Which of the following situations is an inevitable consequence of not raising the federal debt limit?
Contrary to widespread claims that the U.S. government will default on its debt if Congress doesn't raise the debt limit, federal law and the Constitution require the Treasury to service the debt, and this takes only 15% of current federal revenues. Nor would Social Security benefits be affected by a debt limit stalemate unless President Biden illegally diverts Social Security revenues to other programs. The finances of the Social Security program are legally separated from the rest of the federal government, making it illegal to spend Social Security taxes on any program other than Social Security. If Democrats and Republicans don't agree on a bill to raise the debt limit, the federal government will have to cut enough spending to completely stop the growth of the national debt. Or in other words, it will have to operate with a balanced budget.
DocumentationDebt Limit Consequences