The Obama administration will have to decide whether to delay — or
possibly suspend — tens of billions of dollars in Social Security
checks, food stamps and unemployment benefits if negotiations to raise
the federal debt ceiling are not resolved this week, experts say, one of
the many difficult choices officials will have to make at a time when
the government will essentially be running on fumes.
The government will begin Monday with about $30 billion cash in
the bank and a little more room to borrow as a result of extraordinary
measures launched in the wake of the debt-ceiling crisis. By Thursday,
administration officials say they will exhaust all borrowing authority
and have only that cash on hand.
Experts on federal finances say that money might be enough to make
payments for a few days, but certainly not for more than two weeks. In
any event, they say, President Obama will have to make untested
decisions about who and what to pay because daily tax receipts will make
up only about 70 cents of every dollar of necessary spending.
Economists
roundly agree that no matter which course Obama chooses, a drop in
federal spending that large would exert a huge drag on economic growth.
And in contrast to what happens during a traditional downturn — the
safety net expands to help the vulnerable — assistance to seniors and
low-income people could be delayed or reduced if Congress doesn’t raise
the debt ceiling.
READ MORE: http://www.washingtonpost.com/business/economy/debt-ceiling-breach-would-push-economy-into-freefall-without-a-government-safety-net/2013/10/13/a4efd588-3287-11e3-8627-c5d7de0a046b_story.html?hpid=z1
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