Jan 13, 2017

Get ready for a Trumpian debt ceiling showdown

Seth Wenig / AP

Transcripts released Thursday of Federal Reserve meetings in 2011 underscore a potentially serious conflict between President Trump and Congressional Republicans: the debt ceiling.

The old claim: The Treasury and Fed said they couldn't prioritize interest payments to the U.S. government's creditors, ahead of other obligations like salaries or entitlement transfers, if the debt limit wasn't raised.

The truth: They were planning to prioritize interest payments to creditors.

The transcripts are vindication for Republican budget hawks who argued that refusing to raise the debt ceiling would not put the country at risk of default, at least when it came to global bond markets.

Why it matters: The Treasury Department will have to start resorting to "extraordinary measures" to avoid breaching the debt ceiling in March. Those maneuvers will be exhausted roughly six months later, but President-elect Trump has shown little interest in the magnitude of belt-tightening that was demanded of Obama in exchange for a ceiling hike.

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Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2 p.m. ET: 6,325,303 — Total deaths: 377,460 — Total recoveries — 2,727,679Map.
  2. U.S.: Total confirmed cases as of 2 p.m. ET: 1,820,523 — Total deaths: 105,644 — Total recoveries: 458,231 — Total tested: 17,340,682Map.
  3. Public health: Protests against police brutality threaten coronavirus response — Controlling the virus in nursing homes won't be easy.
  4. Business: More than 1 in 6 black workers lost jobs between February and April.
  5. Climate: The alarm over climate financial risk gets louder because of coronavirus.
  6. Media: Interest in the George Floyd protests has soared past the coronavirus.

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Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

Protests over the death of George Floyd and other police-related killings of black people continued across the U.S., inciting a federal response from President Trump, the National Guard, Immigration and Customs Enforcement and Customs and Border Protection.

The latest: Immigration agents have been deployed to assist federal, state and local law enforcement. The U.S. Secret Service closed the streets immediately on all four sides of the White House Tuesday, until "riots become peaceful, or stop."

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Illustration: Eniola Odetunde/Axios

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