A union representing nearly 75,000 government employees wants federal courts to declare the “debt ceiling” unconstitutional.
In a lawsuit against President Joe Biden and Treasury Secretary Janet Yellen, the National Association of Government Employees wants an injunction preventing the government from defaulting on its debts.
The complaint, filed Monday in the U.S. District Court for Massachusetts, says the union’s workers are “at immediate and imminent risk of layoff or furlough” if congressional Republicans can’t reach a deal with Biden to increase the government’s borrowing limit.
The debt ceiling blocks the Treasury’s ability to sell securities in order to finance basic operations. Sometime early next month, Yellen has said, the government will run out of extra cash, and incoming tax revenue won’t be enough to cover spending that Congress has already required by law.
The situation is fundamentally unconstitutional, the lawsuit argues, because it gives the president “the unchecked discretion to cancel or curtail the operations of government approved by Congress without the approval of Congress.”
Republicans have demanded spending cuts in exchange for lifting the debt ceiling, while Biden has so far refused to negotiate. Since Republicans control the House and Democrats control the Senate, lawmakers expect Biden to cut a deal eventually — but so far, nobody has blinked.
House Speaker Kevin McCarthy (R-Calif.) and other Hill leaders will meet with Biden at the White House later on Tuesday.
Congress has raised the debt ceiling dozens of times over the years. Failing to do so could have a catastrophic impact on the economy, since Treasury securities serve as a benchmark for the cost of debt throughout the financial system, and they’re generally presumed to be a safe investment.
The White House has reportedly been considering experimental ways the administration could bypass a default even if Congress fails to act, such as simply continuing payments while pointing to the 14th Amendment clause stating that the validity of U.S. debt “shall not be questioned.”
Asked about invoking the 14th Amendment, Biden said last week that he hadn’t “gotten there yet.”
The NAGE lawsuit also points to the 14th Amendment.
“The Fourteenth Amendment prohibits any person from questioning the validity of the public debt and requires the President to first meet obligations to the holders of federal debt through borrowing or by finding the necessary funds from cancelling, suspending, or refusing to carry out spending already approved by Congress,” the suit says, arguing that the debt ceiling law gives the president “unlawful discretion to cancel, suspend, or refuse to carry out spending approved by Congress.”
Asked about the lawsuit on Monday, White House press secretary Karine Jean-Pierre said, “I’m not going to speak to any ongoing lawsuit.”
NAGE president David Holway said the litigation “is both an effort to protect our members from illegal furloughs and to correct an unconstitutional statute that frequently creates uncertainty and anxiety for millions of Americans.”