The Public Debt Clause: Back from the Dead?

Michael Abramowicz’s youthful “thought experiment” has morphed into a serious (well half-serious) policy proposal in this recent article by law professor Garrett Epps.  The essence of Epps’s claim (presented as an imagined speech by President Obama) is that debt limit is unconstitutional under the Public Debt Clause. Epps further suggests that the President can therefore ignore the debt limit, issue debt instruments on his own authority, and use the funds to continue the government’s spending at currently authorized levels.

There are several important differences between Abramowicz’s position and Epps’s. To begin with, Abramowicz acknowledges the novelty of his position, noting that no plaintiff has ever even attempted to use the Public Debt Clause to challenge the debt limit or any other congressional action that might arguably jeopardize the ability of the United States to repay its debt. Moreover, although he explores the possibility of judicial enforcement of the Public Debt Clause, at the end of the day he concludes that Clause “should be thought of as dead” and explains “why the Supreme Court should not attempt to revive it.”

Abramowicz also explores some of the difficulties would arise if the courts were to try to enforce the Public Debt Clause (or, more precisely, his interpretation thereof). For example, the courts would have to decide which types of obligations fall within the “public debt.” It might be argued that entitlements like Social Security or Medicare fall within the protection of the Clause, but Abramowicz suggests that this might exceed even his own broad interpretation. Because entitlements are not based on voluntary agreements, they are not like either bonds or payments owed to those who have provided goods or services to the federal government.

Moreover, Abramowicz notes that the Supreme Court’s decision in Fleming v. Nestor, 363 U.S. 603 (1960), would stand as a barrier to any attempt to establish a constitutional right to Social Security payments. In Fleming, the Court upheld a statute which retroactively withdrew benefits from aliens deported as Communist sympathizers. The Court noted that Congress had expressly reserved the power to alter, amend or repeal any part of the Social Security Act and found that this provision made explicit what was implicit in the institutional needs of the program, ie, beneficiaries have no vested property right in their benefits. (For more on the right of Congress to change Social Security benefits, see this CRS report). Although the Public Debt Clause was not discussed (not surprisingly, since it would not have occurred to anyone that it related), Abramowicz notes that “it seems intuitively unlikely that the Court would ever uphold Fleming’s interpretation of the Due Process Clause but reach a contrary result on the basis of the Public Debt Clause.”

Finally, if one assumes that the core purpose of the Public Debt Clause is to assure the creditors of the United States of repayment, then a broad interpretation of the “public debt” will tend to be self-defeating. After all, if all of the obligations of the United States have constitutional priority, then none of them do. Or, to borrow a phrase from Abramowicz, protecting entitlements under the Public Debt Clause would transform it “from a brake against fiscal chaos to an accelerator that could push the economy off the fiscal cliff.”

None of these qualifications or nuances appears in Epps’s article. He does not mention Abramowicz, or the fact that he and Abramowicz are evidently the only people to have ever suggested that the Public Debt Clause might require Congress to authorize unlimited borrowing. He asserts, or would have Obama assert, that Social Security is within the scope of the Public Debt Clause, though even Abramowicz does not believe this. Indeed, Epps would seemingly declare all of the government’s spending sacrosanct under the Public Debt Clause, a position that doesn’t appear to be supported by Epps’s own claims about the Clause.

Because the article is framed as a political speech, Epps gives himself literary license to present his argument in the most conclusory and misleading way. The reader is given no clue as to the utter novelty of the legal claims being made. Epps would have Obama declare that “[f]or nearly a century and a half, the absolute language of the Fourteenth Amendment was not even questioned.” Unless this statement is utterly meaningless, it is false. Certainly it is not the case that no one has voted against raising the debt limit. Many have done so, including then-Senator Obama.

These problems, however, are not the worst thing about Epps’s article. We will get to that shortly. But first we will take a closer look at the argument that the debt limit violates the Public Debt Clause.

 

 

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