Could the 14th Amendment fix America’s debt-ceiling debacle?
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.
2023-05-19 13:17:17
Source from www.economist.com