If the White House and lawmakers cannot reach an agreement to raise the country’s debt ceiling by the Aug. 2 deadline, it will fall to President Obama and Treasury Secretary Timothy Geithner to determine how Uncle Sam pays his bills — indeed, which bills the federal government will pay, and which it will set aside — once the country has no more borrowing power.
Analysts have likened the exercise that the chief executive would be forced to undertake to triage: the frantic, on-the-fly process by which physicians and nurses decide which patients arriving at a hospital’s emergency room most urgently require medical attention, and which patients, however great their suffering, must be ignored for the moment.
An analysis by the Bipartisan Policy Center, using previous budget figures to project federal revenues and outlays for the month of August, found that the shortfall would be approximately $160 billion. That figure declines a bit — to approximately $135 billion — if one starts one’s calculations for the month on Aug. 3, the day after the Treasury exhausts its reserve funds.
On that date, a large set of Social Security and disability checks is set to go out, worth a total estimated value of $23 billion. Obama has suggested he is uncertain whether those checks would in fact be sent out on that date, in the absence of a deal on the $14.2 trillion debt ceiling. Others suggested the president’s statement was either designed to influence Republican lawmakers in the ongoing negotiations or one that might only be true for a limited period of time. In the latter scenario, the Social Security checks would go out on Aug. 4 or 5.