Around the end of this year, the government of the United States of America will run out of money. Again. By running out of money, we mean govern- ment will exhaust its ability to borrow more money without going back to Congress to increase the amount of the debt it is authorized to carry. Right now, the government is authorized to borrow $16.4 trillion, but that is not enough. Because the government is borrowing about 40 cents of every dollar it spends on its day-to-day operations, it can be expected to run out of money pretty regularly. In fact, we went through this fiscal farce just last summer. Like a tired rerun, it is back again.
Not surprisingly, we are talking about real money. To put this amount of debt in some perspective, it is more than a trillion dollars more than the size of the entire U.S. economy. Just in case anyone has been reading the news lately, it is a potential tragedy of Greek proportions. It is putting our constitutional system of government in hock and mortgaging the liberty of future generations of Americans. For a nation that, until now, has lived by the philosophy that it would hand the next generation a brighter future than the last, it is quite a reversal. So how did we get here? Last year’s debate about increasing the debt ceiling offers some intriguing clues.
Last summer, American liberals felt threatened. Their unalienable right to spend money they don’t have was called into question when a Republican House of Representatives refused to increase the ability of the government to borrow money without some assurance there was a limit to it. In a fit of pique, liberals argued that a failure to increase the amount of money the government was authorized to borrow would cause a default that was unconstitutional. It seems that the “me” generation thinks it has a constitutional right to continue to spend money it does not have. Without much doubt, its theory has to be among the most stupid - and most childish - constitutional arguments that ever have been put forward in Washington. But a compliant press actually gave it some credence.
They were desperate. Margaret Thatcher reportedly once observed that the problem with socialism is that eventually, you run out of other people’s money to spend. We don’t say we believe in socialism on this side of the Atlantic, possibly because the public doesn’t think government is very good at producing anything except deficits. Even liberals understand that nationalizing the means of production would be a disaster, if for no other reason than that it would deprive them of a source of political contributions. Liberals do, however, believe in spending other people’s money. That much is clear. But the difference is that on this side of the Atlantic, the liberal left prefers to spend the money of future generations. That is easier because the unborn don’t have a say in the matter. They don’t have the right to vote and cannot object.
In essence, what happened last summer was that a liberal government’s ability to spend the money of future generations was being threatened. A sympathetic establishment, quite rightly, saw it as an existential threat. In response, it invented a frivolous constitutional argument about default and followed the adage that if you repeat a lie often enough, people will believe you.
In fact, the Constitution is quite clear in this area. It should be. It was built on the foundation of a rebellion that was, in turn, inspired by a tax revolt. That is one reason why Article I of the Constitution firmly vests the power of the purse in the elected representatives of the people in Congress. The power to tax, spend and, yes, even to borrow are all vested in Congress, which shall have the power “To borrow money on the credit of the United States.” Pretty clear, you might think. Neither the executive nor the judiciary has that power. In fact, it is unconstitutional for the executive to spend money not appropriated by Congress. That much is obvious even to the most uninformed reader of the Constitution. So how could anyone get something so fundamental so wrong?
The liberal left ignored the text of Article I of the Constitution because the House is controlled by fiscal conservatives. They could not figure out why that in itself should not be unconstitutional. While that argument must have been tempting, they instead focused their attention on the 14th Amendment, one of two post-Civil War amendments that, in their view, codified the federal government’s moral supremacy over a subservient nation. The previously obscure Section 4 of the 14th Amendment deals with Civil War debts. It 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 insurrections or rebellions, shall not be questioned.” It goes on to repudiate the debt of the Confederacy. Nevertheless, it has language that you can play with. If you omit the phrase “authorized by law” and assume that the word “debt” includes expenditures subject to congressional authorization that are not debt, you can invent a theory that failure to authorize more borrowing would lead to a “default” that would be unconstitutional. Never mind that it is a complete fabrication, because existing tax revenues are more than sufficient to pay the interest on the actual debt, and the outstanding actual debt can be rolled over beneath the existing ceiling. But neither the text of the Constitution itself nor the fiscal reality of the government’s borrowings would stop liberals from embarking upon a journey of self-serving constitutional fantasy. The end, as the left likes to say, justifies the means.
A compliant liberal press lapped it right up. Politico ran an opinion column, full of obvious errors, that screamed “Dear GOP, Default is Unconstitutional.” The Washington Post commended the president for his restraint in not invoking the bogus constitutional argument, selectively quoting the language of the 14th Amendment without the pesky phrase “authorized by law.” Because the legislative power is vested firmly in Congress, that condition was not particularly helpful to the cause. The Post article even raised the preposterous notion that the president might have the power to raise new taxes or issue new debt, quoting others, of course, and conceding that the issue was a “little-researched” question. In Washington, apparently, the dumber the idea, the more research it needs. Go figure.
But while we are looking at the question of the constitutional implications of fiscal irresponsibility, it might be more instructive to consider the other, far simpler, post-Civil War amendment to the Constitution. The 13th Amendment elegantly states, “Neither slavery nor involuntary servitude, except as punishment of a crime whereof the party shall have been duly convicted, shall exist within the United States.” Involuntary servitude includes indentured service and peonage - in other words, compulsory service in payment of a debt. Think about that for a minute.
Under current estimates, the national debt is projected to increase to nearly $26 trillion by the year 2022. That debt will be inherently unsustainable, as the chairman of the Federal Reserve has emphasized. If interest rates increase - a near certainty if the economy ever recovers - the country will be in a trap of its own making. The government will have to borrow more and more money just to service its existing debt. If the historical rate of growth in the national debt is any guide - it roughly has been doubling every 10 years since 1970 - children born today may cast their first vote for president of a bankrupt government, with a debt approaching $50 trillion. Servicing the interest on that debt alone would require more revenue than all the money the government collected in income taxes from their parents in 2011, and that assumes interest rates are held to a modest 3 percent. It seems unbelievable.
These figures do not even include the real costs of underfunded entitlements, which, by some estimates, are more than twice the federal debt. The Social Security disability “trust” fund will be insolvent in four years, and Medicare in 12. We are fortunate Medicare beneficiaries don’t need contraceptive services.
The implications of this are obvious. Future generations of Americans will be saddled with the compulsory yoke of paying for the fiscal irresponsibility of this generation. They may ask themselves why the protection of the 13th Amendment should not be available to them. They may wonder how the liberties that millions have given their lives to preserve could be squandered so easily and recklessly. They will ask their parents and grandparents for an explanation of their selfish betrayal. They may read Jefferson’s admonishment that spending money to be paid by posterity under the name of funding is but swindling future generations. They will read the Declaration of Independence and ask themselves whether they can assert the same separate but equal station that our forefathers asserted, and sever the bonds of the yoke they are compelled to bear without their consent. Unlike the liberally invented nonsense about the 14th Amendment, those are and will be legitimate and important constitutional questions.
So instead of asking whether a failure to increase the debt ceiling is unconstitutional, a truly vigilant and responsible citizenry and press should ask themselves whether it is unconstitutional to incur any additional debt, particularly for their children. That is, assuming the “me” generation cares about its children and grandchildren. That is not necessarily a constitutional question, but perhaps it should be.
Warren L. Dean Jr. is a lawyer and an adjunct professor at Georgetown Law Center.