Debt ceiling follies

The self-described "Bipartisan Policy Center" seems to have a semi-official spokesperson making the rounds on the budget/deficit crisis this month.  Jay Powell is being quoted and interviewed in every corner of the media, it seems.  And yet, it's hard to pin his story down, and the media spin doesn't help.

Here he is talking to Gwen Ifill on the PBS Newshour, July 12:

GWEN IFILL: Can we start with what the president said today, that, on Aug. 3, Social Security checks might not go out? Is that -- is it that dire?

JAY POWELL: Well, if we don't raise the debt ceiling by Aug. 2, then, on Aug. 3, the federal government will come to work and will be short 44 cents on the dollar for the rest of August and will not be able to make a great number of very important payments. So, what -- the president's statement is correct on its face.

Oh my!  Social Security checks might not go out!  That does sound dire.  But here he is talking to John McCormack of The Weekly Standard just four days earlier:

The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn't.

Powell notes, however, that Congress made sure during a budget standoff in 1996 that Social Security recipients would not be affected. "In 1996, during an impasse, [Treasury Secretary] Bob Rubin gave the Congress notice that he would be unable to pay the March '96 Social Security payment. Congress immediately--and I mean, immediately--passed a law that allowed the Treasury to borrow money specifically for that purpose and exempted that borrowing from the debt limit."

So ... then the president's statement actually isn't correct on its face.  Well, no, because that 1996 legislation was temporary and would have to be reenacted again in order to apply to the current crisis.  So, indeed, absent such legislation, the president's statement is correct on its face, theoretically, assuming Congress would allow that to happen, which it most assuredly would not.

Confused yet?