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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Politics

Politics

Biden argues 14th Amendment not ready to prevent debt default.

U.S. President Joe Biden meets with members of his "Investing in America Cabinet" in the R... U.S. President Joe Biden meets with members of his "Investing in America Cabinet" in the Roosevelt Room at the White House in Washington, U.S., May 5, 2023. REUTERS/Leah Millis
U.S. President Joe Biden meets with members of his "Investing in America Cabinet" in the R... U.S. President Joe Biden meets with members of his "Investing in America Cabinet" in the Roosevelt Room at the White House in Washington, U.S., May 5, 2023. REUTERS/Leah Millis

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On Friday, President Joe Biden indicated he was not ready to invoke the 14th Amendment to prevent the U.S. from defaulting on its obligations on June 1.

“I’ve not gotten there yet,” Biden told MSNBC regarding invoking the Amendment.

The Treasury Department warns the divided U.S. Congress that it may be unable to pay its debts by June 1 if it does not raise the $31.4 trillion debt ceiling.

Some legal experts suggest Biden can invoke the 14th Amendment to keep paying the nation’s bills if Congress doesn’t act.

After the 1861-1865 Civil War, Section Four of the Amendment declared that the “validity of the public debt of the United States… shall not be questioned.” Unfortunately, courts have mostly ignored the provision.

Experts say Biden may use this Amendment to lift the debt ceiling if Congress doesn’t. However, that would likely result in protracted litigation, which might upset financial markets.

A source familiar with the negotiations said the White House and other administration officials considered it but disregarded it as a last-ditch approach unlikely to survive a judicial challenge.

Biden and senior Republicans and Democrats from Congress will meet on Tuesday next week to attempt to settle the three-month debt ceiling dispute and prevent a devastating default before the end of the month.

Biden wants lawmakers to raise the federal government’s self-imposed borrowing limit without conditions. At the same time, Republican House Speaker Kevin McCarthy says his chamber won’t approve any deal that doesn’t cut spending to reduce the deficit.


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