Section Four and the Public Credit Clause
Every constitutional provision eventually gets its day in the sun, and now it is Section Four of the Fourteenth Amendment’s turn. Here is the language of what my friend Michael Abramowicz calls the Public Debt Clause:
“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.”
This language was intended to protect Union debt incurred during the Civil War, but the language sweeps more broadly. In Perry v. United States, 294 U.S. 330, 354 (1935) the Supreme Court (in a plurality opinion by Chief Justice Hughes) said the following about this text:
“While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression ‘the validity of the public debt’ as embracing whatever concerns the integrity of the public obligations.”
I want to add another observation about the debt ceiling. The statute, if interpreted to preclude the issuance of new debt to pay off old debt, may also violate the Public Credit Clause. In Perry, Chief Justice Hughes said:
“The Constitution gives to the Congress the power to borrow money on the credit of the United States . . . The binding quality of the promise of the United States is of the essence of the credit which is so pledged. Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter to destroy those obligations.”
In other words, the Public Credit Clause is an exception to the principle that one Congress cannot bind another through ordinary legislation. Thus, Congress arguably lacks the enumerated authority under Article One to default and is expressly barred from doing so under Section Four. Of course, the authority for both conclusions is slender–a plurality opinion in one case.
Let me direct your attention to some other helpful sources. The first is Professor Abramowicz’s article on “Beyond Balanced Budgets: Fourteenth Amendment Style,” 33 Tulsa L. Rev. 561 (1997). The second would be the briefs in Perry. The third (to toot my own horn) is my draft paper on “The Gold Clause Cases and Constitutional Necessity.”
Finally, I am going to go through my Bingham research to see what he said about Section Four. He did talk about that provision extensively on the campaign trail, though not, to my knowledge, on the House floor.