.USTreasury SecYellen said that despite the debt ceiling being hit months ago, there has been no plan for prioritizing payments given to POTUS. In the case of a default, the Dept would have to make tough choices about what to pay & what to let lapse.
As lawmakers struggle to come to an agreement about raising the debt ceiling, every day gets closer to when the Treasury runs out of room to maneuver under the debt ceiling and fails to make a payment an obligation. If that happens, the Treasury must make some tough choices about what to pay and what to allow to lapse — Yellen said Friday that no plan has been discussed with President Joe Biden.“If Congress fails to do that, it really impairs our credit rating.
Yellen stressed on Friday that while the notion was discussed, then-President Barack Obama wasn’t involved and didn’t greenlight the plan. For instance, if interest payments were prioritized, Social Security payments could be delayed, border control and air traffic control could be left temporarily unfunded, and things such as government-funded school lunches could be at risk.
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