Topline
President Joe Biden said Tuesday the White House is “considering” invoking a Civil War-era constitutional amendment as a potential solution to the debt ceiling showdown, marking the first time the president has acknowledged the possibility of declaring the debt ceiling unconstitutional and avoiding a federal default without action from Congress, which is widely considered a long shot.
President Joe Biden speaks to the press at the White House in Washington on Tuesday. (Photo by … [+]
Key Facts
Biden told reporters at a news conference the Fourteenth Amendment option is on the table, before adding: “I don’t think it solves our problem now.”
The president said the most plausible outcome of debt ceiling negotiations between top Democrats and Republicans is a deal for Congress to raise the borrowing limit—which Biden would then sign into law.
A clause in the 1868 amendment states “the validity of the public debt . . . shall not be questioned,” which White House lawyers have reportedly been reviewing to potentially argue the entire concept of a national debt limit is unconstitutional—though the Washington Post reported Biden staffers are concerned about how markets would react to the legally untested idea.
Contra
Biden expressed doubts over whether invoking the Fourteenth Amendment makes sense to end the ongoing showdown since “it would have to be litigated.” He added: “In the meantime, without an extension, it would still end up in the same place.”
What To Watch For
Even if Congress agrees to raise the debt limit, Biden said the White House might later pursue a Fourteenth Amendment case to end the need for future debt ceiling negotiations. “I’ll be very blunt with you—when we get by this, I’m thinking about taking a look at, months down the road, to see what the court would say about whether or not it does work,” Biden said.
Key Background
Biden’s comments came after a meeting with congressional leaders from both parties, as the nation teeters closer to a financial cliff. Treasury Secretary Janet Yellen recently warned that the country could be unable to pay its bills as early as June 1 if Congress does not vote to raise the debt limit, which economists warn could swiftly plunge the nation into a recession. The White House has claimed Republicans are holding the nation hostage by demanding spending cuts in exchange for raising the debt ceiling, saying the GOP’s demands for spending cuts should be discussed separately. But House Speaker Kevin McCarthy (R-Calif.) has repeatedly said spending cuts are mandatory in any bill raising the debt limit—leaving it unclear where the two sides will find common ground for a solution.
Further Reading
Civil War-Era Amendment? These Long-Shot Proposals Could End The Debt Ceiling Battle (Forbes)
Here’s Why The Debt Limit Matters—And How An Accidental Default Could Spark A Recession (Forbes)
Yellen Urges Congress To Raise Debt Limit Immediately, Warning U.S. Could Run Out Of Money By June (Forbes)
Source: https://www.forbes.com/sites/nicholasreimann/2023/05/09/biden-considering-using-14th-amendment-to-end-debt-ceiling-standoff-without-congressional-action/