Patrick Semansky/AP Photo
Does the president have authority to borrow beyond the statutory debt limit? The answer is clearly yes—and, moreover, the Constitution requires him to borrow enough to pay for what has been appropriated. Congress’s failure to raise the debt limit to pay its bills undercuts its own constitutional power to make binding commitments for the United States—including commitments to pay its debts—that the president must perform.
The Constitution gives Congress the power to make contracts. It does not give Congress the power to renege on these contracts. Once Congress has committed the United States to perform a promise, the president’s duty to “take Care that the Laws be faithfully executed” requires the executive branch to perform. If performance requires payment and Congress has appropriated the funds, Treasury is bound to pay. If Congress does not raise enough revenue to pay for appropriated commitments, then the president’s only choice is to borrow to fill the gap. Each time Congress authorizes a contract and appropriates funds to perform it, it necessarily authorizes borrowing to the extent that Treasury funds fall short.
New debt has filled appropriations gaps routinely for more than a century. This practice has created deeply entrenched expectations of “[p]unctilious fulfillment of contractual obligations” for anyone on the receiving end of U.S. government promises.
Taken literally, the debt limit would allow Congress to exercise a constitutional power with one hand and undercut it with the other.
Among its many commitments, Congress has borrowed trillions of dollars. It needs to keep borrowing more simply to pay interest on the existing debt. Congress has also authorized and directed the executive to make contracts to pay federal employees and suppliers, not to mention its contracts to provide for health, flood, and retirement insurance, and much more.
Taken literally, the debt limit would allow Congress to exercise a constitutional power with one hand (debt contract) and undercut it with the other (borrowing cap). During the last major constitutional challenge to federal debt in 1935, the Supreme Court made clear in Perry v. United States that Congress could not use its constitutional powers at cross-purposes: “The powers conferred upon the Congress are harmonious … Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.”
Taken seriously, the debt limit would require Congress to change the way it exercises its power of the purse. Not only would it have to authorize spending and appropriate funds from the Treasury, but it would also have to raise revenues (hike taxes) or authorize borrowing sufficient to fund the appropriation before its commitment becomes binding. If Congress does not exercise its power to contract and its power to limit borrowing in tandem, the debt limit amounts to giving one house of Congress ex post veto power over federal spending already authorized by law. This is entirely inconsistent with the basic constitutional design and guarantees legislative dysfunction.
Because this veto masquerading as a debt limit is unconstitutional, the president must disregard it, and must “take care” to fulfill the existing obligations of the United States, borrowing new money if necessary.
The 14th Amendment, passed by Congress in 1866 and ratified by the states in 1868, shields the new borrowing. The section dealing with debt responded to threats of political sabotage attending the readmission of Confederate states. It renounced Confederate debts as “illegal and void,” and in parallel precluded challenges to federal debts, including Union war debts and pensions, using a formula understood at the time to make legal issues non-contestable: “The validity of the public debt of the United States, authorized by law … shall not be questioned.” This sentence, known as the Public Debt Clause, bound future Congresses, future presidents, and, importantly, future courts to uphold the credit of the nation. Borrowing over the debt limit to perform existing federal obligations is authorized by law and deemed valid under the 14th Amendment.
It took the United States centuries to build up public credit at home and abroad. Cynical use of the debt limit for political gain fritters it away. It is wrongheaded, unconstitutional, and unenforceable. The president can and must honor the commitments Congress made.
