Will Congress violate the Constitution if it fails to increase the U.S. debt limit in a few months, and does President Obama have the power under the 14th Amendment to raise the debt limit on his own?
Yes. No. Maybe.
Wait a minute, we're confused.
Speaking of confused, a befuddled Congress finally approved a Senate-brokered deal last week to reopen the federal government until Jan. 15 and extend the nation's debt limit deadline to Feb. 7.
But there was no guarantee the same partisan bickering that caused the latest manufactured crisis won't occur again.
Obama himself has consistently rejected the exercise of such a putative power, urged by such advocates as former President Bill Clinton. However, push hasn't quite come to shove -- though the United States has more than once danced on the edge of financial disaster.
If you're looking for guidance from the U.S. Supreme Court on Congress and defaulting on the debt, you have to go all the way back to 1935's Perry vs. U.S.
The 14th Amendment says a lot of things. It's generally understood to extend the Bill of Rights, which originally affected only the federal government, to the states. But Section 4 says: "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."
In Perry vs. U.S., John M. Perry bought a $10,000 Liberty Loan Gold Bond, and when the bond matured in 1934, demanded his payment in gold coin, as promised on the security. In gold coin, that nominal $10,000 would have been worth $16,000 in the 1930s.
But President Franklin D. Roosevelt had ordered all gold to be turned over to the government at a fixed price, and Congress negated gold clauses for securities.
Chief Justice Charles Evan Hughes found the man, who apparently argued the case himself, had no standing to sue, saying he failed "to show a cause of action for actual damages." He also said the government had the power to act on gold. But Hughes eviscerated a federal government argument that Congress could "repudiate" debt.
Speaking for the court, Hughes said the federal government "argues that 'earlier Congresses could not validly restrict the 73rd Congress from exercising its constitutional powers to regulate the value of money, borrow money, or regulate foreign and interstate commerce'; and, from this premise, the government seems to deduce the proposition that when, with adequate authority, the government borrows money and pledges the credit of the United States, it is free to ignore that pledge. ...
"We do not so read the Constitution," Hughes said. "There is a clear distinction between the power of the Congress to control or interdict the contracts of private parties when they interfere with the exercise of its constitutional authority and the power of the Congress to alter or repudiate the substance of its own engagements when it has borrowed money under the authority which the Constitution confers."
"In authorizing the Congress to borrow money, the Constitution empowers the Congress to fix the amount to be borrowed and the terms of payment. By virtue of the power to borrow money 'on the credit of the United States,' the Congress is authorized to pledge that credit as an assurance of payment as stipulated, as the highest assurance the government can give, its plighted faith. To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor [pledger]. This [Supreme] Court has given no sanction to such a conception of the obligations of our government."
How a modern court would react to any putative case involving Congress and a default on the debt is anyone's guess. The justices could reject such as case as a political question not involving the courts, or jump in with both constitutional feet.