As rhetoric heats up about the debt ceiling (not to mention the indignity of being ordered to come to work on a weekend), a new talking point has emerged. This is very interesting – expect sputtering rage when the radio talkers retake the air on Tuesday morning. From the linked post at Crooks & Liars:
It’s an untested concept, but rooted in some really strong history. I cannot recommend this post enough for the backstory and history around the adoption of Section Four of the Fourteenth Amendment:
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. But neither the United States nor any State shall assume or pay 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; but all such debts, obligations and claims shall be held illegal and void.
When I first heard about this I was completely confused as to how language about the public debt became part of a constitutional amendment, which is why you really must read the post on Balkanization. Here’s a snippet:
What do we learn from this history? If Wade’s speech offers the central rationale for Section Four, the goal was to remove threats of default on federal debts from partisan struggle. Reconstruction Republicans feared that Democrats, once admitted to Congress would use their majorities to default on obligations they did disliked politically. More generally, as Wade explained, “every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.”
more from Jon Chait:
This means that the very existence of the debt limit is unconstitutional because it calls into question the validity of the debt. So would any other provision of law. That is a key reason why Congress created a permanent appropriation for interest payments at the same time that the Fourteenth Amendment was debated. Previously, Congress had to pass annual appropriations for interest.
Paul Krugman also had a word on the same subject yesterday.
UPDATE: I urge you to read the comment below by John Nail re a 1935 ruling by the Supreme Court on this very matter.