In March 2015, the debt ceiling was hit again and sovereign default loomed. Refusing to timely raise the debt ceiling, congressional ideologues have four times pushed our nation to the brink of a catastrophic debt default in as many years. Our struggling economy is again threatened, financial institutions are again spending millions planning for default, and vulnerable citizens are once again worrying about their benefit payments. Enough is enough.
This Essay argues that nationwide bondholder litigation can void the unconstitutional debt ceiling, and it presents the first litigation in that effort. (Williams v. Lew, No. 15-1565, U.S. Court of Appeals – D.C. Circuit). The Constitution guarantees not only that public debt will remain valid, but also that the integrity of those obligations will never be so much as questioned by our nation’s government. The debt limit statute, facially and as-applied, violates the Fourteenth Amendment’s Public Debt Clause and the Fifth Amendment’s Due Process Clause. Bondholders have standing to challenge the unconstitutional statute as they suffer economic and noneconomic injuries resulting from the degradation of their investments’ uniquely low-risk profile and monetary value. These injuries manifest as both current harm and certainly-impending future harm.
In the NAACP and ACLU’s tradition of “test cases,” the author’s litigation is prosecuted with modest-success expectations, but with strong determination to prompt future litigation by others. The Justice Department has already exposed a defense strategy based on combining Tea Party default-denial delusion with Clapper v. Amnesty International standing hurdles.
The Essay pleas for state sovereigns and institutional bondholders (with alternative standing allegations) to initiate additional litigation. Public interest law firms, such as the National Chamber Litigation Center and the Constitutional Accountability Center, are challenged to lend support. As bond buying has been since the Republic’s founding, this litigation effort is a necessary act of economic patriotism.