“The Default Prevention Act, which was advanced by the Ways and Means Committee last month, would allow the federal government to keep borrowing above the statutory debt limit for the sole purpose of paying principal and interest on debt held by the public or the Social Security Trust Fund.In other words: If Congress fails to raise the debt limit, holders of Treasury bonds would still be paid and Social Security recipients would still get their checks. That, advocates say, could help allay Wall Street anxiety as lawmakers approach the brink of default.”
BUT TREASURY SECRETARY LEW SAYS HE IS VERY CONCERNED. Jack Lew said Monday on CNBC’s Squawk Box that it would be “ridiculous” not to increase the debt limit before the Nov. 3 deadline and that it could create terrible consequences.
“”There are people who think we have the ability to choose what day this is. We do our very best to count the numbers … [and] give Congress the best information we have,” Lew said.
He also shot down the debt prioritization bill that’s making its way through the House.
“Lew dismissed the idea that the government could prioritize what bills to pay. ‘Once you no longer consider all of your obligations rock solid, you’re no longer the full faith and credit of the United States.’‘It’s also not possible to pick and choose. We have about 80 million transactions a month. Our system wasn’t set up not to pay,’ he added.”
MEDICARE PREMIUM PAYMENTS COULD JUMP. There’s another fiscal deal that’s in danger this year — huge premium hikes for about 8 million Medicare patients, the Hill reports.
“After some initial optimism for an agreement between House Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.), things have since grinded to a near halt, according to several people familiar with the talks. Any hopes of a deal have dropped out of sight until likely December, when the same leaders must approve a government spending bill…”
“Because of a quirk in federal law, in years that the government doesn’t approve an annual cost-of-living increase, Medicare enrollees face a spike in premium costs if they aren’t protected by Social Security’s “hold harmless” provision.Among those affected, monthly premiums will rise to $159.30 per month, from about $104.”