Notes for the May 9, 2023 Debt Ceiling Meeting

THE DEBATE OVER DEBT MANAGEMENT VERSUS DEFAULT WAS SETTLED IN THE BEGINNING.  According to Article VI, Clause 1, “All debts contracted and engagements entered into, before the adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.”  And James Madison removed any doubt when he dismissed “...the pretended doctrine that a change in the political form of civil society has the magical effect of dissolving its moral obligations.”  (The Federalist Papers, No. 43; JM on “All debts and engagements”) 

     Alexander Hamilton, the former artillery officer in the Continental Army and aide de camp to the  Commander in Chief, gave force and effect to Article VI, Clause 1.  His measures made meaningful the related power “to borrow money on the credit of the United States.”  (Article I, Section 8, Clause 2)  He established the good faith of the nation and gave us our good name.  As Secretary of the Treasury, Hamilton began his report, requested by the House of Representatives, citing their resolution that “an adequate provision for the support of the public credit is a matter of high importance to the honor and prosperity of the United States”; and he continued:  (Emphasis Hamilton’s)

              If the maintenance of public credit, then, be truly so important, the next enquiry which                            suggests itself is:  By what means is it to be effected?  The ready answer to which question 

              is, by good faith; by a punctual performance of contracts.  States, like individuals, who 

              observe their engagements, are respected and trusted, while the reverse is the fate of 

              those who pursue an opposite conduct....

              …(T)he last seven years have exhibited an earnest and uniform effort, on the part of the                          government of the union, to retrieve the national credit, by doing justice to the creditors                          of the nation; and that the embarrassments of a defective constitution, which defeated                            this laudable effort, have ceased.

              In nothing are appearances of greater moment than in whatever regards credit.  Opinion                        is the soul of it; and this is affected by appearances as well as realities....  (Emphasis added) 

So if the “original intention” was to make our word true, can we act in a way that makes our word  worthless?  And should that even be a consideration?  Section 4 of the Fourteenth Amendment—“The validity of the public debt of the United States…shall not be questioned”—is a reaffirmation of Article VI, Clause 1 that was to overcome “the embarrassments of a defective constitution,”—the Articles of Confederation—“which defeated this laudable effort”; and, therefore, all debts and engagements entered into shall be valid against the United States under the Constitution.  Finally, as Hamilton noted in his report, it ought to be “a fundamental maxim, in the system of public credit of the United States, that the creation of debt should always be accompanied with the means of extinguishment.” 

     Although the appearance of an issue has been created by the debt ceiling threat of the House Republicans, their arguments are as empty as the cupboard of Old Mother Hubbard.  In reality, there is no debate, if the words of James Madison and the deeds of Alexander Hamilton and George Washington are accepted as precedent.  On the one side of the scale is the debt ceiling, a statutory provision, the technicality of technicalities and of dubious constitutionality.  On the other is the Fundamental Charter itself, The Federalist Papers, the reports of the first Secretary of the Treasury, and Chapter XIV of the Second Treatise of Civil Government by John Locke.  The oath requires the President to “preserve, protect and defend the Constitution”; and he must “take care that the laws be faithfully executed”—and the Constitution is the first law.  (Article II, Section 1, Clause 8 & Article II, Section 3)  Therefore, if forced to choose between the Constitution and the Second Liberty Bond Act of 1917, the Executive shall faithfully execute “the supreme law of the land” to “promote the general welfare and secure the blessings of liberty to ourselves and our posterity.”  (Article VI, Clause 2 & Preamble)  Such action is consistent with “the executive power” as conceived by the Founders and John Locke who stated that “(P)rerogative is nothing but the power of doing public good without a rule.”  (Article II, Section 1, Clause 1 & Second Treatise of Civil Government)  Accordingly, after giving due notice by a Proclamation on Public Credit to the press and the public and a delinquent Congress, the President would issue an Executive Order on the Means of Extinguishment and invoke the Gephardt Rule which simply stated that the debt ceiling was “deemed to have passed” when a budget resolution was approved, and therefore direct the Secretary of the Treasury to take appropriate action. 

Copyright 2023 Marvin D. Jones.  All rights reserved. 

 

https://founders.archives.gov/documents/Hamilton/01-06-02-0076-0002-0001 

[First Report on Public Credit]

A Long Train of Abuses and Usurpations

“The legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex.”  (James Madison, The Federalist Papers, No. 48)

FROM CLASSICAL TIMES it was recognized that a republic exists to promote the general welfare.  The Constitution uses that phrase twice, in the Preamble and in Article I, Section 8, Clause 1.  But how is that to be done if the economy is destroyed? 

     The House GOP is a threat to national security.  They do so under color of law, the Second Liberty Bond Act of 1917 which created the debt ceiling—the technicality of technicalities.  And last week they used a veneer of legitimacy to put a knife to the nation’s throat. 

     Before the blood flows, the President must issue a Proclamation on Public Credit, a formal notice of intent to the Congress that, should the GOP drive the nation toward default, he will take action to maintain the good faith of the United States.  Within x number of days, if a clean debt resolution does not pass the House of Representatives, he would issue an Executive Order on the Means of Extinguishment and invoke the Gephardt Rule, which simply stated that the debt ceiling was “deemed to have passed” when a budget resolution was approved, and therefore direct the Secretary of the       Treasury to take appropriate action.  In the accompanying national address, the President would state that his order was based upon three things consistent with precedent.  It was necessary, specific, and limited.

     The predictable response?  Some would call the President a dictator.  Others would say he chose “the least unconstitutional option.”  To avoid misunderstanding, clarification is in order.

     The Declaration of Independence listed a number of grievances against King George III that exposed him as a despot.  It then concluded that, “A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people.”

     A return to classical times finds Cincinnatus working in his fields when messengers from the Senate told him he had been appointed Dictator.  It was a constitutional office in which an individual served for a limited time to deal with a crisis.  Cincinnatus solved the problem and promptly returned to his farm.

     In our contemporary crisis, if the President were to raise the debt ceiling, those who will say he chose “the least unconstitutional option” need to consider that, actually, he would be doing his job.  For the oath requires him to “preserve, protect and defend the Constitution”—the whole point of which is to “promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”   (Article II, Section 1, Clause 8 & Preamble)  Thus, he is not simply to keep watch over pieces of parchment at the Archives but guard the institutions of the Republic which that document established.

     The Constitution is “the supreme law of the land”; and the President’s must “take care that the laws be faithfully executed.”  (Article VI, Clause 2 & Article II, Section 3)  If original intention has any meaning at all, the debt ceiling is of dubious constitutionality.  Article VI, Clause 1 makes honoring our commitments, meeting our obligations, being true to our word a duty, not an option; and Section 4 of the Fourteenth Amendment reaffirms the same.  Furthermore, Congress exercised its power as to how "to pay the debts...of the United States" when the Department of the Treasury was created.  (Article I, Section 8, Clause 1; emphasis added)

     Alexander Hamilton noted the significance of the difference in phrasing in Article I and Article II during the debate over Washington’s Proclamation of Neutrality that took place in the exchanges of the Pacificus and Helvidius letters.  "All legislative powers herein granted..." read the former; and the latter, "The executive power shall be vested in a President of the United States of America."  (Emphasis added)  The Founders knew that no matter how wise the members of the Legislature, they could not foresee all circumstances that may arise.  They agreed with John Locke that on occasion the Executive would have to act independently for the benefit of the Republic.  “...(F)or prerogative is nothing but the power of doing public good without a rule.”  (Second Treatise of Civil Government, Chapter 14, 166)  That view was restated by Lincoln, TR, and JFK.  But perhaps it is best to recall how it was expressed shortly after the Convention.

     “Energy in the Executive is a leading character in the definition of good government.  It is essential to the protection of the community against foreign attacks; it is not less essential to the steady administration of the laws; to the protection of property against those irregular and high-handed  combinations which sometimes interrupt the ordinary course of justice; to the security of liberty against the enterprises and assaults of ambition, of faction, and of anarchy.  Every man the least conversant in Roman history, knows how often that republic was obliged to take refuge in the absolute power of a single man, under the formidable title of Dictator, as well against the intrigues of ambitious individuals who aspired to the tyranny, and the seditions of whole classes of the community whose conduct threatened the existence of all government, as against the invasions of external enemies who menaced the conquest and destruction of Rome.”  (Alexander Hamilton, The Federalist Papers, No. 70)

     To yield to “the legislative…vortex” would not be ”the least unconstitutional option.”  (James Madison, The Federalist Papers, No. 48)  It would be gross neglect of duty.

     “There can be no need however to multiply arguments or examples on this head.  A feeble executive implies a feeble execution of the government.  A feeble execution is but another phrase for a bad execution; and a government ill executed, whatever it may be in theory, must be, in practice, a bad government.”  (Alexander Hamilton, The Federalist Papers, No. 70)

     Now, instead of a transition of administration, there must be a transition to action—to seize the initiative.  Put the chaos caucus on notice that the Proclamation on Public Credit and the Executive Order on the Means of Extinguishment may only be the beginning.

     The Battle of Capitol Hill did not end on January 6, 2021.  It has become an insurgency by some of the incumbents who were in danger during that insurrection.  Now the GOP has gone back in time to when the Continental Congress stood alone, a single house with neither an executive nor a judiciary—and the States were sovereign.  Those inadequacies of the Articles of Confederation were laid bare as the new Constitution was considered.  “The founders of our republics…seem never to have recollected the danger from legislative usurpations, which, by assembling all power in the same hands, must lead to the same tyranny as is threatened by executive usurpations.”  (James Madison, The Federalist Papers, No. 48) 

(c)2023 Marvin D. Jones.  All rights reserved.

 

 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2239911

[“the least unconstitutional option”]

http://www.msnbc.com/the-last-word/o%E2%80%99donnell-rewrites-mcconnell%E2%80%99s-filibuster

[McConnell’s Filibuster Against His Own Bill (2012)]