Daily Archives: July 14, 2011

President Does Not Have Constitutional Authority to Prioritize Payments by Treasury

Conventional wisdom among the wizards of smart and pundits of politics in the mainstream media is that President Obama will use the prioritizing of payments by the Treasury to boost his political standing should Congress fail to raise the debt ceiling August 2. For Congress to permit him to do so would overturn four hundred years of American history and two hundred years of the rule of law under the Constitution. It would also be a gross violation of the number one doctrine of our government system, separation of powers.

The “power of the purse” has existed with the people’s assembly in America since the establishment of Virginia’s House of Burgesses in 1619 and the signing of the Mayflower Compact in 1620. The power of the purse residing with the people’s assembly during the colonial period was based on the English Constitution and the principle of representative government dating back to the signing of the Magna Carta in 1215 and the later establishment of the House of Commons in the fourteenth century.

During the 157 years between 1619 and 1776 the colonial legislatures used the power of the purse to rein in the colonial governments when they became too overbearing; often refusing to allocate funds for proposed government projects and sometimes even refusing to pay the salaries of government officials until their demands were met. Under the doctrine of representative government, Great Britain could not legally levy internal taxes on the colonies because they had no representation in Parliament.

Following the French and Indian War, England attempted to tighten its control over the colonies by doing away with their legislatures’ power of the purse, first with the Sugar Act, the Currency Act and the Stamp Act of 1765 and 1766. When these failed, Parliament passed the Declaratory Act of 1766 and the Revenue Act of 1767. The Declaratory Act declared… “that the said colonies and plantations in America have been, are, and of right ought to be, subordinate unto, and dependent upon the Imperial Crown and Parliament of Great Britain”.

Passage of these Acts and British efforts to enforce them led directly to the Boston Tea Party, the Boston massacre, Lexington and Concord, the Revolution and the signing of the Declaration of Independence in 1776 in which Thomas Jefferson answered the Declaratory Act with these words: “…These United Colonies are, and of right ought to be free and independent States…”

When the original Constitution was written in 1787, the power of the purse was given to the House of Representatives as the only branch of government elected directly by the people. Article I, Section 7 says, “All Bills for raising Revenue shall originate in the House of Representatives;” Section 8, clause 1 describes the types of revenue Congress is authorized to raise and the purposes for which it is to be raised. This is followed by a list of functions on which Congress is authorized to spend that revenue.

The first purpose for which Congress is authorized to raise and spend revenue is to “pay the debts”. The second is to “provide for the common defense”. Amendment 14, Section 4, clause 1, says, “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.” Aside from reassuring us that any debts incurred in putting down the insurrection by the progressives against the Constitution will be honored, this Amendment prohibits the government from defaulting on its debts. Article I, Section 8, Clause 12 requires Congress to fund the military.

Although at least three-fourths of the debts incurred by Congress was used for unconstitutional expenditures, they were granted by lenders in good faith based on their faith in America’s credit worthiness, are lawfully valid debts, and must be honored.  2.5 trillion dollars of that debt is owed to the Social Security Trust fund that has been borrowed for the operations of government over the past several generations. The President does not have the Constitutional authority to refuse to honor that debt.

The President is a member of the Executive Branch. That is the administrative branch whose job is to administer the laws and policies prescribed by Congress. The Executive Branch does not have Constitutional authority to pass laws or originate policies other than those internal administrative policies necessary to carry out its constitutional functions as assigned to it by laws passed by Congress. The origination of legislation and policy are the functions of the Legislative Branch.

In the event the debt ceiling is not raised by Congress and the government does not have the funds to continue operating at its present level, the Constitution and the House of Representatives sets the priority of what is and is not to be paid. Approximately $200B comes into the treasury every month. The Constitution requires the treasury to pay the debts as they come due including interest on the debt. That includes the amount required to pay Social Security obligations when due and the operation of the military. These consume about 40% of federal revenue. Prioritizing the remaining 60% among the necessary operating expenses of government is the responsibility of the House of Representatives not the White House.