1d ago / 11:50 PM UTC
Fitch puts U.S.' AAA on rating watch negative
Zoë Richards and Brian Cheung
Fitch Ratings, a top credit rating agency, put the United States’ AAA long term foreign currency issuer default ratingon negative watch on Wednesday evening.
"The Rating Watch Negative reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date (when the U.S. Treasury exhausts its cash position and capacity for extraordinary measures without incurring new debt)," the agency said in a statement.
"The failure to reach a deal to raise or suspend the debt limit by the x-date would be a negative signal of the broader governance and willingness of the U.S. to honor its obligations in a timely fashion," Fitch said, adding that such a failure was "unlikely to be consistent with a ‘AAA’ rating."
The move is not a downgrade, but a warning it could do so.
Moody's and S&P, two other ratings agencies, had placed the U.S. on negative watch during debt ceiling talks in 2011. S&P followed through with the downgrade; Moody's did not.
1d ago / 11:00 PM UTC
Has the U.S. ever defaulted?
The U.S. has never intentionally defaulted.That “intentionally” framing is key. In 1979,a technical bookkeeping glitch led to late payments, something that was rectified within weeks, only affecting a small group of investors.
1d ago / 9:21 PM UTC
House members will go home for Memorial Day weekend, as talks continue
Frank Thorp V
House Majority Leader Steve Scalise, R-La., told members on the House floor that they will be able to go home for Memorial Day weekend after votes Thursday, as debt ceiling talks continue.
Members will be given a 24-hour notice if they're needed back in Washington to vote on a deal, he said, reiterating that they will have 72 hours to review the text of any agreement before the House votes on it.
"I don’t know how my colleagues across the aisle who voted for the 'Default on America Act' are going to look our veterans in the eye this Memorial Day,” House Minority Whip Katherine Clark, D-Mass., countered, referring to the Democrats' nickname for the GOP-passed debt ceiling bill.
“Now you’re sending us home with no resolution," Clark continued. "That’s the plan, to default, to run out the clock.”
1d ago / 8:57 PM UTC
All 213 House Democrats sign petition to force debt ceiling vote
House Democratic leaders said Wednesday that all 213 members of their Democratic Caucus now have signed a discharge petition to bypass McCarthy and force a vote to raise the debt ceiling.
It’s “another sign of the unity that we have,” Minority Whip Katherine Clark, D-Mass., told reporters, “and we know who we are fighting for — it’s the American people, and that’s what continues to drive our work.”
She made the announcement in a dramatic fashion, just moments after a top aide slipped her a note while she stood on the dais at the news conference.
Democrats still would need at least five GOP votes to bypass McCarthy and pass the legislation to avoid default. So far, no Republicans have agreed to support it.
Typically in the House, the majority controls what bills reach the floor and the minority party has little say.
But the discharge petition is a little-known, rarely used tool that gives the minority the ability to force a vote on the floor if it can secure signatures from 218 members, a simple majority of the chamber.
"House Democrats have provided a vehicle to end this reckless and dangerous default crisis and avoid the economy crashing," Minority Leader Hakeem Jeffries, D-N.Y., said. "It's now time for House Republicans to break with the extreme wing of their party and join House Democrats to put an end to the default crisis."
1d ago / 8:48 PM UTC
Progressive Caucus slams GOP on debt crisis: 'This is McCarthy-made'
Christopher Cicchiello and Ali Vitali
The Progressive Caucus held an afternoon press conference where it addressed the ongoing debt negotiations. Members decried McCarthy and the GOP for their continued unwillingness to negotiate, taking a more offensive tone.
"What are they proposing instead? They want you to foot these bills for these tax cuts," said caucus Chair Rep. Pramila Jayapal, D-Wash., adding Republicans have rejected including closing tax loopholes, a billionaire minimum tax and $3 trillion worth of general deficit reduction.
Rep. Ilhan Omar, D-Minn., echoed a similarly bleak tone, specifically discussing how defaulting on the debt would impact McCarthy's own constituents in California.
“Even a short-term default would kill over 62,000 jobs in his district alone. It would jeopardize Social Security payments for 54,000 families in his district," she said.
Rep. Jan Schakowsky, D-Ill., closed with an impassioned speech, highlighting a woman who "called my office in tears" about the potential of losing her $1,200 monthly income.
“This is unnecessary. This is manmade. This is McCarthy-made," she concluded.
1d ago / 8:23 PM UTC
GOP negotiators have left the White House
Republicans tasked with negotiating a deal to address the debt ceiling have left the White House.
Reps. Garrett Graves, R-La., and Patrick McHenry, R-N.C., left Capitol Hill for the White House just before noon, saying that it was the administration's team that had invited them.
Earlier in the day, McCarthy said that he was sending his negotiators to finish the talks, though he emphasized that both sides were still "far apart."
1d ago / 7:58 PM UTC
Poll: 70% of Americans are concerned the nation will default on its debt
Roughly 7 in 10 Americans are either somewhat or very concerned that Biden and Congress will not reach a deal to raise the debt ceiling ahead of the X-date for default, according to a national poll from Quinnipiac University.
Americans were evenly divided over whether Biden and the Democrats in Congress or McCarthy and the Republicans in Congress were behaving more responsibly in negotiations.
1d ago / 7:16 PM UTC
Negotiators are meeting at the White House
Biden’s press secretary said a meeting between negotiators for the administration and House Republicans that began at noon was still underway.The two sides are meeting in the Office of Management and Budget at the White House after days of talks on Capitol Hill have yet to yield a deal.
Karine Jean-Pierre characterized the meetings as "productive," but declined to say when Biden and McCarthy would next speak, saying this would happen "when the time is right."
“We are going to give the negotiators some time," she added.
1d ago / 6:51 PM UTC
White House accuses congressional Republicans of holding Americans 'hostage' in debt ceiling debate
The White House hit out at Republican negotiators, accusing them of holding middle class jobs "hostage" and “caving” to the most conservative members of the Republican caucus, in a memo released this afternoon.
Andrew Bates, a White House spokesperson, criticized House Republicans, who he said were "threatening to actively harm their own constituents unless extreme demands are met."
Bates pointed to a quote from hardliner Republican Rep. Matt Gaetz, who when asked about the mood of conservative members, told Semafor that they “don’t feel like we should negotiate with our hostage.”
"House Republicans need to be called out for the vicious threat they are making to sabotage America, and to put down the gun they’re holding to the head of middle class jobs," the White House memo said. "Then they need to face reality and work across the aisle on a reasonable budget agreement."
The memo argued that Republican negotiators were refusing to compromise on broadly popular policies, like strengthening Medicare's ability to lower prescription drug costs. Bates said the Biden administration was not making demands beyond raising the debt ceiling.
1d ago / 5:51 PM UTC
Poll: Majority think debt ceiling shouldn't be tied to spending negotiations
A new poll from Monmouth University found that a majority of Americans do not think the debt ceiling should be tied to negotiations about federal spending.
Just 1 in 4, the poll found, support tying the debt ceiling to economic spending.
Biden had insisted his administration would not negotiate over the debt ceiling. But after the deadline was set for June 1, his administration began negotiating on federal spending — a process officials insisted was happening "parallel" to lifting the debt ceiling.
1d ago / 4:48 PM UTC
House Democratic angst grows as Biden’s debt limit negotiations with GOP drag on
Sahil Kapur, Scott Wong, Katherine Doyle and Peter Nicholas
House Democratic anxieties are flaring over Biden’snegotiations with Republicanstoavert default.
Some Democrats fear his limited public statements onthe debt ceilingamount to ceding the messaging war to McCarthy and his deputies, who have been ubiquitous in recent days in casting blame on the White House. Other Democrats say Biden is wrong to discreditthe 14th Amendmentoption to tackle the debt limit unilaterally, as the GOP engages in what Democrats see as a hostage standoff.
Ultimately, their angst is about whom the public will blame if a deal can’t be reached, or if the terms of any agreement are draconian. Without a more aggressive effort to talk to the public, Democrats worry that voters will focus their anger on Biden — and them.
One House Democratic lawmaker said the White House needs to do a better job harnessing “the levers of communication of the presidency, which they haven’t effectively utilized up to this point.”
Read the full story.
1d ago / 4:33 PM UTC
McCarthy says sides still "far apart" on a number of places in negotiations
Garrett Haake, Kate Santaliz, Frank Thorp V and Megan Lebowitz
McCarthy reiterated that there are still a number of places where both sides are "far apart" on negotiations. The remarks came as he announced that he is sending GOP negotiators to the White House today.
"There’s a number of places that we’re still far apart," he said. "I mean, it didn’t seem like it’d be this hard."
McCarthy added that he thinks "we can make progress today."
May 24, 202302:19
1d ago / 4:21 PM UTC
Republican negotiators head to the White House
Kyle Stewart and Alexandra Bacallao
Republicandebt ceiling negotiators Rep. Garret Graves, R-La., and Rep. Patrick McHenry, R-N.C., departed the Capitol just before noon for their meeting with White House negotiators.
“They invited us, we answered the invitation,” McHenry said.
Asked if this meeting is a hopeful sign, he paused and then said, “Not yet.”
“Look the deal is, is that we’ve been working all night trying to look at things differently, trying to come up with new ideas,” Graves said. “We recognize the urgency here.”
McHenry addressed the fundamental issues at play: “It’s spending, it’s work requirements, it’s two sticking points they are doggedly resisting some reasonable set of, set of outcomes.”
1d ago / 4:21 PM UTC
GOP negotiators expected to attend talks at White House
Kristen Welker and Megan Lebowitz
Republican negotiators will go to the White House for debt talks today, according to a source familiar with the negotiations. The meeting was expected to start at noon.
Neither Biden nor McCarthy are expected to attend.
The meeting comes after negotiators disbanded at 1 p.m. yesterday. Today, a Democratic official familiar with the talks characterized the negotiations as hitting a "speed bump."
1d ago / 4:21 PM UTC
Debt limit negotiations hit ‘speed bump,’ Democratic official says
Kristen Welker and Rebecca Shabad
Negotiations over how to address the debt limit to avoid a catastrophic default have hit a “speed bump,” a Democratic official familiar with the talks told NBC News today.
After days of citing “productive” negotiations, the tone in Washington appeared to shift yesterday after the negotiators disbanded at 1 p.m. ET with no plans for further talks or meetings between the leaders.
The Democratic official argued that Biden has “negotiated in good faith” on the nation’s budget but said that McCarthy has “bowed to MAGA extremists who want no compromise.” The source said far-right House Republicans are pressuring McCarthy not to budge.
Read the full story.
President Joe Biden signed into law Saturday a bill to suspend the nation's debt limit through January 1, 2025, to avert a first-ever US default.Did debt ceiling talks resume after Republicans trigger brief pause? ›
High-stakes talks on the debt ceiling resumed Friday evening, after a six-hour pause triggered by House Republican negotiators walking out of the room in frustration. One of the toughest sticking points in the talks has been the question of spending caps, a key GOP demand but a red line for many Democrats.Did Congress suspend the debt ceiling? ›
The House passed a bill to suspend the debt ceiling on Wednesday, clearing a major legislative hurdle with just days left before the US is expected to default. The final House vote was 314 to 117, with 149 Republicans and 165 Democrats supporting the measure.What is bidens proposal for the debt ceiling? ›
Two-year debt increase, spending limits
The agreement would keep nondefense spending roughly flat in the 2024 fiscal year and increase it by 1 percent the following year, as well as provide for a two-year debt-limit increase — past the next presidential election in 2024.
Domestic Holders of Federal Debt
The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation's money supply, is the largest holder of such debt.
1837: Andrew Jackson
(In 1835, the $17.9 million budget surplus was greater than the total government expenses for that year.) By January of 1835, for the first and only time, all of the government's interest-bearing debt was paid off.
|Table of historical debt ceiling levels|
|Date||Debt Ceiling (billions of dollars)||Change in Debt Ceiling (billions of dollars)|
|September 30, 2017||Suspended|
|March 1, 2019||22,030 (de facto)||+2,183|
|August 2, 2019||Suspended|
U.S. debt, long viewed as ultra-safe
Its debt, long viewed as an ultra-safe asset, is a foundation of global commerce, built on decades of trust in the United States. A default could shatter the $24 trillion market for Treasury debt, cause financial markets to freeze up and ignite an international crisis.
Fourteenth Amendment Equal Protection and Other Rights
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
The U.S. Senate passed a debt ceiling bill, addressing the issue just before the country would have defaulted on its debts. Senators voted 63-36 to pass the bill. Both senators Joe Manchin, a Democrat, and Shelley Moore Capito, a Republican, voted yes. The bill now goes to President Biden, who has said he will sign it.
The Senate vote was 63 to 36. Take a look at how every member of the Senate voted on its final passage.How many votes needed for debt ceiling? ›
White House aides privately estimate they may need to deliver as many as 100 Democratic votes to ensure an eventual debt limit deal can pass the narrowly divided House, two people familiar with the matter told POLITICO.Has US debt ceiling been raised? ›
Whenever the Treasury Department could no longer pay the government's bills, Congress has acted quickly [PDF] and sometimes unanimously to increase the limit on what it could borrow. Since 1960, Congress has increased the ceiling seventy-eight times, most recently in 2021.How much does the debt ceiling deal spend on defense spending? ›
WASHINGTON — The debt ceiling agreement negotiated between House Republican leaders and the White House would cap the defense budget topline at President Joe Biden's $886 billion request for fiscal 2024, a 3.3% increase over this year. It would also cut non-defense spending to $704 billion.Why is the US debt ceiling? ›
To provide more flexibility to finance the United States' involvement in World War I, Congress modified the method by which it authorized debt in the Second Liberty Bond Act of 1917. Under this Act, Congress established an aggregate limit, or "ceiling," on the total amount of new bonds that could be issued.Does China have more debt than the US? ›
As recently as 2020, total debt in the United States relative to GDP exceeded China's. But as of mid-2022, China's relative debt burden stood 40 percent higher than America's.Does China owe money to us? ›
As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).What country is the US most in debt to? ›
According to usafacts.org, as of January 2023, Japan owned $1.1 trillion in US Treasuries, making it the largest foreign holder of the national debt. The second-largest holder is China, which owned $859 billion of US debt.When was America last not in debt? ›
Except for about a year during 1835–1836, the United States has continuously had a fluctuating public debt since its Constitution went into effect on March 4, 1789.Which country has no debt? ›
|Characteristic||National debt in relation to GDP|
|Hong Kong SAR||4.26%|
The debt ceiling is the maximum amount of money the government can borrow. On January 19, the US hit its borrowing limit of $31.4 trillion. Since then, the Treasury has implemented a number of measures to avoid failing to pay back its legal obligations, known as a default.Where does the U.S. borrow money from? ›
The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government. Offered in a wide range of maturities.Why does the U.S. borrow money from China? ›
China's demand for Treasurys helps keep U.S. interest rates low. It allows the U.S. Treasury to borrow more at low rates. Congress can then increase the federal spending that spurs U.S. economic growth.What country has the most debt? ›
Norway is the country with the highest level of household debt based on OECD data followed by Denmark and the Netherlands.What are the odds of the U.S. going to default? ›
The odds of the U.S. government missing its debt ceiling deadline have reached about 25% — and the chances are rising by the day, according to a new estimate by JPMorgan Chase experts.What would happen if the U.S. stopped paying its debt? ›
A default on U.S. debt could trigger a worldwide recession and upend stock markets in addition to wreaking havoc in Americans' financial lives. Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is also an authority on student loans.Why didn t Biden invoke the 14th Amendment? ›
WHAT DOES BIDEN SAY? Biden has said his administration is studying the idea of invoking the 14th Amendment. He said he's skeptical that it is a viable option but the “one thing I'm ruling out is default.” “The problem is it would have to be litigated,” he said of the constitutional reasoning on Tuesday.Why is the 14th Amendment controversial today? ›
This is because, for the first time, the proposed Amendment added the word "male" into the US Constitution. Section 2, which dealt explicitly with voting rights, used the term "male." And women's rights advocates, especially those who were promoting woman suffrage or the granting of the vote to women, were outraged.How can we prevent the debt ceiling crisis? ›
- Mint the big platinum coin. ...
- Treat the debt ceiling as unconstitutional. ...
- Treat the debt ceiling as illegal. ...
- Issue high-interest bonds.
- John Barrasso of Wyoming.
- Marsha Blackburn of Tennessee.
- Mike Braun of Indiana.
- Katie Britt of Alabama.
- Ted Budd of North Carolina.
- Bill Cassidy of Louisiana.
- Tom Cotton of Arkansas.
- Mike Crapo of Idaho.
Who qualifies for student loan forgiveness? To be eligible for forgiveness, you must have federal student loans and earn less than $125,000 annually (or $250,000 per household). Borrowers who meet that criteria can get up to $10,000 in debt cancellation.What is in the new debt ceiling bill? ›
Some $886 billion will be spent on defense, according to the bill text. The debt ceiling bill that House Republicans passed in April would have returned discretionary spending to fiscal 2022 levels and then limited the growth in spending to 1% for a decade. Defense spending would have been protected.How much debt does the US government have per person? ›
|March 31, 2022||91.28K|
|December 31, 2021||88.97K|
|September 30, 2021||85.48K|
|June 30, 2021||85.87K|
art. I, § 8, cl. 1 ( The Congress shall have Power . . . to pay the Debts and provide for the common Defence and general Welfare of the United States . . . . ).Did the war left Congress in debt? ›
The war left Congress in debt. Congress had paid soldiers in full for military service in the war. Congress lacked the power to tax and couldn't pay its debts.] Robert Morris proposed a 10 percent tax on imported goods to help pay the national debt.How many votes are needed to pass a bill in the Senate? ›
When the Senate considers the bill, they can vote on it indefinitely. When there is no more debate, the bill is voted on. If 51 of 100 Senators vote for it, the bill passes by a simple majority.How many Republicans are in the House 2023? ›
|Leader since||January 3, 2019||January 3, 2023|
|Leader's seat||California 20th||New York 8th|
|Last election||222 seats, 50.6%||213 seats, 47.8%|
Under Senate debate rules, it takes a three-fifths majority of those duly chosen and sworn to invoke cloture and end debate on a piece of legislation.Who owns the U.S. debt? ›
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.How much debt is the US in 2023? ›
At the end of FY 2022 the federal debt was $30.84 trillion. At the end of FY 2023 federal debt is “guesstimated” to amount to $32.69 trillion. Thus far, on 2023-06-22, the federal debt is $32.17 trillion. See Coronavirus Update page.
How has the national debt changed over time? The national debt has grown by $25.73 trillion since 1993. The largest single-term increases took place under President Donald Trump, largely in response to the COVID-19 pandemic, and President Barack Obama's first term during the Great Recession.Who has the highest defense spending percentage? ›
The United States led the ranking of countries with highest military spending in 2022, with 877 billion U.S. dollars dedicated to the military. That constituted nearly 40 percent of the total military spending worldwide that year, which amounted to 2.2 trillion U.S. dollars.What percentage of the budget is Defence in USA? ›
Defense spending accounts for 12 percent of all federal spending and nearly half of discretionary spending. Total discretionary spending — for both defense and nondefense purposes — is typically only about one-third of the annual federal budget.How much is the US Defence budget in dollars? ›
U.S. military spending FY 2000-2022
In 2022, the United States spent around 876.94 billion U.S. dollars on its military. U.S. military spending has been increasing in current dollar terms since 2016. Spending increased dramatically in 2022 after the Russian invasion of Ukraine.
The Fed tries to influence the supply of money in the economy to promote noninflationary growth. Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse.Why is the US in such bad debt? ›
The U.S. debt is the total federal financial obligation owed to the public and intragovernmental departments. The U.S. national debt is so big because Congress continues both deficit spending and tax cuts.What makes up the most of the U.S. debt? ›
Breaking Down the National Debt
Public debt is made up of both public debt and intragovernmental debt. The majority of the debt—about $24.5 trillion—is debt held by the public. This includes Treasury bills, notes, and bonds owned by U.S. investors, the Federal Reserve, and foreign governments.
The debt limit caps the total amount of allowable outstanding U.S. federal debt. The U.S. hit that limit—$31.4 trillion—on January 19, 2023, but the Department of the Treasury has been undertaking a set of “extraordinary measures” so that the debt limit does not yet bind.How did the federal debt get so high? ›
Flashpoints that greatly contributed to the debt over the past 50 years include the wars in Iraq and Afghanistan, the 2008 financial crisis and the 2020 COVID-19 pandemic -- the latter two prompting sweeping stimulus measures from Congress that cost trillions of dollars.How much debt does the US have? ›
The United States has the world's highest national debt at $31.4 trillion. Global debt currently stands at $305 trillion, $45 trillion higher than before the COVID-19 pandemic, according to the Institute of International Finance (IIF) – a global association of the financial industry.
What Happens If the Debt Gets Too High? Hitting the debt limit and failing to pay interest payments to bondholders would have grave economic consequences. The U.S. government would be in default, lowering its credit rating and increasing the cost of its debt. This would throw the U.S. economy into a tailspin.What if America paid off its debt? ›
If the U.S. paid off its debt there would be no more U.S. Treasury bonds in the world. "It was a huge issue ... for not just the U.S. economy, but the global economy," says Diane Lim Rogers, an economist in the Clinton administration. The U.S. borrows money by selling bonds.What happens if the US goes over the debt limit? ›
Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history.Why does the US owe so much money to China? ›
U.S. debt to China comes in the form of U.S. Treasuries, largely due to their safety and stability. Although there are worries about China selling off U.S. debt, which would hamper economic growth, doing so in large amounts poses risks for China as well, making it unlikely to happen.Is there any country not in debt? ›
Learning about Countries and Their Debt
The best example can be taken from Hong Kong (it is a one of the debt free countries), whose economy has the least debt to GDP ratio. It is an almost debt free country. It has a well-regulated financial system and large foreign reserves.
Norway is the country with the highest level of household debt based on OECD data followed by Denmark and the Netherlands.Are student loans automatically forgiven after 25 years? ›
Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).Can the president forgive student loans? ›
Yes, but there are caveats. The president and other members of the executive branch, such as the secretary of education, can forgive debts only when Congress authorizes it.How do I know if my loans are forgiven? ›
If you qualify for student loan forgiveness or discharge in full, you will get a notification and will no longer need to make payments. In some cases, you may even get a refund. If only some of your debt is canceled or discharged, you'll still be responsible for repaying the rest of what you owe.