The statutory debt limit restricts the funds that can be borrowed to meet the government's financial obligations. On the other hand, the Fourteenth Amendment's Public Debt Clause mandates that all the government's financial obligations be met. This Note argues that the Public Debt Clause is violated when government actions create substantial doubt about the validity of the public debt, a standard that encompasses government actions that fall short of defaulting on or directly repudiating the public debt. The Note proposes a test to determine when substantial doubt is created. This substantial doubt test analyzes the political and economic environment at the time of the government's actions and the subjective apprehension exhibited by debt holders. Applying this test, this Note concludes that Congress's actions during the 1995–96 and 2011 debt-limit debates violated the Public Debt Clause, though Congress's conduct during the debate over the debt limit in 2002 did not. And under a departmentalist understanding of executive power, a conclusion of this nature would be the basis for the president to ignore the debt limit when congressional actions create unconstitutional doubt about the validity of the public debt.
Jacob D. Charles,
The Debt Limit and the Constitution: How the Fourteenth Amendment Forbids Fiscal Obstructionism,
62 Duke Law Journal
Available at: http://scholarship.law.duke.edu/dlj/vol62/iss6/3