Washington, DC -- Congressman Eliot Engel (D-NY-17) wrote to President Barack Obama stating that since the Fourteenth Amendment of the Constitution prohibits the United States from defaulting on its public debt, having a statutory debt ceiling is unconstitutional. 

“Should bipartisan negotiations fail, I would encourage President Obama to continue the discussions for a long-term budget plan to prevent the debt from growing even more.  However, they should be done without holding the United States debt hostage.  I believe the debt should not have been in the debate in the first place, as the artificial debt ceiling appears to violate the Constitution.  While I am hesitant to have Congress defer to the Executive branch, it is clear that the dangers of defaulting on our debts have been considered a major concern for 150 years. We cannot let the current political posturing ruin our country’s good credit,” said Rep. Engel.

The 14^th Amendment to the United States Constitution states that “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.”  Rep. Engel interprets this to mean it is unconstitutional to default on the debt owed to the bondholders of the United States, the largest one being the American people.  As a result, the President should instruct the Treasury to continue issuing whatever debt instruments are needed to prevent the country from falling into default.

“I understand what the Republicans are doing here – they are tying their massive and irresponsible budget cuts to our national credit rating, essentially gambling with our financial well-being, in order to score political points and move their agenda forward.  This is extremely reckless.  The need for debt reduction is real, and requires a bipartisan and responsible agreement.  Democrats have agreed to some very tough choices in the form of spending cuts to social programs.  The Pentagon has agreed to cuts in the military budget.  However, Republicans are threatening to walk away from the table once tax breaks for the wealthiest Americans and oil companies are brought up.  This is not the type of action associated with true leadership,” said Rep. Engel.

The 12-term Congressman added, “As a result, let’s take this debate to another room.  We have to get a budget deal done – we all know it.  So let’s do it independent of this risky forum.  The economy should not be forced to face a reality where markets are spooked, the country’s credit rating is downgraded and the foundations of our entire economy are put at risk. The consequences could make the 2007-08 deep recession look like a picnic.  We cannot let that happen.”

The statutory debt ceiling has not been challenged directly in court, but the 1935 U.S. Supreme Court case Perry v. United States addressed the constitutionality.  It stated,

While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress...we [cannot] perceive any reason for not considering the expression “the validity of the public debt” as embracing whatever concerns the integrity of the public obligations.

Rep. Engel continued, “I wish things were different, and our two parties could come together to do the greater good.  However, that appears to not be the case.  At least, in regards to the national debt, we don’t really need to.  I call on the President to take these actions for the betterment of our country.  I call on the leaders in both parties to not challenge the decision and to get back to work on a long-term budgetary solution to our spending and revenue problems.  That is true leadership, and is exactly what the American people need from us all.”

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