Understanding the 14th Amendment and the US Debt Ceiling

US President Joe Biden has said he believes he has the legal right to invoke the 14th Amendment to the Constitution to raise the federal government’s debt ceiling by $31.4 trillion. So what is this modification?

The 14th Amendment and Public Debt

The fourth paragraph of the Fourteenth Amendment, adopted after the Civil War between 1861 and 1865, states that “the validity of the public debt of the United States shall not be questioned.” Historians say the goal is to ensure that the federal government doesn’t forfeit its debts, as some former Confederate states did.

Controversy and Conflicting Interpretations

But the article has largely gone unheeded by the courts, and legal experts disagree on what is required of Congress and the president to implement it. Michael Dorff, professor of law at Cornell University, said the option “the least unconstitutional for Biden is to go it alone to protect the integrity of the national debt,” explaining that “that means borrowing money.” But any action by Biden will almost certainly lead to legal action.

Legal Standing and Potential Challenges

It is not clear who can sue, and it can be difficult for a plaintiff to prove that they were harmed by an act, a concept known as “legal standing”. In 1997, the US Supreme Court ruled that individual legislators did not have the right to bring such lawsuits, but Congress would likely vote to declare it suffered a collective injury. The Supreme Court could also hear the case to quickly resolve the issue, as happened with Biden’s decision to cut $430 billion in student debt. The Supreme Court ruled on the national debt clause only once, during a 1935 challenge to Democratic President Franklin D. Roosevelt’s decision to withdraw the United States from the gold standard, and ruled that the plaintiff, the bondholder, had no right to Sue.

Potential Consequences of a Debt-Ceiling Default

Administration officials and US economists have said that a debt-ceiling default would disrupt the global financial system and send the United States into recession, an immediate disaster that could have been avoided if Biden had resorted to the Fourteenth Amendment.

Source: Reuters.f