Wednesday, October 9, 2013

The Debt Ceiling & the Constitution


Sean Wilentz, a professor of history at Princeton, was on Bloomberg this AM; he makes several important points, as follow-up to his Op-Ed in the NY Times….

1.     The President can’t invoke the 14th Amendment to authorize payment of our debts until we default; to do so before default, would be unconstitutional.

2.     According to Section 4, it is unconstitutional to question the debts of the US, authorized by law, and whether they will be paid. This essentially refers to our existing debt which has already been authorized by congress.

3.     This part of the constitution was written specifically to address such a threat, like the one being mounted by the tea party, and was previously used to ensure that the US government would be able to pay all authorized debts incurred during the battle against the Confederacy.

14TH AMENDMENT: 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.


An excerpt from the Op-Ed by Mr. Wilentz:

“Congress passed the 14th Amendment and sent it to the states for ratification in June 1866. Its section on the public debt began as an effort to ensure that the government would not be liable for debts accrued by the defeated Confederacy, but also to ensure that its own debt would be honored.

That was important because conservative Northern Democrats, many of whom had sympathized with the Confederacy, were in a position to obstruct or deny repayment on the full value of the public debt by paying creditors in depreciated paper money, or “greenbacks.” This effective repudiation of obligations already accrued — to, among others, hundreds of thousands of Union pensioners and widows, as well as investors — would destroy confidence in the government and endanger the economy.”