If SS checks don’t get paid, that will be his/Geithner’s choice. There is enough revenue coming in to pay all treasury obligations and fully fund SS benefits. I guess he will have to cut short his Libya adventure and maybe cut funding for Planned Parenthood and the Nat’l Endowment for the Arts.
I think you are right about that. If I recall correctly, social security is very close to running a neutral cash flow this year and doesn’t flip to a significant negative cash flow until 2012 or 2013. I can’t remember if it’s projected to run a slightly positive cash flow or a slightly negative cash flow, but in any event it’s very close to being fully funded by the social security payroll taxes paid by workers and employers. There’s also plenty of income tax revenue flowing in to pay interest on federal debt and make up for any slight underfunding of social security this year. So there’s no reason for us to default on interest payments or not pay social security benefits on time—Absolutely no reason whatsoever. If there’s no debt deal fairly soon, we could have to shut down some bureaucracies (a positive development!) and delay paying government workers until an agreement is reached to raise the debt limit.