The essence of the argument involves section 4 of the Fourteenth Amendment to the Constitution, which reads: “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.”That last line is key: government action “making uncertain whether or not a debt will be honored is unconstitutional.” The Republican Leadership is deliberately creating uncertainty in the markets, something they have always falsely accused Obama of doing. President Obama should go on television and tell the world that no matter what Eric Cantor does or says, the U.S. will not default. If Cantor and Boehner are no longer able to hold default over Obama's head, their actions lose any leverage they might have had. Obama can simultaneously neuter Boehner and Cantor while preventing them from causing harm to the U.S. economy.
In my view and that of Prof. Epps, this means that the president would have constitutional authority to take extraordinary measures to protect the public credit and prevent a debt default even if it means disregarding the debt limit, which is statutory law subordinate to the Constitution.
Since my article appeared, I have had the opportunity to do further research on this topic and now feel even more strongly that the Fourteenth Amendment trumps the debt limit. I found strong support for this position in a law review article by George Washington University law professor Michael Abramowicz. Writing in the Tulsa Law Journal (“Beyond Balanced Budgets, Fourteenth Amendment Style,” 33:2, Winter 1997, pp. 561-612), he concludes that any government action “making uncertain whether or not a debt will be honored is unconstitutional.”
Obama should act sooner than later. If he acts right away, the markets can proceed knowing that Cantor's plan to crash the economy has been completely and utterly blocked while the Republican Party will stand exposed for the villains that they are for trying to wreck the economy for political gain. If Obama gives into the GOP's threats then it will simply be another case of caving in and making bargains with economic terrorists.