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

Jeremy Kreisberg & Kelley O’Mara (Under the Supervision of Professor Howell Jackson)303Professor Balkin 310 and Professors Eric Posner and Adrian Vermeule 311cite the suspension of habeas corpus by President Abraham Lincolnduring the Civil War. Professor Richard Pildes responded toProfessors Posner and Vermeule by arguing that unilateral borrowingby the President would cause similar consequences to a default. 312According to Professor Pildes, unilateral borrowing could result ineconomic turmoil both domestically and in the world economybecause “the country would have been tied in knots for a year ormore about whether the President had acted unconstitutionally;impeachment surely would have loomed; and it is unclear whowould have bought U.S. debt, and at what price, given all the legaluncertainty that would have existed about whether the Presidenthad issued the debt lawfully.” 313 Professor Balkin warned that “thePresident has the power to act as a default rule in emergencies,” but“he must ask Congress for retroactive authorization of what he hasdone” and, “without subsequent authorization, it would be illegal.” 314C. The President Must Obey Statutory Spending CommitmentsRather Than the Debt LimitThe President may base his authority to borrow on a theoryof statutory interpretation. Because Congress has passed anappropriations bill and has set revenue levels with a tax code anda debt limit, the President must breach one of the following if thenational debt hits the statutory limit: (1) the obligation to spend allmoney appropriated by Congress; (2) the obligation to tax at thelevels provided by Congress; or (3) the obligation to borrow moneywithout hitting the debt limit. 315 The President may be able tobreach his duty to borrow within the debt limit because the spending310See Jack Balkin, Under What Circumstances Can the President Ignore the Debt Ceiling?, Balkinization.July 6, 2011, http://balkin.blogspot.com/2011/07/under-what-circumstances-canpresident.html.311See Eric A. Posner and Adrian Vermeule, Op-Ed, Obama Should Raise the Debt Ceiling on HisOwn, N.Y. Times, July 22, 2011, http://www.nytimes.com/2011/07/22/opinion/22posner.html. “[President Lincoln] said that it was necessary to violate one law, lest all the laws butone fall into ruin.”312Richard H. Pildes, Book Review: Law and the President, 125 Harv. L. Rev. 1381, 1411(2012).313Id.314Balkin, supra note 310.315See Buchanan, supra note 107.