{"id":574321,"date":"2023-05-13T13:00:00","date_gmt":"2023-05-13T10:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment\/"},"modified":"2023-05-13T13:00:00","modified_gmt":"2023-05-13T10:00:00","slug":"debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment\/","title":{"rendered":"#Debt ceiling: Biden faces legal risks, financial peril with 14th Amendment"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6aedb2cd86ce1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6aedb2cd86ce1\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment\/#Legal_questions_loom_over_strategy\" >Legal questions loom over strategy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment\/#Financial_fallout\" >Financial fallout<\/a><\/li><\/ul><\/nav><\/div>\n<div>\n<p>The unprecedented step of President Biden invoking the 14th Amendment to avoid a national default would likely lead to legal uncertainty hanging over the already-fragile financial system.<\/p>\n<p>Markets are concerned about a default, which could come as soon as June 1 if Biden and lawmakers can\u2019t come to an agreement. But if Biden chose to act unilaterally instead, the financial system could take a hit with the risk of a default being tied up in the courts.<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p><strong>What to know:<\/strong> How the 14th Amendment could solve the debt crisis<\/p>\n<p>The president on Tuesday said there have been discussions about whether or not the 14th Amendment can be invoked to avert a default, adding, \u201cI don\u2019t think that solves our problem now. I think that only solves your problem if, once the court has ruled that it does <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ly for future endeavors.\u201d<\/p>\n<p>If he acted unilaterally, Biden could be sued by Treasury bondholders awaiting debt payments from the U.S. Republican lawmakers could also sue Biden, arguing that he violated Congress\u2019s control over federal spending and taxation by ignoring the debt limit.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Legal_questions_loom_over_strategy\"><\/span><strong>Legal questions loom over strategy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1400\" height=\"787\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?w=900\" alt=\"\" class=\"wp-image-3949548\" srcset=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg 1400w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=160,90 160w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=300,169 300w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=768,432 768w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=1280,720 1280w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=645,363 645w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=320,180 320w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=256,144 256w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=512,288 512w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=640,360 640w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=876,492 876w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=960,540 960w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/04\/supremecourt_032223_Getty.jpg?resize=50,28 50w\" sizes=\"auto, (max-width: 899px) 100vw, 876px\"><figcaption class=\"wp-element-caption\"><em><sub>The US Supreme Court in Washington, DC, on March 22, 2023. (Photo by Stefani Reynolds \/ AFP via Getty Images)<\/sub><\/em><\/figcaption><\/figure>\n<p>The legal argument hinges on language in a clause stating that U.S. sovereign debt \u201cshall not be questioned.\u201d<\/p>\n<p> Lawmakers adopted the amendment after the Civil War, and the section in question relates to quelling future insurrections. Even so, some legal scholars believe it also gives the president power to order the Treasury to keep borrowing money and ignore the debt limit.<\/p>\n<p><strong>Treading carefully:<\/strong> 14th Amendment talk on debt limit viewed with extreme caution by Team Biden<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>David Super, a constitutional law expert at Georgetown University, said that if the president thinks the debt limit is unconstitutional, he can invoke the 14th Amendment.<\/p>\n<p>He warned, though, of serious repercussions from the unprecedented step.<\/p>\n<p>\u201cGiven how polarized the country is and how determined the Republicans are to use the debt limit for extortion, they surely would arrange for somebody to sue,\u201d Super said.<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>\u201cIf there was someone who was found to have standing to sue, then the courts could determine whether the president\u2019s determination is correct and could conceivably order him to cease making payments,\u201d he added. \u201cBut that would be a very momentous choice and likely wouldn\u2019t happen quickly.\u201d<\/p>\n<p>Jonathan Turley, a legal scholar at George Washington University, warned that \u201cany litigation would come with potentially high political and legal costs.\u201d<\/p>\n<p>\u201cThe House has the constitutional control of the purse and is using that authority to seek budget cuts in future expenditures, including some not previously approved by Congress,\u201d Turley said.<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p><strong>Q+A:<\/strong> 10 questions answered on the debt limit<\/p>\n<p>Senior White House officials\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2023\/05\/08\/debt-ceiling-14th-amendment-biden\/\">reportedly<\/a>\u00a0view the idea of Biden acting unilaterally as an emergency measure of last resort. Treasury Secretary Janet Yellen warned invoking the 14th Amendment to avoid a default could trigger a \u201cconstitutional crisis.\u201d<\/p>\n<p>The situation puts the Biden administration in a legal bind. The debt limit appears to clash with both the 14th Amendment and laws mandating that the federal government make certain expenditures such as <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security payments.<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<p>While other ideas \u2014 such as minting a trillion-dollar coin  \u2014 have been floated, Biden has publicly dismissed them.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Financial_fallout\"><\/span><strong>Financial fallout<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1400\" height=\"787\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?w=900\" alt=\"\" class=\"wp-image-3994683\" srcset=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg 1400w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=160,90 160w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=300,169 300w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=768,432 768w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=1280,720 1280w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=645,363 645w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=320,180 320w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=256,144 256w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=512,288 512w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=640,360 640w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=876,492 876w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=960,540 960w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/stockexchange_050323_ap-seth-wenig_debtlimit.jpg?resize=50,28 50w\" sizes=\"auto, (max-width: 899px) 100vw, 876px\"><figcaption class=\"wp-element-caption\"><em><sub>Traders work on the floor at the New York Stock Exchange in New York, Wednesday, May 3, 2023.  Stocks are drifting ahead of what Wall Street hopes will be the last hike to interest rates for a long time.  (AP Photo\/Seth Wenig)<\/sub><\/em><\/figcaption><\/figure>\n<p>The Biden administration is exploring all possible avenues to avoid a catastrophic default, which would undermine global faith in U.S. debt, drive up borrowing costs for Americans and prompt millions of job losses,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.moodysanalytics.com\/-\/media\/article\/2023\/going-down-the-debt-limit-rabbit-hole.pdf\">according to an analysis<\/a>\u00a0from Moody\u2019s Analytics.<\/p>\n<p>The U.S. Treasury market is the backbone of the financial system, as all assets are compared to historically risk-free Treasury bonds.<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p><strong>Trouble ahead:<\/strong> Dimon warns markets will panic as possible default nears<\/p>\n<p>But experts said that the 14th Amendment route \u2014 in which the Treasury Department continues to issue debt beyond the statutory limit \u2014 poses its own risks to financial stability.<\/p>\n<p>During an extended period of legal uncertainty, buyers might view newly-issued Treasury bonds as riskier or illegitimate, potentially sending interest rates soaring. The political instability could have a similar effect of driving investors away from the U.S. market in the long run, experts said.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\"><\/aside>\n<p>If a court issued an injunction preventing the federal government from issuing new debt or invalidating bonds issued after the limit was breached, the nation could fall into default anyway.\u00a0<\/p>\n<p>\u201cOne of the great virtues of U.S. government debt is that there\u2019s no credit risk. If that debt is invalidated, suddenly you\u2019ve introduced it,\u201d said Brian Knight, senior research fellow at the Mercatus Center at George Mason University.\u00a0<\/p>\n<p>On the other hand, some experts believe that if the Treasury Department were allowed to issue debts beyond the limit, it would find plenty of buyers interested in securing higher interest rates until the crisis is resolved.\u00a0<\/p>\n<p>\u201cThe debt that would be issued to bridge this period would end up being very, very short term debt,\u201d said\u00a0Daniel Alpert, managing partner of Westwood Capital.\u00a0\u201cFirst, you\u2019ll see a spike in rates, but when people actually start getting paid, that will calm down.\u201d<\/p>\n<p>The financial system is still reeling from three of the four largest bank collapses in U.S. history. Banks are sitting on massive unrealized losses on Treasury bonds that saw their value tank when the Federal Reserve aggressively hiked interest rates.<\/p>\n<p>Opponents of the debt limit see the 14th Amendment as a long-term solution to credit risk that arises every time the GOP threatens to block an increase. Prominent bankers including JPMorgan Chase CEO Jamie Dimon have called on Congress to abolish the debt ceiling.<\/p>\n<p>But the constitutionality of the debt limit hasn\u2019t been challenged in court, until recently.\u00a0<\/p>\n<p>On Monday, the\u00a0National Association of Government Employees sued to end the debt limit, stating that the statute gives the president \u201cunchecked discretion to cancel or curtail the operations of government approved by Congress without the approval of Congress.\u201d<\/p>\n<p>The union, which represents 75,000 federal government workers, cited the 14th Amendment in its complaint.\u00a0<\/p>\n<p>\u201cThis litigation is both an effort to protect our members from illegal furloughs and to correct an unconstitutional statute that frequently creates uncertainty and anxiety for millions of Americans,\u201d David Holway, the union\u2019s president, said in a statement.\u00a0<\/p>\n<p>The lawsuit is aimed at Biden and Yellen. If a court ruled in the union\u2019s favor, the Biden administration could simply choose not to appeal, legal experts said.<\/p>\n<\/div>\n<p>Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/homenews\/4002251-debt-ceiling-biden-faces-legal-risks-financial-peril-with-14th-amendment\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The unprecedented step of President Biden invoking the 14th Amendment to avoid a national default would likely lead to legal uncertainty hanging over the already-fragile financial system. Markets are concerned about a default, which could come as soon as June 1 if Biden and lawmakers can\u2019t come to an agreement. But if Biden chose to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":574322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/6452c652b4d2a1.92682384-e1683925121331.jpeg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[134417,134343,134353,90482,115,4965],"class_list":["post-574321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-blog-briefing-room","tag-campaign","tag-court-battles","tag-house","tag-news","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/574321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=574321"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/574321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/574322"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=574321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=574321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=574321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}