The Union is suing to lower the US debt limit as a default is emerging

May 8 (Reuters) – A union for US federal government workers filed a lawsuit on Monday alleging a law setting a $31.4 trillion debt ceiling is unconstitutional because political leaders trying to avoid a historic default, which is expected as early as next month.

The National Association of Government Employees (NAGE) says the Debt Limit Act, passed in 1917, violates the US Constitution’s separation of powers because it forces the president to cut spending already approved by Congress in the event of a default.

The lawsuit, filed in federal court in Boston, says the 14th amendment requires the president to find funding to meet the country’s debt obligations. The union in the complaint said it will seek an order temporarily blocking the Debt Limitation Act while the case goes ahead.

The White House has been exploring the possibility of using the 14th Amendment to avert a debt crisis, but Democratic President Joe Biden said Friday he is not yet ready to try the untested legal strategy. The relevant clause has been largely disregarded by the courts, and legal experts are at odds over what it requires of Congress and the Presidency.

The union said in the lawsuit that Congress could not impose a debt limit “without at least determining the order and priority of payments once that limit is reached, rather than letting the president do so.”

The union is seeking to scrap the debt limit law and prevent the Biden administration from limiting borrowing in the event of a default so it can continue funding government agencies.

The lawsuit names Biden and Treasury Secretary Janet Yellen as defendants. A Treasury Department spokesman declined to comment. The White House did not immediately respond to a request for comment.

The US hit its debt ceiling in January, and Yellen told Congress at the time that she was suspending investments in federal employee pension and health plans to avoid an immediate default. Yellen has warned that the US could run out of money to meet its commitments as early as June 1.

The union, which represents 75,000 government employees, said in Monday’s lawsuit that its members had already been harmed by Yellen’s extraordinary move. A default would further hurt government workers by triggering furloughs and layoffs, the union said.

Republicans in Congress have called for any increase in the debt ceiling to be coupled with massive spending cuts. But Biden and other Democrats have insisted that raising the debt limit should not be linked to budget talks.

Biden and congressional leaders from both parties are scheduled to meet Tuesday, but an immediate agreement to avoid a default is not expected.

Reporting by Daniel Wiessner in Albany, New York, editing by Alexia Garamfalvi and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

Daniel Wiesner

Thomson Reuters

Dan Wiessner (@danwiessner) covers labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].


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