14th Amendment Issues Persist Despite Debt Limitation Agreement

President Joe Biden delivers remarks on the deal with House Republicans to raise the debt ceiling while cutting and capping some government spending, at the White House in Washington on Sunday, May 28, 2023. (Pete Marovich/ The New York Times)

President Joe Biden delivers remarks on the deal with House Republicans to raise the debt ceiling while cutting and capping some government spending, at the White House in Washington on Sunday, May 28, 2023. (Pete Marovich/ The New York Times)

WASHINGTON — The deal President Joe Biden reached with House Republicans to raise the debt ceiling is aimed at averting a catastrophic default on the nation’s debt. But the precarious situation that has brought the United States days after it was unable to pay its bills has renewed calls for the Biden administration to stop the debt ceiling from continuing to be a political tool.

After saying this year that he would not negotiate spending cuts in exchange for a debt ceiling increase, Biden did just that. The deal includes spending caps and slashes some of the president’s policy priorities in exchange for suspending the debt ceiling for two years.

The bill, which the House is expected to put to a vote on Wednesday, reopened the door to the debt limit being a perpetual leverage point that allows the minority party — in this case, Republicans — to use the debt limit. borrowing to obtain legislative concessions.

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This has raised questions about whether there is a way to prevent another episode like this – by abolishing the debt ceiling or using the 14th Amendment to make the legal limit unconstitutional.

Biden has opted not to challenge the debt ceiling’s constitutionality this time around, but suggested last week he had the power to do so and hinted he might try to use it instead. coming.

“My hope and intention is that when we fix this issue, I will find some justification to take it to court to see whether or not the 14th Amendment is, in fact, something that might stop it,” Biden said. at a press conference in Japan after a gathering of leaders of the Group of 7 nations.

The president said Sunday that any discussion of whether to invoke the 14th Amendment was not imminent. “It’s another day,” he said.

Invoking the 14th Amendment has been touted as a potential solution to avoid future fights over the debt limit, as it includes a clause stating that “the validity of the public debt of the United States, authorized by law, including debts contracted for the payment of pensions and bonuses for services in the suppression of the insurrection or the rebellion, will not be called into question.

Some legal scholars argue that this clause trumps the statutory borrowing limit, which is set by Congress and can only be waived or suspended with legislative approval.

The Biden administration studied whether it could use the 14th Amendment to circumvent Congress on the grounds that it would be a violation of law if the federal government did not pay its bills on time.

When and how Biden might try to carry out this legal test could affect how his legislative agenda holds up in a potential second term and how future presidents navigate budget negotiations when a minority party appears willing to risk default.

The Justice Department signaled this week that the Biden administration preferred to keep its legal thinking on the matter private.

This month, the National Association of Government Employees union filed a lawsuit in Boston district court challenging the constitutionality of the debt ceiling law and seeking to prevent the federal government from suspending certain operations. if the debt ceiling is exceeded.

A federal judge had asked the Justice Department to respond to the lawsuit by Tuesday and explain in writing its position on whether the 14th Amendment required the president to continue borrowing to pay his bills, regardless of the legal debt limit.

However, after the settlement was reached, attorneys for the department requested that a hearing scheduled for Wednesday be postponed.

The judge, Richard Stearns, agreed to postpone it indefinitely and allowed the Biden administration to avoid exposing its legal justification.

The move disappointed some progressive groups who pushed the administration to invoke the 14th Amendment to defuse the fight against the debt limit.

“The question of whether and how the debt ceiling can be legally enforced is relevant not only to the current mess, but also to the one that a Biden-McCarthy deal has put in place for early 2025,” said Liberal Party Leader Jeff Hauser. Revolving door project. “We will not end the recurring hostage-taking until the courts determine that the paradoxes inherent in the debt ceiling law and the clear implications of the 14th Amendment to the Constitution and the presentation clause render the debt ceiling law inapplicable.”

On Tuesday, Rep. Jason Smith, R-Mo., chairman of the House Ways and Means Committee, made clear his party plans to continue to use the borrowing limit as leverage. “The debt ceiling should be the mechanism that forces the parties at the table to negotiate ways to address Washington’s spending habits,” he said.

Although they have studied the merits of invoking the 14th Amendment, Biden administration officials have expressed concern that using it to circumvent Congress would lead to a legal fight that could sow uncertainty, shake the financial markets and the economy, even if the federal government seemed to pay its debts.

This month, Treasury Secretary Janet Yellen described invoking the 14th Amendment to ignore the debt limit as “legally questionable”.

Last week, Wally Adeyemo, the deputy treasury secretary, told CNN that the Biden administration has no intention of invoking the 14th Amendment: “I think the president and the secretary are clear that that it won’t solve our problems now.”

Shalanda Young, the White House budget director, objected Tuesday when asked to scrap the debt ceiling and said her only goal was to get the bill to Biden’s office and avoid payment default.

A White House spokesperson declined to comment on how Biden might test the 14th Amendment issue in the wake of the debt limit fight.

Laurence H. Tribe, a law professor emeritus at Harvard University, said it was too late for Biden to seek advice from the courts even though the administration issued a legal opinion through the Office of General Counsel. arguing that the debt limit was unconstitutional.

“I don’t think there’s a court solution ahead of us, because the only time the courts can step in is when it’s a real problem,” Tribe said.

Tribe, who argued that Biden should tell Congress that the United States will pay all of its bills as they come due even if the Treasury Department has to borrow more than Congress has said, suggested it is now up to lawmakers to take action to iron out the contradictions between their authorizing expenditures and then setting a limit on how much the government can borrow to pay those expenditures.

Although this impasse over the debt limit appears to be resolved, future fights loom. The deal only suspends the borrowing limit until January 2025, leaving open the possibility that Biden could face the threat of defaulting sooner if he wins a second term.

For this reason, the union of state employees intends to pursue its case and give the courts the opportunity to examine its merits.

“This weekend’s announcement of a debt ceiling agreement does not resolve our concerns for our federal employee members, nor our federal lawsuit,” said union president David Holway. “If the deal becomes law before the June 5 deadline, Congress will have only kicked in the road, setting us up for another crisis in the near future.”

He added, “As long as the Debt Limitation Act remains in place, this game of political football will continue to threaten our members and the country.”

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