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Union for government employees sues to enjoin debt limit law

As a congressional standoff over the debt ceiling inches the U.S. closer to default, federal employees argue the government has a constitutional duty to keep borrowing money.

(CN) — A union that represents federal employees filed suit for an injunction Monday against the federal law that gives the White House unilateral authority to cut government spending if Congress can’t compromise on stalled debt ceiling negotiations.

Application of the law could be imminent since there has been no agreement to raise the limit of $31.4 trillion reached in January. As the tense stalemate over federal spending limits has dragged on in Congress, Republicans have insisted that any increase to the debt ceiling come with austere budget cuts. Treasury Secretary Janet Yellen has deployed various accounting measures to prevent a default on the government's loans, but she predicts those measures will not hold out past June 1.

A default would have dire ramifications for the entire U.S. economy, but the National Association of Government Employees notes in its lawsuit that impact on its members would entail layoffs, furloughs or loss of benefits as the Treasury Department prioritizes payment of government loans over other federal spending.

The workers’ union brought its federal complaint in Boston, where its lead counsel at Lichten & Liss-Riordan is located.

“Some employees may be forced to work unpaid with only the promise that they may be paid if and when the debt limit crisis is resolved,” the lawsuit states. It also notes that workers may be unable to find other jobs during a furlough under federal law.

In an effort to protect its members, the union alleged that federal law governing the executive branch’s conduct during a debt crisis is unconstitutional.

In particular, it points to a provision that allows the president to cancel funding approved under the federal budget to help pay down government debt — despite the constitutional requirement that issues of spending be left entirely to Congress.

“Nothing in the Constitution or any judicial decision interpreting the Constitution allows Congress to leave unchecked discretion to the President to exercise the spending power vested in the legislative branch by canceling, suspending or refusing to carry out spending already approved by Congress,” the union says.

It argues that the federal debt limit statute puts the White House in an impossible constitutional position. The president is constitutionally required to carry out all laws without exception, but is also directed by the debt law to make what the union sees as unlawful decisions about government spending in the event spending limits are not raised in time.

The union requested that a federal judge declare the debt limit law unconstitutional until a debt ceiling agreement is reached. In the meantime, the court should also allow the Treasury Department to ignore the debt limit and continue borrowing funds.

Meanwhile, lawmakers have yet to signal any progress in their battle over the debt ceiling. A group of 43 Republican senators signed a letter to Senate Majority Leader Chuck Schumer on Sunday that doubled down on the party’s bargaining position.

“Our economy is in free fall due to unsustainable fiscal policies,” the lawmakers, led by Utah Senator Mike Lee, told the top Senate Democrat. “This trajectory must be addressed with fiscal reforms.”

The Republicans resolved to block a vote on a bill raising the debt ceiling without also slashing federal spending.

The House has already passed the GOP’s proposal for pulling the government back from a debt crisis. The lower chamber in April cleared a measure that would raise the debt limit by roughly $1.5 trillion until March 31 of next year while cutting federal spending to 2022 levels and limiting growth to just 1% annually over the next decade. The bill would also advance several GOP policy priorities, such as reimplementing work requirements for welfare programs and striking tax incentives for renewable energy generation.

The Republican proposal has been a nonstarter with Democrats, who have vowed it would not pass the Senate.

Although the White House for months has balked at negotiating with Republicans on the debt ceiling, arguing that the GOP was holding the economy hostage for budget concessions, President Biden is expected to meet Tuesday with congressional leaders, including House Speaker Kevin McCarthy.

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Categories / Economy, Employment, Financial, Law, National

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