Use Article I to Address Debt Ceiling
By: Thomas Geoghegan
Politico
July 28, 2011
http://www.politico.com/news/stories/0711/60107.html

The tea party has a secret: It wants to raise your
taxes. The plan is to get the government to default.
Thanks to the meltdown, we now have a fiscal or federal
government debt equal to the annual U.S. gross domestic
product. So let's lower our bond rating, and push up the
interest on that debt by 0.5, or 1, or 1.5 percent.

That's a whopping cash payment to all our T-bond holders
in China, Japan, Europe and Saudi Arabia. We might as
well fill up the galleons with bullion to sail off to
Cathay. The "tea" in tea party must stand for "all-the-
tea-in-China," because it's on that kind of scale our
taxes will go to pay the higher interest for this tea
party escapade.

Is it too late? Probably. Even if there's a deal now,
the bond rating will likely drop. But with no deal, even
worse will come.

So what do we do? The courts are open today. I clutch at
the hope the U.S. Chamber of Commerce might sue. At this
hour, only it could save us. For perhaps the Chamber
could get a court to toss out as unconstitutional any
debt ceiling law at all.

Why the Chamber? In the Roberts Court era, the Chamber
wins every case. And if default comes, and we first pay
Social Security to widows, and then pay the bondholders
in China, it's the Chamber members - the tiny vendors
who sell screwdrivers to the Army or even the big guys
like Halliburton - who will take the first hit.

But is the debt ceiling law really unconstitutional? My
old law professor says no. He also says no one has
"standing" - an inside baseball term for the special
injury a litigant must plead in order to sue. Other law
professors opine that the courts will do nothing,
because it is a political question.

Of course, as to whether anything is "unconstitutional,"
there is no Platonic answer up there in heaven. It's
unconstitutional if a court says it is.

Virtually the entire legal debate about the debt ceiling
has been focused on the 14th Amendment, section 4. It's
easy to see why. The language is on point: "The validity
of the public debt of the United States, authorized by
law.shall not be questioned (emphasis supplied)." That
would seem to say: If Congress authorized it, Congress
must pay for it.

But the far better case is that, under Article I of the
Constitution, Congress has no power to welch on a debt.
Article I, unlike the 14th Amendment, is a restraint on
Congress. If the power is not in Article I - Congress
does not have it.

Above all, this is a government of limited powers. The
Supreme Court still strikes down federal laws for that
reason.

By analogy, consider the limits of Article I on state
legislatures. Though Article I pretty much leaves the
state legislatures alone, there are some pointed
exceptions. Article I, section 10, says: "No State.
shall pass any. law impairing the Obligation of
Contracts."

That's exactly what the debt ceiling does. As the co-
host of a money management radio talk show said
recently: "You don't call up the credit card company and
tell the bank, `I have to put my fiscal house in order,
so I'm not going to pay my credit card debts." Neither
can Congress, under Article I. It cannot impair the
obligation of contracts.

So, yes, Congress has put down the plastic - but it must
still pay its debts. If Article I does not give such an
Armageddon power to Congress expressly - then it is not
a power Congress has.

A power to impair the obligation of contracts, to cancel
the debts that a government owes its creditors, is the
commercial equivalent of martial law. It is not an
express Article I power of the Congress - and Article I
treats such impairment by the states as a constitutional
abomination.

Back around the Ides of March, I wrote a piece for
Politico to lay out all the reasons why Article I
precludes the idea that Congress can renege on its Visa
type spending "authorizations" any more than you and I
can. If you're still in doubt how to resolve this no
brainer, flip to the 14thth Amendment for clarification.

So it's a pretty powerful argument that Congress cannot
impair the obligation of contracts.

Alas, some law professors would shoo us away. And
speaking of professors, let's begin with President
Barack Obama, a law professor himself. The president
said that his lawyers told him the constitutional
question was doubtful. Why he gave away this bargaining
chip, I have no idea. He would have been far better off
saying nothing, and letting his enemies guess.

But are his lawyers wrong? I would never second-guess a
White House lawyer. And I would agree with them if they
said the following: "Mr. President, if you claim it's
unconstitutional, and just keep paying the bills, we
can't say what will happen."

That's perfectly true. But months ago, why didn't they
go out to get a private litigant to bring a suit? Even
better, they could have whispered something into the ear
of a state attorney general: "Hey, give this suit a
try."

Suppose the president had filed a suit, alleging this
restrains him in his Office of President in executing
the laws. Sure, if the president is the plaintiff, the
law professors would be right. Any court would run for
cover: "You two branches battle it out."

But while a suit by the president would raise a
"political question" - it's altogether different for
business. I mean any business - let's say it's Ace
Hardware, and it wants Treasury Secretary Timothy
Geithner to pay $5 for that screwdriver.

That's no political question. It's a bread-and-butter
legal question: Where's my five bucks?

The debt ceiling is, in effect, a suspension of the rule
of law - for the biggest paying customer the private
sector has. It gives rise to the most primal
constitutional claim - one for equitable or injunctive
relief for which there will never be a legal remedy.

Indeed, by definition, the debt ceiling removes the
legal obligation on which a claim for money damages
would be based.

Surely any affected business - or an association of them
- should be entitled to sue, has the right to sue. There
have been dozens, I dare say hundreds, of cases in which
businesses succeeded in claiming that Congress has done
some damn thing or another to trample on their private
contractual rights.

Some of these have been big cases. But there was no
"political question" bar. Consider the Supreme Court's
1935 Schecter Poultry decision, which threw out the
National Industrial Recovery Act, the signature law of
FDR's New Deal. The unanimous court did not consider
that a "political question," though it outlawed the
principal program for ending the Great Depression. Why
was that not a political question? Well, for one thing,
it was a business that sued.

Even the Dred Scott decision passed the "political
question" hurdle. Again, a businessman wanted the return
of his property - which happened to be a human slave.
Throughout U.S. history, property owners and creditors
have an impressive win record in attacking
unconstitutional laws.

Similarly, they have "standing." When it comes to
"standing" in federal courts, creditors often do far
better than even members of Congress. The Constitution
is very friendly to creditors - and always has been.
Sure, standing and political question can be troubling
in big metaphysical type constitutional claims - say, a
draftee who wants to challenge a war as
unconstitutional. But the odds are far better when it's
a businessman who wants to get the five bucks for his
screwdriver.

Am I sure of all this? No. No one can be. But at the
very least it is a jump ball, and victory may well go to
the party who seems - well, just taller to the court.

Maybe that's a better way to think of "standing." This
is not warmed over legal realism. For better or worse,
the real world is not as real as the legal realists like
to think.

But it does matter who files the suit. If the litigant
is the U.S. Chamber of Commerce - or a party with equal
heft - the court will have to take it seriously. For
even idealistic judges, the passionate ones on right or
left, tend to burn with a gem-like flame when a powerful
litigant fans the fire.

During the 1960s, for example, the most powerful
plaintiff that could give cover to an activist judge was
the Justice Department. That's how we desegregated the
South. Now, according to every win-loss record, it's the
U.S. Chamber of Commerce.

The Constitution was set up for the protection of
creditors. That's what the document is about. Now, we
need these creditors to step forward to protect the
Constitution.

Thomas Geoghegan, a labor lawyer, is the author of "See
You in Court: How the Right Made America a Lawsuit
Nation."

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