The debt ceiling debate lingers on. (See my blog post on January 9th 2011.)

 The political train wreck is less than one month away and counting….For the first time in its history the U.S. might have to default on its debt.  Or does it?

There has been some discussion recently about the possibility of the President having the Constitutional right to by-pass Congress and fix the crises.  Some people believe President Obama could declare the debt ceiling unconstitutional by invoking section four of the 14th Amendment:

          “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.”

If the Aug. 2 deadline passes without an agreement, then President Obama could conclude—statutory debt ceiling or not — that he is constitutionally required to order the Treasury to continue paying its bills.

Whether or not this is a correct interpretation of the U.S. Constitution is a matter for the Supreme Court to decide.  We can only hope we never get to that point and a bi-partisan agreement can be reached for the country’s sake and well as its markets.

Advertisement