A federal judge has scheduled a hearing for next Wednesday on an emergency motion filed by a labor union representing 75,000 federal government employees for a preliminary injunction to suspend the debt ceiling statute. The National Association of Government Employees earlier this month filed a lawsuit against Treasury Secretary Janet Yellen and President Joe Biden, arguing that the debt ceiling law is unconstitutional and should be suspended to allow the Treasury to continue paying the government’s bills.
On Tuesday, District Court Judge Richard G. Stearns, a Clinton appointee, scheduled the hearing on the emergency motion for May 31 at 2 PM in his Boston courtroom. The Department of Justice, representing the defendants, was given until May 30 to file a response clarifying the government’s position regarding what authority Biden has regarding the public debt.
That raises the question of how Attorney General Merrick Garland’s DOJ will respond. The DOJ could offer no defense on the constitutionality of the debt ceiling or even agree with the plaintiffs that it’s unconstitutional.
RELATED STORY: Government employees' union files for emergency injunction to avert debt default in federal court
On Monday, the Justice Department signaled that it intended to oppose National Association of Government Employees’ request for a preliminary emergency injunction. A court document states in one part: “Defendants intend to file an opposition to Plaintiff’s Emergency Motion for Preliminary Injunction.” But the DOJ did not say anything about the nature of its objection.
Politico reported that Stearns resisted holding the hearing earlier than May 31. The judge said: “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.”
But Politico said that Stearns did not get a direct answer from Justice Department lawyer Alexander Ely when he asked whether the DOJ disagreed with National Association of Government Employees’ main argument in the suit that the president has the authority under the constitution to ignore the debt ceiling statute. Josh Gerstein for Politico wrote:
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.”
Geoghegan suggested that the DOJ was avoiding staking out a position on this issue for now because it could have a big impact on the ongoing talks between the White House and House Republican leaders.
In any case, the National Association of Government Employees’ request for a preliminary injunction does offer an emergency option should the House GOP caucus of MAGA decide to follow Donald Trump’s lead and block any compromise deal to raise the debt ceiling, pushing the country into a catastrophic default. Biden and House Speaker Kevin McCarthy have been talking daily in an effort to reach a deal to raise the debt ceiling to avoid an economically catastrophic default.
The lawsuit filed by National Association of Government Employees has no relation to the negotiations between the White House and House Republican hostage-takers who are using the debt ceiling as leverage to force Democrats to agree to spending cuts that would hurt poor and working-class people. The Republicans have rejected doing anything to increase revenue by closing tax loopholes for the wealthy.
Progressive Democrats in the House and Senate have urged Biden not to cave to House Republicans.They want Biden to invoke the 14th Amendment to the U.S. Constitution, which states that "the validity of the public debt ... shall not be questioned."
RELATED STORY: Government employees’ union files for emergency injunction to avert debt default in federal court.
The Biden administration has been reluctant to do this fearing that declaring the debt ceiling unconstitutional would lead to a pitched legal battle with an uncertain outcome before the conservative-majority Supreme Court. That would result in uncertainty which could roil markets and harm the economy.
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The National Association of Government Employees filed its lawsuit on May 8 in the U.S. District Court for Massachusetts in Boston. Last Friday, the union filed for an emergency injunction seeking a speedy ruling to avert a default. The injunction request begins by stating:
Plaintiff, National Association of Government Employees, Inc. (“NAGE”), by and through its undersigned counsel, hereby moves this Court on an emergency basis for an Order of Preliminary Injunction declaring the Debt Limit Statute, 31 U.S.C. 3101(b), in violation of the separation of powers and the Presentment Clause as set forth in Articles I and II of the United States Constitution, and enjoining Defendant Janet Yellen, in her capacity as United States Secretary of the Treasury, from limiting the borrowing of the United States pursuant to the Debt Limit Statute.
David Dayen, executive editor of The American Prospect, wrote a long thread on Twitter on Friday detailing the arguments raised in the request for the emergency injunction. In an article published Monday, Dayen explains that the union’s argument is “that the debt ceiling statute effectively forces the president to use a line-item veto, which has already been ruled unconstitutional. It gives the president excess power.”
In a press release announcing the lawsuit, the National Association of Government Employees said:
As described in the complaint, pursuant to the Fourteenth Amendment, the President must ensure the federal government does not default on its debt. Should the debt limit be reached, the President still must find the funds to meet its obligations to holders of the public debt, either through borrowing or by cutting spending enough to meet debt payments. However, cutting programs that have been authorized and funded by Congress is not an authority available to the President.
The complaint alleges that the Debt Limit Statute is unconstitutional because it puts the President in a quandary, as it would require him to exercise discretion in deciding which programs Congress has authorized should continue being funded and which programs should not. The Constitution requires that funding appropriations be determined by Congress, not the President.
The lawsuit seeks suspension of the debt ceiling statute “until Congress determines the priorities and order of payments that the President should take, in order to meet the limit set on total indebtedness.”
The union says its members have standing because the extraordinary measures already taken by Yellen to avert default included suspending investments in union members’ retired plans, and the harm to federal employees will only get worse in case of default.
Judge Stearns does have the power to issue a preliminary injunction to suspend the debt ceiling statute while the union’s case proceeds in the courts.
Stearns began his career as a special assistant to Sen. George McGovern, the 1972 Democratic presidential nominee. A Rhodes scholar, Stearns roomed with Bill Clinton at Oxford. In 1993, President Clinton appointed him to the federal bench.
Dayen in a new article published Wednesday in
The American Prospect wrote that by “o
pposing an injunction in the main lawsuit challenging the debt ceiling, the president has deliberately boxed himself into negotiations with legislative terrorists.” He wrote:
Part of this is about the complete malpractice of two key officials of the administration: Janet Yellen and Attorney General Merrick Garland. Yellen, co-defendant in this case, has been the most publicly opposed to any measures other than a bipartisan deal. Her department has completely botched pursuing those measures, as Employ America wrote in a must-read post. Treasury is now scrambling to figure out how to delay certain payments, something they could have sorted out months ago. Garland supplied the attorneys defending this case, and while we as yet don’t know their rationale, the Justice Department would usually take the lead on deciding whether and how to defend statutes.
But the buck stops with Joe Biden, who selected both these lieutenants. He put himself in this bad negotiating position. And he’s not going to let anyone push him off course.
On the other hand, Lawrence O’Donnell on his MSNBC show Tuesday night suggested that Biden and his aide Steve Ricchetti might be doing everything right on the debt ceiling based on his long experience as a negotiator. O’Donnell said Biden might be trying to lock the Republicans into a deal on spending cuts in an effort to avoid another government shutdown in September when Congress must authorize a budget for the upcoming fiscal year.
