The lawsuit comes just weeks before Yellen has warned that the government could default on the federal debt if Congress fails to raise the borrowing limit by then. Financial markets have been increasingly nervous about the potential for default, with economists warning that a failure to raise the debt limit could trigger a global financial crisis.
Some analysts have argued that in that case, the government could prioritize interest payments on Treasury securities. That would ensure that the United States wouldn’t default on its securities, which have long been regarded as the safest investments in the world and are vital to global financial transactions.
“Nothing in the Constitution or any judicial decision interpreting the Constitution,” the lawsuit states, “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.”
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