US hits borrowing limit, kicking off fight between Republicans and Democrats – live

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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:

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:

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.

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.