You wouldn’t be alone if you thought the U.S. Congress was stuck in the past. It may be 2023, but our nation’s legislature still cannot agree to a long-term solution to the perennial debt ceiling problem.
And while 2023 may result in another short-term fix, legal commentators are suggesting a new way for President Biden to bypass congress and avoid the debt ceiling: Section 4 of the Fourteenth Amendment. This clause prohibits the validity of the public debt from being questioned.
But will it succeed? Let’s dive in.
Debt Ceiling Saga Returns
The debt ceiling springs from a federal statute that prohibits the federal government from issuing or guaranteeing more than a certain amount of money. Since 1960, Congress has worked together to raise the debt ceiling in the statute a whopping 78 times.
If that sounds impressive, it should be noted that not all of those raises were completed smoothly. For example, in 1995, Republicans in control of Congress entered a stand-off with Democratic President Clinton over spending priorities. And on two separate occasions, the federal government actually shut down because the debt ceiling was not raised and there was a consequent lapse in government funding. Eventually, Congress and the President reached a deal to pass a budget and increase the debt ceiling.
It was not until 2011 that Congress and the President entered into another battle over the debt ceiling. Top House Republicans and President Obama sparred over the deficit, future spending cuts, and taxes. After a months-long fight, the two sides reached an agreement and raised the debt ceiling.
The last debt ceiling crisis occurred in 2013 when Republicans and Democrats again failed to reach an agreement, leading to another government shutdown.
Fourteenth Amendment and the Debt Ceiling
The Fourteenth Amendment was adopted in 1868 as one way to remedy the injustices of slavery. Specifically, the Amendment was designed to extend citizenship rights, privileges and immunities, due process, and equal protection to former slaves.
But the Fourteenth Amendment contains a little-known clause. Section 4 prohibits the validity of the public debt of the United States from being questioned. The original purpose of this clause was to stop anyone from questioning the debts the United States incurred from fighting the Civil War. Section 4 also prohibited the federal government from paying for any debt the Confederacy incurred in fighting the war or any loss an individual incurred from the emancipation of a slave.
But as Congress has been unable to reach an agreement on the debt ceiling, scholars and other commentators have begun to question whether it could be used to overcome the frequent debt ceiling impasses. The idea gained traction in 2011 when former President Clinton suggested that then-President Obama invoke Section 4 to bypass the statute. President Obama refused, saying that he had talked to his lawyers, who were “not persuaded that that is a winning argument.”
In nearly every debt ceiling crisis since, commentators have raised the possibility of using Section 4. And 2023’s debt ceiling crisis is no different.
Battle of the Experts
Legal experts disagree on the use of Section 4 to avoid the debt ceiling.
Law professor Saikrishna Prakash argues that “neither the Constitution nor the law nor common sense” supports the use of Section 4. While Section 4 prohibits anyone from questioning the validity of the debt, Prakash argues that it does nothing to empower President Biden to unilaterally raise the debt ceiling: “Congress, not the president, has the power to ‘borrow money on the credit of the United States.'” He argues that even if Biden did have the power, the problem is more about issuing money, not questioning the validity of the debt.
But Laurence Tribe, a prominent legal scholar, argues that Prakash’s view is an improper way to read the text of the amendment. Instead, Tribe holds that the question is “whether Congress—after passing the spending bills that created these debts in the first place—can invoke an arbitrary dollar limit to force the president and his administration to do its bidding.” He says that the answer is no, and that Section 4 allows the President to temporarily pay our debts until the debt ceiling is more permanently fixed.
The Court Decides
But this year’s debt ceiling crisis presents an unusual opportunity to test the Section 4 debate. A union called the National Association of Government Employees has filed a lawsuit against Treasury Secretary Janet Yellen and President Biden, asking that the court prohibit the federal government from entering a shutdown. The union argues that the debt ceiling statute violates the separation of powers—a constitutional rule that prohibits one branch of the government from interfering with another branch—because it precludes President Biden from carrying out his constitutional duties. Specifically, Section 4 of the Fourteenth Amendment “requires the President to meet obligations to the holders of federal debt,” but the debt ceiling statute “puts the President in a quandary” in limiting his ability to pay the debts that are constitutionally owed.
Less than a week ago, the union filed its emergency motion to declare the debt ceiling statute unconstitutional. Federal District Judge Richard Stearns has set a May 31 hearing on the motion. But during a videoconference, he expressed skepticism that the situation called for emergency action: “if the emergency is as dire as you think it is, I would think that it’s within the power of the president to address it using executive branch authority.” The judge gave government lawyers until May 30 to file a written response.
While Judge Stearns may be skeptical of the need for emergency action, his real hope may be that Congress and the President reach a deal to avert the crisis. This could mean the case would be irrelevant. In other words, the federal government would have kicked the can down the road, yet again.
Related Resources
- The Fourteenth Amendment’s Public Debt Clause (FindLaw’s Constitution pages)
- Will Biden’s Student Loan Program Survive the Supreme Court? (FindLaw’s Federal Courts blog)
- Billions in Federal Loans Involving For-Profit Schools to Be Forgiven (FindLaw’s Practice of Law blog)
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