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.

Gerard Magliocca

Gerard N. Magliocca is the Samuel R. Rosen Professor at the Indiana University Robert H. McKinney School of Law. Professor Magliocca is the author of three books and over twenty articles on constitutional law and intellectual property. He received his undergraduate degree from Stanford, his law degree from Yale, and joined the faculty after two years as an attorney at Covington and Burling and one year as a law clerk for Judge Guido Calabresi on the United States Court of Appeals for the Second Circuit. Professor Magliocca has received the Best New Professor Award and the Black Cane (Most Outstanding Professor) from the student body, and in 2008 held the Fulbright-Dow Distinguished Research Chair of the Roosevelt Study Center in Middelburg, The Netherlands. He was elected to the American Law Institute (ALI) in 2013.

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6 Responses

  1. Harry says:


    I posted the following comment/question on another blog about this same topic. Can you offer any insights?

    With the substantial caveat that I am a novice on this issue, why does the fact that a debt is unquestionably valid mean that the President has to pay the debt? Wouldn’t it simply mean that, assuming no soveriegn immunity issues exist, the creditors can seek to levy on a breach-of-contract judgment received from the Court of Claims or other suitable venue? If the government doesn’t pay, why don’t the creditors just get an order establishing the government’s liability (which the Clause should permit them to do rather easily) and take the U-Haul and a federal marshal to the nearest federal government building and start loading computers and desks until the debt is satisfied?

    It seems to me that the argument making the rounds confuses the validity of a debt with the remedy for the breach of a valid obligation. What am I missing?


  2. Kent says:

    Doesn’t the mere fact that the US needs to issue new debt to pay off old debt call into question the validity of the debt? Put another way, the Public Credit Clause should preclude both the issuance of new debt to pay off old and the US defaulting on its debts.

    After all Madoff didn’t prove the validity of his fund by “borrowing” new money to pay for the old. The whole practice operates under the assumption that there is someone to lend the US the money which places to validity of the nation’s debt not in the hands of the US but in the hands of the lender.

    The only way to not call into question the validity of the debt would be to balance the budget.

  3. Gerard Magliocca says:


    Your reading is perfectly reasonable. If Congress lacks the power to trigger a default, though, then it’s not clear that the President must stand by and allow the default to occur.

  4. Brett Bellmore says:

    But, given the range of ways he has available to prevent a default from occurring, neither is it clear that the obligation to prevent a default frees him to usurp the power to borrow, which the Constitution gives to Congress, not the Executive. As I read it, to avoid default he can either refrain from spending money Congress has appropriated, a statutory violation, or collect taxes Congress has not levied, a constitutional violation, or borrow money Congress has not authorized, another constitutional violation.

    “Highest law of the land” doesn’t mean much if the President gets to violate the Constitution to avoid violating a statute.

  5. Ken Rhodes says:

    Perhaps, Brett (et al), the issue is not what the President can do, or has the authority to do, but rather, what Congress has to do.

    CONGRESS is estopped from allowing default. If they, through positive action or failure to act, ignore that constitutional estoppel, then what shall OUR COUNTRY do?

  6. Brett Bellmore says:

    Sure it is, in as much as it’s the Executive branch that’s threatening to engineer a default. The Legislative branch has merely set up a situation where default is among the available responses. Being the least responsible among them….

    As for what the country should do, one of my relatives just suggested that, come the next election, we should all agree to just defeat every last incumbent. Sounds good to me.