Closing summary
Republican senator Tim Scott threw his hat into the ring with a speech in South Carolina where he promised to pursue a more compassionate form of conservatism, while advocating for hardline border security policies and downplaying the effects of racial inequality on American society. The GOP’s presidential field is crowded and set to become more packed on Wednesday when Ron DeSantis makes his campaign official, but can anyone defeat the final boss of Republican politicians, Donald Trump? We’ll see.
Here’s what else has happened today:
Joe Biden and Kevin McCarthy will meet at 5.30pm to (hopefully) resolve the debt ceiling standoff.
The NAACP issued a travel advisory for Florida over policies DeSantis has pursued as governor, and which he will likely try to sell voters on in his presidential campaign.
Mandatory water cuts were avoided in the west after the Biden administration and several states agreed to a deal regarding management of the Colorado river.
Trump and fellow South Carolina senator Lindsey Graham both wished Scott well on his presidential bid.
Speaking of Trump, federal prosecutors have evidence that he was warned he could not hold onto classified documents, the Guardian has confirmed.
We’re 10 days away from 1 June, the estimated date when the US government, fresh out of cash and prohibited by the legal debt ceiling from borrowing more money, will default on its obligations for the first time in history.
Joe Biden and Kevin McCarthy are in the midst of negotiations over a deal to raise the limit, likely in exchange for spending cuts or the enactment of conservative priorities that the GOP has demanded. But it’s coming awfully close to the deadline, particularly since it takes several days for Congress to consider and vote on legislation, and there’s no telling who might object to whatever deal the Democratic president reaches with the Republican speaker of House.
The Associated Press took a look at what might happen if Washington does the unthinkable and actually defaults, and reached a grim verdict:
The repercussions of a first-ever default on the federal debt would quickly reverberate around the world. Orders for Chinese factories that sell electronics to the United States could dry up. Swiss investors who own U.S. Treasurys would suffer losses. Sri Lankan companies could no longer deploy dollars as an alternative to their own dodgy currency.
“No corner of the global economy will be spared” if the U.S. government defaulted and the crisis weren’t resolved quickly, said Mark Zandi, chief economist at Moody’s Analytics.
Zandi and two colleagues at Moody’s have concluded that even if the debt limit were breached for no more than week, the U.S. economy would weaken so much, so fast, as to wipe out roughly1.5 million jobs.
And if a government default were to last much longer — well into the summer — the consequences would be far more dire, Zandi and his colleagues found in their analysis: U.S. economic growth would sink, 7.8 million American jobs would vanish, borrowing rates would jump, the unemployment rate would soar from the current 3.4% to 8% and a stock-market plunge would erase $10 trillion in household wealth.
Biden and McCarthy are set for a 5.30pm meeting at the White House for further talks on a debt limit agreement.
