The Debt Ceiling Standoff: Biden Considers Invoking 14th Amendment to Avoid Default
President Joe Biden has been considering using the 14th Amendment to circumvent the debt ceiling.[0] The 14th Amendment to the US Constitution states that “the validity of the public debt, authorized by law…shall not be questioned,” and some legal scholars argue that this clause gives the Treasury Department the ability to keep borrowing money past the current $31.4 trillion debt limit that requires congressional approval to raise or lift.[1] At least 11 Senate Democrats are urging Biden to invoke his constitutional authority under the 14th Amendment to raise the nation's debt limit without having to go through Congress.[2] However, Republicans in the House have called for sharp government spending cuts, rejecting the alternatives proposed by the White House, which has called for closing tax loopholes and more limited spending reductions.[3] Historically, former presidents and congressional leaders have achieved agreements to increase the nation's debt ceiling through compromise, with neither party receiving their entire desired outcome, a total of 78 occasions.[2]
Biden recently met with Republican House Speaker Kevin McCarthy, agreeing to have their negotiators get together again later Sunday and that they would meet in person Monday. During Biden's visit to Japan, his representatives held discussions with prominent Republicans, but no consensus was reached. Both parties remained resolute in their stances regarding government expenditure for the upcoming fiscal year commencing in October.[4] Janet Yellen, the Secretary of the Treasury, has issued a warning that the United States could exhaust its borrowing capacity by June 1st, giving negotiators a limited window of time to come to a resolution.
The act of brinksmanship may come with a high price soon.[4] Treasury officials say the US will be unable to pay its bills by as early as June 1 unless Congress raises the $31.4tn debt ceiling.[4] With congressional leaders unable to reach a compromise, it is expected that the US will run out of money to pay its bills on June 1. In recent days, the White House stated that Republicans are not willing to negotiate sufficiently from their initial debt ceiling proposal. The proposal was passed by the House, but the Democratic-controlled Senate rejected it outright.
Biden has insisted that he will not agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for nearly one million Americans.[5] He has also criticized “MAGA Republicans in the House” for attempting to benefit politically from a US debt default because it would significantly harm the economy, which he said is “the one way to make sure Biden's not reelected.”[5] Despite the party's insistence that a slew of cuts is the only way to clamp down on Washington's spending, not all areas of the budget are reportedly on the table.[6] There's little appetite among Republicans for any cuts to the defense side of the budget, which makes for a ludicrous mismatch between their stated reasons for this standoff and where their priorities lie.[6]
The House GOP's Limit Save and Growth Act was introduced with an initial proposal from Republicans, which suggested setting a maximum limit for discretionary spending at FY 2022 levels for the upcoming fiscal year, and then restricting any further increase to a maximum of 1%. In April, the GOP's proposition was approved, which entails a reduction in discretionary spending up to the levels of 2022, followed by a 1% limitation on any future increments. House Republican negotiators declined an offer from the White House to freeze government spending in the 2024 budget as part of a deal to raise the debt ceiling.
To discuss a way forward, Biden convened a meeting with McCarthy, Hakeem Jeffries (the House Democratic Leader from New York), Chuck Schumer (the Senate Majority Leader from New York), and Mitch McConnell (the Senate Minority Leader from Kentucky). Although the group was unable to come to an agreement, discussions at the staff level are currently ongoing in order to prevent default.[7] Despite the ongoing negotiations, the US is running out of time to resolve the debt ceiling issue, and the consequences of a default could be severe.[8]
0. “Biden considers invoking 14th Amendment to fend off looming debt ceiling crisis” The News Journal, 21 May. 2023, https://www.delawareonline.com/story/news/2023/05/21/president-biden-14th-amendment-address-debt-ceiling/70240926007/
1. “Congressional Democrats beg Biden to nullify their existence” The Hill, 20 May. 2023, https://thehill.com/opinion/white-house/4012134-congressional-democrats-beg-biden-to-nullify-their-existence
2. “What to Know About the History of the Debt Ceiling” TIME, 18 May. 2023, https://time.com/6281003/debt-ceiling-history
3. “Senate Democrat calls potential for debt default a ‘manufactured crisis’” The Hill, 21 May. 2023, https://thehill.com/homenews/senate/4014417-senate-democrat-calls-potential-for-debt-default-a-manufactured-crisis
4. “Biden says he won't agree to debt ceiling deal solely on Republican terms as he leaves G7 summit” NBC News, 21 May. 2023, https://www.nbcnews.com/politics/politics-news/biden-says-wont-agree-debt-ceiling-deal-solely-republican-terms-leaves-rcna85454
5. “Biden Blames ‘MAGA Republicans’ for Breakdown in Debt Ceiling Talks” Rolling Stone, 21 May. 2023, https://www.rollingstone.com/politics/politics-news/biden-blames-maga-debt-ceiling-explainer-1234739178/
6. “The military budget is massive — and safe from the GOP's debt ceiling cuts” MSNBC, 17 May. 2023, https://www.msnbc.com/opinion/msnbc-opinion/gop-debt-ceiling-cuts-military-budget-rcna84459
7. “Nine questions you may have about the debt ceiling” NPR, 15 May. 2023, https://www.npr.org/2023/05/15/1175733139/debt-ceiling
8. “Debt-Ceiling News: Biden to Talk With Speaker Kevin McCarthy” Bloomberg, 21 May. 2023, https://www.bloomberg.com/news/articles/2023-05-21/biden-to-speak-with-mccarthy-on-stalled-debt-limit-talks
