This whole business with the debt ceiling is generally discussed as a political issue, but I’ve been wondering about it as a purely legal issue.
Here’s the question. People often say that, if Congress doesn’t raise the debt ceiling, the US won’t be able to pay its bills and will be forced to default. But as I understand the law (not very well, that is), that doesn’t seem quite right. If Congress does nothing, then, if I’m not mistaken, the law requires two contradictory things:
- The US government will be required to spend the money allocated by Congress.
- The US government will be forbidden to execute the mechanism that allows for this spending.
(Let’s follow the President’s lead and leave the platinum-coin option out of the discussion for now.)
When people say that the US will be forced to default in this situation, they’re assuming that the government will obey law 2 and break law 1. Why couldn’t it be the other way around?
Although the question is inspired by the current controversy, I’m curious about the broader legal question: when the law is self-contradictory, is there a legal principle that governs which one takes precedence, or do people get to pick and choose?
Although of course you’d hope that legislatures would avoid making logically incompatible laws, I’d bet that this question has arisen from time to time, in which case it seems to me that there’d be case law laying out a clear legal guideline. Is there?
I know that when it’s a statute vs. the Constitution, the Constitution wins — “supreme law of the land” and all that. But in this case it’s statute vs. statute. (For the sake of argument, let’s assume that both laws are constitutional. I know there’s a 14th-amendment argument about the constitutionality of the debt ceiling, but let’s ignore that for now.)
There’s a famous theorem in symbolic logic of the form
p ^ !p ==> q,
pronounced “p and not-p together imply q.” It says that, once you’ve established both halves of a contradiction, you can logically infer anything you like. (Apparently this is called the paradox of entailment. I was hoping it’d have a cool Latin name like modus ponens, but no such luck.) Maybe the President should use this principle of logic to say that, if the debt ceiling controversy isn’t resolved, he’s allowed to do anything he wants.
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.
The debt ceiling is itself a law, made by Congress. Could not Congress revoke it if desired?
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.
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?
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.
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.
The so-called paradox of entailment has cooler names (like “explosion”), and even cool Latin names (like “ex falso quodlibet”).
On topic, others bits of the internet I’ve happened across that discuss this topic seem to think that, in cases of unavoidable contradiction, the more recent law wins. That would explain why people assume law 2 will be the law obeyed. (Personally, I think he should take advantage of their next attempt to pull this stunt by treating it as a line-item veto for whatever he doesn’t want to fund, in order to stay under whatever limit he’s given.)
not sure if this is still open and read for comment, but I was just pondering this very real case of contradictory statutes-or incompatible-as you better called it- here in the Arizona statutes. It has to do with problems here regarding the laws that cover Landlord-Tenant matters. It’s bothered me for some time, but the last few days have forced me to examine, in it’s entirety, the statutes under the Title of Property.
You can imagine how broad that Title is, and how many things pertain to it, right? I cannot believe how ridiculous, how insanely stupid it is organized!! Everything was just added in as separate chapters, instead of consolidating. Ok,
it would be like defining the laws for clothing in a dress code, but instead of it relating to a type of event (dress code for school), it lists brown clothes as a chapter, then white shoes as another chapter. Within, there are similarities, but differences in the information…. confused? don’t follow? Yeah, that’s what I’m talking about!!!!