JACKSON, Miss. (WJTV) – Congressional leaders and the White House are still at odds as to what to do with the nation’s debt. While a deal has still yet to be reached, the impact of a debt limit breach could have devastating impacts.
The breach would cause a pause in federal spending in the United States and likely raise unemployment levels.
State Economist Corey Miller said Mississippi would be among the worst impacted due to the state’s dependence on federal aid.
“We have a lot of low income people in Mississippi who receive payments from the federal government. Social Security, food stamps, disability, Medicare, Medicaid, all of those payments could be delayed,” explained Miller.
Mississippi’s manufacturing jobs and federal employees could face problems, too.
“We rely more heavily on manufacturing in our economy. That would increase the cost of borrowing and make it more difficult for manufacturing firms to raise capital. There are a lot of federal employees in the Vicksburg area because the Army Corps of Engineers. We would be affected just like every other state in that respect,” said Miller.
As President Joe Biden and House Speaker Kevin McCarthy have yet to produce an agreement, some have argued that the president should invoke section four of the 14th Amendment.
Section four reads that the validity of the public debt of the U.S. shall not be questioned and could provide a legal pathway for the president to force the U.S. to pay some of their bills, depending on how he uses it.
“If the president says, ‘I’m going to prioritize paying Treasury bills, Social Security, and move some money around and shut down nonessential government operations and defense spending until we can pay our bills,’ I just can’t see a court enjoining the president to open up the government when they’re isn’t money to pay the bills or rearranging the spending priorities,” said Matt Steffey, a professor at the Mississippi College School of Law.
While this strategy may hold up in court, it would only be a temporary fix.
“Invoking the 14th Amendment just kicks the can down the road. Suing to stop him invoking the 14th Amendment just kicks the can down the road. Every solution other than agreement just kicks the can down the road,” said Steffey.
Treasury Secretary Janet Yellen said the U.S. could hit its debt limit by June 1, 2023.