The U.S. Chamber of Commerce has sent a letter to President Joe Biden expressing their opposition to the use of the 14th Amendment to address the debt ceiling. The Chamber warns of economic, financial, and legal turmoil if the controversial line is taken, claiming that it would lead to a default. Neil Bradley, the Chamber’s chief policy officer, argues that the invocation of the 14th Amendment would cause Treasury interest rates to skyrocket, resulting in raised borrowing costs for families and businesses.
The letter from the Chamber of Commerce contrasts with a letter sent by Senators Bernie Sanders, Elizabeth Warren, and nine other Senate Democrats, urging Biden to prepare to invoke the 14th Amendment to the Constitution. They cited the Fourteenth Amendment, which states that “the legitimacy of the public debt of the United States shall not be questioned” and stressed the need for a bipartisan agreement to raise the statutory debt ceiling.
Several experts warn that the use of the 14th Amendment could trigger a constitutional crisis, and Treasury Secretary Janet Yellen has called the idea into question. This disagreement over the debt ceiling has led to stalled talks between the White House and House Republicans, causing US markets to turn negative. Moody’s Analytics chief economist, Mark Zandy, predicts that the market could face moments similar to the 2011 debt crisis if no deal is reached by Memorial Day weekend. He warns that “the market will start to react. We’ll see more red on the screen, and, by the end of the week, we’ll have a darker red.”
Overall, the debate over the 14th Amendment and the debt ceiling has become politically and economically contentious, with potentially disastrous consequences for the country’s financial stability. While some advocate for the use of the Amendment to avoid default, others warn of the harmful economic consequences that such a move could produce.