Coburn dismisses default 'rumor'

Sen. Tom Coburn (R-Okla.) said Monday that the country would not default on its debt if lawmakers failed to strike a deal to raise the debt ceiling. [WATCH VIDEO]

"I would dispel the rumor that is going around that you hear on every newscast that if we don't raise the debt ceiling, we will default on our debt," Coburn told CBS's "This Morning." "We won't."

"We'll continue to pay our interest," Coburn continued. "We'll continue to redeem bonds, and we'll issue new bonds to replace those. So it's not entirely accurate." 

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The Oklahoma Republican said there was "no such thing as a debt ceiling in this country" because Congress has always raised it. 

"That's why we're $17 trillion in debt," he said.

White House press secretary Jay Carney said Monday that Coburn was wrong to say the Treasury Department could avoid default. Even if Treasury was able to temporarily attend to its debt payments, Carney said, it wouldn't pay other obligations.

"Prioritization is default by another name. If you pay some of your bills and not all of your bills, you're in default on the bills that didn't pay," Carney said.

The White House said that exceeding the debt ceiling would also threaten to make the nation's credit rating "worthless."

"You've got to pay all your bills, that's how you maintain your credit worthiness," Carney said.

On Sunday, Treasury Secretary Jack Lew warned that Congress was "playing with fire" as it approached the debt ceiling. He told CNN that the government would have about $30 billion in cash on hand to pay its debts but warned that  was not a "responsible amount of cash to run the government on."

"If they don't extend the debt limit," Lew said, "we have a very, very short window of time before those scenarios start to be played out." 

The Treasury Department has estimated that it will run out of "extraordinary measures" to continue paying the nation's bills on Oct. 17.

This story was updated at 1:50 p.m.

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