BOISE – Failure to increase the federal borrowing limit by Thursday could send the economy into a tail spin.
Congress faced this issue earlier in the year and essentially kicked the rock down the road for a few months.
Now if a deal cannot be met by Thursday, the U.S. government will no longer be able to borrow money to pay its bills.
What Congress is tasked with is something it's done dozens of times since Congress enacted the debt ceiling in 1917. The debt ceiling is a fixed dollar cap on what Congress can borrow to pay its bills.
The limit is currently set at $16.7 trillion, and we're already there.
"If we hit the debt ceiling we would have to stop making payments," said Mike Ferguson, Director for the Idaho Center for Fiscal Policy. "In other words, it could lead to a default on our securities, treasury bills, treasury notes."
The problem is Congress has budgeted to spend more than it is getting in, meaning the nation's debt, if we maintain the status quo, would be over the limit.
To maintain our spending habits, the U.S. is borrowing money from the public in the form of bills and bonds. If the debt ceiling isn't raised, the U.S. Treasury will only have enough money to pay its bills until November 1st.
Here are the next five major bills due:
- October 28 - Social Security benefit payment
- October 28 - Federal employee salaries
- October 30 - Medicaid payments to providers
- October 31 - Interest payment on public debt
- November 1 - Medicare payment to providers & private plans
There's debate from all sides over what bills will be paid and what bills would sit.
"I don't think anyone does really know because we've never reached this point," said Ferguson.
But what will likely happen is the first bills in will be the first bills to be paid, meaning no prioritizing what is paid, and that could mean no Social Security payments and no federal employee salaries leaving those groups to cut spending.
"It would basically have ripple effects that would probably throw us into another economic downturn," said Ferguson.
KTVB reached out to Idaho's congressional delegation and none of them were available to talk because of how fast, or slow, depending on your perspective, everything is moving in Washington, D.C.