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

276The 2011 Debt Limit Impasse: Treasury’s Actions & The Counterfactual – What Might Have Happened if the National Debt Hit the Statutory Limitrefiners and processors . . . if they sell their stock to eligible farmers’cooperatives.” 131Although Justice Stevens’ majority opinion struck down the LineItem Veto Act on the narrow ground that it violated the PresentmentClause 132 of the Constitution, 133 Justice Kennedy’s concurrenceprovided a separation of powers argument against the Line Item VetoAct on the basis that unilateral, presidential cancellation of budgetauthority threatens individual liberties. 134 According to JusticeKennedy, “if a citizen who is taxed has the measure of the tax orthe decision to spend determined by the Executive alone, withoutadequate control by the citizen’s Representatives in Congress,liberty is threatened. Money is the instrument of policy, and policyaffects the lives of citizens. The individual loses liberty in a realsense if that instrument is not subject to traditional constitutionalconstraints.” 135 However, Justice Scalia disagreed, arguing that, whilethe Line Item Veto Act was an impermissible delegation of legislativeauthority to “‘cancel’ an item of spending,” the Act would have beenconstitutional if it “authorized the President to ‘decline to spend’ anyitem of spending.” 136B. Legal Theories for Executive Action if the National DebtHits the Statutory LimitIf the national debt hit the statutory limit, the legal ambiguitiessurrounding the Fourteenth Amendment and the Executive’sduty to fulfill statutory spending obligations could be resolved innumerous ways. The section below outlines several courses of actionthe Executive might take if borrowing authority is exhausted, andexplores the legal rationale on which each theory could be grounded.131Id. at 423-25.132U.S. Const. Art. I, Sec. 7.133524 U.S. at 448-49.134See id. at 449-52.135Id. at 451.136Id. at 468-69.