Could U.S. just skip some payments to avoid debt ceiling?

A traffic light shows red in front of the U.S. Capitol.

If you've been following what's going on in Washington, you know that we've got two fights. One fight is over the government shutdown, which continues. The other fight is about a deadline that’s coming up in 10 days. Treasury Secretary Jack Lew has said that on Oct. 17, the U.S. government will not be able to pay all its bills, unless Congress approves more borrowing.

The U.S. pays lots of bills -- millions of them every day. There has been talk of “prioritizing" them -- paying some folks, like those we owe debt interest to, ahead of others. But when you look at the quantity of bills the Treasury Department pays on one given day, you see that is a lot easier said than done. 

Let’s take Tues., Oct. 1, for example. There were payments to federal workers worth $755 million, and payments to defense contractors worth about $964 million.

These figures come from a Treasury Department spreadsheet -- a very dense Treasury Department spreadsheet.

And that was just the beginning, said Loren Adler of the Committee for a Responsible Federal Budget.

“On that day, we also have about a $4 billion payment to military active-duty members,” he said. “In addition, there is also a big retirement payment that goes out to both federal civilian and military retires of about $9 billion.”

Now remember, we’re not talking about a single $4 billion check here. There are more than 1.4 million men and women on active duty. That’s more than 1.4 million checks.

“Remember, Treasury does, on average, three to five million transactions a day,” said Steve Bell, who directs the economic policy project at the Bipartisan Policy Center.

“Now, that’s impossible for any one human being to do,” Bell said. “So, what they do, essentially, is computer to computer.”

All these payments are automated, and that, Bell said, is what would make prioritization so difficult.

“Right now, I would say it would be impossible -- logistically impossible -- for Treasury, in any quick time, to change the present system.”

On top of the fact that time is running out, Bell said the Treasury Department’s working with computers that are not state of the art.

And don’t forget 80 percent of the department’s employees have been furloughed. 

About the author

David Gura is a senior reporter for Marketplace, based in the Washington, D.C. bureau.

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