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Trump May Need Obama’s Secret Debt Plan

In 2011, Obama administration put together contingency plan to prioritize payments..

By Saleha Mohsin and Liz Capo McCormick, Bloomberg | Updated on July 14, 2017

Deep within the Treasury Department sits a once-secret plan written by the Obama administration that could lead to the first-ever default on U.S. debt. Bond traders are worried that Donald Trump’s Treasury secretary may have to use it.

The U.S. government will reach its statutory limit on borrowing some time in October, the Congressional Budget Office estimates. The Trump administration has asked Congress to raise the ceiling before then, but it is running into the same complications the Obama White House encountered: lawmakers, mostly Republicans, who want to use the debt limit as leverage for controversial policy changes.

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