President Joe Biden has ordered the creation of a working group to study ways to circumvent future brinkmanship over the US debt limit, months after the nation was taken to the edge of default.
(Bloomberg) — President Joe Biden has ordered the creation of a working group to study ways to circumvent future brinkmanship over the US debt limit, months after the nation was taken to the edge of default.
White House Counsel Stuart Delery and National Economic Council Director Lael Brainard will lead the group, composed of administration officials and without any Republican members. The effort will consider actions Congress can take as well as what the administration is calling “Constitution-based” solutions to avert future debt-ceiling standoffs, according to a statement obtained by Bloomberg News.
The move comes less than two months after the president and House Speaker Kevin McCarthy battled to the wire over raising the borrowing limit and reached a last-minute deal, avoiding a default that would have roiled financial markets and dealt a catastrophic blow to the economy just as Biden was beginning his reelection campaign.
The White House did not provide a deadline for the group to finish its work and there is no date yet for its first session. The group also includes Treasury Secretary Janet Yellen, Attorney General Merrick Garland, Council of Economic Advisers Chairman Jared Bernstein and budget director Shalanda Young.
“Now that the latest debt ceiling crisis is behind us, it is necessary to explore all legal and policy options to prevent Congress from ever again holding hostage the full faith and credit of the United States,” the White House statement said.
Earlier: Biden’s Bid to Kill Debt Limit Forever Fades After Recent Deal
Biden previously floated drastic measures to circumvent the statutory debt limit. But by creating a group to study options, Biden is avoiding taking immediate action. Progressives have urged him to do away with the limit, worried that keeping the status quo leaves the president vulnerable to another standoff with Republicans in 2025.
In one of its first acts, members of the group plan to meet with legal and economic experts including Harvard Law School Professor Laurence Tribe; Seth Carpenter, Morgan Stanley & Co. LLC’s chief global economist; and former NEC Director Brian Deese.
The group will meet with other experts and members of Congress in future sessions, the White House said.
Biden earlier this year accused Republicans of “reckless hostage taking” over the borrowing limit and for months refused to negotiate with House leaders over their demands. He eventually struck a deal with McCarthy in May to suspend the debt ceiling until after the 2024 election in exchange for spending reductions.
During the tense negotiations, Biden mused about using extraordinary legal measures, such as invoking the Constitution’s 14th Amendment to unilaterally lift the borrowing cap. With the threat of default still looming, Biden said it was his “hope and intention” to take the issue to the courts once the talks were over.
At the same time, Biden said he was not in favor of getting rid of the debt ceiling entirely because “it would cause more controversy.”
His deal with Republicans dashed any chance for now of permanently ending debt-limit battles, according to legal experts and White House allies. There’s little opportunity to try a case in the court system that would knock down the limit.
“With the crisis having passed, no ‘test case’ would be likely to yield any authoritative adjudication,” Tribe told Bloomberg News in June. “The only solution, in my view, is for Congress to grab this bull by the horns and permanently eliminate the statutory ceiling.”
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