One can argue, with John Hinderaker and others, that the US Treasury won't default on its debt because there will be plenty of cash coming in to cover interest payments (principal rollovers are included in the current debt ceiling). The notion is that when faced with payment obligations such as, for example, a Medicaid grant to a state, a defense related payment to General Electric, an interest payment on government debt and a payment to Social Security seniors, the Treasury can do the right thing and avoid default on the debt by "defaulting" on some other obligation of lesser legal weight. Of course there is no statutory scheme describing how that is to be done, so the Treasury Secretary would be operaing in a bit of a legal haze.
However! That assumes that the Treasury can actually separate its bills into 'Pay Now' and 'Pay Later' categories. Every household and small businesss in America has refined this skill over the past four years but apparently the Treasury has solved the legal question of its lack of prioritization authority by simply paying everything as it comes due. This was kicked around a few years ago when Obama was threatening to hold up Social Security checks during the 2011 debt ceiling scuffle. The legal mechanisms, including the Trust Fund, are intended to assure that Social Security obigations are already counted agasint the debt ceiling. However, despite a clear Congressional intent no one was sure that the mechanics of implementing those payments would actually work. Here is a former deputy Social Security administrator:
“I'm now 99.9 percent positive that Treasury has legal authority to pay Social Security benefits in both cases of a government shutdown and hitting the debt limit, since the payment of benefits shouldn’t affect the debt limit because it reduces the trust funds to the exact extent that it increase publicly-held debt,” Fichtner said. “What I don't know is whether Treasury has to pay benefits if it chooses not to.”
And now I see the genius behind the Obamacare enrollment debacle. The Treasury ought to be able to prioritize their payments, but as a practical matter, can the bright lights who brought us the ObamaCare website actually re-engineer the Treasury payment programs in a matter of days or weeks?
The world waits and wonders.