Treasury Preps Backup Plans
Publicly, Treasury Secretary Tim Geithner says there are no options if the U.S. can’t raise the debt ceiling by Aug. 2. But behind the scenes, the Treasury is working feverishly to find backup plans. Those options include deciding whether the administration can delay making some payments, and whether the government has the legal authority to prioritize some payments—i.e., debt payments—over others. But Geithner’s team is also exploring the controversial question of whether the 14th Amendment might make the debt ceiling unconstitutional—a position that some liberals have espoused as the deadline draws nearer (Obama has publicly refused to comment on the option, saying he expects a deal to be cut). Treasury officials have tried to cover up their preparations, worried that the presence of a Plan B might undermine any sense of urgency on Capitol Hill.