What happens if a debt ceiling agreement isn't reached? (credit, contractors)

[VTHokieFan]

Do federal employees and contractors show up to work if we have to prioritize payments and we can't pay for their salaries?

[ChristineVA]

I read in the Post over the weekend that it had no impact on workers.

[VTHokieFan]

Originally Posted by ChristineVA

I read in the Post over the weekend that it had no impact on workers.

So how will they be paid?

[CAVA1990]

Originally Posted by VTHokieFan

So how will they be paid?

With money that would have gone to the creditors. They'd be defaulting on the debt payments, not on the operatng budgets. Like they say, pay yourself first.

[ChristineVA]

Originally Posted by VTHokieFan

So how will they be paid?

With the FY11 budget that was passed. The money is there until September 30, 2011.

[VTHokieFan]

Originally Posted by CAVA1990

With money that would have gone to the creditors. They'd be defaulting on the debt payments, not on the operatng budgets. Like they say, pay yourself first.

We wont be defaulting, which is why I ask.

[ChristineVA]

Debt ceiling debate threatens federal pay and benefits -- GovExec.com

A February report from the Congressional Research Service found that the debt ceiling carries little risk for federal workers, however. "Failing to raise the debt ceiling would not bring the government to a screeching halt the way that not passing appropriations bills would," CRS wrote, quoting a 1995 report from the Congressional Budget Office. "Employees would not be sent home, and checks would continue to be issued."

[CAVA1990]

Originally Posted by VTHokieFan

We wont be defaulting, which is why I ask.

We will if we don't reach an agreement. Who would you rather deal with, angry Chinese or angry Senior Citizens not getting their Medicare or Social Security checks? The Chinese can't vote.

[novajs]

Originally Posted by CAVA1990

With money that would have gone to the creditors. They'd be defaulting on the debt payments, not on the operatng budgets. Like they say, pay yourself first.

Nice. Defense contractors and government employees still get paid while the stock market tank and interest rate go through the roof.

[pcity]

Originally Posted by novajs

Nice. Defense contractors and government employees still get paid while the stock market tank and interest rate go through the roof.

So it'd be better if no one gets paid and the stock market still tanks and interest rates still go through the roof?

(Not believing that we'll really "default" anyway, though.)