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What Happens if Joe Biden Legally Challenges the Debt Ceiling - The New York Times [1]

['Robert Hockett']

Date: 2023-05-09

The deadline for a debt ceiling hike is only weeks away, with Treasury Secretary Janet Yellen saying the U.S. could run out of money to pay its debts by June 1. Some Republicans, whether serious or bluffing, seem ready to go to the brink of default — if not actually default on the U.S. national debt. Debate has intensified over whether President Biden might sidestep the debt ceiling so the nation can keep paying what it owes.

There are powerful legal reasons and arguments for him to do so. These include the 14th Amendment, which prohibits questioning what we already owe, and the so-called later-in-time rule of statutory construction, which basically means that Congress’s most recent budget legislation trumps any earlier legislated ceiling.

Given the stakes, it’s important to explore the likely consequences if Mr. Biden ignores the debt ceiling — how doing so would affect our economy and the markets, our retirement savings and even our constitutional system. There is encouraging news for the president and those who follow our first Treasury secretary, Alexander Hamilton, in believing we must pay our legally incurred debts. We are far better off doing so, even if it means short-term chaos should Mr. Biden allow the June 1 deadline to come and go.

First, consider the consequences if the United States stopped paying its debts and defaulted on June 1. This would undo what Hamilton and his successors sought to ensure: a national credit rating beyond cavil or reproach. We would see a great tottering — if not worse — of U.S. banking, U.S. financial markets and the world’s capital markets.

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[1] Url: https://www.nytimes.com/2023/05/09/opinion/biden-mccarthy-debt-ceiling.html

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