Yellen says using 14th Amendment to scrap debt limit would cause a 'constitutional crisis'

Ryan King

May 07, 11:14 AM May 07, 11:14 AM

Treasury Secretary Janet Yellen repeatedly declined to rule out the possibility of declaring the debt ceiling unconstitutional if Congress fails to resolve its standoff, but said doing so would be a "not-good" option.

Amid the brinkmanship, some have suggested that President Joe Biden could invoke the 14th Amendment to scrap the debt limit and avert a default. Yellen warned that such action would trigger a constitutional crisis and also stressed that Congress must act quickly to forestall an economic calamity.

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"There is no way to protect our financial system in our economy other than Congress doing its job and raising the debt ceiling and enabling us to pay our bills. And we should not get to the point where we need to consider whether the president can go on issuing debt. This would be a constitutional crisis," Yellen said on ABC's This Week.

The 14th Amendment stipulates that the “validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” However, the Constitution also grants Congress the power of the purse.

Yellen avoided a direct answer about whether such action was off the table.

"If Congress fails to meet its responsibility, there are simply no good options. And the ones that you've listed are among the not-good options," Yellen added.

Biden downplayed the potential use of the 14th Amendment during a recent MSNBC interview.

"I've not gotten there yet," he said.

Yellen also re-upped her well-worn warnings that if Congress fails to up the debt limit, "economic chaos would ensue" that would unleash havoc on both the domestic and global economy. She insisted that there are no more tricks in the department's reserve to buy additional time.

Biden is set to meet with congressional leaders, including House Speaker Kevin McCarthy (R-CA), on May 9. McCarthy and Biden last met back in February. The United States rammed up against its $31.4 trillion debt limit back in January, but the Treasury Department has deployed "extraordinary measures" to keep funds flowing in the time since.

Yellen recently estimated that those steps will run dry by June 1, giving Congress less than a month to resolve its differences. So far, neither side has shown signs of blinking, with Biden demanding a clean bill with no strings attached and McCarthy adamant that spending cuts be part of any deal.

SVB collapse: Senate GOP gets second briefing on bank failure after being 'excluded' from first

Emily Jacobs

March 13, 06:21 PM March 13, 06:21 PM

Senate Republicans received an additional briefing on the Silicon Valley Bank collapse Monday after the Treasury Department neglected to invite or inform a number of GOP lawmakers and staff of a hastily scheduled Sunday session.

Treasury officials briefing lawmakers during the Sunday night session admitted on the call that their invitations did not get out to every lawmaker, an aide to Sen. Tim Scott (R-SC) told the Washington Examiner on Monday. Scott, who serves as the top Republican on the Senate Banking Committee, was one of the many GOP lawmakers who did not receive an invite. GOP Banking Committee staffers were also not told of the Sunday briefing.

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"It is unacceptable that Senate Republicans were excluded from Treasury's briefing to Congress this evening," Senate Banking Republicans tweeted from their minority party account after missing out on the first call. "The lack of transparency & responsiveness from the Biden administration has been galling. The administration has the responsibility to keep ALL members updated in real time."

Sen. John Kennedy (R-LA), who serves with Scott on the panel, was one of the other Republicans not told of the call beforehand, WHD News reported Monday. His representatives did not respond to an inquiry from the Washington Examiner on the matter.

Sen. Katie Britt (R-AL), another Senate Banking Republican, lambasted the Biden administration in a statement to WHD News after the Sunday mishap, telling the network, "The public deserves full transparency and accountability without regards to partisanship, and it is unacceptable that this administration excluded Senate Republicans, including those on the Senate Banking Committee, from Sunday night’s bicameral member briefing."

A number of Republicans were present on the call, however, including Reps. Thomas Massie (R-KY) and Marc Molinaro (R-NY) and Sen. Mitt Romney (R-UT).

The Scott aide said the Treasury Department agreed to another briefing at noon on Monday in an effort to reach those who were missed.

The Treasury Department did not respond to the Washington Examiner's request for comment, though an agency official rejected the accusation that Republicans were purposely excluded to WHD News on Monday, noting that invitations for the call had been sent to GOP leadership in the House and Senate.

Officials on both calls briefed lawmakers on the federal regulatory efforts taking place to prevent the Silicon Valley Bank collapse from tanking other financial institutions. Banking regulators shut down SVB on Friday, two days after the nation's 16th-largest federally insured bank announced that it needed to raise more than $2.2 billion to remain solvent, which sent its stock price plunging over 60% in 48 hours.

On Sunday evening, they also announced the closure of Signature Bank while revealing plans to make customers of both financial institutions whole. The SVB failure is the second-largest in U.S. banking history, while Signature Bank is the third.