The Debt-Ceiling Crisis Is Real

The Debt-Ceiling Crisis Is Real
Finally, some conservative policy makers besides Mr. Mulvaney have convinced themselves
that crashing into the debt ceiling won’t be a big deal because the government can “prioritize” its bill payments, so that interest on Treasury debt will be paid on a current basis, while other bills sit unpaid.
Crashing into the debt ceiling, by contrast, would occur if Treasury had no money in its bank account
because Congress prohibited it from funding deficits through incremental borrowing.
Sometime in October, the United States is likely to default on its obligation to
pay its bills as they come due, having failed to raise the federal debt ceiling.
But that puts him in tension with his White House colleague Mick Mulvaney, the director of the Office of Management and Budget and a founding member of the Freedom Caucus, who has intimated
that breaching the debt ceiling would not be that consequential, and who has argued that the must-pass legislation should be used to advance the hard right’s agenda.
Without a firm signal from the White House that the debt ceiling should not be held hostage
to political agendas, it will be hard to get Congress to do the right thing.
The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political.
Hitting the debt ceiling is not the same as a government shutdown or other fiscal brinkmanship.
Treasury can pay the government’s bills on a first-in, first-out basis, with the wait for payment growing
every month, or it can prioritize bills, as Mr. Mulvaney and others have suggested it would.