January 2014 Bar Bulletin
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January 2014 Bar Bulletin

How the Supreme Court Can Resolve the Debt Ceiling Crisis

By Adam H. Rosenzweig


What should happen when Congress and the president find themselves in a fiscal policy showdown resulting in a constitutional violation? This question has risen to the fore in light of the recent political showdowns over the so-called "debt ceiling" crisis.

Some scholars have argued that there are no constitutional options if the debt ceiling is not raised, meaning the president would be forced to choose the least unconstitutional option. Others have argued that the president has the power under Article 4 of the 14th Amendment to issue debt in contravention of the debt ceiling. Others still have argued that the president has inherent emergency powers under Article II of the Constitution to do so.

As most American schoolchildren learned in civics class, the U.S. government is composed of three branches: the legislative, the executive and the judicial. If the legislative and executive cannot - or will not - comply with their constitutional obligations, should the judiciary step in? In other words, what is the proper role of the Supreme Court in remedying constitutional violations arising from fiscal policy showdowns, such as the debt ceiling standoff, between Congress and the president?

The Supreme Court engages with constitutional issues arising from the coordinate federal branches all the time. When Congress enacts a law that violates the Constitution, the Supreme Court can strike down the law as unconstitutional. When the executive violates the Constitution, the Supreme Court can order the executive to fulfill its constitutional obligations.

In the case of the debt ceiling, however, neither would suffice. Even if it wanted to, the Supreme Court couldn't order the president to spend money that wasn't in the treasury nor could it order Congress to pass a statute authorizing new debt or cutting spending.

So in limited circumstances, such as those of the debt ceiling crisis, the sole remaining option would be for the federal courts, and the Supreme Court in particular, to impose taxes or borrow money to remedy the constitutional violation.

While at first glance this may seem like an odd, or even outrageous, proposition, in fact the Supreme Court recognized the power of federal courts to do something strikingly similar more than 20 years ago. In the case of Missouri v. Jenkins, the district court ordered the school district of Kansas City, Missouri, to undertake certain spending to comply with Brown v. Board of Education.

The school district attempted to pass a new tax to comply with the court's order, but the state of Missouri adopted a state constitutional amendment banning the district from doing so. The district court found the state's actions unconstitutional and therefore struck down the ban. Unfortunately, this was not sufficient to raise the money because the school district had never authorized a tax levy in the first place. So the court was forced to impose taxes and issue bonds directly. On appeal, although the details get somewhat complicated because of the state and local nature of school districts, the Supreme Court effectively held that such an order would be within the inherent power of the courts to remedy constitutional violations.

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