Can President Obama just ignore the debt limit?

Some economists suggest that the 14th Amendment renders the debt limit conversation moot (and maybe unconstitutional): the US must pay its debts. Period.

The debt limit standoff is getting more serious by the day. Republicans continue to insist that they won’t vote for any deal to cut the deficit and raise the debt limit ceiling that includes tax increases. Democrats continue to insist that they won’t vote for any such deal that doesn’t include some revenue enhancements.

Meanwhile, the deadline to reach a solution is fast approaching – the US will go into default on August 2, according to the Treasury.

So here’s a solution some Democrats and a few conservatives are floating – President Obama should just ignore this whole debate and order Secretary of the Treasury Timothy Geithner to keep those debt payments flowing.

“In my view ... the president would have constitutional authority to take extraordinary measures to protect the public credit and prevent a debt default even if it means disregarding the debt limit, which is statutory law subordinate to the Constitution,” writes economist Bruce Bartlett, a former Treasury official for the first President Bush, on the Capitol Gains and Games blog.

The argument here runs like this – the US Constitution is the highest law of the land, and it states that the US has to pay its debts. Section Four of the 14th Amendment opens this way: “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.”

The 14th Amendment was one of the Reconstruction amendments passed in the wake of the Civil War. According to University of Baltimore law professor Garrett Epps, the language about debts is in there because Republicans feared that the defeated South would manage to regain a majority in Congress and repudiate the debts President Lincoln had incurred to preserve the Union.

The debt limit, meanwhile, is not in the Constitution. It was instituted by Congress help finance the US entry into World War I. Prior to that time, lawmakers had voted to approve specific acts of government borrowing, such as the loan to construct the Panama Canal. The debt limit was intended as a sort of revolving line of credit against which the US Treasury could borrow without getting Congress involved in every decision.

Economist Bartlett writes that he feels “strongly” that the 14th Amendment trumps the debt limit. And if that is the case, it might be that the debt limit is not valid at all, he argues.

“The very existence of the debt limit is unconstitutional because it calls into question the validity of the debt,” he writes.

Treasury Secretary Geithner has hinted in some interviews that he might support this approach. If President Obama goes along, then the current budget standoff would be greatly altered. GOP lawmakers’ leverage – the threat that the nation might have to stop paying on bonds or other financial obligations due to an inability to continue borrowing – would vanish.

But this is just a theory, remember, and the Constitution is a lengthy document with provisions that sometimes seem to be at odds. That’s a big reason why the US has a Supreme Court – to rule on constitutional disputes. And if President Obama decided to simply ignore the debt limit, the resultant firestorm of litigation almost surely would end up in the high court’s lap.

The political reaction might be similarly explosive. Any discussion of using the 14th Amendment in this manner “is crazy talk,” said Sen. John Cornyn (R) of Texas on “Fox News Sunday.”

“It is not acceptable for Congress and the president not to do their job and say basically the president has the authority to do this by himself,” said Senator Cornyn.