The 14th Amendment says that the “validity of the public debt of the United States, authorized by law, shall not be questioned.”
However, Congress holds the power of the purse. Yellen warned that using the amendment could trigger a constitutional crisis and that Congress must act quickly to raise the debt ceiling to prevent economic calamity. She emphasized that there are no more tricks in the department’s reserve to buy additional time.
The United States hit its $31.4 trillion debt limit in January, but the Treasury Department has been using “extraordinary measures” to maintain funds. Yellen estimated that these measures will run out by June 1, giving Congress less than a month to reach an agreement. President Joe Biden has downplayed the potential use of the 14th Amendment, saying he has not considered it yet. Biden is set to meet with congressional leaders on May 9, including House Speaker Kevin McCarthy, but neither side has shown signs of yielding.
Biden has called for a clean bill with no strings attached, while McCarthy insists on spending cuts being part of any deal
Yellen warned that if Congress does not raise the debt ceiling, it would unleash economic chaos on both the domestic and global economy. She stressed that there is no way to protect the financial system and economy other than by Congress raising the debt ceiling to allow bills to be paid. While Yellen did not rule out using the 14th Amendment, she emphasized that Congress must act quickly to avoid a constitutional crisis.