President Obama spoke today with CBS News’ Scott Pelley, and not surprisingly, the anchor asked about some of the consequences in the event Congress chooses not to raise the debt ceiling.
PELLEY: “Can you tell the folks at home that the Social Security checks are going to go out on August the 3rd. There are about $20 billion worth of Social Security checks that have to go out the day after the government is supposedly going to go into default.”
OBAMA: “Well this is not just a matter of Social Security checks. These are veterans’ checks; these are folks on disability and their checks. There are about 70 million checks that go out.”
PELLEY: “Can you guarantee as President those checks will go out on August the 3rd?”
OBAMA: “I cannot guarantee that those checks go out on August 3rd, if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
This has caused a bit of a stir, but it isn’t exactly new. Two weeks ago, USA Today ran a good piece explaining that failure on Capitol Hill would put “Social Security payments to millions of retirees and people with disabilities” in jeopardy.
It shows that in August, the government could not afford to meet 44% of its obligations. Since the $134 billion deficit for that month couldn’t be covered with more borrowing, programs would have to be cut.
If Social Security, Medicare, Medicaid, unemployment benefits, payments to defense contractors and interest payments on Treasury bonds were exempt, that would be all the government could afford for the month. No money for troops or veterans. No tax refunds. No food stamps or welfare. No federal salaries or benefits.
Want to protect the social safety net? That would be possible — but only if Treasury stopped paying defense contractors, jeopardizing national security. Plus virtually every federal agency and employee.
Of course the president can’t guarantee checks will go out on schedule; Republicans will have blocked the government’s ability to pay its bills.
This whole mess could go away with five minutes worth of work, but it’s a crisis Republicans brought upon us voluntarily, and apparently don’t want to resolve.