Comments on: Contradictory laws

By: Brent Follin

Brent Follin — Tue, 15 Jan 2013 21:14:47 +0000

I remember reading somewhere that the Secretary of the Treasury would stand trial before congress for impeachment in a scenario where the federal government oversteps its credit limit. In this case, the articles of impeachment would certainly pass the house, but there’s no way a 2/3 majority of senators would vote for removal from office. My guess is that the senate acquittal would mean congress (e.g. the republican house) would have no further recourse to prevent the overdrawing of the federal credit limit.

In reality though, I think any scenario involving reaching the credit limit is really just some example of our government system not working in the circumstances, and in the past, the executive branch has acted unilaterally in such circumstances (a good example is the modern notion of war without congressional declaration). Regardless of the legal wrangling, I highly doubt the treasury will stop paying any of its obligations for even a moment, though there is still worry about market effects (such as a downgrade) that could accompany the mixed signals not raising the debt ceiling would give off.

By: Josh McGuire

Josh McGuire — Tue, 15 Jan 2013 18:18:16 +0000

Well, no, it’s not obvious at all, and may not even be correct. I guess I’d need to think about that possibility a bit more. Still, it’s in the category of government agency “going rogue,” which is very different from U.S. government failing to meet an obligation for which they cannot be sued. The former might have legal consequences of some sort.

By: Ted Bunn

Ted Bunn — Tue, 15 Jan 2013 17:10:06 +0000

Josh –

Thanks!

One followup: is it obvious that someone would be able to get a court to stop the treasury from spending in excess of the debt ceiling? Who would have standing?

By: Ted Bunn

Ted Bunn — Tue, 15 Jan 2013 17:08:43 +0000

Phillip — It certainly could and should, but the Republicans in the House like having the ability to use it to make trouble, so they have no incentive to do so.

By: Phillip Helbig

Phillip Helbig — Tue, 15 Jan 2013 16:00:10 +0000

The debt ceiling is itself a law, made by Congress. Could not Congress revoke it if desired?

By: Josh McGuire

Josh McGuire — Tue, 15 Jan 2013 15:49:23 +0000

I was most of the way through a complex analysis having to do with the general vs. the specific when I decided that it’s not really that complicated. I think this analysis is guided by practical considerations:

1. You can’t spend money until you have it. Therefore, one of these two events comes first in time (raising the debt ceiling), and the prohibition against it trumps the subsequent requirement simply because it comes first.

2. If the entities from whom you would be borrowing the money are aware that you are not on firm legal ground in doing so, they’re not likely to lend it even if you purport to allow yourself to borrow it.

3. (The most legal answer) Laws without remedies are illusory. If the U.S. were to try to raise the debt ceiling without authorization, someone could probably get a court to stop the treasury from doing so. By contrast, the U.S. is probably immune from lawsuits for failing to pay its obligations in circumstances where it doesn’t have the money.