“I’m looking at the 14th Amendment to see whether or not we have the authority, I think we have the authority. The question is whether this amendment can be invoked in a timely manner so that it’s not challenged, and if we don’t we’re past the date- limit, with the risk of defaulting on payments. This problem is unresolved,” said Biden, during the press conference organized in the Japanese city of Hiroshima, at the end of the G7 Group summit.
Biden reiterated that the leaders in Congress with whom he is negotiating have assumed the commitment that the situation of entry into the inability to pay will not be reached, so he does not think there will be a need to invoke the 14th Amendment. “I start from the premise that we are serious and that we will find a solution to avoid the inability to pay,” Biden emphasized, according to The Hill publication.
The 14th Amendment to the Constitution states that the issue of US sovereign debt “shall not be contested”, so, according to some legal interpretations, the president could unilaterally decide to continue foreign borrowing if Congress does not specifically approve it. The provisions of the Amendment can generate various interpretations, and the Washington Administration fears that a unilateral presidential decision could be challenged in court.
The Speaker of the House of Representatives, Kevin McCarthy, one of the leaders of the Republican Party, said that he had a “productive” telephone conversation with Biden on Sunday in the negotiations on overcoming the budget crisis.
Before going to the G7 summit, Biden met with House Speaker Kevin McCarthy, House Democratic Leader Hakeem Jeffries, Senate Democratic Leader Chuck Schumer, and Senate Republican Leader Mitch McConnell. . Biden, for his part, categorized the discussions as “productive”, stressing that they agreed that the United States will avoid default.
Kevin McCarthy, the president of the House of Representatives, proposed, in mid-April, an addition of 1,500 billion dollars to the sovereign debt threshold, but conditioned the plan to reduce budget expenditures. Kevin McCarthy announced that he will continue negotiations with the Biden Administration on the basis of a plan to increase the sovereign debt threshold by 1,500 billion dollars, but he asked for the limitation of discretionary budget spending at the level of the fiscal year 2022, the capping at 1% of the increase in the budget deficit, the reactivation of unspent funds during the pandemic and the rejection of the law on funding intended for the Internal Revenue Service (IRS). Also, McCarthy would like to suspend the facilities approved by President Biden regarding credits for public higher education and cancel the tax credits granted by the Inflation Reduction Act. President Biden is demanding urgent action by Congress without any strings attached.
The US Secretary of the Treasury, Janet Yellen, has repeatedly warned that the United States risks defaulting if Congress does not approve raising the sovereign debt ceiling. Default “could happen on June 1”, warned Janet Yellen recently. The United States has reached the sovereign debt ceiling set at $31.4 trillion since January, but the Treasury Department has continued to make payments through exceptional actions to manage existing resources and spending.
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