US debt ceiling: Democrat lawmakers ask Biden to use ‘14th Amendment’ to evade debt default

As the back-and-forth on extending the debt limit continues, a group of progressive lawmakers in the US are now urging President Joe Biden to use his authority under the 14th Amendment of the Constitution to continue paying the US government’s bills, even if the ceiling is not raised.

With Republicans adamant that the Biden administration implement big spending cuts if the debt ceiling was to be raised, the search for a viable 'Plan B' has been ongoing. According to Democrat lawmakers, the 14th Amendment of the Constitution should be used as the escape route. The law states: "The validity of the public debt of the United States...shall not be questioned."

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The likes ofTina Smith, Elizabeth Warren, Ed Markey and Bernie Sanders have written a letter to Biden, listing the plan, claiming that GOP lawmakers were not negotiating in good faith.

Even Biden has considered the alternative but experts fear that using it would trigger a legal battle, as well as undermine global faith in USA's creditworthiness and damage the economy.

“I have been considering the 14th Amendment. And a man I have enormous respect for, Larry Tribe, who advised me for a long time, thinks that it would be legitimate. But the problem is it would have to be litigated," said Biden last week.

Where are the talks headed?

After reports claimed that talks between Biden's Democratic administration and House Republicans had come to a halt, an NBC report, late on Friday night claimed that the two factions had returned to the negotiating table. Later, a White House official confirmed to the news outlet that the two parties had reopened talks.

"We will be back in the room tonight," House Speaker and Republican leader Kevin McCarthy told Fox Business.

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What is the debt limit?

In layman's terms, a debt limit is the amount of money that the US government can borrow to meet its financial obligations such as social security, military salaries and medicare benefits payments.

Congress earlier this year extended the statutory debt limit to $31.4 trillion. However, the weak economic fundamentals and overflowing expenditures mean that the US will be breaching the limit. Consequently, Congress has been engaged in a fierce tussle to raise the limit.

According to US Treasury Secretary Janet Yellen, even the extraordinary measures, if implemented will only buy the government a limited amount of time.

"It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government's obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability," warned Yellen earlier this year.

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With the Senate under the control of Democrats and the House in Republican hands, it is highly unlikely that a straightforward limit hike will be possible.

If the congressional lawmakers cannot make a decision quickly, the world's largest economy could risk defaulting on its debt.

(With inputs from agencies)

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