The Article III Fiscal Power

By Rosenzweig, Adam H. | Constitutional Commentary, Spring 2014 | Go to article overview

The Article III Fiscal Power


Rosenzweig, Adam H., Constitutional Commentary


Imagine that the United States faces an unprecedented Constitutional crisis. Earlier in the year, Congress authorized the President to spend $3 trillion, comprised of $1 trillion in defense spending to fund a war duly authorized by Congress, another $1 trillion of interest on debt incurred by the United States also duly authorized by Congress, and another $1 trillion of Medicare expenses (which are mandatory under existing law duly enacted by a previous Congress). As the end of the year approaches, the President realizes that the United States will not have enough money to pay all these bills, leading to a choice: should the President (1) decline to prosecute a duly authorized military conflict, (2) fail to pay interest on duly authorized and issued national debt, (3) fail to make duly authorized and mandatory Medicare payments, or (4) borrow an additional $1 trillion to cover the shortfall? The President chooses option (4), and thus requests the authority from Congress to issue $1 trillion of debt. But this time Congress refuses, denying the President the power to issue the debt. What options remain?

This hypothetical represents a simplified version of the so-called "debt ceiling" standoff between Congress and President Obama in 2011. The resolution at the time was a compromise (of sorts) to raise the statutory debt limit in exchange for certain promises to cut spending in the future. But what if Congress had stood its ground? Either the President could violate the Constitutional obligation to faithfully execute the laws by failing to spend duly authorized funds or violate the separation of powers by issuing debt without Congressional authorization. A real Constitutional crisis seems to emerge, (1) with no way out. Or is there?

As most American schoolchildren learn in civics class, the United States government is comprised of three branches: the legislative, the executive, and the judicial. So if the legislative and executive cannot--or will not--comply with their Constitutional obligations, what about the judiciary? Could a federal court itself, under its own authority, satisfy the Constitution if the other branches won't? Typically, when the Executive violates the Constitution the solution is for the Supreme Court to order the Executive to fulfill its Constitutional obligations. But in the hypothetical above this would not be sufficient; even if it wanted to, the Supreme Court couldn't order the President to spend money the country didn't have, nor could it order Congress to pass a new statute to authorize debt or withdraw appropriations. (2)

The thesis of this Essay is that, under certain limited circumstances, the Supreme Court can, under its own, independent, power under Article III of the Constitution, impose taxes and borrow money, wholly separate from the powers of Congress to do so under Article I or any potential powers of the President to do so under Article II. (3)

While at first glance this may seem like an odd, or even outrageous, contention, in fact the Supreme Court has recognized the inherent power of federal courts to do something strikingly similar over twenty years ago in the case of Missouri v. Jenkins. (4) In that case, the school district of Kansas City, Missouri, was ordered to undertake certain spending to comply with Brown v. Board of Education ("Brown I"). (5) The school district passed a new property tax to do so, but the state of Missouri passed a law withdrawing the taxing power from the school district, making the tax increase null and void. The district court found the state's actions unconstitutional, and ordered the school district to collect the tax and spend the money. In other words, the court itself ordered the imposition and collection of a tax that was not authorized by state law. On appeal, the Supreme Court effectively held that this was within the inherent power of the district court to remedy Constitutional violations. (6)

Jenkins understandably caused quite an uproar at the time, although much of the commentary focused on the aspect of the case related to the power of federal courts over states and localities, (7) while others on the more limited issue of enforcement of school desegregation. …

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