Does the 14th Amendment allow the President to raise the debt ceiling?
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If the debt ceiling is not raised by early August, some are arguing that the President has legal authority to use the so-called “constitutional option” to require that the debts of the United States be paid.
Where does this idea come from? Section four of the 14th Amendment to the United States Constitution reads: “The validity of the public debt of the United States, authorized by law…shall not be questioned.”
A Fiscal Times column urged the President to use such an option.
Republicans are playing not just with fire, but the financial equivalent of nuclear weapons. Perhaps at one time when the federal debt was owned entirely by Americans we could afford to take a chance on debt default because the consequences would only be internal. But today, more than half of the privately held public debt is owed to foreigners.
Meanwhile, the Heritage Foundation labeled such a move a “devious and dangerous 14th Amendment ploy.”
This constitutional debate now seems mute because according to a New York Times piece last Thursday, Treasury Secretary Geithner told lawmakers the Administration believes it doesn’t have the power to raise the debt limit under the Constitution.
Geithner told the lawmakers the White House did not believe it had the authority, under the Constitution, to continue issuing debt if it reached the debt ceiling. Nobody in the room disputed Mr. Geithner’s bleak assessment, the officials said.
Hopefully the Administration won’t have to even consider this. Washington must put partisan politics aside and come to a timely agreement on the debt ceiling.