by jcolman

Brad DeLong has an excellent idea.

In the 1990s Bob Rubin established a precedent that when the debt ceiling binds and the Treasury cannot pay all the bills congress has ordered it to pay, the Treasury Secretary gets to choose which bills not to pay.

Debts the Treasury owes but is not paying, you see, are not part of the debt subject to limit.

Rubin simply did not pay the Federal Emoloyees Thrift Savings Plan the monies the Treasury owed it–it neither had Treasury bonds nor cash as assets but only the Treasury Secretary’s word that the Treasury would pay the debt someday.

Were I Tim Geithner, I would start by not paying congressional salaries, rather than not paying the TSP.

Genius. To that I would add their staff salaries as well.

They’d fold like a cheap suit.