US hits borrowing limit, kicking off fight between

US hits debt limit, Treasury says

The US government has hit the legal limit on how much money it can borrow, and Congress must approve an increase to avoid a debt default in the coming months, Treasury secretary Janet Yellen said this morning.

In a letter to congressional leaders, Yellen announced the Treasury would begin taking “extraordinary measures” to make the government’s cash on hand last until Congress acts. These include a “debt issuance suspension period” lasting from today till 5 June, as well as suspending investments into two government employee retirement funds.

“As I stated in my January 13 letter, the period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the US government months into the future. I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Yellen wrote.

Key events

In a nutshell, here is what the supreme court’s investigation into the May leak of the draft opinion in Dobbs v. Jackson Women’s Health Organization found:

At this time, based on a preponderance of the evidence standard, it is not possible to determine the identity of any individual who may have disclosed the document or how the draft opinion ended up with Politico. No one confessed to publicly disclosing the document and none of the available forensic and other evidence provided a basis for identifying any individual as the source of the document. While investigators and the Court’s IT experts cannot absolutely rule out a hack, the evidence to date reveals no suggestion of improper outside access. Investigators also cannot eliminate the possibility that the draft opinion was inadvertently or negligently disclosed – for example, by being left in a public space either inside or outside the building.

The Dobbs case was so controversial because it overturned the precedent allowing abortion access nationwide established in Roe v Wade.

The case is not completely closed, the report notes, saying “continued investigation and analysis may produce additional leads that could identify the source of the disclosure.”

Supreme court ‘unable to identify’ source of abortion opinion leak

Supreme court investigators could not determine who leaked the draft opinion of conservative justices’ June ruling overturning the right to abortion established in Roe v Wade, according to a report released by the court this afternoon.

A team composed of the supreme court’s marshal and her staff “has to date been unable to identify a person responsible by a preponderance of the evidence,” the report said.

Follow this blog for more on this developing story.

Ramon Antonio Vargas

Joe Biden still plans to announce his re-election campaign relatively soon despite the investigation into classified documents found at his former private office and home in Delaware, CNN reports, quoting anonymous members of the president’s inner circle.

The article asserts that the president’s inner circle sees the document case ensnaring Biden as little more than “DC noise” from members of the elite within the nation’s capital. Biden, therefore, intends to stick to a timeline that would see him make a re-election announcement sometime after his state of the union speech scheduled for 7 February, the article adds.

Supporters of Biden’s Oval Office predecessor Donald Trump – who is running for the White House again in 2024 – have hoped that the documents case undermines the president’s re-election chances. But Biden and his fellow Democrats argue that there are differences between the president’s case and the one involving government secrets found at Trump’s Mar-a-Lago resort in Florida.

An FBI search of Mar-a-Lago last year uncovered more than 11,000 documents, including about 300 marked classified or top secret, from Trump’s time as president. Meanwhile, the documents involved in Biden’s case reportedly number fewer than 12 and date back to his time as Barack Obama’s vice-president.

US will ‘pay price’ if GOP doesn’t budge on debt ceiling standoff, Schumer says

Ramon Antonio Vargas

The US “will pay the price” if it stops paying off debts now that the nation has hit the legal limit on how much money it can borrow, the Democratic Senate majority leader Chuck Schumer has said.

Schumer’s statement backed up the Joe Biden White House’s demands that Republicans controlling the US House agree to raise the country’s so-called debt ceiling without conditions, though several GOP lawmakers have said the president’s staff must be willing to compromise.

“This is not complicated: if the Maga GOP stops paying our nation’s bills, Americans will be the ones to pay the price,” Schumer’s statement Thursday argued. “Political brinkmanship with the debt limit would be a massive hit to local economies, American families and would be nothing less than an economic crisis at the hands of the Republicans.”

The statement continued, “From rising home costs, interest rates, cuts to social security, Medicare and more, it’s clear who will actually pay the price for gratuitous partisan politics: American families.”

For the US to avoid a debt default in the coming months, both chambers of Congress must approve an increase to the limit on how much money the federal government can borrow, Treasury secretary Janet Yellen has said. Democrats hold a slim majority in the Senate, and the same is true of Republicans in the House, setting up a fight over the issue between the two parties.

The day so far

So it begins. The US government has hit its legal borrowing limit, and the clock is now ticking for Congress to reach an agreement to raise it, or for the country to default for the first time in its history, sometime in the coming months. The White House is demanding Republicans controlling the House agree to raise the debt ceiling without conditions, but several moderate GOP lawmakers say the Biden administration needs to compromise at the bargaining table. Meanwhile, top Senate Republican Mitch McConnell thinks everyone needs to chill out.

Here’s what else has happened today so far:

There are many factors dragging down Joe Biden’s popularity, and the recent discovery of classified documents in his possession has probably not helped matters.

The president is now facing a scandal similar to the one that Donald Trump was caught up in starting in August of last year, but there are importance differences between the two men’s situations. Here’s a breakdown:

Two presidents, many classified documents.

Joe Biden remains an unpopular president, a Reuters/Ipsos poll released today finds, though voters don’t seem to like other Washington power players much either.

Biden’s approval rating was 40% in the poll conducted over three days till Sunday, just a smidgen higher than the 39% reported a month ago and remaining near the lowest level ever recorded of his presidency.

However, Republican House speaker Kevin McCarthy’s approval was a dismal 20% in the poll, while only 35% said they had a positive view of the House and 38% said the same of the Senate.

Moderate House Republicans who represent districts Joe Biden won are frustrated with the White House’s refusal to negotiate over the debt ceiling, CNN reports.

The Biden administration is currently pushing Congress to agree to a “clean” debt limit increase, without the conditions sought by the GOP leadership in the House. These moderate lawmakers could be crucial to bridging the narrow gap with Democrats in the lower chamber to make that happen, but several have told CNN that some kind of agreement needs to be reached on addressing America’s budget deficit.

“I don’t think that a clean debt ceiling is in order, and I certainly don’t think that a default is in order,” Pennsylvania’s Brian Fitzpatrick said.

Don Bacon of Nebraska said, “I’m not in favor of Biden’s no-negotiating strategy, and I’m not inclined to help,” adding, “The GOP can’t demand the moon, and Biden can’t refuse to negotiate. There needs to be give-and-take on both sides.”

Mike Lawler, a New York Republican newly arrived in the House, said the Biden administration can’t ignore the GOP’s demands. “They need to come to a realization pretty quickly they are no longer in a one-party controlled government, and it requires negotiation.”

The debt ceiling is the talk of the town in Washington DC, but in New York, it is merely a cartoon:

It is not even a particularly scrutable New Yorker cartoon, as this Washington Post reporter notes:

Brian Riedl is an economist who has advised a number of Republican politicians in the past, and shared some thoughts on Twitter about why the GOP is so eager to throw down over raising the debt ceiling:

Democrats assert that the debt limit is the wrong place/time to address soaring deficits. Fine.

But with 70% of spending and nearly all taxes on autopilot – untouchable in the annual budget process – perhaps they can tell us when they *would* be willing to address the issue?

— Brian Riedl ? ?? (@Brian_Riedl) January 17, 2023

Deficit hawks would be happy to move the negotiations out of the debt limit debate. Just give us an alternative time and place and we’ll be there.
If the answer is “never,” well, this is why – rightly or wrongly – critics will grab the only (admittedly bad) tool they have.

— Brian Riedl ? ?? (@Brian_Riedl) January 17, 2023