Toomey: Geithner should join GOP efforts to prioritize payments

{mosads}Toomey and Geithner engaged in a war of words earlier in the debt-limit fight over whether the Treasury could avoid default without raising the debt limit by simply prioritizing some payments over others. 

Toomey insisted it was an option, championing legislation that would guide the Treasury to do just that. But Geithner repeatedly dismissed the idea, calling it unworkable, arguing that the markets would see the government shirking other payments and still consider it a default.

Geithner also has maintained for weeks that the Treasury had no contingency plan on the debt limit and that a congressionally approved hike was the only way forward. And the Treasury is keeping the pressure on lawmakers to deal with the debt limit.

“If Congress fails to act, it will create a situation where the US is legally obligated to pay all of its bills but doesn’t have the capacity to do so. There is only one viable path to solving that problem, and Congress should devote itself to raising the debt limit while putting in place as much fiscal restraint as possible,” said a Treasury spokesperson Thursday in response to Toomey’s letter.

But now, with the deadline in view and no deal readily apparent, the Treasury is taking steps to prepare.

In response, Toomey is calling on Geithner to support a similar piece of legislation, one he and other Republicans have introduced that would prioritize payments on debt service, Social Security, and to active military members.

“I urge you to support this legislation or to work with me and other members of Congress to constructively improve upon it,” Toomey wrote. “It is important that we send a united, bipartisan message to the markets that defaulting on our debt is not an option, and I hope you will join me and many of my Senate and House colleagues in doing so.”

This post updated 4:58 pm.