President Bush: Violating the 14th Amendment?
On January 20, 2005, President George W. Bush was inaugurated as this nation's 43rd President. On that day, he took the Oath of Office:
I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect, and defend the Constitution of the United States.
This is no little promise. Upholding the Constitution is the most important aspect of the Presidency. In fact, President Bush himself went on to comment on this:
On this day, prescribed by law and marked by ceremony, we celebrate the durable wisdom of our Constitution, and recall the deep commitments that unite our country. I am grateful for the honor of this hour, mindful of the consequential times in which we live, and determined to fulfill the oath that I have sworn and you have witnessed.
Painting of Congressman Samuel J. Randall
After the Civil War, the 14th Amendment was passed. Section 4 of this Amendment dealt with debts of the Federal Government as well as of the Confederacy. As has been reported:
On December 5, 1865, the second day of the 39th Congress, Democratic Congressman Samuel J. Randall of Pennsylvania introduced a resolution affirming that the federal debt could not be repudiated. It received overwhelming bipartisan approval in the House, 162-1. The Joint Committee on Reconstruction then took up the issue and drafted a proposed constitutional amendment upholding the federal debt and rejecting Confederate debt. It was reported to the full House on December 19, 1865, and passed the same day with large bipartisan support, 150-11. No action was taken on the proposed constitutional amendment in the Senate. It was superseded by the Fourteenth Amendment, which incorporated its text into Section Four.
Section 4 of the 14th Amendment to the Constitution 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 emphasis of this analysis is on the first sentence. The Constitution prohibits questioning of the public debt of the United States.
There has been recent questioning of the validity of the Social Security Trust Fund. The argument has been advanced by columnist Charles Krauthammer
who wrote in the Washington Post on February 18, 2005:
The Social Security system has no trust fund. No lockbox. When you pay your payroll tax every year, the money is not converted into gold bars and shipped to some desert island, ready for retrieval when you turn 65. The system is pay as you go. The money goes to support that year's Social Security recipients. What's left over is "lent" to the federal Treasury. And gets entirely spent. It vanishes. In return, a piece of paper gets deposited in a vault in West Virginia saying that the left hand of the government owes money to the right hand of the government.
These pieces of paper might be useful for rolling cigars. They will not fund your retirement. Your Leisure World greens fees will be coming from the payroll taxes of young people during the years you grow old.
"Pieces of paper" and "useful for rolling cigars"??? What could Mr. Krauthammer be thinking? The Social Security Trust Funds are the "Old=Age and Survivors Insurance" (OASI) Trust Fund and the "Disability Insurance (DI)Trust Fund."
The Social Security Administration reports on what happens to these funds:
The Old-Age and Survivors Insurance Trust Fund is a separate account in the United States Treasury. A portion of the taxes received under the Federal Insurance Contributions Act and the Self-Employment Contributions Act are deposited in the fund. The trust fund is used for paying monthly benefits to retired-worker (old-age) beneficiaries and their spouses and children and to survivors of deceased insured workers. Funds not withdrawn for current expenses (benefits, the financial interchange with the Railroad Retirement program, and administrative expenses) are invested in interest-bearing Federal securities, as required by law; the interest earned is also deposited in the trust fund.
Would you call Interest Bearing Federal Securities "pieces of paper good for rolling cigars?" Isn't that questioning the "public debt of the United States?"
But what did President Bush say about this? As reported, Bush stated:
"Every dime that goes in from payroll taxes is spent. It's spent on retirees, and if there's excess, it's spent on government programs. The only thing that Social Security has is a pile of IOUs from one part of the government to the next."
To call interest-bearing Federal Securities just "a pile of IOU's" is certainly questioning the debt of the United States Government. Americans can and shall do better than this assault on our own credit-worthiness by our own President!
He didn't just say this once. Before the Commerce Department, President Bush had this to say:
"Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security -- are spent. They're spent on benefits and they're spent on government programs. There is no trust."
Does anyone really believe that the United States of America will not make good on its debt instruments? Do American believe that the Federal Government will not honor their Treasury Bills, their EE Savings Bonds, or their Treasury Certificates? And won't it send a wrong signal to credit markets that the President of the United States thinks that interest-bearing Federal Securities are worthless?
As the Minneapolis Star-Tribune wrote in its editorial of February 14, 2005:
Moreover, as some have pointed out, the president's approach hints at being simply unconstitutional. Amendment 14, ratified in 1868, says in Section 4 that, "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 president, need we point out, has taken an oath to preserve, protect and defend the Constitution.
America needs a President who talks up the United States and not one who bad-mouths our own government securities. America needs a President who believes in the Dollar and the American Economy. We need a President who believes that the full faith and credit of the United States government is more than just a piece of paper with IOU's. America deserves better!