A Misguided Tea Party Claim On The Debt Ceiling

Kremer issued that statement after President Obama, in a news conference on Monday, argued that if Congress did not raise the debt limit, the United States would not be able to pay for services rendered in the past: “If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed,” Obama said. “We might not be able to pay our troops, or honor our contracts with small business owners.” 

This is an interesting question, which we explored before the last debt limit showdown in 2011. Then, we examined whether Social Security benefits could still be paid even if the debt ceiling was breached; the answer was a bit inconclusive. But after that last crisis, the Treasury Department’s inspector general provided Congress with a detailed look at the options the administration had considered for such a crisis.

 Moreover, Kremer has upped the ante by saying the government could pay not only Social Security benefits but also Medicare and the military — three of the biggest parts of the budget — as well as interest payments on the debt. Let’s examine whether her claim is credible.

More