has surfaced which, if embraced by Obama, would totally alter the entire economic and political playing field. It is now being suggested that the President does not need authorization by Congress to raise the debt ceiling and issue new Treasury securities, that indeed regardless of what Congress does he is required to do so! All of this rests on an obscure passage in the 14th Amendment to the U. S. Constitution, viz:
"Section 4. The 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. 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, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."
As the text makes clear, this Article was added to deal with the potentially explosive question of debts of the Confederacy and the demand by former slave-owners for compensation for their "property." But in 1935, the United States Supreme Court, in a case actually having to do with debts the U. S. incurred while operating on the Gold Standard, took a quite expansive view of Article 4 [see Perry v. United States, 1935]. The court was actually split 4-4-1 on the correct resolution of the case and its implications, but at least eight of the nine justices were in agreement that the United States was absolutely required to meet its debt obligations. Now, I am no sort of Constitutional scholar at all, but it does seem to me that if the Congress and the President jointly have, through Act of Congress, spent certain monies, thereby committing the good faith and credit of the United States, then the Administration is constitutionally obligated to fulfill those commitments, regardless of whatever artificial ceiling that same Congress has imposed on the government's issuing of debt.
It takes no brains at all to see that if Obama were to invoke this power, all hell would break loose. He would almost certainly face impeachment in the House of Representatives, and win his case in the Senate. This would not be a nonsense impeachment over sexual peccadillo's, but a genuine Constitutional confrontation, and in my amateur opinion, Obama would be in the right.
We shall see.