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The Guardian - US
The Guardian - US
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Chris Stein in Washington

US hits borrowing limit, kicking off fight between Republicans and Democrats – as it happened

Janet Yellen, the US treasury secretary.
Janet Yellen, the US treasury secretary. Photograph: Kevin Dietsch/Getty Images

Closing summary

The latest standoff over the debt ceiling kicked off today, when the US government officially hit its legal borrowing limit. The clock is now ticking for Congress to reach an agreement to raise it, otherwise the country will default for the first time in its history, perhaps as soon as June. The White House is demanding Republicans controlling the House raise the limit without conditions, but several moderate GOP lawmakers say the Biden administration needs to compromise. Separately, the supreme court released a report into the leak of its draft opinion overturning Roe v Wade, and said they could not figure out who did it.

Here’s what else happened today:

As eager as some in Washington may be to fight over the debt ceiling, Edward Helmore reports that the head of America’s largest bank has warned of the consequences of a protracted standoff:

The US should not be “playing games” with the debt ceiling, the JP Morgan chief executive, Jamie Dimon, warned warring US political factions on Thursday as a heated row over the federal borrowing limit reached a crisis point.

“We should never question the creditworthiness of the US government. That is sacrosanct and it should never happen,” Dimon said on Thursday in an interview on CNBC. “This is not something we should be playing games with at all.”

​Dimon’s comments came as the US treasury department announced later Thursday it would take steps to keep paying the federal government’s bills as the US hit its $31.4tn debt limit as expected.

The White House is maintaining its no-negotiations stance on the debt ceiling, the Associated Press reports:

This report could be the last word from the investigation into who leaked the draft of the Dobbs opinion to Politico.

The supreme court marshal’s investigators “continue to review and process some electronic data that has been collected and a few other inquiries remain pending. To the extent that additional investigation yields new evidence or leads, the investigators will pursue them,” the report said.

But to underscore that the marshal had truly pursued all leads in its investigation into what the report calls “one of the worst breaches of trust in its history”, the supreme court asked former homeland security secretary Michael Chertoff to review the investigation and see if there was anything they missed.

“At this time, I cannot identify any additional useful investigative measures,” Chertoff concluded.

This investigation must have made the lives of supreme court employees stressful.

The report details all the ways in which about 100 employees were questioned and scrutinized, as well as how the court examined its electronic equipment for clues.

The electronic leads the court pursued turned up nothing, according to the report. Analysts could not determine if the court’s systems were hacked, though “the investigators did not find any logs or IT artifacts indicating that the draft opinion was downloaded to removable media, but it is impossible to rule out,” the document states. While some of the court’s printers kept logs of who was duplicating what, others did not, or kept records that were incomplete. And there was “no relevant information” on any of the court-owned electronic devices the investigators retrieved from staff, nor on any of the personal cellphones and other gear they examined.

Besides the justices, 82 people had access to either physical or electronic copies of the Dobbs opinion. The investigators conducted a total of 126 interviews with 97 people, according to the report, but these, too, were fruitless. All staff agreed to be interviewed, but the report notes no leads came from these conversations. The court also checked legal research history requests from staff, and found nothing suspicious. Finally, they asked each employee interviewed to sign and swear to an affidavit saying they didn’t disclose the opinion. All they got out of this was “a few” admissions from staff that they’d told their spouse about the opinion or vote count, and some other violations of court rules that did not reveal the leaker.

“Some individuals admitted to investigators that they told their spouse or partner about the draft Dobbs opinion and the vote count, in violation of the Court’s confidentiality rules. Several personnel told investigators they had shared confidential details about their work more generally with their spouses and some indicated they thought it permissible to provide such information to their spouses. Some personnel handled the Dobbs draft in ways that deviated from their standard process for handling draft opinions,” the report said.

Finally, the investigators looked into connections between the court and reporters, especially Politico, the website that published the draft, but found nothing. Nor did anything come out of a forensic examination of the draft digital opinion posted on Politico’s website, an analysis of an employee’s home printer, or fingerprint analysis of “an item relevant to the investigation.”

There is one group of supreme court staff that the document makes no mention of investigators interviewing – the justices themselves.

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.”

Updated

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.

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.

Updated

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

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:

Updated

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:

Urban Institute economist Len Burman has a reality check for those in Congress flirting with not raising the debt ceiling.

A default could undermine the America’s pre-eminence in global markets, where the dollar is used as many countries’ dominant reserve currency. But more immediately, it would actually force Washington to spend even more, because a default would drive up interest rates, forcing the government to shell out more money to owners of its trillions of dollars in debt:

Updated

Over in the Senate, top Republican Mitch McConnell is sanguine about the possibility that the US could default on its debt, CNN reports:

While the House GOP has made the loudest fuss about raising the debt ceiling, Republicans in the Senate may, at some point, come out with their own demands for signing on to any deal.

The below, from rightwing lawmaker Matt Rosendale on the debt ceiling, is about as specific as it gets at the moment when it comes to the House Republicans’ demands:

The US government has for decades run a budget deficit, meaning it has to borrow to cover its costs. Achieving the type of “balanced budget” Rosendale seems to be endorsing would require massive revenue increases – likely through more taxes – major cuts to government programs, or some combination of both.

White House chief of staff Ron Klain is over on Twitter, taking a dig at Republicans’ lack of specifics about what they want in exchange for raising the debt ceiling:

House GOP leadership has made clear they want spending cuts in some form, but haven’t yet said more than that.

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.

Updated

Another day, another Trump scandal. Martin Pengelly has details of the latest:

Donald Trump mistook E Jean Carroll, the writer who accuses him of rape, for his ex-wife Marla Maples during a deposition in the case last year, excerpts released in US district court on Wednesday showed.

“That’s Marla, yeah,” Trump said, when shown a photograph. “That’s my wife.”

The mistake was corrected by a lawyer for the 76-year-old former president. But observers said it could undermine Trump’s claim he could not have attacked Carroll because she is not his “type”.

It was not the first release of excerpts from Trump’s deposition, which happened in October. Last week, Trump was shown to have claimed Carroll “said it was very sexy to be raped”.

Carroll says Trump raped her in a department store changing room in the mid-1990s. Trump denies it.

Another thing that’s going to be in the news for months is Donald Trump’s presidential campaign, and the former president has today announced what he’s billing as a “big political speech” at one of his Florida resorts.

“Making a big political speech today at TRUMP DORAL, in Miami. The Fake News says I am not campaigning very hard. I say they are stupid and corrupt, with the Election still a long time away,” he wrote on his Truth social account.

Trump does not name the outlets he believes are deserving of “the Fake News” moniker, but several publications, including the Guardian, have noted that his latest presidential bid has been uncharacteristically quiet since its November debut.

“But do not fear, MANY GIANT RALLIES and other events coming up soon,” Trump continues on Truth. “It will all be wild and exciting. We will save our Country from DOOM and MAKE AMERICA GREAT AGAIN!”

So there you have it.

The debt limit is going to be in the news for months, and the Guardian’s Lauren Aratani has the answers to all your questions about what would happen if it isn’t increased, and what the two parties want:

The US government will hit its borrowing limit – or the debt ceiling – on 19 January, the beginning of what looks to be a vicious fight over the government’s budget and one that threatens to worsen an already precarious economic outlook.

The US treasury secretary, Janet Yellen, sent an ominous letter of warning to Congress last Friday that “certain extraordinary measures” will have to be put in place to prevent the United States from defaulting on its obligations” – essentially moving some money around so the government does not default just yet. Those measures will last a few months, but if the limit is ultimately not raised, the federal government will run out of funds.

Here is more on the debt ceiling and what it means for the federal government.

For Kevin McCarthy and the Republican majority he leads in the House, the debt limit is all about leverage.

In exchange for their votes in the November midterms, the party made big promises to their supporters, but the Democrats’ continued control of the Senate and Joe Biden’s presence in the White House means much of the legislation House Republicans pass will go nowhere. Increasing the government’s borrowing limit is one area where the two parties must work together, and while they have been vague on the details, McCarthy’s team says they will only agree to an increase if the Democrats reduce government spending.

Using the debt ceiling as leverage has been done repeatedly in the past, but the circumstances today harken back to the standoff of 2011. Then, Barack Obama was in the White House and had a Democratic majority in the Senate, while the GOP had just retaken the House. As is the case today, the Republicans demanded spending cuts, and negotiations dragged on for so long that S&P Global Ratings downgraded American’s debt from its highest grade.

The deal that resolved the standoff ultimately did lead to some spending cuts – but the country’s debt has only increased in the years since.

Democrats and Republicans prepared for battle as US hits debt ceiling

Good morning, US politics blog readers. The US government is expected to today hit the legal limit on how much debt it can accrue to pay its bills, but the immediate consequences will be more political than economic. The treasury says it should have enough cash on hand to settle bills for everything from interest payments to government workers’ salaries till about June, but Congress will need to agree on increasing the limit if the world’s largest economy is to avoid defaulting on its debt for the first time in its history. Joe Biden and the Democrats want to raise the limit without conditions, but Republicans controlling the House of Representatives say they’ll only agree to do so if spending is cut, to some degree. This will be one of the major political battles of the year, and you can consider today its informal start date.

Here’s what else is happening:

  • Joe Biden is heading to California’s Santa Cruz county to tour damage done by a series of winter storms, with a speech scheduled for 6pm eastern time.

  • The House and Senate have no business scheduled, but expect to hear from both parties about the debt limit.

  • As the cliche goes, all politics is local, even in Washington DC, where city leaders nationwide are gathering for the annual US Conference of Mayors winter meeting.

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