Progressives try to persuade Biden to use the 14th Amendment to resolve debt crisis

WASHINGTON — Progressives are pushing hard for President Joe Biden to take the unprecedented step of invoking the 14th Amendment as a way to avoid financial calamity if the White House and House Speaker Kevin McCarthy do not strike a deal on the debt ceiling in the coming days.

The lawmakers and legal scholars argue that the Reconstruction-era amendment — to ensure debts were paid after the Civil War — trumps the debt limit statute, or the law that sets the dollar amount of how much the U.S. government can borrow to pay its bills.

Section 4 of the amendment states “the validity of the public debt of the United States, authorized by law, including debts incurred … shall not be questioned.”

“The text of the 14th Amendment, which says that the debt of the United States ‘shall not be questioned,’ … nothing questions that more than a default, or frankly, a debt limit that may make it impossible practically to pay the debt of the United States,” Democratic Sen. Sheldon Whitehouse of Rhode Island said Monday on a call with reporters hosted by the left-leaning Roosevelt Institute.

A unilateral action by the president to proceed as though the U.S. has not run out of borrowing authority would not bypass Congress, the chair of the Senate Committee on the Budget and others argue. 

Rather, it would be a choice by the U.S. leader to follow the letter of the 14th Amendment and continue abiding by the numerous spending laws passed by Congress, they argue.

“It’s not ‘How can the Biden administration go around Congress?’ The problem is Congress has legislated contradictory things. They’ve said you must spend this money and also, these are the taxes that you must collect. And also, here’s the debt ceiling,” UCLA law professor Joseph Fishkin argued on the call. 

“A lot of people seem to be assuming that if the administration is kind of stuck in that dilemma where you have to violate one of those statutes, for some reason, the one that has to be violated is the one on spending money,” he continued.

Biden and McCarthy met Monday to continue negotiations but still hadn’t reached an agreement to raise the nation’s borrowing limit.

Administration’s stance

Biden said Sunday that he’s “looking at the 14th Amendment, as to whether or not we have the authority.”

“I think we have the authority. The question is: Could it be done and invoked in time that it could not — would not be appealed and, as a consequence, pass the date in question and still default on the debt. That’s a question that I think is unresolved,” he said during remarks from the G7 summit in Hiroshima, Japan.

Treasury Secretary Janet Yellen hours later on NBC’s “Meet the Press” also expressed concern about whether the administration had time to invoke the amendment as a solution.

“It doesn’t seem like something that could be appropriately used in these circumstances, given the legal uncertainty around it, and given the tight time frame we’re on. So my devout hope is that Congress will raise the debt ceiling,” she told host Chuck Todd.

Weeks earlier at the White House, the president said he was “considering” the amendment but “the problem is, it would have to be litigated, and in the meantime without an extension, the (situation) would still end up in the same place.”

Proponents of using the amendment said they responded “quizzically” to the administration’s concern about time.

“You know, really, it doesn’t take any time. You actually just keep going with spending the money Congress has appropriated, and then there will be fights and litigation after that,” Fishkin said, adding that the quicker a decision is made, the better chances are for any “cloud” over the market to be “lifted.”

Legal questions

But a question remains over how the stock market would react to even a whiff of the courts being the ultimate decider on the 14th Amendment.

“Some people assume that the president’s power to issue new debt would be resolved legally by the Supreme Court, but it would be resolved, for practical purposes, by the bond markets before the courts could even act. And the resolution would not be a happy one,” Michael McConnell, director of the Constitutional Law Center at Stanford Law School, argued in a New York Times op-ed this month.

McConnell wrote that the idea that the president could preempt Congress’s power of the purse as “far-fetched.”

“(Section 4) does not make it unconstitutional for the United States to run out of money. Nice idea, but impossible. Section 4 prevents the only institution of government that could deny the validity of the debt — namely, Congress — from doing so,” McConnell wrote. “For the United States to fail to pay interest or principal on its debt would be financially catastrophic, but it would not affect the validity of the debt.”

Another question proponents of the 14th Amendment are asking: Who could challenge the president in court for continuing to pay the nation’s bills?

“No one really has standing to challenge spending money that was appropriated (for) other people,” Fishkin argued.

However, he predicts a flood of lawsuits would follow a default, which would have wide-ranging consequences for anyone who relies on the federal government for income, including Social Security recipients, disabled veterans, military contractors and so on.

The National Association of Government Employees, which represents 75,000 federal employees under the umbrella Service Employees International Union, has already filed suit in a Massachusetts federal court on behalf of members who will lose income and not be able to pay union dues as a result of a default.

The group filed suit, in part, on the grounds that allowing the Treasury to prioritize certain payments over others during a default violates the separation of powers. In other words, Congress makes the spending decisions, not the president.

A federal judge has scheduled a hearing for May 31.

Progressives’ push

Dozens of progressive House Democrats sent a letter to Biden May 19 urging him to invoke the 14th Amendment.

“If the options are either agreeing to major cuts to domestic priorities under the Republican threat of destroying the economy and moving forward to honor America’s debts, we join prominent legal scholars, economists, former budget officials, and a former president in advocating for invoking the 14th Amendment of the Constitution,” lawmakers wrote. 

“Not only does the debt ceiling run counter to the Constitution’s mandate that the validity of America’s public debt shall not be questioned, it contradicts the appropriations law that requires the Treasury to issue debt for the funding you are obligated to administer at Congress’s direction,” the letter continued.

Independent Vermont Sen. Bernie Sanders and 10 Senate Democrats also sent a letter to the president advocating for unilateral action. Those who signed it included Whitehouse and Tina Smith of Minnesota, Jeff Merkley of Oregon, Jack Reed of Rhode Island and John Fetterman of Pennsylvania.

“Republicans’ unwillingness to consider one penny in new revenue from the wealthy and large corporations, along with their diminishment of the disastrous consequences of default, have made it seemingly impossible to enact a bipartisan budget deal at this time,” wrote the senators, who sent the letter May 18. “We write to urgently request that you prepare to exercise your authority under the 14th Amendment of the Constitution.”

Not a new idea

Discussion of invoking the 14th Amendment has entered the national conversation in prior years as Congress and previous administrations edged toward the fiscal cliff.

Following the U.S. nearly defaulting in 2011, the idea escalated when Cornell Law professor Michael Dorf and University of  Florida Levin College of Law professor Neil Buchanan argued that the president “ignoring” the debt ceiling is the “least unconstitutional” course of action.

However, previous administrations and legal scholars have rejected the idea.

Biden said on May 9 once the current debt situation is addressed, he wants to take a look “months down the road” at what a court would say on whether a president can use those provisions to address the debt ceiling without action by Congress.