Some people are grasping at the notion that President Obama can “invoke” the 14th amendment to sell more Debt without Congressional authorization.
Looks look at the more closely. First is the original notion contained in Article 1, Section 8 of the Constitution titled “Powers of Congress”:
To borrow money on the credit of the United States;
That’s pretty clear – after the Civil War, the Federal government included Section 4 in the 14th amendment for two reasons – to make clear the debts of the Confederacy would not be paid by the Federal Government and COULD NOT be paid for by the States – and that the debts of the Federal Government would be honored and defeated States could not argue that they weren’t responsible for the debt because they weren’t part of the United States:
Section 4. 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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
The “Authorized by Law” is the key to this idea. That IS what the debt limit is. It is an authorization by law – only Congress can make a law authorizing borrowing.
The US Treasury selling debt beyond the authorized limit has a large number of legal issues in addition to creating a Constitutional crisis. But consider it from the other side – if you’re a bank or a foreign country – and the US Treasury is holding a debt auction selling debt that is not authorized by Congress, do you bid for the debt? Do you buy it on the assumption that it will be converted to authorized debt in the future?
Would the Federal Reserve be willing to buy up all the unauthorized debt? Will the member banks vote not to allow that?