Treasury Department Warns of Default by Mid-June
On Thursday this week, the United States officially hit the debt limit. Treasury Secretary Janet Yellen has announced the Department will take so-called “extraordinary measures” to continue to meet financial obligations. These measures are expected to keep the U.S. Government solvent until June but, in a letter to Congress, Yellen urged action to raise the debt limit above the current limit of $31.4 trillion to avoid defaulting on the debt and to do so sooner rather than later to avoid unnecessary harm to the U.S. and global financial markets and the U.S. economy. The United States has never defaulted on its debt, and experts agree that the consequences of doing so would be catastrophic.
House Republican leadership is opposed to raising the debt limit ceiling without significant cuts to both discretionary spending and entitlement programs, while Republican Senate Majority Leader Mitch McConnell has declared there will be no default on the debt. The White House has already called House Republican demands a non-starter. The necessity of raising the debt limit will have significant consequences this new Congress and will increase in volatility the closer we get to the projected date.
Here’s what else you may have missed this week:
The Republican-led House Oversight and Accountability Committee launched their first probe. Chair James Comer (R-KY) kicked off the first of any anticipated investigations into President Joe Biden after recent revelations that, similar to former President Trump, he too was in possession of classified documents after leaving office. The documents in question have been found at his Delaware home and at the Penn Biden Center in an unsecured closet located at the University of Pennsylvania. Biden’s own U.S. Justice Department Attorney General Garland acted to appoint a special prosecutor, which could stymie requests for documents.
Chair Comer will press on regardless, requesting University of Pennsylvania President to provide documents as well as to identify who may have had access to the documents. The Center has been asked about how the think tank solicited donations and whether they received contributions from Chinese nationals. This also reflects the House intention to explore Chinese Communist Party influence on government and businesses, including through the newly established House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party. Your WSW team will be tracking this new Select Committee as well as the newly established Judiciary Subcommittee on the Weaponization of the Federal Government as it relates to government action and business.
State of the Union scheduled for February 7th. Last week House Speaker Kevin McCarthy formally invited President Biden to give his second such address to Congress. The tone of this speech before a divided Congress will likely be muted in comparison to his previous remarks, emphasizing bipartisan cooperation and implementation of previous Biden policy funding priorities. President Biden will also likely counter or seek to pre-empt Republican criticisms of the economy’s fiscal policy, border security and more.
