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    Wall St. Is Counting on a Debt Limit Trick That Could Entail Trouble

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    If the debt limit is breached, investors expect Treasury to put bond payments first. It’d be politically and practically fraught.Washington’s debt limit drama has Wall Street betting that the United States will employ a fallback option to ensure it can make good on payments to its lenders even if Congress doesn’t raise the nation’s borrowing limit before America runs out of cash.But that untested idea has significant flaws and has been ruled out by the Biden administration, which could make it less of a bulwark against disaster than many investors and politicians are counting on.Many on Wall Street believe that the Treasury Department, in order to avoid defaulting on U.S. debt, would “prioritize” payments on its bonds if it could no longer borrow funds to cover all its expenses. They expect that America’s lenders — the bondholders who own U.S. Treasury debt — would be first in line to receive interest and other payments, even if it meant delaying other obligations like government salaries or retirement benefits.Those assumptions are rooted in history. Records from 2011 and 2013 — the last time the U.S. tipped dangerously close to a debt limit crisis — suggested that officials at the Treasury had laid at least some groundwork to pay investors first, and that policymakers at the Federal Reserve assumed that such an approach was likely. Some Republicans in the House and Senate have painted prioritization as a fallback option that could make failure to raise the borrowing cap less of a disaster, arguing that as long as bondholders get paid, the U.S. will not experience a true default.But the Biden administration is not doing prioritization planning this time around because officials don’t think it would prevent an economic crisis and are unsure whether such a plan is even feasible. The White House has not asked Treasury to prepare for a scenario in which it pays back investors first, according to multiple officials. Janet L. Yellen, the Treasury secretary, has said such an approach would not avoid a debt “default” in the eyes of markets.“Treasury systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another,” Ms. Yellen told reporters this month.Perhaps more worrisome is that, even if the White House ultimately succumbed to pressure to prioritize payments, experts from both political parties who have studied the temporary fix say it might not be enough to avert a financial catastrophe.Senator Ted Cruz, center, and other Republicans during a news conference on debt ceiling on Capitol Hill last week.Haiyun Jiang/The New York Times“Prioritization is really default by another name,” said Brian Riedl, formerly chief economist to former Republican Senator Rob Portman and now an economist at the Manhattan Institute. “It’s not defaulting on the government’s debt, but it’s defaulting on its obligations.”Congress must periodically raise the nation’s debt ceiling to authorize the Treasury to borrow to cover America’s commitments. Raising the limit does not entail any new spending — it is more like paying a credit-card bill for spending the nation has already incurred — and it is often completed without incident. But Republicans have occasionally attempted to attach future spending cuts or other legislative goals to debt limit increases, plunging the United States into partisan brinkmanship.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

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    America Set to Hit Its Borrowing Limit Today, Raising Economic Fears

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    The milestone will not immediately affect markets or growth, but it sets the stage for months of entrenched partisan warfare.WASHINGTON — The United States is expected to hit a congressionally imposed borrowing limit on Thursday, requiring the Treasury Department to engage in accounting maneuvers to ensure the federal government can keep paying its bills.The milestone of hitting the country’s $31.4 trillion debt cap is the product of decades of tax cuts and increased government spending by both Republicans and Democrats. But at a moment of heightened partisanship and divided government, it is also a warning of the entrenched partisan battles that are set to dominate Washington in the months to come, and that could end in economic shock.Newly empowered Republicans in the House have vowed that they will not raise the borrowing limit again unless President Biden agrees to steep cuts in federal spending. Mr. Biden has said he will not negotiate conditions for a debt-limit increase, arguing that lawmakers should lift the cap with no strings attached to cover spending that previous Congresses authorized.Treasury officials estimate the measures that they will begin employing on Thursday will enable the government to keep paying federal workers, Medicare providers, investors who hold U.S. debt and other recipients of federal dollars at least until early June. But economists warn that the nation risks a financial crisis and other immediate economic pain if lawmakers do not raise the limit before the Treasury Department exhausts its ability to buy more time.The episode has prompted fears in part because of the lessons both parties have taken from more than a decade of debt-limit fights. A bout of brinkmanship in 2011 between House Republicans and President Barack Obama nearly ended in the United States defaulting on its debt before Mr. Obama agreed to a set of caps on future spending increases in exchange for lifting the limit.Most Democrats have solidified in their position that negotiations over the debt limit only enhance the risks of economic calamity by encouraging Republicans to use it as leverage. That is particularly true of Mr. Biden, who successfully stared down Republicans and won an increase in 2021 with no stipulations.Newly elected Republicans, emboldened by anger among their base and conservative advocacy groups over failures in the past to exact concessions for raising the limit, have pledged not to let that happen again.Treasury Secretary Janet L. Yellen has dismissed ideas for lifting the borrowing cap unilaterally, such as minting a $1 trillion coin, as fanciful.Sarahbeth Maney/The New York TimesIn reality, both parties have approved policies that fueled the growth in government borrowing. Republicans repeatedly passed tax cuts when they controlled the White House over the last 20 years. Democrats have expanded spending programs that have often not been fully offset by tax increases. Both parties have voted for large economic aid packages to help people and businesses endure the 2008 financial crisis and the 2020 pandemic recession.Federal spending declined from its pandemic high in 2022, reaching nearly $6 trillion in the fiscal year, or just under 24 percent of the economy. The federal budget deficit, which is the shortfall between what the United States spends and what it takes in through taxes and other revenue, topped $1 trillion for the year. That is a decline from the past two years as emergency pandemic spending expired, though the Biden administration predicts the deficit will rise again in the current fiscal year.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More

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    As Debt Ceiling Threat Looms, Wall Street and Washington Have Only Rough Plans

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    A default would most likely rattle markets and carry big risks, no matter how the Federal Reserve and Treasury try to curb the fallout.With days to go before the United States bumps up against a technical limit on how much debt it can issue, Wall Street analysts and political prognosticators are warning that a perennial source of partisan brinkmanship could finally tip into outright catastrophe in 2023.Big investors and bank economists are using financial models to predict when the United States, which borrows money to pay its existing bills, will run out of cash. They are assessing what it could mean if the government is unable to pay some of its bondholders and the country defaults on its debt. And they are gaming out how to both minimize risks and make the most of any opportunities to profit that might be hiding in the chaos.The need to start planning for a potential debt limit breach became more urgent last week, when Treasury Secretary Janet L. Yellen told Congress that the United States would hit its borrowing cap on Thursday. At that point, Treasury will begin using “extraordinary measures” to try to stay under the cap for as long as possible — but those options could be exhausted as soon as June.Congress places a limit on the amount of debt the country can issue, with a simple majority in the House and Senate required to lift it. That cap, currently $31.4 trillion, needs to be adjusted to allow the United States to borrow to pay for obligations it has already committed to, such as funding for social safety net programs, interest on the national debt and salaries for troops.Wrangling over lifting the borrowing cap has become a fixture, and this year is shaping up to be particularly complicated. Republicans hold the House by a slim majority, and a small but vocal faction of the party has won changes to the rules that govern legislative debate. They have made clear that they want deep spending cuts in exchange for raising the debt limit, and their empowerment could make this round of negotiations more likely to end in disaster.Bank of America analysts wrote in a note to clients this week that a default in late summer or early fall is “likely,” while Goldman Sachs called the possibility that the government would not be able to make good on its bills a “greater risk” than at any time since 2011. When the nation approached the brink in that episode, its credit rating was downgraded and wild market gyrations helped to force lawmakers to blink.A debt default would most likely rattle markets and carry big risks.Andrew Kelly/ReutersIn Washington, the Federal Reserve and Treasury are not publicly speaking about what they could do if an outright default were to happen this time, in part because the mere suggestion they will bail out warring politicians could leave lawmakers with less of an incentive to reach a deal. But they have a series of options — albeit bad ones — for mitigating the disaster if political impasse takes the nation up to or over the brink of default.It is tricky to guess exactly how financial markets will react, both because the timing of any default is uncertain and because many investors are waiting and watching to see what happens in Washington.But former government officials and cautious Wall Street observers warn that the effects could be significant. Markets have grown bigger and more complex since 2011, and an outright default could lead to mass selling, which would impair financial functioning. While the government has done contingency planning for a default, former officials say there is no foolproof option for staving off a disaster.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More

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    How Close Is the U.S. to Hitting the Debt Ceiling? How Bad Would That Be?

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    The United States has a cap on the amount of money it can borrow. That means it can run out of cash if the limit isn’t lifted.Washington is gearing up for another big fight over whether to raise or suspend the nation’s debt limit, with Treasury Secretary Janet L. Yellen warning last week that the United States will reach its existing borrowing cap of $31.4 trillion on Thursday.The United States borrows huge sums of money by selling Treasury bonds to investors across the globe and uses those funds to pay existing financial obligations, including military salaries, safety net benefits and interest on the national debt. Once the United States hits the cap, Treasury can use “extraordinary measures” — suspending some investments and exchanging different types of debt — to try to stay beneath the cap for as long as possible. But eventually, the United States will need to either borrow more money to pay its bills or stop making good on its financial obligations, including possibly defaulting on its debt.Responsibility for lifting or suspending the borrowing cap falls to Congress, which must get a simple majority in both the House and Senate to vote for any change to the debt limit. Raising the debt limit has become a perennial fight, with Republican lawmakers using it as leverage to try to force spending cuts.This year is shaping up to be the messiest fight in at least a decade. Republicans now control the House and they have adopted new rules governing legislation that make it more difficult to raise the debt limit and strengthen Republicans’ ability to demand that any increase be accompanied by spending cuts. Senate Republicans have also insisted that increases to the debt limit should be tied to “structural spending reform.”President Biden has said he will oppose any attempt to tie spending cuts to raising the debt ceiling, raising the likelihood of a protracted standoff.All of this drama raises the question of what the debt limit really is, how it got here and why the United States does not do away with debt limit entirely and spare the nation from its periodic face-off with an economic time bomb.What is the debt limit?The debt limit is a cap on the total amount of money that the federal government is authorized to borrow to fulfill its financial obligations. Because the United States runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. That includes funding for social safety net programs, interest on the national debt and salaries for troops. The debt ceiling debate often elicits calls by lawmakers to cut back on government spending, but lifting the debt limit does not authorize any new spending and in fact simply allows the United States to finance existing obligations.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More

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    Why Hitting the Debt Ceiling Would Be Very Bad for the U.S. Economy

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    If Congress fails to increase the government’s borrowing limit in time, the result would be a shock to the economy and financial markets.WASHINGTON — The new Republican majority in the House of Representatives has Washington and Wall Street bracing for a revival of brinkmanship over the nation’s statutory debt limit, raising fears that the fragile U.S. economy could be rattled by a calamitous self-inflicted wound.For years, Republicans have sought to tie spending cuts or other concessions from Democrats to their votes to lift the borrowing cap, even if it means eroding the world’s faith that the United States will always pay its bills. Now, back in control of a chamber of Congress, Republicans are poised once again to leverage the debt limit to make fiscal demands of President Biden.The fight over the debt limit is renewing debates about what the actual consequences would be if the United States were unable to borrow money to pay its bills, including what it owes to the bondholders who own U.S. Treasury debt and essentially provide a line of credit to the government.Some Republicans argue that the ramifications of breaching the debt limit and defaulting are overblown. Democrats and the White House — along with a variety of economists and forecasters — warn of dire scenarios that include a shutdown of basic government functions, a hobbled public health system and a deep and painful financial crisis.Speaker Kevin McCarthy signaled this week that he and his fellow Republicans would seek to use the debt limit standoff to enact spending cuts and reduce the national debt. He said that lawmakers likely have until summertime to find a solution before the United States runs out of cash, a threshold that is known as “X-date.”“One of the greatest threats we have to this nation is our debt,” Mr. McCarthy said on Fox News on Tuesday evening, adding, “We don’t want to just have this runaway spending.”Speaker Kevin McCarthy signaled this week that he and his fellow Republicans will seek to use the debt limit standoff to enact spending cuts and reduce the national debt.Kenny Holston/The New York TimesMr. Biden has repeatedly said he will refuse to negotiate over the debt limit, and that Congress must vote to raise it with no strings attached.That has introduced the very real likelihood of a debt limit breach. “Fiscal deadlines will pose a greater risk this year than they have for a decade,” Goldman Sachs economists wrote in a note.Here’s a look at what the debt limit is and why it matters.What is the debt limit?The debt limit is a cap on the total amount of money that the federal government is authorized to borrow to fulfill its financial obligations. Because the United States runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. That includes funding for social safety net programs, interest on the national debt and salaries for troops. While the debt ceiling debate often elicits calls by lawmakers to cut back on government spending, lifting the debt limit does not authorize any new spending and in fact simply allows the United States to finance existing obligations. In other words, it allows the government to pay the bills it has already incurred.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More

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    Fed Officials Fretted That Markets Would Misread Rate Slowdown

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    Central bankers remained committed to wrestling inflation lower, and wanted to make sure investors understood that message, minutes from the Federal Reserve’s December meeting showed.Federal Reserve officials worried that inflation could remain uncomfortably fast, minutes from their December meeting showed, and some policymakers fretted that financial markets might incorrectly interpret their decision to raise interest rates more slowly as a sign that they were giving up the fight against America’s rapid price gains.Inflation is beginning to slow down but remains abnormally quick: The Personal Consumption Expenditures price index climbed by 5.5 percent over the year through November, down from a 7 percent peak in June but still nearly triple the Fed’s 2 percent inflation goal. Fed officials still saw inflation as unacceptably high at their meeting last month — and worried that rapid price gains might have staying power.“The risks to the inflation outlook remained tilted to the upside,” Fed officials warned during their December policy meeting, minutes released on Wednesday showed. “Participants cited the possibility that price pressures could prove to be more persistent than anticipated, due to, for example, the labor market staying tight for longer than anticipated.”Such risks set up a challenging year for Fed policymakers, who will need to decide how much more they need to raise interest rates — and how long they need to hold them at elevated levels — to bring inflation firmly under control. The Fed wants to avoid pulling back too early, which could allow inflation to become entrenched in the economy. But officials are also conscious that high rates come at a cost: As they slow growth and weaken the labor market, workers are likely to earn less and may even lose their jobs.That’s why the Fed wants to tread carefully, bringing price increases under control without inflicting more damage than necessary. Officials slowed their rate increases last month, lifting their main policy rate by half a point after several three-quarter-point moves in 2022. Officials forecast that they would raise rates by more in 2023, but their estimates suggested that they were nearing the level at which they might pause: They saw rates climbing to about 5.1 percent in 2023, from about 4.4 percent now.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Why Japan’s Sudden Shift on Bond Purchases Dealt a Global Jolt

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    The world has relied on ultralow interest rates in Japan. What will happen if they rise?Japan is the world’s largest creditor. At the end of 2021, it held roughly $3.2 trillion in foreign assets, 30 percent more than No. 2 Germany. As of October, it owned over a trillion dollars of U.S. government debt, more than China. Japanese banks are the world’s largest cross-border lenders, with nearly $4.8 trillion in claims in other countries.Late last month, the world got an unexpected reminder of how integral Japan is to the global economy, when the country’s central bank unexpectedly announced that it was adjusting its stance on bond purchases.To those unversed in the intricacies of monetary policy, the significance of Japan’s decision to raise the ceiling on its 10-year bond yields may not have been immediately clear. But for the finance industry, the surprising change raised expectations that the days of rock-bottom Japanese interest rates could be numbered — potentially further squeezing global credit markets that were already tightening as the world economy slows.Since this summer, the Bank of Japan has been an outlier, keeping its interest rates ultralow even as other central banks raced to keep up with the Federal Reserve, which has ratcheted up lending costs in an effort to tame high inflation.As global rates have diverged from those in Japan, the value of the yen has fallen as investors sought better returns elsewhere. That has put pressure on the Bank of Japan to shift the world’s third-largest economy away from its decade-long commitment to cheap money, a policy known as monetary easing.Japan’s deep integration into global financial networks means that there is a lot of money riding on the timing of any move away from that policy, and investors have spent years fruitlessly waiting for a sign.As of mid-December, the overwhelming expectation was that the bank would hold off on any changes until next spring, when Haruhiko Kuroda, the Bank of Japan’s governor and an architect of its current policies, is set to step down.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Southwest CEO Bob Jordan Faces a Giant Crisis, 10 Months Into the Job

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    Bob Jordan, the airline’s top executive, heralded the company’s performance just weeks before the storm highlighted gaping weaknesses in its operations.After Southwest Airlines made it through Thanksgiving with few flight cancellations, Bob Jordan, the company’s chief executive, was in a celebratory mood. At a meeting with Wall Street analysts and investors this month at the New York Stock Exchange, he said the company’s performance had been “just incredible.”But a few weeks later, over the Christmas holiday, Southwest’s operations went into paralysis, forcing the company to resort to mass cancellations. The debacle has raised questions about Mr. Jordan’s performance and has prompted employees and analysts to ask why the company has been slow to fix well-known weaknesses in its operations.Other airlines fared far better during the extreme cold weather over Christmas weekend than Southwest, which after days of disruption canceled more than 2,500 flights on Wednesday, vastly more than any other U.S. airline, according to FlightAware, a flight tracking service. The airline has already canceled more than 2,300, or 58 percent, of its flights planned for Thursday.Travelers, lawmakers and even employees are increasingly demanding answers from Southwest and Mr. Jordan. While the company has repeatedly apologized for its performance, it has provided few details about how things went so wrong and what it is doing to right its operations. The company said on Wednesday that Mr. Jordan and other executives were not available for interviews.Mr. Jordan implied on Tuesday that the airline was caught out by a low-probability event after many delays and cancellations.Christopher Goodney/BloombergIn a video posted on Southwest’s website late Tuesday, Mr. Jordan, who became chief executive in February after three decades at Southwest, implied that the airline was caught out by a rare event. “The tools we use to recover from disruption serve us well 99 percent of the time,” he said, “but clearly we need to double down on our already existing plans to upgrade systems for these extreme circumstances.”Southwest has known for years that computer systems that manage customer reservations and assign pilots and flight attendants to each flight needed improvements. Union leaders and even the company’s executives have acknowledged that the systems struggle to handle large numbers of changes when the company’s operations are disrupted.Disruptions can have a cascading effect on Southwest’s flights because it operates a point-to-point system, in which planes travel from one destination to another; other large airlines use the hub-and-spoke system, with flights typically returning frequently to a hub airport.Southwest is now trying to piece together its operations after many of its crews and planes were not where they were scheduled to be because of earlier flight cancellations, the company said in an emailed statement to The New York Times. Because the company’s operations have been so thoroughly upended, the effort is expected to take days. To get crews and planes in the right places, Southwest had to reduce its schedule. This should allow the airline to bring crews to the airports where they are needed.In his video on Tuesday, Mr. Jordan appeared to acknowledge that Southwest’s model was susceptible to breaking down under stress. “Our network is highly complex, and the operation of the airline counts on all the pieces, especially aircraft and crews remaining in motion to where they’re planned to go,” he said.Many travelers have expressed frustration with Southwest, saying it has become impossible to get information from the company.Emil Lippe for The New York TimesThe company has spent years trying to overhaul its technology systems, but this latest crisis is expected to ratchet up the pressure on Southwest and Mr. Jordan to make progress faster.Union leaders said they had run out of patience with how the company had been updating the technology systems.Labor Organizing and Union DrivesU.K.’s ‘Winter of Discontent’: As Britain grapples with inflation and a recession, labor unrest has proliferated, with nurses, railway workers and others leading job actions across the country.Starbucks: The union organizing Starbucks workers declared a strike at dozens of stores, the latest escalation in its campaign to secure a labor contract.Education: The University of California and academic workers announced a tentative labor agreement, signaling a potential end to a high-profile strike that has disrupted the system for more than a month.Electric Vehicles: In a milestone for the sector, employees at an E.V. battery plant in Ohio voted to join the United Automobile Workers union, citing pay and safety issues as key reasons.“We’re at the point where we’ve given him enough grace,” Michael Santoro, vice president of the Southwest Airlines Pilots Association, said in an interview, referring to Mr. Jordan.Transport Workers Union Local 556, which represents Southwest’s flight attendants, issued a statement agreeing with the pilots. “It is not weather; it is not staffing; it is not a concerted labor effort; it is the complete failure of Southwest Airlines’ executive leadership. It is their decision to continue to expand and grow without the technology needed to handle it,” the union’s president, Lyn Montgomery, said.These statements stand out because Southwest has generally had very good relations with most of its labor unions. After the meltdown, labor leaders have grown increasingly critical of the company this week. The pilots group, for example, expressed frustration that the company had not yet shared its plan for getting its operation back to normal, something it typically does after disruptions. “We have heard zero,” Mr. Santoro said.Southwest Airlines staff members helped customers at Dallas Love Field Airport on Tuesday.Emil Lippe for The New York TimesIn the last few days, union officials, pilots and flight attendants have complained to journalists and on social media that crew members have often had to wait hours to be assigned to their next flight or be directed to hotels where they could spend the night.Customers have also expressed intense frustration with the airline, saying it had become impossible to get any information from the company. Some people have said they waited hours at baggage and ticket counters and gates to speak to Southwest agents. Others have tried and failed to get through to the company by phone or online.Howard Tutt came to Chicago’s Midway airport on Wednesday to try to retrieve a bag his son had checked for a flight to California that was ultimately canceled. He said he had waited hours with other customers to speak to someone to no avail. Nearby, dozens of bags were waiting to be reunited with travelers outside Southwest’s baggage office and near its carousels.“He had to leave in the middle of Christmas dinner because they told him the only flight he could get on was at 9 p.m. on the 25th,” Mr. Tutt, 61, said, referring to his son. “Then he got to the airport, checked his bags and was delayed for six hours before they canceled the flight.”Mr. Tutt, a resident of Orland Park, Ill., said the family had tried a variety of approaches to locate the bag, which contains Christmas gifts for his son’s girlfriend and her family. “We’ve emailed, tried via chat message, and called but cannot reach anyone.”Analysts said that, as cancellations piled up, Southwest found itself in a dire position in which it needed to almost start from scratch to rebuild. “You’ve lost control of what you expected the operation to be,” said Samuel Engel, a senior vice president and airline industry analyst at ICF, a consulting firm.The question that will loom over the company for a long time is why Southwest’s system broke down while those of other large airlines held up relatively well. Analysts say Southwest’s point-to-point network, which is quite different from the hub-and-spoke system used by its peers, made it harder to restart operations.But they also say Southwest’s technology, despite yearslong efforts to modernize it, was lacking. And Mr. Jordan is likely to be asked why he didn’t do more to make the systems strong enough to deal with weather and technology disruptions, which have dogged Southwest in recent years, including two mass flight cancellations and delays last year.Though Mr. Jordan has been chief executive for a short time, he has long been a member of Southwest’s senior leadership team, which would have given him plenty of opportunity to understand the company’s strengths and weaknesses. He started at the company as a computer programmer, helped develop its frequent flier program and aided in incorporating the planes and crews of AirTran Airways after Southwest acquired that company.Robert W. Mann Jr., a former airline executive who now runs the consulting firm R.W. Mann & Company, said Mr. Jordan was “in the hot seat right now.”But analysts were skeptical that Southwest could change quickly. They say the company’s management suffers from “Southwest exceptionalism,” or a stubborn belief that its unique approach to running an airline is best. Even though Southwest has it origins as an upstart taking on sleepy incumbents, analysts say its decision making can move at glacial speeds. “The airline has always been very cautious about change,” Mr. Engel said.Southwest’s approach works well much of the time, and it has contributed to the company’s strong financial performance over the last five decades, analysts say. It allowed, for instance, for planes to be used more quickly for their next flight. Longtime shareholders have done well. Southwest’s stock is up 217 percent over the last decade, outpacing the wider stock market and its best-performing rivals. But this month, Southwest’s stock, down by nearly a fifth, has performed worse than the market and its peers.There is no evidence that Mr. Jordan is vulnerable. But poor crisis management has severely weakened other airline executives.In February 2007 JetBlue experienced a meltdown when the airline did not act as quickly as its peers to cancel flights, hoping an ice storm on the East Coast would not have affected air travel as much as it did. At one point, nine JetBlue planes filled with passengers sat on the tarmac at Kennedy International Airport for six hours.David G. Neeleman, JetBlue’s founder and chief executive at the time, who was also a former Southwest executive, said he was “humiliated and mortified.” Months later, he agreed to step down as chief executive.Mr. Neeleman did not respond to requests for comment.Robert Chiarito More