According to WSJ, the Congress probably has no later than may to raise the ceiling on the national debt, and to avoid default.
Technically, however, default may not happen right away if Congress fails to act.
In 2009, apparently, the Treasury started working on backup plans to borrow more, even without the authorization of Congress.
And actually, the issue has come up before:
During the Clinton administration, the government actually hit the debt ceiling during a standoff between Treasury Secretary Robert Rubin and GOP House Speaker Newt Gingrich. Mr. Rubin successfully avoided default by borrowing money from at least two federal pension funds.
Eventually, the debt ceiling was raised, but only after a brief government shutdown and warnings from the Clinton administration that the government might temporarily stop mailing Social Security checks.
On separate occasions in 2002 and 2003, the Bush administration avoided hitting the debt ceiling by suspending investments in a pension plan for federal employees, among other things.
Ever since election night, this has been a hot topic, and the GOP has made no bones about the fact that it plans to use the debt ceiling issue as leverage in its desire to see drastic spending cuts. What, specifically, they’ll demand, is unclear, however. Most likely they won’t touch the real biggies: Social Security, Medicare, etc.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.