Debt Ceiling
The House passed a Budget deal on October 28, 2015 that, among other things, will extends the government’s borrowing authority through mid-March 2017. In 2013, the Republican-controlled House and the Democrat-controlled Senate negotiated with the White House on three fiscal matters with looming deadlines: raising the debt ceiling now approaching the limit $16.5T, massive federal spending cuts known as sequester and a budget resolution. On February 4th, the President signed a bill into law extending the debt limit debate until 5/18/13. This date may also get extended as far as August due to financial manipulations similar to those used in 2011. The "No Budget, No Pay Act of 2013" also mandates that pay for lawmakers be held in escrow starting April 16 until their chamber has passed a 2014 budget resolution. Congress must pass a spending bill, called a continuing resolution or “CR,” which would continue spending after Sept. 30, 2013, the end of the 2013 fiscal year. As it stands now, the government’s legal authority to borrow more money runs out in mid-October, 2013. According to the Bipartisan Policy Center, if that date arrived on October 18, the Treasury “would be about $106 billion short of paying all bills owed between October 18 and November 15. The congressionally mandated limit on federal borrowing is currently set at $16.7 trillion. The debt limit has been raised 13 times since 2001 and has grown from about 55 percent of Gross Domestic Product in 2001 to 102 percent of GDP last year. The hoped for legislation will raise the debt ceiling through Dec. 31, 2014.
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What the 14th Amendment Really Says

5/22/23
from The Wall Street Journal,
5/21/23:

The ‘14th Amendment Option’ Is a Trap for Biden.

The debt talks are stalled and President Biden is again threatening to invoke the Constitution’s 14th Amendment to pay interest on America’s debt without Congress raising the debt ceiling. The truth is that the Treasury has more than ample revenue coming in each month to avoid defaulting on the debt, and Mr. Biden doesn’t need to distort the meaning of the 14th Amendment to do it.

He’s confusing the public, and he may be confused himself, about what the 14th Amendment really says and how it affects the debt ceiling. Section 4 of the Amendment says that the “validity of the public debt of the United States, authorized by law . . . shall not be questioned.” This means the Treasury cannot repudiate debt held by the public as issued in Treasury bonds and notes. In practical terms this means Treasury Secretary Janet Yellen must prioritize debt repayment once statutory federal outlays exceed federal revenue. In other words, she and Mr. Biden can’t willfully default even for a time without violating the 14th Amendment.

If he borrows money without congressional approval, the U.S. could later repudiate that debt.

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What the 14th Amendment doesn’t allow is the claim by many progressives that the President can issue new debt without the consent of Congress. Merely because Congress has approved new spending doesn’t mean the President can issue new debt on his own authority to finance it. He can’t issue new debt on his own to finance Medicare, for example. As Article I of the Constitution makes clear, that power belongs to Congress.

House Speaker Kevin McCarthy last month mustered the votes for a bill to raise the debt ceiling, thanks in no part to his Democratic colleagues. President Biden has called the House GOP’s bill “wacko” and Senate Majority Leader Chuck Schumer has said that its adoption would mean “real pain for American families.” Messrs. Biden and Schumer evidently think the bill’s policy and spending reforms—i.e., tying welfare payments to work and capping annual growth in discretionary spending—are unreasonable.

While Democrats are preoccupied with who will lose the benefits of higher spending, the real debate requires looking at the private spending the Fed will have to crowd out with higher rates if federal spending isn’t constrained.

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