President Barack Obama may have just hinted that his administration will prioritize payment on government bonds over other obligations—a move that would allow the United States to avoid a default on its debt in the event that the debt ceiling is not raised.
At a press conference at the White House, Obama listed a number of programs that the government would not be able to pay for if the debt ceiling isn’t raised. He included such things as Social Security benefits, salaries for air-traffic control and veteran’s benefits. But he quite clearly—and almost certainly, intentionally—left out the idea that the U.S. might not make all debt payments as they come due.
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks,” Obama said.
When he did mention debt, it was not in the context of the government delaying payments. Instead he spoke of questions that might be raised by financial markets.
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