The Fourteenth Amendment Is No Blank Check for Debt Increases

Abstract: A clause of the Fourteenth Amendment to the United States Constitution provides, “The validity of the public debt of the United States…shall not be questioned.” Far from authorizing the President to incur more debt—a power vested solely in Congress—this clause bars Congress from repudiating debt that it has already incurred. Whether a default would amount to repudiation is an open question, but one that need not be answered at a time when tax revenues are sufficient to service current debt. Not only is the debt limit consistent with the Constitution’s separation of powers, but there is a colorable argument that it, or something like it, is constitutionally mandated.
Liberal legalists and pundits are abuzz with the idea that an obscure constitutional clause empowers the President to burst through the debt limit if Congress declines to raise it. While their focus on the constitutional text is welcome, their theory as to what it means would be merely laughable if some politicians had not begun to embrace it as a way out of a difficult negotiation.
The President has no more unilateral power to issue new debt on the credit of the United States than he has to collect taxes or make expenditures that have not been enacted by Congress. To claim such a power would be unprecedented, unconstitutional, and absurd. Moreover, the affront to the Congress’s rightful prerogatives would be serious, even for those seeking to avoid the hard work of putting the federal budget in order.
Section Four
Section four of the Fourteenth Amendment provides, “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.” It also declares “illegal and void” “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.”
This clause simply means that Congress and the President cannot question the validity of debt that is already incurred, but it in no way requires the nation to incur more debt. Even if it precludes temporary default—which is far from clear—it could not authorize the President to incur additional debt.

The Fourteenth Amendment was among those proposed and ratified during Reconstruction, and section four was its least-debated provision. During the Civil War, the Union had taken on massive debt to fund the war effort and had promised pensions to wounded soldiers and soldiers’ widows and orphans. The Confederate states had done about the same. Members of the 39th Congress, which excluded representatives of the Confederate states, feared that a future Congress dominated by Southern Democrats would wipe out Union debt and possibly seek to have the federal government guarantee the Confederate debt—an appalling possibility that would reward those who had financed an insurrection and risk political disruption for years to come.[1]

Their solution was to amend the Constitution to declare Confederate debt unenforceable while barring subsequent Congresses from “question[ing]” “the public debt of the United States.” This formulation was somewhat narrower than that of earlier proposals, which stated that federal “obligations”—potentially a more expansive category than debts—would be “inviolable.”[2] But it was also broader than the specific question at hand: the vitality of Civil War debts. This was deliberate. Senator Benjamin Wade, a proponent of the amendment, set forth the rationale:

I believe that to do this will give great confidence to capitalists and will be of incalculable pecuniary benefit to the United States, for I have no doubt that every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution….[3]

The Supreme Court’s sole opportunity to interpret and apply section four was in a 1935 case, Perry v. United States, which challenged Congress’s attempt to pay off bonds subject to a gold clause in devalued legal tender. The Court stated:

In authorizing the Congress to borrow money, the Constitution empowers the Congress to fix the amount to be borrowed and the terms of payment. By virtue of the power to borrow money “on the credit of the United States,” the Congress is authorized to pledge that credit as an assurance of payment as stipulated, as the highest assurance the government can give, its plighted faith. To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise…. This Court has given no sanction to such a conception of the obligations of our government.[4]

This principle, said the Court, “applies [] to the government bonds in question, and to others duly authorized by the Congress.”[5]

Constitutionality of the Statutory Debt Limit

Article I of the Constitution vests the power in Congress “to borrow money on the credit of the United States” and the power “to pay the debts and provide for the common defense and general welfare of the United States.” From 1789–1917, Congress authorized nearly all federal debt directly by approving specific loans or issuances of debt instruments to finance specific projects or activities. That changed with the nation’s entry into World War I, which immediately strained the federal budget and led Congress to take a different approach: authorizing the Treasury to issue debt of varying terms in response to market conditions and need while capping aggregate debt.[6] This is, in its essential features, the system in place today.

In this way, the federal government could incur debt at a lower cost without Congress abdicating its constitutionally assigned power and responsibility to authorize and oversee the amount. The debt limit also serves to force Congress “to consider the interests of the general public and future generations…to step back and consider the consequences of its deficit-spending decisions.”[7]

The Constitution vests exclusive power in Congress to raise revenue to fund the government’s obligations, whether by taxes or loans.[8] Congress could not entirely delegate that power to the President, even if it wanted to do so.

Thus, not only is the debt limit consistent with the Constitution’s separation of powers, but there is a colorable argument that it, or something like it, is constitutionally mandated.
An Unconstitutional Usurpation
The Constitution vests in Congress, and withholds from the Executive, the power to commit to spending, to raise revenue by enacting taxes, and to incur public debt. The Fourteenth Amendment does not alter this. Congressional control of borrowing, through the debt limit, and section four of the amendment are in unison, not tension.
First, debt limits do not repudiate existing debt. To “question” “the validity” of a debt is to cast doubt on the obligation itself, not other factors involving repayment. This is true as a matter of common law as well. Insolvency, in itself, does not impugn the validity of a debt, but only the debtor’s present ability to pay. Under federal bankruptcy law, repudiation occurs only with discharge of the bankruptcy petition—the “clean start” that bankruptcy promises. Indeed, a debtor may “affirm” a debt and commit to paying it despite a bankruptcy discharge; in that case, even where payments have lapsed for a time, the debt’s validity has never been questioned.

Second, the Fourteenth Amendment has no bearing at all on most federal spending, because most federal spending is not in service of a debt obligation and is not necessary to pay back existing debt. The Supreme Court has held specifically that Congress can alter government promises, as opposed to vested rights, at any time.[9] It has also held that even “entitlement” programs such as Social Security do not establish property or other rights that the government is constitutionally obliged to observe.[10] While the federal government is obliged to make good on its debts and contractual obligations that it has already incurred, it is not constitutionally committed to carry out other spending.

Even if additional borrowing were curtailed, the government’s revenues are more than sufficient to satisfy current debt payments and avoid a default. At present, debt repayment comprises only a small proportion of total federal spending. Less than 10 percent of total federal spending in the President’s 2012 budget would go to satisfying net interest on the national debt, and some additional percentage would go to satisfying other accrued debts.[11] Looked at another way, deficit spending constitutes about 43 cents of every dollar of federal spending. Thus, even with no deal to raise the debt ceiling, 57 cents of spending on the dollar could continue unimpeded—including all debt payments.[12]

Third, the Fourteenth Amendment does not specify any particular manner by which the obligation to honor the nation’s debt may be met. Congress may, for example, raise taxes, cut spending, or redirect funds to satisfy “public debt.” There is no constitutional requirement that it borrow. So if the President had the unilateral power to issue debt, why would he not also possess the power to raise taxes unilaterally or to sell off government assets?
The answer, as with borrowing, is that these powers are vested in Congress, not the President. No one seriously contends that the drafters of the Fourteenth Amendment intended to place the taxing or selling powers in the President’s hands, which would be a fundamental reorganization of the branches of government and demolish essential checks and balances. So it is with the power to borrow money on the credit of the United States.
Constitutional and Unconstitutional Options

Even if Congress and the President are unable to reach agreement on raising the debt ceiling, the result need not, and probably would not, be default. Revenues are more than sufficient to service the national debt, and history suggests that, even in a revenue-constrained environment, the Treasury would act to avoid default and thereby preserve the full faith and credit of the U.S. government.[13]

In no case does either the Constitution or statutory law afford the President discretion to borrow sums unauthorized by Congress—a point belatedly conceded by the General Counsel of the Treasury Department.[14] To do so would be an unconstitutional usurpation of the legislative power and upend the separation of powers. The result would be a serious separation-of-powers violation by the President, with either Congress taking steps to correct and the courts being asked to resolve on behalf of third parties affected by the impasse. (Whether the courts would or even could act is uncertain, but it is predictable that litigation would cause uncertainty for months or even years.)

No Blank Check
Section four of the Fourteenth Amendment is a limit on Congress’s power to repudiate the nation’s debt and not (almost literally) a blank check for the President. Fair-weather constitutionalists take note: The Constitution was not made for political expedience but to make and keep a Republic.

Putting Patients in Harm’s Way: A Doctor’s View of Obamacare

Abstract: The recipient of this year’s Salvatori Prize for American Citizenship is the founder of Docs 4 Patient Care (D4PC), formed in 2009 as a voluntary association of medical practitioners that advocates sensible health care reform and affordable access to quality care for everyone. In the past two years, D4PC has enlisted doctors who love medicine and love their patients, and who believe in the sanctity of the doctor–patient relationship, to join it in providing the means for doctors to give their patients a clear understanding about what is happening to their health care and what they must do to preserve it.
Mr. Meese, Heritage Foundation leadership, Heritage members, and guests: I want to thank you for this great honor and let you know how humbled I am to be up here today receiving an award that I’m not sure I truly deserve.
Standing up here before so many great Americans and being recognized for an effort that I consider to be part and parcel with the very reasons that I became a doctor seems a bit odd. So many very important people and organizations have stood before you to receive this award previously—the Tea Party, the great author David McCullough, and the Federalist Society, to name a few. To be mentioned in the same sentence as these former recipients simply takes my breath away.
Many of you are probably asking the question that I would be asking if I were sitting where you are: Who is Hal Scherz, and why is he getting an award like this?
I am a pediatric urologist and have been for 23 years. If you know a urologist, you’re aware that in general, we have a good sense of humor—after all, you need one to do what we do. I was going to share a funny story about Obamacare but decided against it because, after some deliberation, I decided that it was not a laughing matter.
The new health care law is thoroughly disingenuous, beginning with its very name: the Patient Protection and Affordable Care Act. Unfortunately, this law accomplishes neither. This law does more to put patients in harm’s way than if they didn’t have health coverage at all.

• Not only does it require the purchase of health care coverage from a company that the federal government approves of, but it establishes what your health care coverage will be and from whom you can get it.
• As if that wasn’t bad enough, your doctor will make medical decisions based on flowcharts provided by the federal government as determined by the Secretary of Health and Human Services (HHS).
• The worst part is that decisions about what your doctor may do will be overseen by an unaccountable board of 15 people, almost all non-physicians.

As far as affordability goes, this too is a myth. The law has so many unrealistic parts to it that instead of “driving the cost curve down,” we are seeing an explosion in costs resulting in everyone’s health insurance rates rising. Even before the law has been fully implemented, we are seeing the results. Instead of costs for a family of four coming down by $2,500 annually as promised by the President, they have shot up, on average, $2,100.
This is just the beginning. There are myriad hidden new taxes to pay for this, which amounts to half a trillion dollars. Insurance companies are already getting out of the health care business, and employers and other groups, especially the public-sector unions that supported all of this, are finding the costs so spectacularly high that they are crying to the HHS Secretary that they need waivers to be exempted from the provisions. Sadly enough, they are getting them.
After Mr. Obama was elected President, it became clear that he was coming after health care. Virtually every doctor that I know understands that there are many problems that need fixing in health care, but what the President had in mind was something very different.
I have a full-time private practice caring for children with urologic problems. I am a reconstructive surgeon, and I am the managing partner of Georgia Pediatric Urology, a 38-person urology group in Atlanta, Georgia. I am also a clinical professor at Emory University, where we train residents and fellows in pediatric urology. My wife is a full-time pediatric ophthalmologist, and we have three children. We have many other interests and commitments, and our lives are quite busy and hectic. My plate is not just full—it’s overflowing.
I share this to make you understand that the last thing in the world that I ever dreamed of doing was giving up an additional 25 hours or more of my life every week for the past two years, without any financial benefit to me personally, to fight to preserve the thing that I love the most after my family—my profession. I love taking care of children. I’m really good at what I do, and my patients like me. President Obama and his surrogates have put people like me on the endangered species list. I should probably seek federal relief.
When it became clear to me that our health care system would be circling the drain after President Obama got through with it, I could not sit around idly. I was frustrated that there was not more of an outcry from doctors who felt as I did. Sadly, most of my colleagues did feel the same, but doctors are a strange group of people. It is difficult to get them to rally behind a cause. Some say it is like trying to herd cats.
In the winter of 2009, I was getting frustrated listening to talk radio, particularly with people like Hugh Hewitt and Dennis Prager, who constantly railed against the doctors for being so complacent about what was going on. But they were right. To make matters worse, the American Medical Association (AMA), which you might be interested to know only represents about 17 percent of the doctors in the country, was supporting Obamacare, so the public believed that doctors were lining up in favor of this monstrous bill.
So I reached the tipping point: I either needed medication or had to do something bold. My friend and fellow Atlantan, Congressman Tom Price, allowed me to unload on him, and what he said to me struck a nerve. He said that the time to be complacent was over and that people like me had to stand up and do something bold.
So I did. I twisted his arm and got him to come to my office to give the same speech to 40 doctors, who then wrote checks to help us get underway, and Docs 4 Patient Care (D4PC) was born.
What a two-year ride it has been! We have over 4,000 doctors on our e-mail list and over 8,000 supporters who follow us.
Time does not permit me to go through everything that we have done, but in the past two years, we have gotten doctors who love medicine and love their patients, and who believe in the sanctity of the doctor–patient relationship, to join us. We have provided the means for doctors to give their patients a clear understanding about what is happening to their health care and what they must do to preserve it.
I didn’t know where this was going. I certainly didn’t expect to be here today. I just knew that what we were doing was right and that all that was needed was a spark and that I could provide that spark to get the fire going.
D4PC has delivered this message over 300 times on syndicated radio shows and television. We have done so in dozens of articles and opinion pieces in print media and on the Internet, including twice last year in The Wall Street Journal. We have brought this message to Washington 11 times, and when we come, we call it “House Calls on Congress.” We wear our white coats—coats which are earned every day and not just given out as props like they do in the Rose Garden at the White House—so that everyone knows that we are there.
And the Congressmen and Senators now know us. Some welcome us as allies in the fight to preserve the greatest health care system in the history of the planet because they know that we are sincere and that we understand the problems and are the best hope to fix them.
Most important, we deliver this message thousands of times daily to our patients. One of our signature projects has been to take two minutes with our patients at the end of their visit to discuss health care and give them some literature. Some people were appalled that we would do such a thing. The AMA tried to put us on notice, issuing a statement warning doctors not to use their influence in political matters.
I look at this differently. What is more important to people’s health than to understand how the government wishes to control it? I feel that doctors have an obligation to explain this to patients who don’t understand this and wish to learn. And 99 percent of my patients thank me and hug me and wish that more doctors did this.
I can go on for a lot longer, but must wrap this up. Before I do, there are many thank you’s that must be given out.
First, I am receiving this award not for myself, but on behalf of Docs 4 Patient Care and the people who have worked so hard to get us to this point. The Salvatori Prize will go back to Docs 4 Patient Care. D4PC is essentially a labor of love. We do everything on our own nickel and take time away from our families, our patients, and practices to do things like being here today or going to Washington.
There is a core group in the audience today who I would like to recognize.

• Dr. Tod Rubin has been with me almost since the beginning and gets the credit for our excellent Web site and information that gets out to the public.
• Dr. Dick Armstrong is our COO, and if I am the heart of D4PC, then he is the soul. These guys have become my best friends over the past two years.
• Felicia Horton, our executive director, is our only full-time employee—because it’s all that we can afford. I can only dream about our potential if we had more people like Felicia. She stalked me from the day that I called into the Hugh Hewitt show in May 2009 and knew that she wanted to be part of this. She does everything for us, from secretarial work to political strategy to creative content. We couldn’t be where we are today without her. I love her and am eternally indebted to her.

We have made many friends along the way, and the list of people who have helped us is so long that I can’t mention them all. If I leave anyone out, it doesn’t mean that they are any less important than someone that I do recognize.
First, I would like to acknowledge Bridgett Wagner from Heritage. She immediately got what we were doing and has taken us under her wing from the very beginning. When we come to Washington, she opens up Heritage for us and makes us feel like we are coming to our own Washington office.
The entire health care policy community has been good to us and has helped us with developing our messages and our understanding of the health care issues on a level that we as doctors don’t typically deal with. Bob Moffit from Heritage, Grace-Marie Turner from Galen, Sally Pipes from Pacific Research Institute, and Betsy McCaughey from Defend Your Healthcare have been wonderful mentors and friends to us.
Our attorney, Cleta Mitchell, knows about righteous causes and has believed in us from the beginning and does her best to make sure that we don’t bring trouble down on ourselves.
I would also like to acknowledge someone who has become a dear friend and a mentor to me in my journey as a writer. Some of you know Tony Dolan, who was Ronald Reagan’s chief speech writer for eight years. He patiently worked with me and transformed me from a technical writer of medical papers into a writer of political thought, and I am indebted to him.
Finally, I wish to thank my children and my wife, Dr. Jeri Salit, who have put up with a lot to enable me to pursue this mission. I love them very much, which is why I will not rest until I know that I have done everything humanly possible to ensure that the promise of excellent health care for them in the future is the same as it has been for all of us in this room today. It is because of their grace and patience that it is possible for me to be here today on behalf of D4PC accepting the Salvatori Prize.
Once again, thank you for this honor.
—Dr. Hal C. Scherz is the founder of Docs 4 Patient Care (D4PC). He delivered these remarks upon accepting The Heritage Foundation’s 2011 Salvatori Prize for American Citizenship. The prize, named for the late entrepreneur and philanthropist Henry Salvatori, is presented annually to an American who advances the principles and virtues of the nation’s Founders. D4PC is a voluntary association of medical practitioners whose mission is to champion sensible health care reform while promoting quality of care and affordable access for all.