House Republicans
The sticking point remains House Republicans’ demand that the deal involve policy conditions that cut the budget deficit. Senate Democrats reject anything beyond an extension of the debt ceiling.
Senator Orrin Hatch of Utah, the top Republican on the Finance Committee, said the Obama administration is unfairly blaming Congress for not raising the debt limit.
“Our nation’s debt is now larger as a share of our economy than at any time since World War II,” Hatch said. “Despite the rhetoric of the administration, our growing debt is not solely the result of decisions made by Congress. It is not all due to the financial crisis.”
Lew said today the idea of some Republicans in Congress to pay some bills instead of others, known as prioritization, wouldn’t “solve the problem.” Under questioning, he called such a strategy “default by another name.”
“The United States should not be put in a position of making such perilous choices for our economy and our citizens,” he said. “There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets.”
Prioritizing Payments
Economists at Goldman Sachs Group Inc., IHS Inc. and BNP Paribas SA said they expect the Treasury to husband the tax money it collects to make sure it can meet interest payments on the nation’s debt. Other obligations, from salaries of government workers to payments to defense contractors, would face the ax.
The Treasury Department typically takes in about $7 billion daily in income and payroll taxes, though those amounts can vary significantly from day to day, the Congressional Budget Office said in a Sept. 25 report.
A $6 billion interest payment is due on Oct. 31. Bills totaling about $67 billion are due the following day, for Social Security benefits for retirees, Medicare payments to hospitals and other health-care providers, and military pay and benefits.