Debt Limit Debate: Biden's Options and Potential Consequences.

As the US government approaches a possible default on its debt, officials in the Biden administration are considering a constitutional challenge to the debt limit, which would require the government to continue issuing new debt to pay bondholders, Social Security recipients, government employees, and others, even if Congress fails to lift the limit before the so-called X-date. The 14th Amendment clause stating that “the validity of the public debt of the United States, authorized by law, shall not be questioned” is the basis for this theory. The debate is taking on new urgency as the United States inches closer to default, and it remains unclear what type of compromise may be reached in time to avoid a default.