Debt Ceiling: CHAOS If Congress Blows It
NEW YORK (CNNMoney) - President Obama has put the country on notice that he can't guarantee Social Security and other government checks will go out if the debt ceiling isn't raised by Aug. 2.
So it's worth reviewing just what the fallout could be if lawmakers fail to act on time -- either in early August or sooner if markets start to lose confidence that Congress will get its act together.
Nearly half of all government checks won't go out: The Treasury Department would be unable to pay between 40% and 45% of the 80 million payments it needs to make every month, according to an analysis by the Bipartisan Policy Center.
Why? It's basic math: The United States doesn't bring in enough revenue to pay all its bills -- with monthly deficits averaging $125 billion.
And if the debt ceiling isn't raised, Treasury won't be allowed to borrow new money to make up for the gap between revenue and spending.
Bottom line: Roughly $125 billion of bills on average may have to be put off.
Millions won't be paid: Just whose payments will be delayed is the question. And the answer won't come easy because any choice will hobble parts of the economy and anger large groups of Americans.
Take Aug. 3 as an example. Treasury is due to send out checks to 29 million Social Security recipients. Of course, they may be paid but only if others are not. >>>CLICK HERE TO READ MUCH MORE FROM CNN
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