One week from today, unless there’s an agreement to raise the $14.29 trillion national debt limit, the president of the United States will have to do the once-unthinkable. He will have to pick winners and losers — we’ll all be losers if it comes down this — as he tries to prioritize which bills the nation will pay with limited cash on hand. It will be an ugly and heart-wrenching process that could roil the markets and enrage the citizenry once the impact is truly felt.
Contrary to what House Speaker John Boehner (R-Ohio) and other Republicans say, raising the debt ceiling is not giving President Obama a blank check. Doing so allows the federal government to pay the bills run up by previous presidents and Congresses. All told, in the month of August, the federal government will have $306 billion in bills with only $172 billion in hand to pay them. Coming up with the remaining $134 billion for the month will require some truly tough choices. A “Debt Limit Analysis” from the Bipartisan Policy Center puts the tough choices that would have to be made in living color.
Wednesday, August 3
Treasury is expected to take in $12 billion. But it will have $32 billion in expenses. Social Security checks amount to $23 billion of that total. The Treasury’s cash deficit would be $20 billion.
Thursday, August 4
Treasury is expected to take in $4 billion. But it will have $10 billion in expenses. Medicaid and Medicare payments amount to $3.1 billion. The Treasury’s cash deficit would be $26 billion.
Friday, August 5
Treasury is expected to take in $7 billion. But it will have $12 billion in expenses. Medicaid and Medicare payments, unemployment benefits, welfare, food stamps and federal salaries and benefits amount to $6.7 billion. Treasury’s cash deficit would be $31 billion.
Let’s pray none of this will be necessary.