The compromise bill that emerged Sunday night from behind closed doors is being loudly trumpeted in an attempt to persuade recalcitrant conservatives in both houses to vote for something — anything — in time to avoid the August 2 deadline.
A careful analysis of the ultimate compromise bill yields some important conclusions. First of all, there is nothing in the law or statutes that states categorically that the nation will default if the August 2 deadline isn’t met. This is merely a “best estimate” by Treasury Secretary Timothy Geithner as to when he will run out of options to continuing paying the government’s bills by “borrowing” from various pots of money such as the federal government employees’ retirement plan. If he is able to do that, it’s unclear why he would run out of other options automatically on the 2nd.
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