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Yellen Calls Invoking 14th Amendment to Raise Debt Limit ‘Legally Questionable’

Treasury Secretary Janet L. Yellen on Thursday downplayed the possibility that President Biden could effectively bypass the debt ceiling by invoking the 14th Amendment, calling the proposal “legally questionable.” rice field.

Her comments come as lawmakers and the Biden administration remain at odds over whether and how to raise the debt ceiling, which limits how much the federal government can borrow. Yellen warned lawmakers last week that the US could run out of money to pay its bills on time by June 1.

Biden is scheduled to meet again with congressional leaders on Friday, after failing to pull out a deal at the first meeting on Tuesday.

This brinkmanship policy is based on the 14th Amendment to the Constitution, which states that the “debt incurred by the Biden administration for the validity of the legally recognized public debt of the United States, the payment of pensions and the payment of bounties for rebellion and counterinsurgency activities”. is not an issue.”

This strategy would effectively be a constitutional challenge to the debt limit. According to this theory, even if Congress were unable to lift the restrictions before the so-called X-date, the 14th Amendment would allow the government to issue new bonds to pay bondholders, social security recipients, government employees, etc. It will be required to continue to publish.

But Yellen continued to deny the idea.

“There will obviously be lawsuits over it. It’s not a short-term solution,” Yellen said at a press conference in Japan ahead of the G7 finance ministers’ meeting. “It is legally questionable whether it is a viable strategy.”

Biden administration officials are considering the idea, but the president expressed similar skepticism after meeting with Chairman Kevin McCarthy this week, suggesting a unilateral move to raise the debt ceiling without Congress. He said he expects lawsuits to escalate.

As she prepares to meet with world leaders, Yellen warns of dire consequences for the U.S. and global economy if the debt ceiling is not lifted. He pointed to the significant uncertainty associated with defaults, but predicted that a sharp decline in government spending and the expected turmoil in financial markets would lead to a “very large recession.”

“A default would threaten the progress we’ve made over the past few years as we worked hard to recover from the pandemic,” Yellen said. “And that would trigger a global recession that would set us back even further.”

“It would also risk undermining America’s global economic leadership and would raise questions about its ability to defend its national security interests,” it added.

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