July 6, 2011, Fairfax, VA—Americans for Limited Government President Bill Wilson today issued the following statement warning the Obama Administration against invoking the Fourteenth Amendment of the Constitution to arbitrarily ignore the congressionally enacted $14.294 trillion debt ceiling:
"Any attempt by the White House to issue Obama bonds will trigger a constitutional crisis and call into question the validity of the new debt being issued. Even if one were to interpret that the Fourteenth Amendment applied to the validity all debt, and not just Civil War debt, it would not authorize the government to borrow as much as it likes.
"The amendment simply means that money, which has already been borrowed, shall be paid back on time and in full. Spending is not borrowing, but the Administration fails to make that distinction. It may wish that Congress would authorize more borrowing to pay for government's reckless spending, but the fact remains that it has not yet. It is a political question with which Congress has discretion.
"Moreover, if one were to invoke the provision, the Fourteenth Amendment would actually tie the Obama Administration's hands from borrowing more if the debt limit is not raised.
"That is because under the amendment, the validity of the existing debt cannot be questioned. So, the government would be required to pay interest first out of revenue since it is not allowed to voluntarily default. And existing debt would have to be refinanced up to the limit. After that, without the authority under law to borrow more, the budget would have to be balanced.
"Article I, Section 7 of the Constitution gives the House of Representatives the sole power to originate 'the raising of revenue.' And there is no question that new debt is new revenue. So, only Congress can authorize the government to borrow more money.
"This is actually confirmed by the Fourteenth Amendment, which only refers to debt 'authorized by law.' Congress has not authorized the government to borrow more than $14.294 trillion. Therefore, anything above that would be unauthorized borrowing, and would be nothing more than illegal junk bonds lacking the full faith and credit of the nation.
"The White House needs to consider carefully the consequences of issuing its own debt without any congressional authorization. The full faith and credit of the United States depends on the consent of the governed through their representatives to borrow more. Without that, there is no guarantee the unauthorized debt will ever be nor should it ever be repaid or honored."
"The Empty Obama Ploy," by ALG President Bill Wilson, July 5th, 2011 at http://netrightdaily.com/2011/07/the-empty-obama-ploy/ .