During the Great Depression President Franklin D. Roosevelt asked Congress to impose a prohibition against United States citizens owning gold in any form other than ornamental. This prohibition was granted him by Congress and subsequently upheld in a five to four vote by the United States Supreme Court. The decision of the Court upholding the prohibition was one of four, so called, “Gold Cases” issued in 1935. The total effect of these cases was to clarify how the prohibition would work and the limitations thereof.
One of the subsequent Gold Cases was Perry v United States U.S. 330. In Perry the Court was asked whether the government had to pay the holders of a specific government bond in “United States gold coin of the present standard of value.” The bond specifically said this would be the case
After Congress passed Roosevelt’s prohibition making such gold coinage illegal for such purposes, the Treasury attempted to substitute paper money for the gold coin promised. The investors realizing paper money was not worth the same as the promised gold coin protested.
Citing the fourth paragraph of the Fourteenth Amendment to the United States Constitution that says in its first sentence, “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,” the Court decided Congress had exceeded it authority in so far as it pertained to an obligation of the United States made prior to the installation of the gold prohibition. (The second sentence had to do with the nullification of any obligation of anyone to compensate for lost property in the South due to the insurrection of those states against the Union during the Civil War or to repay money loaned for the purposes of supporting that insurrection. This second sentence was not cited in the case.)
All appropriations bills passed by Congress, certainly since it imposed the anti embargo law on President Nixon and all subsequent Presidents, are explicit promises to pay to one degree or another. The existence of a debt limit imposed in law is an explicit “questioning” of all obligations and debts of the United States government. It is such because it imposes what is, until now, a theoretical limit on how much of the total money the Congress has promised to pay can be paid. As Congress has furnished no priority ranking of what is to be paid and what is not to be paid from among the total appropriations made by Congress, in the event that the debt ceiling is breached, all appropriations are “questioned.”
To me, this business of imposing a debt limit is, on its face, unconstitutional. Its very existence calls into question the debt of the United States. Just because Granny’s social security payment is small potatoes compared to whatever we owe Goldman Sachs or China, it is no less a debt of the United States and it cannot be questioned, not legally. How ironic that the anti trail lawyer Republican Party may have just given birth to the mother of all class action suits. Again, I am not a lawyer but this promises to be a doozy. Talk about Republicans adding to the deficit. The final judgment on the ones covering Social Security and Medicare could be breathtaking.
Note: I am not an attorney. The post is a mere layman’s/citizen’s opinion. It is offered as food for thought and nothing more.