Default could 'sink the whole boat'
The first major hurdle comes on Aug. 3, when the U.S. government is scheduled to pay $23 billion in benefits to Social Security recipients. Only $12 billion in revenue is expected that day, leaving the Treasury $11 billion short — and $20 billion in the red when other scheduled payments for that day are taken into account.
Obama said in an interview with CBS News last week that he couldn’t guarantee Social Security payments will go out, a statement that could send retirees and disability recipients into a panic.
“I’d say it’s at risk,” said Jay Powell, a former senior Treasury Department official now with the Bipartisan Policy Center. “The president’s statement is correct on its face. He said he can’t guarantee those payments will be made. Even if you pay nothing other than interest, you can’t guarantee it.”