Closing summary
We’re only 16 days away from 1 June, when the US government – having hit the legal limit on how much money it can borrow months ago – is expected to exhaust its cash on hand and could default on its debt obligations, potentially causing a financial calamity.
Today, Joe Biden met with top Republican and Democratic lawmakers in congress to negotiate a deal to raise the debt ceiling. Biden will be cutting his trip to Asia short, so he can continue negotiations. House Speaker Kevin McCarthy signaled that the talk was promising, even though Republicans and Democrats remain “far apart” on issues.
Republicans want to cut federal spending before agreeing to lift the debt ceiling – scaling safety net back programs for poor Americans and seniors. They want to impose work requirements for recipients of public assistance, which could be a non-starter for many Democrats.
A number of elections are happening today. Kentucky Republicans will vote on a challenger to take on the state’s Democratic governor Andy Beshear, and special elections in Pennsylvania could determine which party control’s the state’s house of representatives.
In the Senate banking committee, Democratic and Republican lawmakers were skeptical of explanations from former Silicon Valley Bank CEO Gregory W Becker for why the institution went under.
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In a statement, the White House said the meeting today was “productive and direct”.
“The president directed staff to continue to meet daily on outstanding issues. He said that he would like to check in with leaders later this week by phone, and meet with them upon his return from overseas,” according to the White House.
The US could default on its debts by 1 June if negotiations do not conclude, and the debt ceiling is not raised, by then.
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Here’s the Guardian’s explainer on the debt ceiling, and the significance of these talks:
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“It was a positive meeting,” said Hakeem Jeffries, the House minority leader. “We all agreed that default was not an option.”
Senate majority leader Chuck Schumer said that he and Jeffries were “committed” to getting a bipartisan bill done. “The bottom line is that we all came to agreement that we were going to continue discussions in the way that I believe Speaker McCarthy described, which was agreed to by all of us in the room together.”
Lawmakers speak to press after debt limit meeting
Kevin McCarthy, the Republican House speaker, said the two sides are still “far apart” on a debt limit deal. “It is possible to get a deal by the end of the week,” he said, and noted that the “structure of the talks” has improved.
McCarthy said they’ve agreed to have Biden appoint someone to negotiate with Republican leaders.
Back in Congress, CBS News tracked down George Santos to ask him what he thinks about the push by Democrats to expel him.
Here’s what he has to say:
ONLY ON @CBSNews: @RepSantosNY03 tells me what he thinks of a resolution introduced by @RepRobertGarcia to expel him from Congress. 👇🏾 pic.twitter.com/v7bUIQKDJY
— Nikole Killion (@NikolenDC) May 16, 2023
The Guardian’s Maanvi Singh is taking the blog over to keep you updated on the rest of the news for today, including the outcome of the ongoing debt ceiling talks at the White House.
Biden cuts Asia trip short to address debt limit – report
Joe Biden has cut short his trip to Asia and will return on Sunday from visiting Japan to work on reaching a deal over the debt ceiling, NBC News reports:
BREAKING BIDEN TRIP CHANGE According to a source familiar with the president's trip planning
— Kelly O'Donnell (@KellyO) May 16, 2023
“President Biden has decided to return to the United States on Sunday, immediately following the completion of the G7, to ensure Congress takes action by the deadline to avert default.“
The president had been set to stop in Australia, and pay the first visit by an American president to Papua New Guinea. According to the Washington Post, the three-country trip was meant to solidify allied efforts to counter China, as well as rally support for Ukraine and for fighting the climate crisis.
Biden is still expected to meet with leaders from the G7 group of the world’s richest countries while in Hiroshima, Japan.
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A quick vibe check from Joe Biden at the start of the meeting with Republican and Democratic congressional leaders in the Oval Office.
“Hello folks. Get a good picture of all of us. We’re having a wonderful time. Everything’s going well,” he said to reporters, with a laugh that seemed to indicate everything is, perhaps, not going well.
See the moment here.
Biden, McCarthy convene at White House for debt ceiling talks
Joe Biden and Kevin McCarthy are now in the Oval Office for their latest attempt to find an agreement on raising the US government’s borrowing limit ahead of the estimated 1 June deadline for default.
Joining them is vice-president Kamala Harris, the Senate’s Democratic leader Chuck Schumer, the chamber’s top Republican Mitch McConnell and the Democratic House minority leader Hakeem Jeffries. The group said little to reporters who were allowed in briefly as the meeting began, but the lawmakers are expected to address the media at the White House once the gathering wraps up.
The question now is whether they’ll have anything substantive to say.
Robert Reich, a former secretary of labor professor of public policy at the University of California, Berkeley, and Guardian US columnist, has also weighed in on the standoff over raising the debt ceiling.
He does not have much time for Republicans saying raising the debt ceiling would lead to higher spending and bigger federal debts.
Writing on Twitter, he said:
I’m sick and tired of hearing this lie peddled by the GOP and corporate media. Raising the debt ceiling does not increase spending or the federal debt. It simply allows the government to pay bills it has already taken on— and defaulting on the debt would be catastrophic.
— Robert Reich (@RBReich) May 16, 2023
And spelling out what he thinks a GOP plan would mean, he wrote on Monday:
The GOP’s debt ceiling plan would mean:
— Robert Reich (@RBReich) May 15, 2023
-A reduction of up to 108K teachers and aides
-200K children kicked off Head Start
-Meals on Wheels taken away from 1 million seniors
-7K fewer rail safety inspection days next year alone
It's just ruthless — plain and simple.
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House speaker Kevin McCarthy is heading to the White House now to discuss the debt limit standoff with Joe Biden, alongside top Senate Republican Mitch McConnell and the chamber’s leader Chuck Schumer.
Such talks have in the past not yielded a breakthrough, but there are signs that both parties are looking for a deal. Case in point: at the just-concluded White House press briefing, a reporter asked National Security Council spokesman John Kirby if Biden would continue with a trip to Asia scheduled to start on Wednesday, given the ongoing debt ceiling negotiations. Kirby indicated the president might cut his trip short:
AP’s @ZekeJMiller: “Rest of [Biden's] trip is now up in the air because of debt limit negotiations?”
— The Recount (@therecount) May 16, 2023
National Security Council’s John Kirby: “What I can speak to is G7 and going to Hiroshima. The president’s looking forward to that. We’re taking a look at the rest of the trip.” pic.twitter.com/oOtIyRlZtI
Biden is scheduled to attend a meeting of G7 leaders in Japan, before visiting Australia and Papua New Guinea.
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House Democrat introduces resolution to expel George Santos
House Democrat Robert Garcia has introduced a resolution to expel indicted fabulist George Santos from the chamber. Santos was elected as a Republican to represent the New York City suburbs last year, after which reports emerged that he lied about large parts of his resume. Last week, he was indicted on federal charges of fraud and money laundering, among other allegations.
Garcia’s resolution requires a two-thirds majority vote to pass, which is a steep hill to climb, considering Republican House speaker Kevin McCarthy has said he would call for Santos to resign only if the chamber’s ethics committee recommends it. The GOP has a slim majority in the House, and Santos supported McCarthy’s election as speaker, as well as many of his legislative priorities.
Here’s the moment Garcia introduced the resolution on the House floor:
Rep. Robert Garcia (D-CA) introduces a resolution to order “Rep. George Santos be, and hereby is, expelled from the House of Representatives.” pic.twitter.com/y5lwAihdtt
— The Recount (@therecount) May 16, 2023
Steve Phillips, the founder of Democracy in Color, has written for the Guardian about what he calls the Biden administration’s timidity when it comes to the debt ceiling fight with Republicans.
He writes:
One wonders what the Biden administration is afraid of when it comes to calling the Republicans’s bluff on raising the federal debt ceiling. While White House officials no doubt have genuine legal and policy concerns about their ability to act unilaterally to defuse the crisis, the overriding reason is probably fear of the political consequences, and on that front they are both misreading the moment and misunderstanding the composition of the country’s electorate.
Read his full opinion piece here:
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Away from US national politics, the state department has condemned the arrest of a former US consulate employee in Russia.
Robert Shonov was detained in the Russian city of Vladivostok on suspicion of “cooperation on a confidential basis with a foreign state, international or foreign organization”.
According to AP, the state department says Shonov is a Russian national who worked at the now-closed US consulate in Vladivostok for more than 25 years. He then worked at a company the US contracted with to support its embassy in Moscow.
State department spokesman Matthew Miller told AP: “Mr Shonov’s only role at the time of his arrest was to compile media summaries of press items from publicly available Russian media sources .His being targeted under the ‘confidential cooperation’ statute highlights the Russian Federation’s blatant use of increasingly repressive laws against its own citizens.”
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A man who allegedly attacked two congressional workers with a metal baseball bat had a history of mental illness and had assaulted someone else earlier in the day, authorities said.
The man, identified as Xuan-Kha Tran Pham, 49, of Fairfax, Virginia, attacked the Democratic congressman Gerry Connolly’s office on Monday, shattering windows and striking two women, including an intern on her first day on the job, authorities said.
AP reports:
Staffers then managed to shelter in an inner office until officers arrived, within five minutes. Connolly said they used a stun gun to subdue Pham.
Pham, 49, has been violent before, attacking police officers last year. His father, Hy Pham, told the Washington Post his son was schizophrenic and had dealt with mental illness since his late teens. He said he had been trying, without success, to arrange mental health care for his son.
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As the debt ceiling hangs over Washington and the US economy as a whole, the Guardian’s Lauren Aratani has the answers to all your question about the high-stakes policy logjam:
The US faces an “unprecedented economic and financial storm”, the treasury secretary, Janet Yellen, warned on Tuesday as Joe Biden met with his Republican counterparts for the latest in a series of tense talks over the US debt ceiling.
Time is quickly running out to find a solution, said Yellen. Without raising the debt limit, the US government will default on its bills, a historic first, with likely catastrophic consequences. Federal workers would be furloughed, global stock markets would crash and the US economy would probably drop into a recession.
Here is more on the debt ceiling and what it means for the US government:
In questioning before the Senate banking committee, former Silicon Valley Bank CEO Greg Becker took responsibility for its collapse, but would not say if he would give back his bonus.
“I was the CEO of Silicon Valley Bank. I take responsibility for what ultimately happened,” Becker said in response to questions from Republican senator Katie Britt, who asked what he would have done differently.
Britt asked him if he would return a $1.5m bonus he received before the institution went under, but Becker was vague. “I’m committed to cooperate with the process, with the regulators and other agencies that I know are going to be looking into that specific question,” he replied.
“OK, well, I hope even if, for whatever reason, they say you don’t have to, I hope that you dig deep and you decide that that needs to be somewhere besides in your pocket,” Britt replied.
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Kevin McCarthy says he intends to push for more work requirements on public programs
Ahead of his meeting with Joe Biden later today, Republican speaker of the House Kevin McCarthy has made clear that he intends to push for more work requirements on public assistance programs:
House Speaker Kevin McCarthy calls for work requirements for “all the programs” as part of debt limit negotiations:
— The Recount (@therecount) May 16, 2023
“What work requirements actually do: help people get a job … The public wants it, both parties want it.” pic.twitter.com/lyUHBDu0si
Major anti-poverty programs the federal government runs include Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, and Temporary Assistance for Needy Families, which states can use to offer cash and services to the poor. Republicans have long called for more requirements to ensure people receiving such aid are made to work or be looking for a job, but supporters of the programs say that would harm their effectiveness.
Meanwhile in the Senate, the top Republican Mitch McConnell made clear that he’s letting McCarthy take the lead in negotiating with the White House:
Ahead of the second debt ceiling meeting, Senate Minority Leader Mitch McConnell signals he’s still backing the House GOP:
— The Recount (@therecount) May 16, 2023
“So, for the second time, I’ll be glad to sit in at the White House to support Speaker McCarthy and to urge President Biden to start operating in reality.” pic.twitter.com/a72rmq3kXD
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While Republicans in statehouses under their control are moving to restrict abortion access, the party’s current presidential frontrunner Donald Trump has remained mum about how far he would go in curbing the procedure.
He was asked repeatedly last week at a town hall hosted by CNN if he would sign a nationwide abortion ban, but refused to answer. He was similarly unclear in an interview published yesterday by the Messenger.
That vagueness has provided an opening for Ron DeSantis, the Florida governor who is expected to run for the Republican nomination while trying to close what polls indicate is a wide deficit in support between him and Trump. The former president has attacked DeSantis with a variety of colorful nicknames, and while the Florida governor has refrained from firing back to the same degree, he did criticize Trump over the abortion issue in a press conference today:
Gov. Ron DeSantis (R-FL) criticizes Donald Trump for refusing to commit to a federal abortion ban during his CNN town hall:
— The Recount (@therecount) May 16, 2023
“He didn’t give an answer about, ‘Would you have signed the heartbeat bill?’ … I was proud to do it. He won’t answer whether he would sign it or not.” pic.twitter.com/JPueGjEp8B
In North Carolina, Republicans are today set to use their recently achieved supermajority in the state legislature to override the Democratic governor’s veto of a bill banning most abortions after 12 weeks of pregnancy, the Associated Press reports.
Democratic governor Roy Cooper vetoed the ban this weekend, which allows abortions at up to 24 weeks of pregnancy for “life threatening” anomalies and 20 weeks for cases of rape and incest, according to the AP. The GOP has a veto-proof majority in the Senate, and attained the same in the House after a Democrat who said she supported protecting abortion access switched parties.
Republican leaders in both chambers believe they have the votes lined up to override Cooper’s veto, while the AP says the governor has singled out four Republican lawmakers who he said campaigned on protecting abortion access in an effort to get them to oppose the bill.
Cooper discussed the ban in an interview with MSNBC:
Gov. Roy Cooper (D-NC), ahead of GOP-controlled state legislature potentially overturning his veto of a 12-week abortion ban:
— The Recount (@therecount) May 16, 2023
“Right-wing politicians should not be in the exam room with women and their doctors ... We need to leave the medicine to doctors and decisions to women.” pic.twitter.com/C4FTDyUfp7
Ex-SVB chief criticised for not having a chief risk officer before collapse
Back to the Senate banking committee, Democratic and Republican lawmakers were skeptical of explanations from former Silicon Valley Bank CEO Gregory W Becker for why the institution went under.
“That sounds a lot like the dog ate my homework,” remarked the committee’s Democratic chair Sherrod Brown, after Becker in his opening statement blamed the Federal Reserve’s interest rate hikes as well as what he called a social media-fueled bank run for the collapse.
Brown asked Becker to explain why Silicon Valley Bank did not have a chief risk officer on its staff for some of last year. That’s a position typically tasked with guarding against the type of insolvency that the bank eventually fell into. “We took risk management seriously,” Becker responded, and blamed the gap on the time it took to find a suitable candidate.
The committee’s top Republican Tim Scott indicated he found Becker’s explanation wanting. “You said you took risk management seriously. It’s hard to believe that comment,” he said, pointing out that at the time of its collapse, 90% of Silicon Valley Bank’s deposits were uninsured by the federal government.
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Here are a few of the other elections happening across the United States today:
Kentucky Republicans will vote on a challenger to take on the state’s Democratic governor Andy Beshear, who is standing for a second term in November.
Control of Pennsylvania’s House of Representatives – and the fate of an abortion access referendum the GOP may put before voters – is at stake in two special elections that will determine which party controls the chamber, according to the Associated Press. Democrats need to win just one of these to cement their majority, and thwart Republicans’ efforts.
Speaking of Pennsylvania, today is the day of the city’s Democratic primary for mayor – the victor of which is likely to win the general election in the solidly blue city. As with the Chicago mayor’s race earlier this year, the New York Times reports that the contest will serve as a bellwether of voters’ appetites for progressive leaders.
Jacksonville, Florida is one of the few major cities in the United States with a Republican mayor, Lenny Curry. Term limits prevent him from running for another term, and polls are open in a runoff election today where voters will decide whether to replace him with another Republican, or hand the reins of the city to the Democratic candidate.
There are a number of elections happening across the country today, including in Kentucky, where a Republican secretary of state who has taken pride in expanding voter turnout is facing a challenge from within his party, the Guardian’s Kira Lerner reports:
Kentucky’s Republican secretary of state has earned widespread praise for increasing his state’s voter turnout during the coronavirus pandemic and for expanding opportunities to vote. He has also shot down conspiracy theories about the 2020 election and defended his state’s election system from claims of fraud, a stance that could cost him his job.
On Tuesday, Michael Adams is facing a primary challenge from two Republicans who align themselves with the growing faction within the GOP who believe elections are frequently rigged and stolen. The winner will face Buddy Wheatley, a Democrat and former state representative, in November.
In an interview, Adams said it would “absolutely” be worth it if he loses the race to have defended and expanded Kentucky’s elections, but he was hopeful that Kentucky Republicans understood the ways his reforms had benefited them.
Failed Silicon Valley, Signature bank executives face Senate grilling
The former leaders of collapsed financial institutions Silicon Valley Bank and Signature Bank are set to testify before the Senate banking committee in a hearing starting now.
The witnesses include the former Silicon Valley Bank CEO, Gregory W Becker, Scott A Shay, former chairman and co-founder of Signature Bank, and its former president, Eric R Howell. The two banks were shut down by federal authorities in the course of a weekend in March after suddenly becoming insolvent, raising fears of a crisis that could spread across the financial system. Another major regional bank, First Republic, failed the following month, and it’s unclear the extent of the risk posed to other financial institutions.
Senators will probably ask about that at the hearing, which you can follow at the live stream embedded at the top of the page.
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The Congress gurus at Punchbowl News have a rundown of all the reasons to be worried about lawmakers’ ability to actually pass a debt limit compromise ahead of the 1 June deadline.
Their concerns focus on the logistics of both reaching a compromise and getting a bill approved by Congress. Despite all the meetings, including the one scheduled for this afternoon between Joe Biden, Kevin McCarthy and other congressional leaders, the sides still appear to be far apart.
Here, according to Punchbowl, are a few of the things that could still go wrong:
Timing. House Republican leadership estimates congress needs 10 days to move this deal if and when it comes together. There are 10 weekdays until June 1 pic.twitter.com/B89V6Nad6k
— Jake Sherman (@JakeSherman) May 16, 2023
Unlike other negotiations, this thing is real big. And there is no driving principal. pic.twitter.com/HaMl1p8iCZ
— Jake Sherman (@JakeSherman) May 16, 2023
Biden leaves for Japan *tomorrow* for an eight-day trip. pic.twitter.com/isQuW9YWxu
— Jake Sherman (@JakeSherman) May 16, 2023
Janet Yellen says failing to raise debt ceiling would spark new financial crisis
In a speech this morning to a group of community bankers, Janet Yellen outlined the consequences of failing to raise the debt ceiling, saying the economy’s recovery from the Covid-19 pandemic would be undone and a new financial crisis would be triggered.
“In my assessment – and that of economists across the board – a US default would generate an economic and financial catastrophe. Over the past few years, American families and businesses – including many of yours – have worked hard to mount a historic economic recovery. A default would reverse all of the hard-earned progress that we’ve made. And it would set us back even further,” she told a meeting of the Independent Community Bankers of America.
She described a scenario where the government would be unable to pay its bills, disrupting government services such as air traffic control and law enforcement as well as payments to military veterans and social security recipients.
“And of course, the financial crisis that accompanies a default on our debt could multiply the severity of the downturn,” Yellen continued. “The US Treasury market serves as the very bedrock of the global financial system. There’s a reason for that: the world has never doubted that America will pay the principal and interest on its bonds – in full and on time. That’s a fundamental principle of modern finance. A default would crack open the foundations upon which our financial system is built. It is very conceivable that we’d see a number of financial markets break – with worldwide panic triggering margin calls, runs and fire sales.”
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Yellen confirms 1 June deadline for debt limit standoff
In a letter to the Republican speaker of the House, Kevin McCarthy, released yesterday, the treasury secretary, Janet Yellen, confirmed the first day of June remains the estimated date when the US government could default if the debt limit is not raised, dashing hopes that incoming tax revenue or other measures could push the deadline back further.
“With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1,” Yellen wrote, adding: “The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates.”
She then warned McCarthy that even if a default is avoided at the last minute, the protracted uncertainty has already caused problems for the US economy:
We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States. In fact, we have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June. If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.
I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible.
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Biden and McCarthy to meet as debt ceiling talks enter crunch time
Good mornings, US politics blog readers. Talks between Democrats and Republicans over raising the debt limit have gone the direction the pessimists told us they would. We’re only 16 days away from 1 June, when the US government – having hit the legal limit on how much money it can borrow months ago – is expected to exhaust its cash on hand and could default on its debt obligations, potentially causing a financial calamity.
Joe Biden and top lawmakers in Congress have seen this day coming for months, and they’ve been negotiating for weeks, but there’s still no deal to raise the borrowing limit even though both parties say a default must be avoided.
The good news here is that Biden, Kevin McCarthy and congressional leaders are meeting at 3pm ET, so perhaps a breakthrough is in the offing.
Here’s what else is going on today:
The treasury secretary, Janet Yellen, is speaking this morning to a conference of the Independent Community Bankers of America in Washington DC, where she may elaborate on the administration’s view of the debt ceiling standoff.
You may hear more about the report special counsel John Durham released on Monday examining the origins of the 2016 investigation into Donald Trump’s ties to Russia.
Michael McCaul, the Republican chair of the House foreign affairs committee, may hold the secretary of state, Antony Blinken, in contempt over his refusal to turn over a 2021 dissent cable written by embassy staff in Kabul, Afghanistan.
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