As the fears of default loom large on the world’s largest economy, US President Joe Biden has said that the circumstances are not at the point where the 14th Amendment needed to be invoked to avoid the country defaulting on its loans.
It is implied from his comments that the Biden Administration has retained the option to invoke the amendment were the country to go into default on June 1.
Joe Biden while talking in an interview with MSNBC said: “I’ve not gotten there yet.”
There is not much time left for the polarized Congress to raise the debt ceiling of $31.4 trillion with the warning coming from the Treasury Department that it could not be able to pay its loans back as soon as June 1.
If Congress fails to act, some legal experts say, Biden, 80, has another option to avert a crisis: “Invoke the 14th Amendment to the US Constitution to ensure the United States can continue to pay its bills.”
The Fourth Amendment of the US Constitution adopted after the 1861-1865 Civil War, notes that the “validity of the public debt of the United States … shall not be questioned.”
But the clause has been largely unaddressed by the courts.
Experts have recommended that Biden could invoke this amendment to raise the debt ceiling on his own if Congress does not act. That would almost certainly lead to prolonged legal wrangling, which could unsettle financial markets
A person briefed on those discussions was quoted by Reuters as saying: White House and other administration officials have examined the possibility but many have dismissed it as a last-ditch solution unlikely to survive a court challenge.
Top Republicans and Biden alongside other Democrats from Congress will discuss Tuesday next week to try to put an end to the three-month standoff over the federal debt ceiling and prevent a crippling default before the end of the month.
The positions maintained by both sides are: Biden is calling on lawmakers to raise the federal government’s self-imposed borrowing limit without conditions, and Republican House Speaker Kevin McCarthy says his chamber will not approve any deal that doesn’t cut spending to address the nation’s growing budget deficit.