US Default Fears: Biden Toys with Invoking 14th Amendment ahead of Meeting with McCarthy

US President Joe Biden and US House Speaker Kevin McCarthy are set to meet on Monday to discuss the issue of raising the debt ceiling to prevent US from defaulting on its debt after the former returns from Japan after ending his Asia trip where he attended the G7 and Quad summits.

McCarthy told American news agencies that he spoke to US President Biden over the phone to discuss the debt limit and the risk of the US defaulting and the call was productive.

“I believe it was a productive phone call. Our teams are talking today and we’re (setting up to have a) meeting tomorrow,” McCarthy was quoted as saying by The Hill. He said Biden called him from Air Force One.

As the United States faces the possibility of defaulting on its trillion-dollar debts, negotiations between President Biden and Speaker McCarthy and their respective teams have become increasingly tense. Economists warn that a default could have disastrous consequences for the financial market.

The talks could become more tense if Biden insists on using the 14th Amendment of the US Constitution to thwart the US from defaulting on its debt.

The 14th Amendment primarily deals with granting citizenship and equal protection under the law to all people born or naturalised in the United States, including formerly enslaved individuals.

The Biden administration is mulling on invoking the ‘public debt’ part of the amendment to ward off the threat of US default.

However, Biden acknowledged that such a move will have legal ramifications.

“I’m looking at the 14th Amendment as to whether or not we have the authority — I think we have the authority,” Biden was quoted as saying by The Hill.

“The question is, could it be done and invoked in time that it would not be appealed, and as a consequence past the date in question and still default on the debt. That is a question that I think is unresolved,” Biden said while addressing the media during a press conference in Hiroshima.

In a recent meeting at the White House, President Biden stated that all four congressional leaders expressed their agreement that the nation should avoid defaulting on its obligations. This signals his hope that invoking the 14th Amendment would not be necessary.