Senior Biden aides privately explored whether payments could continue even if U.S. breached debt ceiling

Despite extensive review, White House says only option remains for Congress to pass legislation to avert calamity

President Biden talks to reporters on Sept. 27 in Washington, D.C. (Oliver Contreras for The Washington Post)

By Jeff Stein

 

senior White House officials privately explored as recently as this week whether the Biden administration could continue making payments even after the federal government breaches the nation’s debt ceiling, according to three people familiar with the mat

The review concluded that the White House would be unable to avoid falling behind on obligations and catastrophic economic consequences even if the administration effectively tried to spend in defiance of the debt ceiling, according to one of the officials familiar with the deliberations.

The debt ceiling sets a legal limit on how much the Treasury Department can borrow, and the government will run out of flexibility to avoid breaching the debt ceiling on Oct. 18.

What is the debt ceiling and why is Congress arguing over

After raising the debt limit for decades, Republicans in recent years have leveraged it to enact spending cuts while also threatening government default. (JM Rieger/The Washington Post)

As part of their internal review, White House officials have circulated internal memos with a range of untested theories should Congress fail to resolve the debt ceiling standoff, including the creation of a $1 trillion “coin” idea that has been popular among some liberals for years, the people said. But these options have been set aside as unworkable, the people said.