Catastrophic. Disastrous. Default. Those are just some of the doomsday terms being used to describe what would happen if Congress fails to raise the country's debt limit and isn't able to pay its debt.
Not so, according to some–mainly Republicans—in Congress. Their reasoning seems to revolve around the same thread: if we don't know what's going to happen because the country has never been down this road before, how can we be sure it'll be so bad?
"We don't know, we haven't ever done it," Rep. Steve Stockman, R-Texas, told ABC News, when asked what happens if the debt limit isn't increased on Oct. 17.
Part two of this theory involves "prioritizing" debt payments, so that the government is able to pay the interest on the country's debt, and postpone other payments.
"We have about $25 billion a month in debt service and we have about $225 billion in revenues that we anticipate," Rep. Dennis Ross, R-Fla., told ABC News. "I think we'll always service our debt so that we never default on our sovereign debt."
"It just becomes a priority of what are we going to pay or not pay thereafter," he added.
That view has been resoundingly denounced by the White House, which has said that the consequences of not raising the debt ceiling—prioritization or no—would send economic markets into a tailspin.
"Prioritization is default by another name," Director of the National Economic Council Gene Sperling said on Monday at a breakfast sponsored by Politico. "Prioritization is like telling a relative who's got near -- who's got perfect credit, you know, it's ok if you pay your mortgage and don't pay your student loan and your car loan, your credit loan."
And in a report to Congress last week, the Treasury Department warned that two years ago in 2011 a near miss on this same issue caused long-lasting consequences to the economy.
An actual default, they warn, could cause credit markets to freeze, the value of the dollar to plummet, interest rates to skyrocket, in a way that could make the 2008 recession seem less severe.
The warnings have come from the White House, economists, the business community and even from China, our biggest debtor, who in a statement yesterday warned lawmakers to "resolve in a timely way the political issues around the debt ceiling and prevent a US debt default."
They have even come from House Speaker John Boehner, who told ABC News' George Stephanopoulos on Sunday that he agreed with the White House's assessment that default could have disastrous consequences for the economy.
But the problem they all face in making their case to skeptical lawmakers is that the exact mechanism for default isn't clear, even to them.
Asked directly how it would happen, Chairman of the Council of Economic Advisers Jason Furman acknowledged that failure to raise the debt limit wouldn't cause the U.S. to instantly fall off the proverbial cliff.
"We've never actually tested it," Furman said Monday. "We don't know what happens. And we don't ever want to find out what happens."
Some lawmakers, like Rep. Ted Yoho, R-Fla., have pledged that they won't vote to raise the debt limit at all, and others have said they'll only do it if the vote is accompanied by reforms that reduce the country's debt overall.
Either way, come Oct. 17, the Treasury Department says that unless Congress acts, on that day it will run out of "extraordinary" measures they've utilized for the last several months to pay the country's debt.
But a few Republicans view even that date as an arbitrary timeline used by the White House to gain leverage and kick long-term budget reforms down the road.
By Rep. Tim Huelskamp's calculations, we have "about five weeks" until the Treasury department faces a sizable enough payment that it might require it to raise the debt ceiling.
"I think the Oct. 17 date … is not the real date," the Kansas Republican told ABC News. "We don't have a payment on debt until Oct. 31 according to the Treasury Department…we have a big one on Nov. 15."
"It's in their interest to kind of keep fudging with those numbers and moving them up to create pressure," he added.Also Read