A MARTÍNEZ, HOST:
What might it take to raise the nation's debt ceiling to avoid a default and potential economic mayhem? Short of a deal being reached across the aisle, a group of Democratic senators are asking President Biden to take an unprecedented step and invoke a clause in the 14th Amendment as a workaround. Senator Tina Smith of Minnesota is leading the effort. She joins us this morning.
Senator, what do you say to Treasury Department secretary Janet Yellen, who says that if President Biden invoked the 14th Amendment, it would create a constitutional crisis?
TINA SMITH: Well, first, I think that if anyone can find a reasonable agreement to get us out of this mess, it's President Biden. And it's - the Republicans should take the threat of default off the table immediately. I think that what Secretary Yellen is saying is that the Biden administration and the president are negotiating in good faith to try to find a path forward. But if the choice we have is between default, which would be disastrous, and the president using the clause in the 14th Amendment, which says that the validity of public debt shall not be questioned, we believe strongly - I believe strongly - that he should use that 14th Amendment authority to avoid the disaster of default.
MARTÍNEZ: The U.S. has never gone into default, so how do we know for sure that it'll be disastrous?
SMITH: Well, what we do is we look at what all of the financial experts are telling us. You're right. It would be unprecedented. The - people like Moody's, for example, are telling us that it could threaten to risk losing 7 million jobs. Mortgage rates and credit card interest rates would go up, potentially take away $10 trillion in household wealth in this country, because what it would do is it would take the core of our financial system, which is trust, and it would shatter it by saying that the United States of America would not be able to pay its debts and pay its bills. And that would have not only consequences for Americans, but it would have global consequences.
MARTÍNEZ: But the constitutional crisis that Secretary Yellen is talking about, how - I mean, if President Biden were to invoke the 14th Amendment, it would seem like it would be challenged immediately legally, so we would solve a financial crisis but then invoke a constitutional crisis.
SMITH: Well, I think that we would certainly expect it to be challenged legally. And that's why we see this 14th Amendment as - approach as - it's like a break-the-glass emergency. Rather than facing the terrible damage that default would pose to us, let's make sure that everybody knows that we have another option on the table. But I think if you look at what it says in the 14th Amendment - and the constitutional experts and lawyers and folks like Laurence Tribe and even past presidents have said that this is - yes, it's an untested option, but it is not theoretical. It's actually pretty straightforward. It says that the validity of public debt shall not be questioned. You know, the president is faced with a choice. Should he follow the Constitution and the 14th Amendment? Should he faithfully execute the law...
MARTÍNEZ: But, Senator, really quick...
SMITH: ...By paying the bills that Congress has incurred or not?
MARTÍNEZ: Really quick, Senator, you left out three words there. The validity of public death authorized by law shall not be questioned. And Congress is the only branch of government that can pass laws.
SMITH: But Congress has passed laws authorizing and, in fact, requiring the president to pay the bills that we have, because those bills have come about because of the laws that we passed for spending. So the president is, in effect, faced with two choices, right? Should he follow the debt limit law, or should he follow the appropriations bills and laws that Congress has passed that incurred that spending requirement to begin with? That's the choice, and that's his constitutional obligation, I think, to make sure that we live up to our obligations and avoid default.
MARTÍNEZ: How do you perceive the risk, though? Because the president's senior aides are - they're worried about the risks of acting without Congress.
SMITH: Well, that's right. Of course they're worried. And that is why we should do everything we can to come to a reasonable agreement. But the challenge we have here, A, is that we have in the U.S. House of Representatives leaders that are threatening to default if President Biden doesn't give in to them. They're suggesting that what we should do in order to avoid default is to throw people and children off of health care, take away their food support. And that is just an unconscionable choice to put us all in and bad for the country.
MARTÍNEZ: That's Democratic Senator Tina Smith of Minnesota.
Senator, thanks.
SMITH: Thank you. Transcript provided by NPR, Copyright NPR.