Politics /

Government Employees Union Files Lawsuit Over 'Unconstitutional' Debt Limit Law

Suit argues debt ceiling laws violate the 14th Amendment, which gives Congress authority over budget matters

The National Association of Government Employees (NAGE) has filed a lawsuit to stop the U.S. Treasury Department from complying with a federal debt limit law, calling it “unconstitutional.”

According to the lawsuit, which names Treasury Secretary Janet Yellen and President Joe Biden as defendants, a debt ceiling law violates the separation of powers principle outlined in the U.S. Constitution, which gives Congress the authority for federal spending.

“The Fourteenth Amendment requires the President to meet obligations to the holders of federal debt. To do so, he must either borrow or find the necessary funds to do so from cancelling, suspending, or refusing to carry out spending already approved by Congress,” according to the legal filing.

“The Debt Limit Statute is unconstitutional because it puts the President in a quandary to exercise discretion to continue borrowing to pay for the programs which Congress has heretofore duly authorized and for which Congress has appropriated funds or to stop borrowing and to determine which of these programs the President, and not the Congress, will suspend, curtail, or cancel altogether,” the lawsuit states.

Within the past 20 years, U.S. debt has risen 400 percent. Over the past decade, amid political haggling over the debt limit, the federal government has narrowly avoided a catastrophic default seven times, according to a report from the Bipartisan Policy Center.

The day before the lawsuit was filed, Yellen appeared on a television show with host George Stephanopoulos and warned of “chaos” if the debt limit ceiling isn’t raised and results in the U.S. to default on its financial obligations.

“And, you know, whether it’s defaulting on interest payments that are due on the debt or payments due for Social Security recipients or to Medicare providers, we would simply not have enough cash to meet all of our obligations. And it’s widely agreed that financial and economic chaos would ensue,” Yellen said.

“U.S. Treasury securities are the safest bedrock security underlying the global financial system,” she added. “A failure of the United States to honor all of its debt would call into question our credit worthiness. Even as we get very close to this date, if Congress doesn’t act, we’re likely to see financial market consequences.”

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