The validity of the public debt of the U.S.....shall not be questioned (14th Amendment)

[Jim Lane]

30. Why I disagree with your reasoning

You write, "Congress passed an imbalanced budget, and the United States is now responsible for the debts incurred by those PAST appropriations."

But the appropriation itself creates no debts. It means that the executive branch has the authority to go ahead and spend the money, but there is no debt until the executive branch actually spends the money.

It does sometimes happen that a government agency finishes the fiscal year without having spent its entire budget. Consider, at a mundane level, that your local municipal budget, as passed by the City Council, includes $2,000,000 for snow removal, and an unusually mild winter means that only $1,300,000 is spent. There is no public debt for the remaining $700,000. Nobody is owed that money.

That case is easy because there's no occasion to spend the money, and the Mayor's decision not to spend it is perfectly in keeping with the City Council's action. What happens if, instead, the executive disagrees with the legislature about the desirability of the spending? Beginning with Thomas Jefferson, Presidents exercised the power of impoundment, meaning that even though the money was appropriated, the President decided that the expenditure was a bad idea, so he didn't do it.

If that were still the law, the case would be fairly clear. Obama would say, "I have the authority to spend the money but we don't have the money and I'm not allowed to create public debt to finance the spending. I could go ahead with the spending only by issuing 'moral obligation bonds' or some such, that wouldn't be debt authorized by law and wouldn't be binding. (Don't laugh. This has been done at the state level. See here for the basic definition.) As the executive, however, I believe that moral obligation bonds are a bad idea, so I'm going to exercise my impoundment power and not spend the (nonexistent) money." That way there would be no constitutional violation.

What makes it tricky is that the law has changed. Nixon grossly abused the impoundment power, by refusing to spend money on an environmental project, after Congress overrode his veto of the underlying legislation. In response, Congress passed the Impoundment Control Act of 1974, which limited the President's authority. Now the President must get Congressional approval for an impoundment.

The situation is still not clear, however, because "impoundment" has always been interpreted to mean the impoundment of funds that are available. What if Congress directs the spending but no funds are available? If the Congress is ordering the President to do an impossible act, is its appropriation therefore a nullity? Does the passage of the debt ceiling law constitute Congressional approval, under the Impoundment Act, for a rescission of any spending appropriation that can't be covered out of current revenues because the debt ceiling has been reached?

As others have pointed out, this might never get to the Supreme Court because no one would have standing to bring a lawsuit. I don't think that disposes of the question, though. It's a bad idea for Congress and the President to think they can just ignore all Constitutional questions because they'll leave it up to the Supreme Court to resolve them. They all took an oath to uphold the Constitution. It would be irresponsible for the elected officials to conduct themselves in a way that violates the Constitution, even if, as a practical matter, they can get away with it.

Of course, in the hypothetical we're discussing, the irresponsibility would be solely that of Congress -- specifically, of legislators who vote against raising the debt ceiling to cover appropriations they themselves have enacted. If that happens, Obama will be in a difficult position. Any course of action he takes will be vulnerable to a strong argument that he's acted illegally.