US reaches borrowing limit, fight between Republicans and Democrats starts – live

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US reaches debt limit, Treasury says

The U.S. government has reached the legal limit on how much money it can borrow, and Congress must pass an increase to avoid defaulting on debt in the coming months, the Treasury Secretary said. Janet Yellen said this morning.

In a letter to congressional leaders, Yellen announced that the Treasury Department would begin taking “extraordinary measures” to ensure that the government’s available funds remain valid until Congress acts. These include a “debt issuance suspension period” that runs from today until June 5, as well as the suspension of investments in two government employee pension funds.

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“As I stated in my January 13 letter, the period 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 quickly to protect the full faith and honor of the United States,” Yellen wrote.

Key events

White House Chief of Staff Ron Klain is on Twitter, digging into the Republicans’ lack of detail about what they want in exchange for raising the debt ceiling:

House GOP leadership has made it clear they want cuts in one form or another, but have said no more than that yet.

US reaches debt limit, Treasury says

The U.S. government has reached the legal limit on how much money it can borrow, and Congress must pass an increase to avoid defaulting on debt in the coming months, the Treasury Secretary said. Janet Yellen said this morning.

In a letter to congressional leaders, Yellen announced that the Treasury Department would begin taking “extraordinary measures” to ensure that the government’s available funds remain valid until Congress acts. These include a “debt issuance suspension period” that runs from today until June 5, as well as the suspension of investments in two government employee pension funds.

“As I stated in my January 13 letter, the period 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 quickly to protect the full faith and honor of the United States,” Yellen wrote.

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

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 U.S. district court on Wednesday showed.

“That’s Marla, yes,” Trump said as he showed a photo. “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 that he couldn’t have attacked Carroll because she’s not his “type.”

It was not the first release of excerpts from Trump’s statement, which took place in October. Last week, Trump appeared to have claimed that Carroll “said it was very sexy to be raped.”

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

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

“Making a big political speech today at TRUMP DORAL, in Miami. The Fake News says I don’t campaign very hard. I say they are stupid and corrupt, while the election is still far away,” he wrote on his Truth social account.

Trump doesn’t name the outlets he says deserve the nickname “fake news,” but several publications, including the Guardian, have noted that his latest presidential bid has been unusually quiet since it debuted in November.

“But have no fear, MANY GIANT RALLIES and other events are coming soon,” Trump continued on Truth. “It all gets wild and exciting. We will save our country from DOOM and MAKE AMERICA GREAT AGAIN!

So there you have it.

The debt limit will 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’s not raised, and what the two sides want:

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

US Treasury Secretary Janet Yellen sent an ominous warning letter to Congress last Friday that “certain extraordinary measures” will have to be taken to prevent the United States from defaulting on its obligations. the government is not yet defaulting. Those measures will last several months, but if the limit is not eventually raised, the federal government will run out of money.

Here’s more about 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 about leverage.

In exchange for their votes in the November midterm elections, the party made big promises to its supporters, but the Democrats’ continued control of the Senate and Joe Biden‘s presence in the White House means that much of the legislation that House Republicans pass will go nowhere. Raising the government’s borrowing limit is one area where the two sides need to work together, and while they’ve remained vague on the details, McCarthy’s team says they’ll only agree to an increase if Democrats cut government spending.

The use of the debt ceiling as leverage has been used repeatedly in the past, but today’s conditions hark back to the stalemate of 2011. Then, Barack Obama sat 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, Republicans demanded cuts and negotiations dragged on so long that S&P Global Ratings downgraded US debt from its highest rank.

The deal that resolved the deadlock eventually led to some cuts, but the country’s debt has only increased in the years since.

Democrats and Republicans prepared for battle as the US hits the debt ceiling

Good morning, blog readers about American politics. Today, the US government is expected to reach 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 needs to have enough cash on hand to pay bills for everything from interest payments to government employee salaries through about June, but Congress will have to agree on raising the limit if the world’s largest economy wants to avoid her debts for the first time in its history. Joe Biden and the Democrats want to raise the limit without conditions, but the Republicans who control the House of Representatives say they will only do so if spending is cut to some degree. This will be one of the most important political battles of the year and you can consider its informal start date today.

Here’s what else happens:

  • Joe Biden is heading to California’s Santa Cruz county to survey damage caused by a series of winter storms, with a speech scheduled for 6 p.m. Eastern time.

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

  • As the cliche goesis all politically local, even in Washington DC, where nationwide city leaders gather for the annual winter meeting of the US Conference of Mayors.

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