As we get deeper into May, the standoff over the debt ceiling negotiations is deepening. For Democrats, part of their problem is that they've managed to get outsmarted and outflanked by House Speaker Kevin McCarthy and the House Republican Caucus. To date, House Republicans are the only ones who have passed legislation that lifts the debt ceiling. Neither the White House nor House or Senate Democrats have lifted a finger towards putting legislation forward.
We sit in an ironic position where the White House is headed into negotiations this week with McCarthy with only a string of speeches and soundbites on their side. Biden plans to open talks without any legislation, a proposal with bipartisan support from McCarthy, a ticking clock, and pressure from moderate Democrats to get something done. It's hard to understate how poorly the White House has mishandled this so far vs. McCarthy when Biden holds the better hand of cards.
It's getting so bad that NBC News is running news items warning the White House it is managing the situation poorly. In a story, they lead with, "There is growing concern that President Joe Biden will be left defending a faltering economy if the government fails to avoid a default on the nation's debt, according to sources inside the White House and on Capitol Hill."
What is Joe Biden's plan to get out of this pickle? It's not negotiating or legislating better. According to The Hill, the White House is looking at throwing a legal Hail Mary: "Top political figures are swirling the possibility that President Biden could use the powers of a clause in the 14th Amendment as a last-ditch effort to ward off the looming threat that the US could default on its debt as soon as next month."
Attorneys in the White House and left-wing legal scholars point to the Fourteenth Amendment as their savior. The New York Times quoted sources that said the White House is seriously considering declaring the debt limit unconstitutional and simply moving on from the showdown.
How does this work? This legal Hail Mary is based on a strained reading of Section Four of the Fourteenth Amendment. It says:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
These legal scholars are hanging their hat on the first sentence: "The validity of the public debt of the United States ... shall not be questioned." Essentially, they want to use this phrase to mean that the Fourteenth Amendment nullifies the debt ceiling, which Congress sets under statute.
These scholars claim that since the public debt cannot be questioned, the executive branch can continue issuing debt because Congress never had the power to set a debt limit. The US has to follow those words and stay open at all times, not crashing through and causing a default.
Section Four was written after the Civil War to establish which debt the US would take on after the war. In a nutshell, the US declared the Union would honor all its obligations and promises but would not take on any debt held by the Confederacy. That monetarily ended the Confederacy and economically harmed those countries and companies that aided the rebels in the war.
The idea first got floated between 2011 and 2014 when debt ceiling fights ramped up under Barack Obama's Presidency. Neither the Obama White House nor any serious legal observer thought it was a workable solution. No one believed the President could ignore the statutory debt ceiling and order the government to continue issuing debt.
None of the legal points from that era have changed for the present tense. The only thing that's changed is that we now have President Biden and the junior varsity members of the Obama administration floating a failed concept from the previous decade.
The Fourteenth Amendment Hail Mary isn't a serious response to the debt ceiling negotiations. All Biden has to do to regain the upper hand is work with the Democratic-led Senate to pass a counterproposal to the Republican plan. That's just an opening starter, and he hasn't even done that!
We'll see if Biden can find a rabbit in his hat to shift the political landscape in his favor. Right now, he keeps stepping on rakes. That means any blame for shutdown issues falls on the White House, not Republicans.