AMERICA is HURTLing towards the “X-date” of June 1st, when Janet Yellen, the treasury secretary, says the country could run out of money to pay its bills. The solution to which Congress has turned more than 100 times—raising or suspending the debt ceiling, currently $31.381trn—has thus far eluded President Joe Biden and congressional Republicans, who are demanding big spending cuts. Negotiations continue, albeit fitfully, with a growing sense of urgency: Mr Biden is returning home on May 21st from the G7 meeting in Japan, earlier than planned, to push for a deal. Hopes of a breakthrough were dampened on May 19th when negotiators broke off talks.
What if a deal remains elusive? The ever greater polarisation of American politics makes continued intransigence less unthinkable than in past showdowns. Doing nothing, and allowing America to default on its commitments, could cause an economic disaster. Hence the search for a viable Plan B.
One option is to declare the debt ceiling unconstitutional. Section 4 of the 14th Amendment says the “validity” of America’s “public debt…shall not be questioned”. The clause was born of a concern that members of Congress from southern states might refuse to repay Civil War debts incurred in fighting the Confederacy. If all public debts are beyond question, the logic goes, an artificial cap on the federal debt cannot stand. Barack Obama twice considered—but opted against—using this approach when a Republican-controlled House took America to the brink of insolvency.
This time, some Democrats are urging Mr Biden to keep the option on the table. “I think that the language is very explicit in that amendment,” said Dick Durbin, chair of the Senate Judiciary Committee. For Elizabeth Warren, a Democratic senator from Massachusetts, although “the 14th Amendment is not anyone’s first choice”, it is an escape hatch the president should consider if Kevin McCarthy, the House speaker, “is going to push the United States over a cliff”.
The approach has some scholarly backing. Laurence Tribe of Harvard Law School, one of America’s most-cited law professors, has made a case for it in the New York Times and, speaking on MSNBC, advised the president: “There is every reason for you to do your duty under the 14th Amendment.” For Garrett Epps, a law professor at the University of Oregon, the clause prohibits default, “even a little, even for a short while”. A dissenting view comes from Michael McConnell, a conservative former federal judge now at Stanford Law School. He dismisses the idea as “dangerous nonsense” that would “twist the words of the 14th Amendment” to swell presidential power.
Mr Tribe acknowledges “thorny” questions about resorting to the 14th Amendment, such as whether empowering presidents to ignore laws they deem unconstitutional invites “presidential overreach”. Still, he and other scholars believe that—with or without invoking the 14th Amendment—ignoring the debt limit may be the best way for Mr Biden to preserve the separation of powers.
Do less harm
Michael Dorf, a law professor at Cornell University, and Neil Buchanan, an economist and legal scholar at the University of Florida, have long held that a “trilemma” would face presidents deciding what to do once America’s obligations exceed the debt limit. Congress holds the power of the purse, which includes exclusive licence to tax, spend and borrow. If the “X-date” arrives, Messrs Buchanan and Dorf argue, the president would have no choice but to unconstitutionally grab one of those functions from the legislature.
If he abides by the debt limit, Mr Biden would violate his duty to spend funds that Congress has already appropriated. This is especially problematic if he adopts a policy of “prioritisation”—repaying some debts but not others. “If Congress is going to give to the president the discretion to prioritise billions of dollars in payments and non-payments”, Mr Dorf says, “it needs to do so expressly.” Yet even with express authorisation from Congress, it might be unconstitutional for presidents to perform budgetary triage: during the Clinton administration, the Supreme Court struck down the line-item veto, a device that allowed the president to delete specific provisions from budget bills.
Rather than grab such enormous power, the president may be wise to do “the least violence to the constitutional prerogatives of Congress”, as Messrs Buchanan and Dorf have put it, and issue just enough extra debt to pay the bills. This—and not the 14th Amendment—is the main premise of a lawsuit from 75,000 federal workers aiming to protect their paycheques should the X-date arrive.
If Mr Biden turned to such an unprecedented gambit, would it survive legal challenges? Maybe so, says Mr Dorf. The Supreme Court “readily overturns its own precedents”, he observes, and may not put a lot of stock in an “intra-executive precedent” respecting the debt limit. The justices may be especially wary of boxing in a president as he attempts to steer America clear of economic calamity.
How much weight might the White House lend to such scholarly speculation? The legal escape routes must look risky. But they might seem worth trying if Plan A—thrashing out a deal with Congress—proves to be impossible. ■
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