Validity of Public Debt
Section 4 confirmed the legitimacy of all United States public debt appropriated by the Congress. It also confirmed that neither the United States nor any state would pay for the loss of slaves or debts that had been incurred by the Confederacy. For example, during the Civil War several British and French banks had lent large sums of money to the Confederacy to support its war against the Union. In Perry v. United States (1935), the Supreme Court ruled that under Section 4 voiding a United States government bond "went beyond the congressional power."
The United States debt-ceiling crisis in 2011 raised the question of what powers Section 4 gives to the President. Legal analyst Jeffrey Rosen has argued that Section 4 gives the President unilateral authority to raise or ignore the national debt ceiling, and that if challenged the Supreme Court would likely rule in favor of expanded executive power or dismiss the case altogether for lack of standing. Erwin Chemerinsky, professor and dean at University of California, Irvine School of Law, has argued that not even in a "dire financial emergency" could the President raise the debt ceiling as "there is no reasonable way to interpret the Constitution that ". The issue of what effect Section 4 has regarding the debt ceiling remains unsettled.
Read more about this topic: Fourteenth Amendment To The United States Constitution
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