By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > Markets > Stocks > Explainer-Could Biden use the 14th Amendment to raise the US debt ceiling?
Stocks

Explainer-Could Biden use the 14th Amendment to raise the US debt ceiling?

News Room
Last updated: 2023/05/21 at 11:31 AM
By News Room
Share
5 Min Read
SHARE
2/2

© Reuters. FILE PHOTO: U.S. President Joe Biden delivers remarks on “preventing a first-ever government default” during a brief event prior to his departure for Japan, in the Roosevelt Room at the White House in Washington, U.S., May 17, 2023. REUTERS/Kevin Lamarque

2/2

By Andy Sullivan and Jacqueline Thomsen

WASHINGTON (Reuters) – President Joe Biden on Sunday said he believes he has the legal right to invoke the 14th Amendment of the U.S. Constitution to raise the federal government’s $31.4 trillion debt ceiling but does not have the time to do so.

Some fellow Democrats have been urging him to try to use that untested legal theory to bypass the Republican-controlled House of Representatives and raise the borrowing limit.

WHAT IS THE 14TH AMENDMENT?

Section Four of 14th Amendment, adopted after the 1861-1865 Civil War, states that the “validity of the public debt of the United States … shall not be questioned.”

Historians say that aimed to ensure the federal government would not repudiate its debts, as some former Confederate states had done.

But the clause has been largely unaddressed by the courts, and legal experts disagree about what it requires from Congress and the presidency.

Some, like Cornell University law professor Michael Dorf, say the “least unconstitutional” option would be for Biden to act on his own to protect the integrity of the national debt.

“That would mean borrowing money,” he said.

Any action by Biden would surely prompt a lawsuit.

WHO COULD SUE OVER THE DEBT CEILING?

It’s not clear who could bring a case. It could be difficult for any plaintiff to prove they had been harmed by the action — a legal concept known as “standing.”

The U.S. Supreme Court ruled in 1997 that individual lawmakers do not have standing to file such lawsuits, but Congress could potentially vote to say that it had been collectively harmed.

The high court could also opt to hear a challenge in the interest of quickly resolving the issue, as they have done with Biden’s move to cancel $430 billion in student debt.

Any case would be in uncharted legal territory.

The Supreme Court has ruled on the public-debt clause only once, in a 1935 challenge to Democratic President Franklin Roosevelt’s decision to take the United States off the gold standard. The court ruled that the plaintiff, a bondholder, did not have standing to file the case.

Biden and Congress, meanwhile, would be under tremendous pressure to resolve the issue quickly – meaning any case might be irrelevant before it reaches the court.

WHERE DOES THE WHITE HOUSE STAND ON THE 14TH AMENDMENT?

The last time this was a front-burner issue in Washington in 2011 and 2013, prominent Democrats like former President Bill Clinton urged then-President Barack Obama to invoke the 14th Amendment. But White House aides said they did not believe they had the legal authority to do so.

Biden on Sunday said he believed he did, but there was not enough time for that strategy to pay off before June 1, when the Treasury Department has warned that the government may not be able to pay all its bills.

Treasury Secretary Janet Yellen sounded a similar note on Sunday.

HOW WOULD MARKETS REACT IF BIDEN USES THE 14TH AMENDMENT?

Administration officials and economists have said that a default triggered by a debt-ceiling breach would roil the world financial system and plunge the United States into recession.

That immediate catastrophe might be avoided if Biden invoked the 14th Amendment.

But investors nevertheless could be spooked by the drama and demand higher interest rates to reflect the increased risk while the legal issues played out.

Read the full article here

News Room May 21, 2023 May 21, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Elon Musk wants to launch a new political party. Here’s why some people think it won’t work.

Watch full video on YouTube

Why Even High Earners Are Living Paycheck To Paycheck

Watch full video on YouTube

Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

This article was written byFollowThe Investment Doctor is a financial writer, highlighting…

“Invest in what you know.”

Watch full video on YouTube

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

The last time Tom Hayes had his picture taken at London’s Southwark…

- Advertisement -
Ad imageAd image

You Might Also Like

Stocks

CPS reports solid 2023 performance, eyes future growth By Investing.com

By News Room
Stocks

Niu Technologies faces mixed results in Q4 2023 By Investing.com

By News Room
Stocks

Exagen Inc. reports strong 2023 revenue growth By Investing.com

By News Room
Stocks

Legacy Housing reports mixed results amid sales decline By Investing.com

By News Room
Stocks

Harmony Biosciences exec sells over $383k in stock By Investing.com

By News Room
Stocks

Biofrontera posts record revenue and outlines growth plans By Investing.com

By News Room
Stocks

Granite Ridge CFO buys $31,000 in company stock By Investing.com

By News Room
Stocks

Coliseum Capital Management buys MasterCraft Boat shares worth over $3.2m By Investing.com

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?