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

302The 2011 Debt Limit Impasse: Treasury’s Actions & The Counterfactual – What Might Have Happened if the National Debt Hit the Statutory LimitDepending on the revenues relative to spending obligations, 301 theargument for the unconstitutionality of the debt limit may dependon a broad reading of “public debt.” The “pensions and bounties”phrase of the Public Debt Clause 302 may bolster the argument that“public debt” includes more than bond payments. 303 The Perry Courtindicates that the Public Debt Clause protects “the integrity of thepublic obligations,” 304 which may include all statutory spendingobligations. 305 Professor Buchanan cites United States v. WinstarCorp. 306 and Cherokee Nation of Oklahoma v. Leavitt 307 to support theproposition that “statutory spending obligations are legally bindingcommitments that the government . . . cannot ignore once it hascommitted to pay the funds.” 308B. The President’s Emergency Powers Justify Further BorrowingThe President may justify unilateral borrowing by asserting hisemergency powers. 309 If the market responds negatively to the debtlimit, the President may argue that he must borrow money to allaythe concerns of investors. In support of this general proposition,other revenue streams. As a result (on the assumption that the President cannot unilaterallyraise taxes), borrowing money would be the only way to avoid the possibility of default if thenational debt hits the statutory limit.301If tax revenues allow the President to fulfill all of the obligations protected by the PublicDebt Clause, the debt limit may not present constitutionality issues.302U.S. Const. amend. XIV, § 4: “The validity of the public debt of the United States, authorizedby law, including debts incurred for payment of pensions and bounties for services in suppressinginsurrection or rebellion, shall not be questioned.” (emphasis added).303See Abramowicz, supra note 103, at 19. Professor Abramowicz states, “the ‘including’ phraseindicates that the Framers conceived the ‘public debt’ as including not just financial instruments,but also such promises as war pensions and bounties.” Id. He further argues that “[t]he word ‘debts’ draws a parallel with the phrase ‘public debt,’ suggesting that the Framersnaturally thought of pensions and bounties as being part of the ‘public debt.’”304See infra Appendix D.305See Neil H. Buchanan, The Debt-Limit Crisis: A Problem That Will Keep Coming BackUnless President Obama Takes a Constitutional Stand Now, Verdict, July 7, 2011, http://verdict.justia.com/2011/07/07/the-debt-limit-crisis.306518 U.S. 839 (1996).307543 U.S. 631 (2005).308Buchanan, supra note 107. Professor Buchanan further asserts that a narrow interpretationof “public debt” is less logical because the debt we currently owe would not include interestpayments, which are “simply a contractual commitment,” while the principal payments wouldremain the only debt already incurred.309The President is vested with the “executive Power,” U.S. Const. Art. II, Sec.1, swears thathe will “preserve, protect, and defend the Constitution of the United States,” id., serves as theCommander-in-Chief, U.S. Const. Art. II, Sec. 2, and “take[s] Care that the Laws be faithfullyexecuted,” U.S. Const. Art. II, Sec. 3.