14th Amendment talk on debt limit viewed with extreme caution by Team Biden
The President Biden’s team is approaching the possibility of an escape route from the debt ceiling that relies on the 14th Amendment, with extreme caution. This comes ahead of Tuesday’s crucial meeting with congressional leaders.
Some officials have voiced open concerns about the legal standing and potential financial effects of using the 14th Amendment as a solution to the debt crisis.
By pledging to bypass Congress, there is a desire not to undermine talks with legislators on a short or long-term agreement on the debt limit.
Biden, and other senior officials, are not in favor of the idea. It revolves around the 14th Amendment, which states that the public debt “shall not be queried.”
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A private discussion within the administration has been reported to have raised the idea of using this language to allow Biden unilaterally to continue issuing debt.
Treasury Secretary Janet Yellen said on Sunday that using the 14th Amendment could trigger a constitutional crises. She said lawmakers shouldn’t let it reach that point.
“There’s no other way to protect our economic system and financial system than for Congress to do its job, raise the debt ceiling, and enable us to pay our bill,” Yellen stated on ABC. “We should not reach the point that we have to ask whether the president is allowed to continue to issue debt,” Yellen said on ABC. This would be a crisis of constitutional proportions.
Yellen did not say explicitly that the idea wasn’t being considered, but described it as one of “the not good options” if Congress does not act.
In an interview with MSNBC last Friday, Biden was questioned about the 14th Amendment. He replied: “I haven’t gotten there yet.”
The president has expressed his opposition to any changes to the traditional process of calculating debt ceiling. Biden, when asked in October last year about the possibility of abolishing the entire debt ceiling, called the idea irresponsible.
The debate about whether the 14th Amendment, which deals with citizenship in general and was added after the Civil War to the Constitution, is constitutional has intensified inside the Beltway. This is because the U.S. may default on its debts.
Yellen warned Congress that the U.S. may breach the debt ceiling by early June. This would mean the country defaults if Congress doesn’t act. A default could lead to higher interest rates, job losses, stock market drops, and delays in Social Security payments.
Some administration allies see the 14th Amendment, if Congress fails to act as a possible way out of a crisis that could arise. However, it is not without its consequences.
Mark Zandi is the chief economist of Moody’s Analytics, who is frequently cited by Biden Administration officials. He told senators that in March, a 14th Amendment Declaration “seems like the most viable option,” if the country is on the verge of exceeding the debt ceiling.
Investors will wonder whether the 14th Amendment would be upheld in court and, if it were, what this would mean for the checks and balances of our political system. Zandi testified before a Senate Subcommittee for Economic Policy that despite the constitutional crisis, financial markets and recession would continue to be affected.
The administration is likely to be sensitive to discussing how to completely work around Congress ahead of the meeting between Biden, Speaker Kevin McCarthy(R-Calif.), House Majority Leader Hakeem Jeffreys (D.N.Y.), Senate majority leader Charles Schumer(D.N.Y.), and Senate minority leader Mitch McConnell(R-Ky.).
Biden’s use of the power to raise the debt ceiling would almost certainly lead to litigation. However, the debt ceiling is also now facing legal challenges.
The National Association of Government Employees filed a lawsuit claiming that the debt ceiling was unconstitutional. If the limit were reached, Yellen’s decision on which payments to make first would violate the separation of powers, as she would have to take over the spending authority of Congress.
The White House declined to comment about the lawsuit on Tuesday.
Many legal scholars caution that such a move might not be legal.
Anita Krishnakumar is a Georgetown Law professor who said that Article 1 of the Constitution gives Congress the authority to “borrow money for the United States on credit.”
She said that in 1917 Congress improved this process by giving the Treasury Secretary the power to lend money up to a specific amount without the approval of lawmakers. However, the actual authority to borrow the money rests with Congress.
Krishnakumar explained that just because it is against the Constitution to not pay interest on loan applications (for example), does not mean you can do so by violating another clause.
“If the Congress, in a political game of gamesmanship, decides to not increase the debt until it receives some concessions from President — and this act could potentially cause us to not pay our debt to the public — I don’t think that that threat means you can ignore Article 1 Section 8 which gives Congress power to borrow money.”
Some who once scoffed at the 14th Amendment are now in favor of it as the battles over debt ceilings become more common.
Harvard Law Professor Laurence Tribe had previously opposed the idea. However, he stated that while the overarching questions remain, they are “the wrong ones to ask.”
In an op/ed published in The New York Times, he said: “The question is whether Congress can impose an arbitrarily high dollar limit on the president to force him to comply with its demands after it has passed the bills that led to these debts.”
The president should remind Congress, and the nation that he is bound by his oath to protect and preserve the Constitution in order to prevent the United States from defaulting on debts for first time ever.
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