Columbia, SC (WLTX) - Economists and political professionals are getting prepared for what happens if an agreement on the debt ceiling isn't reached before the August deadline.
The president has said that social security might not get paid, but others say that's not true. USC's Dr. Mark Tompkins says right now, no one really knows. Social security is one of the items that may not get paid or the government could choose not to pay something else.
"We've had a federal deficit forever. We've raised our debt limit 89 times, is the popular number. But this is the first time we've gotten to this point," says Tompkins, who teaches political science.
He's been following the research of not just Republicans or Democrats, but of the Bipartisan Policy Center. "The administration is faced with a bunch of tough choices. Each one has bad consequences and the question is, which one will they do?" he says.
The answer is unknown at this point.
If default happens, the federal government will have to decide what to not pay. "One set of questions are the social safety net questions. Another set of questions are people on the federal payroll," Tompkins explains, "Then we include folks who are getting payments from borrowing from the federal government."
He adds, "This is not just a made-up deadline, this is a real deadline that's gonna start having consequences."
And interest rates will climb after a default no matter what bills are paid and that will affect everyone. "At the end of the day, it will have to happen in Congress. So the rest of us read lots of stories and marvel at the events. But there's not much we can do except to wait," he says.