WASHINGTON — Now that Congress has ended the debt limit crisis, the race is on to prevent the next one — and a federal court case in Boston could be a key to that effort.
Many Democrats want to eliminate the debt limit after Republicans again used it for budget negotiating leverage that risked provoking an economically devastating government default. Congress has the power to do it legislatively, but that path is a nonstarter with a Republican-controlled House.
So debt limit opponents have been pushing a legal strategy. They argue the limit, adopted by Congress more than a century ago, is unconstitutional because it conflicts with a provision in the 14th Amendment. President Biden has said he’d like to explore the constitutional question at another time, when the nation is not facing an imminent default in which a court challenge would add to the uncertainties.
“My hope and intention is, when we resolve this problem, I’d find a rationale to take it to the courts to see whether or not the 14th Amendment is, in fact, something that would be able to stop it,” Biden said on May 21.
Enter a lawsuit filed on May 8 in US District Court in Boston by the Quincy-based National Association of Government Employees, which represents nearly 75,000 employees of the federal government. The suit challenges the constitutionality of the debt limit and argues federal workers would be harmed if it was breached because of the layoffs, furloughs, and lost benefits that would ensue when the economy crashed.
“I think it’s a good argument,” said Harvard Law professor Laurence Tribe, who believes the debt limit is unconstitutional.
But there’s a problem, Tribe said. The bipartisan budget deal passed by Congress suspends the debt limit until Jan. 1, 2025, eliminating the pending harm to the government employees. The judge in the case postponed a hearing set for this past Wednesday on an emergency motion for a preliminary injunction because Biden and House Speaker Kevin McCarthy had reached the deal ahead of the June 5 default deadline.
“There’s a basic principle that the federal courts, including the Supreme Court, will not give what amounts to an advisory opinion,” Tribe said. “This is one of these situations where it’s like the guillotine. You can’t wait till it’s about to fall, but if it is simply a gallows that is out there and not being used to threaten anyone, there’s no way to get a court to give an opinion about it.”
The union disagrees.
“As long as the debt limit statute remains on the books as is, this game of political football will continue to threaten our members and the country,” NAGE president David J. Holway said in a written statement. “We look forward to pleading our case in court, and to seeing the debt limit statute struck down as unconstitutional.”
With some revisions, the suit could still go on, said Robert C. Hockett, a Cornell law professor who is considering filing a separate legal challenge with some average American as plaintiffs, arguing they were harmed by interest rates that increased during the debt limit showdown.
The defendants in the Boston case are Biden and Treasury Secretary Janet Yellen. The US Justice Department pushed for a delay of the May 31 hearing after the budget deal was struck in part because “the relief that plaintiff seeks may be counterproductive in light of the agreement in principle that has been reached.”
With the crisis past, Hockett said the Biden administration could tell the court that it now would welcome a judgment on the debt limit’s constitutionality. Spokespeople for the White House and Justice Department did not respond to requests for comment.
The debt limit was enacted in 1917 to give the treasury secretary more flexibility in issuing war bonds. It has been raised routinely dozens of times over the years until 2011, when House Republicans used it as a negotiating tool. The showdown ended up pushing the government to the brink of default and triggering the first ever downgrade of the nation’s credit rating.
An anomaly among major economic nations, the debt limit forces lawmakers to vote to raise the borrowing cap to pay for spending they already have authorized.
That’s where the potential constitutional conflict comes in.
The 14th Amendment says, “The validity of the public debt of the United States, authorized by law ... shall not be questioned.” That creates a conflict for the president if the nation hits the debt limit, because he is required to pay for congressionally authorized spending. Ignoring the debt limit law is the “lesser evil” compared to failing to pay the nation’s bills, Tribe argues.
Other legal scholars disagree, saying the Constitution gives only Congress the “power to borrow money on the credit of the United States.” The nonpartisan Congressional Research Service said in a 2021 report that there were “uncertainties” about how the 14th Amendment’s public debt clause would be interpreted because it has never been legally challenged.
Republicans and some conservative legal scholars have said it’s ridiculous to claim the debt limit is unconstitutional.
“To call it science fiction fantasy is an insult to science fiction fantasy,” said Senator Mike Lee, a Utah Republican and a former assistant US attorney. “I predict if it went to the Supreme Court, [Biden] would lose quickly, nine to zero.”
Still, Senator Bernie Sanders, a Vermont Independent, and 10 Democratic colleagues, including Senators Ed Markey and Elizabeth Warren of Massachusetts, wrote to Biden on May 18 urging him to invoke the 14th Amendment and ignore the debt limit so the government could continue to borrow.
Biden rejected that tactic but told reporters on May 21 that he thought he had the authority to do so. His concern was that if ignoring the debt limit were challenged, the court case might not be resolved before the default deadline.
Shai Akabas, the director of economic policy at the Bipartisan Policy Center think tank and an expert on the debt limit, said the move would have been risky.
“No question, it’s better to test the legal limits when we’re not in a situation that could lead to catastrophic fallout,” he said.
Markey said in a written statement Friday that a legal challenge should remain on the table.
“If our Supreme Court justices are the textualists they claim to be,” Markey wrote, “then the legality of invoking the 14th Amendment should be clear.”
Even if the Boston case and any other court challenges are ultimately tossed out now that the debt limit has been suspended, Hockett said it’s important to test the legal theory.
“I think the more we keep this issue alive and the more we spread the understanding that this thing is an anachronism and has got to go, the more likely I think we are to move Biden to push for that, and other Congress members to push for that, and maybe we’ll finally bring this thing to an end,” Hockett said.
Senator Brian Schatz, a Hawaii Democrat, said he’s for any strategy that works. He first introduced legislation to repeal the debt limit in 2017 but a bill has never advanced to a vote.
“I think that the debt limit does nothing but impose risk on the American political and economic system,” Schatz said. “This whole thing is stupid and everybody knows it.”
Jim Puzzanghera can be reached at jim.puzzanghera@globe.com. Follow him @JimPuzzanghera.