House Republicans have advanced legislation they argue would allow the Treasury to prioritize essential payments in the event the government reaches its borrowing cap. Treasury Secretary Jack Lew has told Congress the government will run dangerously low on cash by Oct. 17, and may not be able to pay all its bills after that. On Thursday, the Treasury Department issued a report arguing that a failure to boost the debt limit could lead to an economic catastrophe, and the worst recession since the Great Depression.
But despite the GOP bill, which has not been signed into law, and Hensarling's insistence, the Treasury and outside experts have maintained that such prioritization plans are unworkable. They contend that the flow of money in and out of the federal government is far too complex to allow the government to pick and choose what bills are paid in the event they lack the funds to pay on everything owed.
Nonetheless, Republicans claim that Democrats are fear-mongering on the debt limit, a point Hensarling continued.
"Washington Democrats are the only ones talking about default because it is the only way they can continue their reckless spending spree," he said.