Court sets legal showdown on debt limit 14th Amendment argument

A judge in Boston has ordered a hearing next week on one of the key arguments that President Joe Biden has the legal authority to ignore the debt limit statute and continue to pay the federal government’s bills.

U.S. District Court Judge Richard Stearns set a May 31 hearing on a lawsuit filed by a federal workers union’s contending that the 14th Amendment empowers Biden and other officials to sidestep the standoff with Congress that has threatened a potential default.

Treasury Secretary Janet Yellen has said the so-called X-date for a default could come as soon as June 1, just one day after the scheduled arguments on the National Association of Government Employees’ request for a preliminary injunction requiring Yellen to keep paying bills — and salaries — as usual.

During a brief videoconference Tuesday morning, Stearns sounded skeptical of arguments from the union’s lawyers that disaster for the nation is impending if he did not put the case on an even faster track.

“If the emergency is as dire as you think it is, I would think that it’s within the power of the president to address it using executive branch authority,” said Stearns, an appointee of former President Bill Clinton.

Before setting the May 31 argument date, Stearns said he didn’t see the union’s request for a decision by June 1 as realistic.

“I understand there are time constraints, given that events are developing probably even as we’re meeting, that probably make a decision prior to June 1st impossible,” the judge said.

Stearns did not get a direct answer when he asked Justice Department lawyer Alexander Ely whether the department disagrees with the central argument in the suit: that the 14th Amendment’s assurance that U.S. debt shall not be questioned means the president can ignore a statute capping the national debt.

Ely said he was not authorized to stake out a position on that question and he suggested that the department would argue that the union’s suit is not a proper vehicle to force DOJ to come to a legal conclusion.

“This requires high-level coordination among the U.S. government,” said Ely.

But an attorney for the union, Thomas Geoghegan, pointed out that the claims of an imminent cataclysm from a possible default originate with the very officials named as defendants in the suit.

“This is an unusual case in which the defendants are predicting the calamity,” Geoghegan said as he asked the judge to agree to a speedy process. “The local rules do not take into account that there is a catastrophe looming in this case.”

The union’s lawyer also suggested DOJ is playing for time to avoid staking out a position that could have a profound effect on the ongoing talks between the White House and Republican House leaders.

“What we’re faced with, I fear, is that the government doesn’t really have a position on this, but there is no time to prevent irreparable injury,” Geoghegan said.

Stearns gave the Justice Department a deadline of May 30 to file a written response that could clarify the government’s view on the outer bounds of Biden’s authority regarding the public debt.