The Vanishing 14th Amendment Case - image source NNN
The Vanishing 14th Amendment Case: Democrats Express Frustration as White House Excludes Them from Debt Ceiling Negotiations
The frustration among Democrats has become increasingly evident in recent times. They find themselves ousted from the negotiation room regarding the debt ceiling, as the White House takes charge and excludes their House and Senate leaders from the crucial discussions. This exclusion raises concerns and highlights a growing power imbalance within the decision-making process.
Adding to their dismay, Democrats observe President’s hints regarding the implementation of strengthened work requirements, particularly targeting programs like Temporary Assistance for Needy Families (TANF).
The potential sacrifice of TANF in these negotiations raises eyebrows and stirs discontent among Democrats. Even if this proposal faces backlash from the left-wing and ultimately gets removed from the final deal, the so-called “victory” would only amount to Obama-style spending caps. These spending caps have the potential to inflict severe damage on the macroeconomy and carry various other consequences, adding to the concerns voiced by Democrats.
As frustrations mount, Democrats find themselves grappling with the evolving dynamics of these negotiations and the potential implications of the decisions being made. The ongoing developments create a complex political landscape, prompting Democrats to reassess their strategies and seek avenues for influencing the outcomes to align with their party’s goals and ideals.
Democrats Call on White House to Invoke 14th Amendment to Address Debt Ceiling Crisis
Amid their frustration, Democrats are now actively urging the White House to take unprecedented measures and refuse to engage in what they perceive as a hostage negotiation situation.
A group of eleven senators, including Sanders, Smith, Warren, Markey, Merkley, Hirono, Welch, Blumenthal, Reed, Whitehouse, and Fetterman, has formally requested President Biden to exercise his authority under the 14th Amendment of the Constitution. They point to the specific clause that clearly states, “the validity of the public debt of the United States … shall not be questioned.”
Initially, the letter included five senators, but it has since gained momentum, with additional senators adding their names. Furthermore, Senator Fetterman and Senator Warren have released their own individual statements echoing the same sentiment.
Even Senator Angus King, an Independent from Maine known for his centrist views, has expressed support for the 14th Amendment option, emphasizing the strong legal arguments and the explicit nature of the 14th Amendment itself.
This call to invoke the 14th Amendment reflects Democrats’ determination to explore all available avenues to resolve the debt ceiling crisis and avoid potential economic and political fallout. By referencing this constitutional provision, they seek to emphasize the urgency of the situation and urge the White House to take decisive action based on the legal foundation provided by the 14th Amendment.
The ongoing discussions and endorsements of this approach demonstrate the intricate dynamics at play and the range of perspectives within the Democratic caucus.
Administration Cautious about Invoking 14th Amendment, Fearing Legal Battle and Economic Fallout
It is evident that the administration is hesitant about pursuing the 14th Amendment option to address the debt ceiling crisis. Several opinions have emerged to explain this reluctance, with a major concern being the potential for a court battle. The fear is that invoking the 14th Amendment could result in financial chaos similar to a default, but with the blame shifting to the White House for taking a legally risky action while risking the stability of the U.S. economy.
Interestingly, there is an ongoing court case related to the 14th Amendment option. A complaint has been filed, and the case is in the docket, offering a potential avenue for resolving the issue through legal means. However, it appears that the plaintiffs in this case failed to file in a manner that would expedite the process, which some have criticized as a form of legal malpractice.
Considering the statements made by White House officials regarding the 14th Amendment option, their initial response seems peculiar. Some individuals within the White House have suggested that the 14th Amendment only allows the executive branch to make debt payments and not other obligations, citing Social Security payments as an example.
However, this example does not hold up under scrutiny. Social Security operates independently from the general budget and has a dedicated funding source that is unaffected by the debt ceiling. Furthermore, there are surplus funds in the form of bonds specifically allocated for Social Security, safeguarded by the 14th Amendment.
Economist Dean Baker explains that the designated tax revenues for Social Security would likely not be impacted, and the 14th Amendment would ensure that the money is paid. Additionally, a 1996 law allows the government to utilize funds from the Medicare and Social Security trust funds to address obligations until the debt ceiling is raised.
While potential challenges could arise if the Treasury’s staff is furloughed, impeding payment processing, many of the payment functions are automated, minimizing the disruption caused by staffing issues.
Debate Continues over Interpretation of the 14th Amendment’s Scope in Debt Ceiling Issue
The argument that the 14th Amendment only protects debt service and not all other payments relies on a strained interpretation of the term “public debt,” according to economist Dean Baker. He explains that any legal commitment to spend, such as payments to military contractors, can be seen as creating a debt.
This perspective aligns with bankruptcy law, where such obligations are treated as debts. Furthermore, the underlying principle of invoking the 14th Amendment is that if public debt must be repaid, the president can continue borrowing to fulfill that obligation, thus leaving funds available for other expenditures.
It’s important to note that the White House encompasses a multitude of perspectives and opinions. While it is not a monolithic entity, it represents a diverse range of individuals and their viewpoints. Therefore, it is best to consider the president’s own words on the matter.
In recent remarks, he acknowledged the consideration of the 14th Amendment option but expressed concerns about the need for litigation. He highlighted the potential for the issue to end up in the same place without an extension, indicating the challenges involved in pursuing this course of action.
In essence, if the president is faced with the impossible choice of violating the Constitution or violating federal law, he is likely to prioritize upholding the Constitution. However, if conservative groups were to file lawsuits against the president for invoking the 14th Amendment, seeking injunctions from courts known for their conservative leanings, the resulting legal battle could lead to reaching the debt ceiling anyway, accompanied by the ensuing chaos. Some arguments suggest that this could provide a partial exemption for House Republicans when it comes to assigning blame following a default.
Ideally, it would be advantageous if a case challenging the constitutionality of the debt ceiling statute were already progressing through the courts. This case would argue that the statute places the president in a position where he is forced to break the law once the debt ceiling is reached.
Fortunately, such a case was filed on May 8 by the National Association of Government Employees, an organization affiliated with SEIU, expressing concerns about the potential furloughs or terminations of their members if the debt ceiling is breached. However, there are debates about whether the executive branch truly faces a dilemma due to other possible options, such as minting a trillion-dollar coin or issuing “premium bonds” without face value. Clarity on this matter is crucial, as it would provide a better understanding of the available alternatives.
Surprisingly, the plaintiffs did not file a motion for a temporary restraining order or preliminary injunction, leaving the case dormant since its filing, despite the urgency created by the approaching debt ceiling deadline. Taking swift action, such as seeking a temporary restraining order or preliminary injunction, could compel Judge Richard G. Stearns to expedite the legal process, offering timely resolution to the legal uncertainties surrounding the debt ceiling issue.
Attorneys Remain Silent on Case Progress, Failing to Pursue Urgent Relief
When I reached out to Thomas Geoghegan, one of the attorneys involved in the case, to inquire about their decision not to file for fast-moving relief, he responded by stating that their firm generally refrains from commenting on ongoing cases in which they are counsel. This lack of clarification leaves us speculating about their reasoning.
It is possible that the National Association of Government Employees (NAGE) did not believe it could secure a favorable outcome until the debt limit was reached. Anticipatory rulings are not typically favored by the judiciary. However, the failure to seek swift resolution is exacerbating the chaos currently unfolding in financial markets due to the stagnant debt ceiling negotiations. Yields on one-month Treasury bills have surged, impacting bond traders who must now pay a higher price, resulting in actual financial losses.
Considering these circumstances, it would have been more advantageous if a government bondholder had been the plaintiff in this case. NAGE could have easily become a government bondholder by purchasing a one-month Treasury bill, thereby experiencing the current financial losses and strengthening their case. Unfortunately, this alternative route was not pursued.
Initially, it seemed promising that someone was forward-thinking enough to file a case that would compel a decision on the constitutionality of the debt ceiling statute and the applicability of the 14th Amendment before the impending X-date. However, due to the improper handling of the case, its relevance has significantly diminished. It is disheartening because this misstep has deprived the president of a potential tool in his negotiations, further weakening his position.
Nevertheless, one crucial aspect remains to be considered. Surprisingly, the defendant in NAGE’s case is none other than the president himself, along with Treasury Secretary Janet Yellen. To date, they have not responded to the complaint.
If the president truly desired to eliminate the legal uncertainties surrounding the 14th Amendment, he could take advantage of this opportunity by submitting his own opinion that the debt ceiling is unconstitutional and opting not to provide any defense. Such a move would potentially offer clarity on the matter and address the lingering legal ambiguity.
