President Joe Biden said he was not yet prepared to invoke the 14th Amendment to avert a breach of the debt ceiling, but did not rule out the possible executive action ahead of a meeting next week with House Speaker Kevin McCarthy.
(Bloomberg) — President Joe Biden said he was not yet prepared to invoke the 14th Amendment to avert a breach of the debt ceiling, but did not rule out the possible executive action ahead of a meeting next week with House Speaker Kevin McCarthy.
“I’ve not gotten there yet,” Biden said when asked about the possibility in an interview Friday with MSNBC.
The president’s suggestion that he could consider the historically unprecedented legal maneuver if Congress refused to act indicates that views on the possibility may be shifting within the administration.
Constitutional scholars and economists have been split on the maneuver, which would see the administration continue accruing debt by citing a provision of the Constitution that says the validity of public debts “shall not be questioned.”
Doing so would seem certain to prompt a high-stakes legal fight that risks roiling markets. Treasury Secretary Janet Yellen was dismissive of the idea during the 2021 debt-ceiling standoff, saying it would be “a disastrous situation” if the administration needed to consider doing so.
Read more: US Debt Limit’s Bad Options: The Coin, Premium Bonds and More
But Biden on Friday framed the standoff over the debt ceiling in stark terms, saying he believed extremists in the Republican Party were exerting pressure on leaders, including McCarthy. He said that while he believed the House speaker was “an honest man,” his caucus was “a different group” from years past.
“There’s the Republican Party and there’s the MAGA Republicans, and the MAGA Republicans really have put him in a position where in order to stay speaker he has to agree — he’s agreed to things that, maybe he believes, but are just extreme,” Biden said.
Yellen has warned that the US would exhaust the extraordinary measures it has used to avert default and may be unable to meet its obligations as soon as June 1.
McCarthy is demanding spending cuts as a condition of raising the ceiling. Biden has sought to separate the two, saying Republicans should act on the debt ceiling before negotiations on spending take place.
“I think that we have to make it clear to the American people that I am prepared to negotiate in detail with their budget,” Biden told MSNBC. “How much are you going to spend? How much are you going to tax? Where can we cut?”
With the standoff certain to drag on, White House economists have warned that the brinkmanship alone could take a toll on the economy, prompting the loss of hundreds of thousands of jobs.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.