President Joe Biden said on Friday that he has not yet made a decision about invoking the 14th Amendment to the U.S. Constitution to avoid a possible debt default, but for the first time suggested that he has not ruled out the option. The divided U.S. Congress has until June 1 to raise the federal government’s $31.4 trillion debt ceiling, or the Treasury Department may be unable to pay its bills. If Congress fails to act, some legal experts say Biden has another option to avert a crisis by invoking the 14th Amendment.
The 14th Amendment, adopted after the Civil War, states that the “validity of the public debt of the United States…shall not be questioned.” However, the clause has not been tested in the courts. Some experts have suggested that Biden could use this amendment to raise the debt ceiling on his own if Congress does not act. But this could lead to prolonged legal wrangling, which could unsettle financial markets.
White House and other administration officials have examined the possibility of invoking the 14th Amendment, but many have dismissed it as a last-ditch solution that is unlikely to survive a court challenge, according to a person briefed on those discussions.
Meanwhile, Republicans have argued that Democrats should shoulder the responsibility for raising the debt ceiling, as they have the majority in both chambers of Congress and control the White House. However, Democrats have countered that the debt ceiling is a routine matter that should not be politicized, as it involves paying for obligations already incurred by previous administrations.
If the U.S. does default on its debts, it could have far-reaching consequences for the global economy. The dollar could lose its status as the world’s reserve currency, interest rates could rise, and financial markets could be destabilized. A default could also harm the U.S. credit rating, making it more expensive for the government to borrow money in the future.
In conclusion, the U.S. is facing a looming debt crisis, and the clock is ticking. While Biden has not ruled out the 14th Amendment option, it remains to be seen whether he will ultimately choose to use it. The debt ceiling issue is likely to remain a political football in the coming weeks, with both parties trying to avoid blame for a possible default.