US Government Debt Different - Finance Department - University of ...

274The 2011 Debt Limit Impasse: Treasury’s Actions & The Counterfactual – What Might Have Happened if the National Debt Hit the Statutory LimitUnited States technically defaults. 109 This broad reading of the word“questioned” under the Public Debt Clause is, however, problematicbecause many governmental actions, including perennial deficits,might be said to question the validity of the public debt. 1102. The Duty to Fulfill Statutory Spending ObligationsThe President’s course of action, had the statutory limit beenreached, must also have been chosen in consideration of his dutyto spend money as appropriated by Congress. Congress has thepower “to borrow money on the credit of the United States.” 111While the debt limit constrains executive borrowing authority bydelegating borrowing power to the Executive up to the statutory debtlimit, 112 a different statutory and judicial scheme limits Executiveauthority to curtail spending of appropriated obligations. In 1972,President Nixon asserted his authority to impound, or refuse topay a congressionally-allotted sum, but the courts 113 consistently 114ordered the President to spend the full allotment when beneficiariesof impounded programs brought claims. 115 In response, Congresspassed the Impoundment Control Act of 1974, 116 the currentversion 117 of which prescribes the rules for the rescission or deferralof spending obligations. 118109See, e.g., Neil H. Buchanan, The Debt Ceiling Law is Unconstitutional: A Reply to ProfessorTribe, Verdict, July 11, 2011, http://verdict.justia.com/2011/07/11/the-debt-ceiling-law-isunconstitutional.110See, e.g., Laurence Tribe, Op-Ed, A Ceiling We Can’t Wish Away, N.Y. Times, July 7, 2011,www.nytimes.com/2011/07/08/opinion/08tribe.html?_r=1&pagewanted=print.111U.S. Const. Art. I, Sec. 8, Cl. 2. Power delegated to the Secretary of the Treasury pursuantto 31 U.S.C. 3101(b).112See Anita S. Krishnakumar, In Defense of the Debt Limit Statute, 42 Harv. J. on Legis. 135at 135-36.113For example, in Train v. City of New York, 420 U.S. 35, 44 (1975), the Supreme Court heldthat the President could not withhold a portion of an appropriation; rather, he would have toallot the entire sum.114Cathy S. Neuren, Addressing the Resurgence of Presidential Budgetmaking Initiative: A Proposalto Reform the Impoundment Control Act of 1974, 63 Tex. L. Rev. 693, 697-98 (1984).115Id. at 702-03. President Nixon used impoundment to refuse to fulfill an obligation if itwould push spending to levels exceeding his proposed $250 billion ceiling for the followingfiscal year. He used this authority to cancel Democratic programs and advance his agenda.1162 U.S.C. §§ 681-688. The Impoundment Control Act is Title X of the Congressional Budgetand Impoundment Control Act, 2 U.S.C. §§ 601-688. The full text of the ImpoundmentControl Act can be found infra in Appendix E.117The original deferral procedures were struck down in City of New Haven v. United States,809 F.2d. 900 (D.C.C. 1987), due to its unconstitutional use of the legislative veto, see INS v.Chadha, 462 U.S. 919 (1983).118Neuren, supra note 114, at 703.