Debt ceiling, 14th Amendment, Bonds
Constitutional Law | Fourteenth Amendment | Law and Economics | Tax Law
The federal statute known as the “debt ceiling” limits total borrowing by the United States. Congress has repeatedly raised the ceiling to authorize necessary borrowing, but a political standoff in 2011 nearly made it impossible to borrow funds to meet obligations that Congress had affirmed earlier that very year. Some commentators urged President Obama to ignore the debt ceiling, while others responded that such borrowing would violate the separation of powers and therefore that the president should refuse to spend appropriated funds.
This Article analyzes the choice the president nearly faced in summer 2011, and which he or a successor may yet face, as a “trilemma” offering three unconstitutional options: ignore the debt ceiling and unilaterally issue new bonds, thus usurping Congress’s borrowing power; unilaterally raise taxes, thus usurping Congress’s taxing power; or unilaterally cut spending, thus usurping Congress’s spending power. We argue that the president should choose the “least unconstitutional” course — here, ignoring the debt ceiling. We argue further, though more tentatively, that if the bond markets would render such debt inadequate to close the gap, the president should unilaterally increase taxes rather than cut spending. We then use the debt ceiling impasse to develop general criteria for political actors to choose among unconstitutional options. We emphasize three principles derived from a famous speech by President Lincoln: 1) minimize the unconstitutional assumption of power; 2) minimize sub-constitutional harm; and 3) preserve, to the extent possible, the ability of other actors to undo or remedy constitutional violations.
Buchanan, Neil H. and Dorf, Michael C., "How to Choose the Least Unconstitutional Option: Lessons for the President (and Others) from the Debt Ceiling Standoff" (2012). Cornell Law Faculty Publications. Paper 591.
Published in: Columbia Law Review, vol. 112, no. 6 (October 2012).