As Congress remains locked in a bitter stalemate, the White House is quietly working to prioritize its financial obligations in preparation for the possibility that the government will no longer borrow money to pay its bills.
If Congress fails to reach a deal, the government will be faced with some simple math: according to an analysis by the non-profit Bipartisan Policy Center found that the country will owe about $306.7 billion in expenses next month compared to $172.4 billion in revenue. That means some recipients of government checks, from Defense Department contractors to military personnel to Social Security recipients, are likely to come up short.
"Are we really going to start paying interest to Chinese who hold Treasuries and we're not going to pay folks their Social Security checks, or we're not going to pay veterans for their disability checks?" Obama asked rhetorically last month. "I mean, which bills -- which obligations are we going to say we don't have to pay?"
The Treasury Department had planned to announce a contingency plan on Friday, but it pushed back any announcement amidst legislative uncertainty as Speaker of the House John Boehner, R-Ohio, delayed a vote on Thursday night and scheduled a vote on an updated plan for Friday. The Treasury has declared that it would try to first pay interest on holders of government bonds.
President Barack Obama has already warned that Social Security payments could be delayed, a development that would be devastating for the approximately 55 million people who receive some form of benefits. For some people, those payments can account for as much as 90 percent of their income; for others, it can mean the difference between paying bills and delinquency.
"What we are talking about here is not the financial markets -- not that they are not important -- but the very ability of millions of Americans to buy food, pay their utility bills, their rent or mortgage and to generally function," Joan Entmacher, vice president for family economic security at the National Women's Law Center, told The Huffington Post.