The Constitutionality of the McConnell Debt Ceiling Plan

Isn’t it odd that the in the House of Representatives, the Republicans added a rule to read parts of the Constitution that justifies any new bill while the Senate Republicans want to defy the Constitution? Senator Mitch McConnell wants to allow the President to propose an increase to the debt limit in which Congress will vote on its “approval”. Unlike a bill that would come out of Congress and allow the President to sign it and therefore become law, the McConnell plan allows the President to veto a Congressional vote that is not in favor of an approval or “Disapproves” the proposal. According to the McConnell plan, this veto would then allow the president on his own power to raise the debt ceiling.

This is wrong on multiple levels. Politically, it is cowardly to see the desire to on one hand allow the debt ceiling to be raised, but on the other hand have a majority vote against it for political cover. Politics, however, has not always been the most noble profession and this is no exception. The big problem is with the Constitutionality of this this move. The framers of the Constitution were very clear about which branch has the ability to raise debt.  It is spelled out in Article I, Section 8, of the Constitution that the branch with such power is the Legislature:

Powers of Congress
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;

The McConnell Plan would transfer this power, albeit with a time limit, to the Executive Branch by enabling the President to usurp Legislative power and rule of law with the use of a Veto. The Constitution is very clear about putting the purse strings of the United States in the hands of the Legislature.  They understood that the body to authorize spending must be separate from the body that actually spends. The concentration of both authorizing and spending power in one person’s hands is too great.

James Madison warned of this in The Federalist Papers #47. He wrote:

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny. Were the federal Constitution, therefore, really chargeable with the accumulation of power, or with a mixture of powers, having a dangerous tendency to such an accumulation, no further arguments would be necessary to inspire a universal reprobation of the system.

Madison warns us of placing powers in the hands of one branch that are not subject to the checks and balances of the others. Congress should not be able to circumvent the Constitution and cede power to the President (even if they wish to). It is odd that the very party that wants to see the President ousted from office in the next election is so willing to hand over their own power to the very same President.

Our only hope, if this plan becomes law, is that the Supreme Court in short order declares this plan to be un-Constitutional. However, that in and of itself creates a domino effect of issues surrounding any of the debt related activities that the President under the plan.

Section 4 of the 14th Amendment to the Constitution states:

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.

If the Supreme Court were to rule on the plan as un-Constitutional, what would happen to any debts taken under that plan? Is there a Constitutional crisis when two sections of the Constitution would conflict?

Given the limited time before the United States has to raise the debt ceiling and the Constitutional issues with the McConnell plan, I have to question the judgement of the very people considering it on both sides.

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26 responses to “The Constitutionality of the McConnell Debt Ceiling Plan

  1. I never liked the McConnell Debt ceiling plan. Allowing the President (no matter who ever it is) power over the credit limit to raise it is just plan stupied.
    It should be only the power of Congress that should rasie and lower the credit limit since they are the ones who’s create budgets. Even Congress needs to make plans on cutting the waste out since our debit limit has made it into the public eyes.

    All I have to say in Mr. President and Congress the next round of votes are coming soon and this time there will be change you can believe in. We need to ask the question as we cast our vote did this person do their job for the people or the job for their party.

  2. Michael Dunne

    Ty,
    You may have overlooked one element to the equation- Do their job for their own benefit.

    Of course, those who put the constitution in place were largely realistic types, who felt we were not “governed by our higher angels.”

    As for the emphasis on the legislature, well that is old news; the basis for parliament in Great Britain to gain ascendancy in the 17th century (1688 Glorious Revolution topped it off; and we plagiarized the rhetoric).

    One question I have is: Why is there a debt limit?

  3. Michael Dunne,
    If you go to Planet Money podcast you will get a lesson on why the US went to a national debt limit instead of an itemized list.

  4. I can’t argue with your premises on constitutionality. I’m not a fan of the McConnell plan. While I’d relish in the idea of pinning the responsibility for the next $2Trillion in debt singularly on the President, as it would guarantee a loss in 2012, I think the idea is cowardly and basically admitting that congress is incapable of performing their duties.

    I’m a fan of Cut, Cap, and Balance. It’s easy to demonize spending cuts – social security – you’re putting our seniors in poverty! Medicare – you want poor children to die!

    But I find it difficult to believe that one could credibly argue against the concept that there should be formal limits on the money congress can spend? Seems ludicrous to support the idea that we should allow congress to spend and tax without limits.

    Give them guidelines based on % of GDP, give them out clauses for time of war and national emergency, and let them blame doing the right thing on a balanced budget amendment instead of not doing the right thing and spending our money so they can buy our votes, then raise our taxes so they can afford to buy our votes again the next time around.

    My vote – raise the debt ceiling contingent on passing a balanced budget amendment, make a super majority vote required to raise taxes, and let the states decide whether or not to constrain the spending binge once and for all.

  5. Well by the house reading parts of the Constitution they are being reminded of what they are to do while holding office . Now will this help the cause maybe maybe not. I would have to disagree on raising this debit limit due to we need a stopping point. The pig needs to go on a diet we need to cut the waste and abuse from our government officials. We the people has to live within out means So why not the government.
    Notice President Obama said SSN, The Vets. and Disability checks may not go out as plan on Aug 3, 2011. This was to create a panic within these people. If these people are living check to check it is worst for them. This a political scare tactic that only happens on a campaign trail for desperate political figures. I hope this back fires on the President and cost him his election.
    Now I do believe it would have sound better if he said his and congress pay should stop during this time due to they have wasted our tax payer money. In fact think if you were a CEO would you keep these people on your company payroll? I think we the people should demand our money back.

  6. Ty – great call! during any government shutdown or default Senators, Congressmen, and all elected officials should not get paid!

  7. This quote hit me like a ton of bricks when I thought about it for a second. This quote appeared in several articles today regarding the debt ceiling discussion, and was made in support of the Obama Administrations opposing to the Balanced Budget Amendment.

    “The Office of Management and Budget says the bill “would set unrealistic spending caps that could result in significant cuts to education, research and development, and other programs critical to growing our economy and winning the future. It could also lead to severe cuts in Medicare and Social Security, which are growing to accommodate the retirement of the baby boomers, and put at risk the retirement security for tens of millions of Americans.”

    Hmmmm – Did OMB just say that it is actually IMPOSSIBLE to both balance the budget and meet the current entitlement and discretionary spending promises we currently have?

    They did. Anybody see anything wrong with that?

    It struck me as one of the more frightening statements ever made by a body, part of whose charter is to pay attention to our country’s finances. So this is an organization in charge of analyzing our finances, that does not believe books have to balance?

    Hmmm – no wonder they are in government. They could not get hired in the private sector!!!

  8. No Jeff, OMB just said it will be impossible to both balance the budget and meet the current entitlement as long as spending is capped at the historical average of GDP as the Balaced Budget Amendment dictates.

  9. Would it be a great idea to have a law in place that would not allow congress to spend any money unless we have an actual surplus of money on hand that the goverment can live on.
    Have you also notice that Pres. Obama is playing a word game with taxes he and the deomcrats are talking about up taxes us all but not saying the offical words raise your taxes. Also I would like to know what poll shows that Americans would pay higher taxes???? Who are these crazy people, and if they want to more in taxes then let them. I like to pay lower if at all no taxes.
    I just love how Pres. Obama talks to reports and said that he was given tax breaks and got more money back than he needs….lol….if you do not want that money Pres. Obama then give it away without wanting something in return.

  10. OK – so yes then – that is the administrations argument for unlimited spending with no regard to debt?????

    I’ll gladly pay you Tuesday for a hamburger today.

  11. Obama is no different saying that then saying the rich are “job creators”. The fact is corporations have a stranglehold on the government and the economy. The stock market is a joke and small business can’t get any money. Monopolies need to be broken, corruption needs to be prosecuted, and the ponzi scheme we call the economy needs to end. We need local economies dictating local prices. True capatalism, not the disguised facsism we live in. Corporations are as hindering to the free market as government is and globalization is meeting the constraint of limited resources. Democrats and Republicans are trying to keep the illusion alive and as long as we argue about taxes, gay marriage, and debt, we will never realize that the banks overleveraged themselves, then created a system that would punish all if they fail. The banks and modern economics are the problem period, they need to collapse and as terrible as that may be, nothing is worse than being slaves to them. The ridiculous idea of infinite growth has reached its peak, next on the chopping block is Bank of America. The question is how will we respond?

  12. How would respond is no bail outs for any companies if they fail so be it. Put a cap on the limit that this country could get loans for. Put laws in place that would not allow congress to get IOU from other programs such as SS Admin. Set up a fund and a system for earmarks request that is set up to cut waste and abuse.
    Or The USA could do the biggest bail out which is forgive all US citizens of their Debt and start over. We could send in two of our biggest debts we have which is a house and car loans and be forgiven of all taxes and amount own. Since the goverment was so stupid to bail out the banks we the people should get something in return….but that is a dream that would never happen.

  13. Great points Dan – I’ll ask you to look at it through a slightly different lens though.

    You can’t blame a corporation for lobbying to get an advantage – its human nature to want an unfair share – you can blame an interventionist government for bastardizing the capitalist system with regulation and corporate deals in response to such lobbying – and bailing them out when they fail.

    You can’t blame a Union boss with hordes of taxpayer cash to campaign with, holding a gun to a mayor’s head until he/she takes the bad deal that means eventual bankruptcy for his/her city – but in the end – it is the mayor who said yes.

    So the problem always comes back to government. The less the better. Unfiltered capitalism will work this all out, and I think you are right it may take a full-on collapse to start over.

    Your rant was a rant of a true libertarian – welcome my brother!!!!!!

  14. @jdhine–

    So, I am curious about something. Did you think the Ryan plan didn’t go far enough in cutting spending by privatizing Medicare? I ask because you say you support Cut, Cap & Balance (Full disclosure—I am a hard-left liberal so I am obviously biased on this matter) but when they were discussing the budget plan Republicans voted on the possibility of capping spending @ 18% of GDP—it failed. Even the majority or REPUBLICAN voters felt it was too harsh.

    And to your other point about the OMB, I think what they are saying seems perfectly reasonable. They aren’t saying that you can’t balance the budget and continue to meet current promises; they are saying that you can’t do it under Cut, Cap & Balance. The simple fact is that with spending capped @ 18% of GDP there is simply not enough money to pay all the bills.

    Now, my solution to that (one I assume you would disagree with vehemently) would be large cuts in spending to discretionary military funds, blanket expiration of ALL of the Bush Tax Cuts—not a popular proposal even among democrats as it would hurt them in democratic-leaning middle-class districts—and return corporate tax levels to Clinton (or Carter if I had my way, but then even the progressive caucus would call me a communist)-era rates. That plan, unfortunately, would never get through either chamber.

    But I honestly do not see how America can afford to take care of it’s citizens, pay of its debt, and prepare for the future without a massive infusion of cash and the government’s main source of revenue is taxation.

    The idea that we can cut our way out of debt is ridiculous—you can only cut so far before you begin to slice into the vital arteries of this country: Medicare, Medicaid, Social Security, Veteran’s Services, Assistance to low-income families, Housing Assistance, Education, Public Saftey…what is there to cut–’cause frankly they all seem pretty important.

    Just to be clear, if I sound frustrated I am totally not trying to be rude @ all. I totally respect that on this we have a difference of opinion that probably won’t be resolved. This issue just frustrates me because it seems like nobody in Washington–on either side–seems to have any political courage whatsoever.

  15. Michael Dunne

    The balance budget idea was a canard – Really a PR move from the eighties.

    It represents a dangerous, direct attack on representative, liberal democratic practices in my opinion, and hence contrary to conservative principles around stability and working on a basis of evolution, precedent (all those good things Burke talked about).

    One – It would destroy a core component of the constitution, the basis of which is legislative responsibility for taxation and budgeting (since parliament duked it out with Stuarts)
    Two – Similarly, undermine the legitimacy of the document by appearing to hardwire partisan policy preferences (like hardwiring stuff on slavery in the late 18th century), when the constitution should be seen as a broad framework/ground rules for a political system (third world countries used to practice that kind of partisan, constitutional tweaking)
    Three- There will be gaps in monitoring compliance (What if there is a sudden drop in receipts? What if a military emergency generates unexpected expenses?)
    Three – No mechanism for enforcement (what would you do, through someone into jail and negate an election?)

  16. Michael Dunne

    Otherwise, taxes should have gone up years ago, around 2005, when there were huge bubbles in commercial and home residential real estate, as well as the shadow banking economy; and we knew expesnse would be piling up from the wars in Iraq and Afghanistan.

    Personally I would accept incremental increases involving income, payroll, sin and even tariffs. Maybe tax firms on the basis of revenues (at a far smaller rate)? Would also close corporate loop holes.

  17. Michael Dunne

    I think Ty is right about legislatures not getting paid until they resolve the budget impass.

    Put a little fuego under the toes…

  18. Obviously the problem comes back to government, however it is my opinion that corporations are not persons and should have no say in government. So I guess I don’t blame corporations, I blame the American people for allowing entities concerned only with profit, to dictate policy in their government. I hated the bailout, especially since they all had the capital to back all deposits and it was the derivatives they couldn’t pay. However I do think Glass-Stegal should be reinstated, derivatives should be banned (why would you reduce risk, its just asking for bad decisions), and monopolies should be broken up. I also think that the EPA is 100% necessary. It may affect efficiency, but the benefits far outweigh the costs. Especially with healthcare prices rising the way they are.

  19. Michael Dunne

    Dan,

    I am not big on corporate person-hood either, but believe more a policy of curtailment is needed. The join stock corporation is still a key mechanisms for mobilizing capital and implementing endeavors in this society (at least 65 or so percent of the economy); and contracts have to be protected. They should not be able to donate money though (nor unions or NGOs or non-profits, or lobbyst groups) to anything of a political nature, including advertising content. All political advertising should come from verifiable, individual donors who are able to vote in this country.

    Agree that Glass-Stegal should be reinstated as soon as possible. The fact that large financial firms hated it (like Citi, Travelers, etc.) probably shows how effective it was.

    Not sure we can or should ban all derivatives, but maybe change the culture/regulatory practice from one of people doing something and then having to say they are sorry after things go bust and many years past from court cases, to some actual approval process for new instruments and financial innovations.

  20. Ok I do think that we should start raiseing our voices now and demand that no one in DC should be paid until the debit and budget deal is made with the people of this country blessing.

    Now the people should be made at our goverment while looking in the mirror and blame our selfs for electing a bunch of fools that would allow compaines to help build up a warchest or money that lines the congress pockets with green and sliver. I just wounder if we could get the states to makes laws that congress members has to follow. So we can get rid of rules that congress makes for them selfs.

    Here is a joke for you congress stops it $1000/month for cars. Well only 10 congress members only took part of this.

  21. Ty,

    I am not sure that states can do anything nowadays about legislatures in the US congress and senate. The position and power of the House of Representatives have pretty much been delineated in the original constitution; while voting on compensation had been one of the last amendments passed (but one of the first proffered). The Senate was probably given a lot more leeway with the passing of the 17th amendment.

    Otherwise, it seems for some reason that state legislatures have a worse history than the natiional government bodies in corruption.

    On another note, I like your idea of keeping politicians’ hands out of the social security surpluses, or allowing them to use those surpluses to cover for their fiscal irresponsibility…

  22. We see now that congress can not police them selfs with them passing pay rasies (which name one group other than congress that can say how much a pay rasie should be and vote on it and get it). I disagree with congress on having a say with what they should and should not get. I think it should be the states on where the congress members come from have that final say on what they get and how much they should get paid. Now if that was to take place then maybe then they would be back in touch with the people at home.

  23. Michael Dunne

    Ty,

    Well the congress has been given power of the purse. Not much you can do there. However, the last constitutional amendment gates implementation of increases and decreases in pay. I hate citing wikipedia, but it is the most accessible source at the moment:

    “The Twenty-seventh Amendment (Amendment XXVII) prohibits any law that increases or decreases the salary of members of the Congress from taking effect until the start of the next set of terms of office for Representatives.”

    This gives me a kick:

    Proposed – September 25, 1789
    Pasted – May 5 or 7, 1992[1]

  24. Yep Michael that is right the pay for congress members was so small back then also.

  25. Here is one question where are the Tv Carmeras at, where transparences at for these negotiations. Then the people can see which side is doing right or wrong. I bet they are all playing poker, smoking cigars, and drinking.

  26. I seen and heard too much from Pres.Obama last night he asking the American People to turn on the heat on the House of Reps. and congress as whole to rasie the debt limit. So what Pres.Obama just said he wants the people of this country who can not get their credit limits rasie but we are to get congress to rasie it pass the 2012 election. Does he think we are stupid? Pres.Obama wants another check off for his re-election bid. I am sorry Mr. President I think if you want to be re-eleted then do not rasie the debt limited and go after REAL CUTS, get congress to stop the weastful earmarks.

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