The Congressional Research Service briefed members of Congress on the debt ceiling two weeks ago, telling them that the government need not shut down and could continue to pay bondholders if the debt ceiling borrowing limits were reached.
The 12 page slide show titled "Reaching the Debt Limit" obtained by CNBC explained the consequences of the debt ceiling. It explained the government need not "shut down" entirely nor default on debt payments if the government's ability to borrow is halted. Treasury will be to pick and choose which departments and programs it will continue to support in the event of a borrowing halt.
This drew criticism from some who heard the presentation.
"This is just a shell game, " one senior staffer said. "If you are the Secretary of Commerce, you don't particularly care if the Treasury can't cover your check. You are obligated by Congress to do what are you are suppose to do. You can't actually cut the funding unless you open the budget to raise the debt ceiling."
The Congressional Research Service is the public policy research arm of the Congress. It is a nonpartisan group staffed by 900 lawyers, economists and scientific researchers.
I asked Representative Jeb Hensarling (R-TX), Chairman of the House Republican Conference and Vice Chairman of the Financial Services Committee, to offer his take on the presentation.Page 1 of 8 | Next Page