AP Explains: US to hit debt ceiling

(19 Jan 2023)
FOR CLEAN VERSION SEE STORY NUMBER: 4415638
ASSOCIATED PRESS
Washington – 18 January 2023
1. Wide exterior of US Treasury Department
ASSOCIATD PRESS
Washington – 17 January 2023
2. STILL of US President Joe Biden
ASSOCIATED PRESS
Washington – 7 January 2023
3. STILL of US House Speaker Kevin McCarthy
ASSOCIATED PRESS
Washington – 18 January 2023
4. SOUNDBITE (English) Josh Boak, Associated Press: ++PARTIALLY COVERED++
"Hi, I'm Josh Boak, White House reporter at the Associated Press. The U.S. government hits its debt limit today. What is the debt limit? Well, under law, the government can only borrow $31.38 trillion. To borrow more than that would require congressional and presidential approval. And right now, there is a showdown between President Joe Biden and House Speaker Kevin McCarthy on raising the debt limit.
ASSOCIATED PRESS
Washington – 11 January 2023
5. STILL of US Treasury Secretary Janet Yellen
ASSOCIATED PRESS
Washington – 18 January 2023
6. SOUNDBITE (English) Josh Boak, Associated Press:
++PARTIALLY COVERED++
"The Treasury Department has responded by implementing what it calls extraordinary measures. What this means is that it's changing and suspending its contributions to the retirement and health care funds for government workers, creating enough space financially for the government to keep operating until early June."
ASSOCIATED PRESS
Washington – 13 January 2023
7. STILL of a letter from Janet Yellen to Kevin McCarthy
ASSOCIATED PRESS
Washington – 18 January 2023
8. STILL: Exterior of the Department of Treasury
POOL
Washington – 12 January 2023
9. Wide of President Joe Biden speaking about the US economy
10. Wide of House Speaker Kevin McCarthy addressing the press form statuary hall
ASSOCIATED PRESS
ARCHIVE: New York – 29 December 2022
11. STILL: Various of traders working on the floor of the New York Stock Exchange
ASSOCIATED PRESS
Washington – 18 January 2023
12. SOUNDBITE (English) Josh Boak, Associated Press: ++PARTIALLY COVERED++
"The problem, even though we've raised the debt ceiling roughly 80 times since the 1960s, is the extent of the political divide. Biden says we need to increase the debt ceiling automatically with no changes. While McCarthy and many House Republicans are insisting on spending cuts, McCarthy wants to negotiate. While Biden has said no negotiation, Congress should do its job. That leaves us at an impasse. And even if we have several months for talks for back and forth, we don't see at this moment a clear way to resolve that impasse. What is the risk for the US economy if we can't fix this? Well, the US Treasury note is the most important asset in financial global markets. If investors lose confidence in the United States ability to pay its debts, then interest rates will go up. It will be more expensive to buy cars and houses. Moody's Analytics In 2021, when we last faced this challenge, estimated there could be more than 6 million job losses. The point is that politicians are playing a game right now that could affect the life and livelihood of everyday Americans. And if the US economy stumbles because of the debt limit, it won't be because of the underlying strength of the economy. It will be because of politics."
++ENDS ON SOUNDBITE++
STORYLINE:
The countdown toward a possible U.S. government default began Thursday with Treasury implementing accounting measures as a stopgap, while frictions between President Joe Biden and House Republicans raise alarms about whether the U.S. can sidestep a potential economic crisis.
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[daphneelevasseur]

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[tzubenson]

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