Former U.S. Treasury officials have said there is no way to prioritize which bills would get paid first in the event that the United States reached its statutory debt ceiling.
Rep. David Schweikert (R-Ariz.) asked U.S. Treasury Secretary Janet Yellen whether the Treasury now has the capability to prioritize bill payments if the government can no longer borrow money to pay its bills.
Yellen has not responded to the Jan. 31 letter, and the Treasury did not reply to a request for comment by deadline.
Negotiations over raising the U.S. debt ceiling, essentially the credit-card limit of the federal government, began on Feb. 1 with a meeting between President Joe Biden and House Speaker Kevin McCarthy.
If the limit is not raised, the United States will be unable to meet its financial obligations sometime in June.
In that event, the Treasury Department has the authority to decide which bills to pay and in what order. But they don’t have the ability to do so, former Treasury Secretary Jack Lew said in 2013.
“Well, Mr. Chairman, I have to tell you, I do not believe there is a way to pick and choose on a broad basis,” Lew told the Senate Finance Committee.
“The system was not designed to be turned off selectively. So anyone who thinks that it can be done just does not know the architecture of our multiple payment systems, which are very complex. They were designed properly to pay our bills. They were not designed to not pay our bills.”
Now Schweikert wants to know if anything has changed that would allow Yellen to juggle the nation’s bills if it should come to that.
“What progress has Treasury made in taking the measures outlined in the 1985 GAO decision [giving the Treasury authority to prioritize payments]?” Schweikert wrote, and, “Has Treasury taken the necessary steps in upgrading their technical systems in order to accommodate these measures?”
The United States spent more than $15.7 billion a day from December through October, which amounts to $10.9 million per minute.
Previous negotiations concerning the debt ceiling have created an impasse over the federal budget or appropriations bills, which authorize the government to spend money.
Lacking that authority, the government has shut down all but essential functions 10 times since 1980, totaling 86 days, including two half-days.
The debt ceiling is different in that it authorizes the government to borrow money to cover spending already authorized by Congress.
The federal government has operated on a deficit budget for all but four years since 1970, making ongoing borrowing essential for continued operations. If the debt ceiling is reached, the Treasury will have to default on at least some of its current financial obligations.
