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UC Law Constitutional Quarterly

Fred A. Slone

Abstract

This article demonstrates conclusively the unconstitutionality of a widely feared default on the public debt due to the debt limit.

First, we find that Article I of the Constitution granted Congress no power, express or implied, to provide for a default by the United States. Under the principles of constitutional law established by the Supreme Court in Marbury v. Madison (1803), any law outside the powers of Congress is void. Thus, the unconstitutionality of a default may be readily established pursuant to Article I, with additional support from the Tenth Amendment.

Furthermore, we find that the Fifth and Fourteenth Amendments each protect, indisputably, a person’s right to payment in accordance with the terms of a lawfully authorized obligation of the United States, reinforcing a fundamental principle of the common law–that lawful debts are binding. Indeed, the Supreme Court has determined repeatedly, for nearly 150 years, that a default by the government violates the Constitution.

Thus, Congress must authorize all borrowing necessary to avert a default by the United States, regardless of the amount, as it has clearly done pursuant to 31 U.S.C. §§ 3102-3104, 3111. However, Congress has, at the same time, sought to limit the Treasury’s borrowing to a fixed amount, pursuant to 31 U.S.C. § 3101(b), as amended (the law establishing the debt limit). In the absence of its change, suspension, or repeal by Congress, the debt limit law would, as a natural and foreseeable consequence of its unyielding ceiling on outstanding Treasury obligations, force a willful default by the United States whenever additional borrowing in excess of the debt limit is necessary to pay the public debt. Thus, we conclude, the debt limit law is repugnant to the Constitution, in clear violation of Article I, the Fifth Amendment, the Tenth Amendment, and the Fourteenth Amendment, or any one of them alone.

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