The August 2 debt-ceiling deadline might not be as firm as the White House has insisted it is.
The New York Times reports that the date after which the U.S. will be unable to pay its bills may, in fact, be August 10. How so?
Even though the Treasury will not be statutorily permitted to borrow more to pay its bills on August 2, the federal government would have enough cash on hand to pay debts until August 10, according to estimates from Wall Street banks and a Washington research organization, The Times says.
After August 10, Washington would not be able to write millions of checks. Still, the administration has insisted that August 2 is a firm deadline.
"There are no off-ramps. People keep looking for off-ramps," White House press secretary Jay Carney said on Wednesday.
If the deadline can be moved by eight days, the extra time might buy the parties in Congress and the White House some breathing room to negotiate an increase in the debt limit after weeks of struggling to come to agreement. But it's unclear what effect further delay might have on the United States' credit rating.
Asked what would happen if the United States did not raise the debt ceiling, Carney argued that the government would face some difficult choices; but he reiterated the White House position that the limit would be increased.
"Who do you save? Who do you pay?" he said.
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