The way out for the US to avoid the risk of bankruptcy

Article II, Section 3 of the Constitution requires the president, as head of the executive branch, to “take care that the laws be faithfully executed.” But what is the president’s constitutional duty when spending laws conflict with each other? That is the current situation in the United States.

Specifically, in December 2021, Congress passed a one-sentence bill that would raise the debt ceiling to a figure that would soon be insufficient to meet America’s financial obligations. However, a year later, in December 2022, Congress enacted a very detailed spending law—the Consolidated Appropriations Act of 2023. This law sets Congress’ annual budgets for most federal agencies and programs, and requires payments from the Treasury Department for welfare programs (except those that are permanently appropriated).

To “faithfully carry out” the spending mandate enacted by Congress in December 2022, President Biden must order the Treasury Department to conduct the bond auctions necessary to enable the mandate.

There are two rules of statutory construction that must be followed. First, when two laws conflict, the newer law prevails, a “recency rule.” Second, when two laws conflict, the specific law prevails over the general law, a “general-specific rule.” Based on both principles, President Biden must, by law, prioritize specific appropriations enacted in December 2022 over the general debt-ceiling law enacted a year earlier. Meanwhile, for spending on permanently appropriated programs like Social Security and Medicare, for which appropriations were enacted before the debt ceiling was set, the president is required to faithfully enforce the laws that have been enacted, which are much more specific than the more general debt-ceiling law.

Social Security and Medicare were created in the Social Security Act with specific legal guarantees that the Treasury Department would pay specific benefits to eligible beneficiaries and to health care providers on behalf of beneficiaries. The president’s statutory obligation to pay these specific benefits will outweigh the general language of the debt ceiling law.

Interest payments on Treasury securities (interest-bearing debt issued by the U.S. government as a means of borrowing to meet government spending not covered by tax revenues) are also amortized in perpetuity. The Treasury’s responsibility to raise the cash needed to pay interest is explicitly stated in the Fourteenth Amendment, which states: “The validity of the public debt of the United States… shall not be questioned.” Legal experts argue that under the wording of the Fourteenth Amendment, a U.S. default would be unconstitutional. Therefore, the president is obligated to nullify the debt ceiling if Congress decides not to raise it.

Of course, the best outcome would be a bipartisan two-year budget bill. But if no agreement can be reached due to political deadlock, the president’s constitutional responsibilities are clear: He must “faithfully carry out” the appropriations enacted in 2022 and the benefit payments specifically guaranteed in the Social Security Act and similar benefit statutes.

Many experts say the repeated debt ceiling chaos that has been plaguing Americans and investors around the world needs to stop. It is time for President Biden and the Justice Department to make clear that the president has a constitutional and statutory duty to enforce Congress’ spending and welfare laws.
VNA

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