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Given the 14th amendment exists and its purpose was in fact to assure the treasury would always pay its debts and the constitution overrides any law, it wouldn’

Given the 14th amendment exists and its purpose was in fact to assure the treasury would always pay its debts and the constitution overrides any law, it wouldn’t be a very flimsy loophole to say congress would need to clarify possible up to and including an amendment. The debt ceiling isn’t specifically about paying debts but about authorizing new borrowing. So while the treasury may not be able to legally issue debt to pay existing debt, it would be required to pay debt. This is of course the starve the beast goal of the debt ceiling to force spending cuts to pay the debt by making the debt payment so vast that the federal government would become a shadow of itself in that eventuality. However since the law has never been contested it’s not clear it would work. But the treasury of course has many other ways of paying debts, including simply issuing currency. Even if the 14th amendment doesn’t invalidate the debt ceiling, the treasury still must pay the debts, and doesn’t have to do so by cutting spending. It would however be more orderly and strictly better for everyone if the 14th amendment did invalidate the debt ceiling in a situation that questioned the treasuries ability to make whole debts without resorting to disruptive measures.

immibis 3y ago
The 14th amendment doesn't say the Treasury must always pay its debts. It says everyone has to act as if the Treasury will always pay its debts. It could default tomorrow, and you'd be constitutionally required to accept T-bills at face value anyway.
- jjeaff 3y ago
  "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." It is strangely worded, but I think it could be interpreted to also mean that the government shall not do anything that would call the validity of the debt into question. It doesn't really make sense to pass an amendment that tries to mandate the perception of the validity of the debt. if the government stops honoring it, then the invisible hand of the market will consider it invalid.
  - immibis 3y ago
    That would be a reach. The non-reaching interpretation is the face value one: the validity of the public debt ... shall not be questioned. It's hardly the most anti-market law around - the US has farm subsidies, and some countries even have price controls.
    - ndriscoll 3y ago
      What would that even mean though? Bonds are sold at auctions, and already sell at a price different from face value. The difference determines the yield. You could have "no one questioning the validity" but people are still going to either not participate in the auction, or bid only for high yields.
    - jjeaff 3y ago
      One of the factors in evaluating a case is whether the proposed remedy is feasible or even possible. I'm not sure what forcing everyone else to "consider valid" a government bond that is not being honored. Do you arrest and imprison anyone who reveals that they are not getting paid on their bond at maturity? Do you force buyers to buy it at face value, even though they know it will not be honored?
  - eli 3y ago
    I don't think that's a reach. There's a credible argument that it compels the President to continue to service debts
    - fnordpiglet 3y ago
      I think it’s even stronger than that. It doesn’t just compel the president, which is a political office, but it compels every civil servant in the treasury as it’s a constitutional mandate. So in theory even if the president declares no debt payment, the treasury would still make the payments.
  - SilasX 3y ago
    On my latest re-reading of it in your comment, it sounds more like it's saying, "shut up, you lost, the measures taken to suppress your rebellion are valid, move the frak on".
- fnordpiglet 3y ago
  The context at the time was doubt that the treasury would pay its debts, because it was widely viewed that it would not post the civil war. The language is not clear, but the intent as I understand it from a historical perspective is pretty well understood to mean the treasury must always pay its debts. The language continues to clearly delineate debts accrued by the confederacy (insurrection) as NOT payable, which further enforces the topic is payment of debt.
- HillRat 3y ago
  You have to recall the context in which those provisions were passed: coming out of the Civil War, you had both Union and Confederate bonds and other public debts used to finance the war. Amongst the other conditions upon which the rebellious states were re-admitted to political authority were the cancellation of Confederate debt (the Union was not going to pay for the wages of rebellion) and the guarantee of Union debt (so that Southern and Western states could not collude in Congress to prevent repayment of that debt), both of which were written into the Public Debt Clause. So the clause was absolutely meant to restrict the government's ability to repudiate debts other than those explicitly excluded, because you had a Republican Congress working to tie the hands of a potential future Democratic one. (N.B., I'm not exactly sure what you mean by "required to accept T-bills at face value" -- you can buy T-bills and TIPS on the secondary market at whatever price the market sets. If the US were to start defaulting on its debt, then that price ... would not be as stable as it has traditionally been.)

immibis 3y ago

The 14th amendment doesn't say the Treasury must always pay its debts. It says everyone has to act as if the Treasury will always pay its debts. It could default tomorrow, and you'd be constitutionally required to accept T-bills at face value anyway.

jjeaff 3y ago
"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." It is strangely worded, but I think it could be interpreted to also mean that the government shall not do anything that would call the validity of the debt into question. It doesn't really make sense to pass an amendment that tries to mandate the perception of the validity of the debt. if the government stops honoring it, then the invisible hand of the market will consider it invalid.
- immibis 3y ago
  That would be a reach. The non-reaching interpretation is the face value one: the validity of the public debt ... shall not be questioned. It's hardly the most anti-market law around - the US has farm subsidies, and some countries even have price controls.
  - ndriscoll 3y ago
    What would that even mean though? Bonds are sold at auctions, and already sell at a price different from face value. The difference determines the yield. You could have "no one questioning the validity" but people are still going to either not participate in the auction, or bid only for high yields.
  - jjeaff 3y ago
    One of the factors in evaluating a case is whether the proposed remedy is feasible or even possible. I'm not sure what forcing everyone else to "consider valid" a government bond that is not being honored. Do you arrest and imprison anyone who reveals that they are not getting paid on their bond at maturity? Do you force buyers to buy it at face value, even though they know it will not be honored?
- eli 3y ago
  I don't think that's a reach. There's a credible argument that it compels the President to continue to service debts
  - fnordpiglet 3y ago
    I think it’s even stronger than that. It doesn’t just compel the president, which is a political office, but it compels every civil servant in the treasury as it’s a constitutional mandate. So in theory even if the president declares no debt payment, the treasury would still make the payments.
- SilasX 3y ago
  On my latest re-reading of it in your comment, it sounds more like it's saying, "shut up, you lost, the measures taken to suppress your rebellion are valid, move the frak on".
fnordpiglet 3y ago
The context at the time was doubt that the treasury would pay its debts, because it was widely viewed that it would not post the civil war. The language is not clear, but the intent as I understand it from a historical perspective is pretty well understood to mean the treasury must always pay its debts. The language continues to clearly delineate debts accrued by the confederacy (insurrection) as NOT payable, which further enforces the topic is payment of debt.
HillRat 3y ago
You have to recall the context in which those provisions were passed: coming out of the Civil War, you had both Union and Confederate bonds and other public debts used to finance the war. Amongst the other conditions upon which the rebellious states were re-admitted to political authority were the cancellation of Confederate debt (the Union was not going to pay for the wages of rebellion) and the guarantee of Union debt (so that Southern and Western states could not collude in Congress to prevent repayment of that debt), both of which were written into the Public Debt Clause. So the clause was absolutely meant to restrict the government's ability to repudiate debts other than those explicitly excluded, because you had a Republican Congress working to tie the hands of a potential future Democratic one. (N.B., I'm not exactly sure what you mean by "required to accept T-bills at face value" -- you can buy T-bills and TIPS on the secondary market at whatever price the market sets. If the US were to start defaulting on its debt, then that price ... would not be as stable as it has traditionally been.)