While United States President Joe Biden and the Republicans fight about raising the
Invoking the 14th Amendment would put an end to the debt limit and allow the Treasury to continue making its payments in full.
The Republicans would likely challenge such a move in the Supreme Court, leading to a constitutional crisis and weeks of uncertainty while the matter was looked at.
“We’re talking about at least a month, and that means a month of volatility, uncertainty and hit to the economy that would put the US under a knife’s edge for a recession,” Yaros said.
“We don’t need another shock, especially one like this,” he added.
Were the court to rule in favour of the White House invoking the 14th Amendment, it would effectively end the debt limit as we know it. In the process, it would also end the use of the debt ceiling as political leverage forever, Yaros said.
Such a move would also make the battle over financing the government through fiscal 2024 “much more contentious” and raise the risk of a prolonged government shutdown in the fall, Yaros said.
Is it legal?
It depends on who you ask.
Some experts say such a move would actually be unconstitutional as Congress holds the power to spend.
“The Biden administration even flirting with these ideas really suggests that the administration’s fidelity to the Constitution is questionable or opportunistic,” Philip Wallach, a senior fellow who focuses on regulatory-policy issues at the American Enterprise Institute, a centre-right think tank based in Washington, DC, told the Wall Street Journal.
Anna Gelpern, a law professor at Georgetown Law, disagrees.
“The Constitution requires the president to perform Congressional promises. If he must borrow to perform, so be it. The 14th Amendment shields the new debt from court challenges to its validity,” Gelpern told Al Jazeera.
The ongoing negotiations between the Democrats and the Republicans are about future budgets – they do not and cannot cut spending or raise revenues to pay for outstanding promises, she pointed out.
“People who are saying, pay this but don’t pay that are being disingenuous. Where would they have the president stop when they hit the ceiling – pay Treasury securities but not flood insurance? [This argument] threatens public credit to gin up political theatre. It is not about the Congress’s borrowing power, which is not supposed to be used to undermine the credit of the United States … This is precisely the sort of political sabotage that the 14th Amendment drafters were concerned about.”