Brian Beutler says Pat Toomey’s plan to default on non-bond, non-military obligations is going nowhere:
Since there’s no precedent for the government running out of borrowing authority, some leading Republicans even want to revisit an idea first proposed by Sen. Pat Toomey (R-PA) during the 2011 debt limit fight, to require the Treasury to prioritize debt service over other federal obligations.
“We should pass a bill out of the House saying there will be certain priorities attached to certain things, namely payment of debt services and payment of our military,” Toomey said on Laura Ingraham’s radio show last week.
That creates an opening for Democrats to remind the public how extreme the consequences of a debt limit breach would be, and how prioritizing creditors would make the crunch for ordinary Americans even worse.
“This proposal to prioritize payments to foreign creditors over those to seniors, families, and veterans is the wrong way to go and it’s an absolute nonstarter in the Senate,” said Senate Budget Committee Chairman Patty Murray (D-WA) in a statement to TPM. “Anyone concerned about the devastating impact hitting the debt ceiling would have on our economy and our credit rating should work with Democrats to do the responsible thing and raise the debt limit so the government can pay the bills we’ve already accrued.”
But as experts at the Bipartisan Policy Center have noted, prioritization isn’t technically straightforward, and may not even be possible, if debt service obligations exceed revenues on any given day.