No Debt Hike? A 'Sophie's Choice' For Who Gets Paid

Originally published on July 29, 2011 6:58 pm

If you've ever looked at a stack of bills and realized you owe more money than you have in the bank, you can understand the position the U.S. government will soon be in, if lawmakers don't agree to raise the debt ceiling.

The Obama administration would then face the same decision as any cash-strapped consumer: Who gets paid? And who doesn't?

"Choices then have to be made," said White House Spokesman Jay Carney. "And it's a 'Sophie's Choice,' right? Who do you save? Who do you pay? That's an impossible situation that this country has never faced and should never face if Congress does what it was elected to do, and does its job."

For reporters too young to understand his reference to a "Sophie's Choice," Carney offered a capsule summary of the 1982 movie of the same name, in which a tearful Meryl Streep is forced to choose which of her two children to save from the Nazis.

Sophie's choice was between Jan and Eva. The U.S. government's choice — if it comes to that — is between Peggy, George and Jim.

Peggy Munson, 73, is a retired nurse, who lives in Boise, Idaho.

"I spend every dime of my Social Security every month, just to pay all my bills," Munson says.

Munson's Social Security payment is directly deposited in her checking account each month. And some of the $1,605 goes right back out again for supplemental health coverage, car insurance and homeowner's dues. Munson knows exactly when her government payment is supposed to show up in her bank account, and she'll definitely know if the money is held up.

"I'm a pretty good budgeter," she says. "I try to not get down low. But it depends what happens to you. The stove blew up last spring, and I had to buy a new stove. You may have to go the emergency room for your blood pressure. You have to always plan for the unknown."

Munson's son, who's a firefighter for the U.S. Forest Service, doesn't know if he'll get a paycheck this coming month. Some 2 million federal employees are in that same position.

"There's rumors about furloughs," says George McCubbin, president of the National Border Patrol Council. Since Border Patrol agents are considered essential, McCubbin won't be furloughed. "But there's always the possibility we won't get paid," he says.

McCubbin says that would be a financial challenge, especially for entry-level workers.

"I think for a lot of the younger folks that are already cash-strapped because of what's been happening, it's just going to magnify the problem," he says.

Government bondholders will likely be first in line for their payments: $29 billion worth of interest this coming month. But defense contractors, veterans and even the active duty military may have to scramble.

The biggest bill on the government's desk — $50 billion in August — comes from Medicare and Medicaid providers like the Henry Ford Health System in Michigan. CFO Jim Connelly says nearly half the patients in the hospital network rely on Medicare or Medicaid. So the system relies on timely payments from the government.

"It's imperative that all of our physicians and our clinical staff be doing what they do every day for patients," Connelly says. "We cannot afford to have an economic disruption somehow interrupt that important patient care."

Connelly, McCubbin and Munson all say they're counting on Congress to reach an agreement. Otherwise, the government will soon find itself with just 60 cents in cash for every dollar it owes. And like it or not, somebody will not get paid.

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MICHELE NORRIS, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host: And I'm Robert Siegel.

Have you ever been faced with a stack of bills, only to realize that you owe more money than you have in the bank? Well, if so, then you can understand the position that the U.S. government will soon be in - that is if lawmakers don't agree to raise the debt ceiling. The Obama Administration would then have to choose who gets paid and who doesn't.

White House spokesman Jay Carney says those painful decisions could come as early as next Wednesday.

JAY CARNEY: And choices then have to be made. And it's a Sophie's choice, right? Who do you save? Who do you pay? That's an impossible situation that this country has never faced and should never face, if Congress does what it was elected to do and does its job.

SIEGEL: In a moment, we'll hear about the technological challenge of trying to prioritize tens of millions of government payments.

But first, NPR's Scott Horsley reports on some of the people who are anxiously waiting to learn if their checks will be in the mail.

SCOTT HORSLEY: For White House reporters too young to understand his reference to a Sophie's choice, spokesman Jay Carney offered a capsule summary of the 1982 movie, based on William Styron's book, in which a tearful Meryl Streep is forced to choose which of her two children to save from the Nazis.

(SOUNDBITE OF MOVIE, SOPHIE'S CHOICE)

MERYL STREEP: (as Sophie) (German language spoken)

HORSLEY: Sophie's choice was between Jan and Eva. The U.S. government's choice, if it comes to that, is between Peggy, George, and Jim.

Peggy Munson is a 73-year-old retired nurse who lives in Boise, Idaho.

PEGGY MUNSON: I spend every dime of my Social Security every month, just to pay all my bills. It's going to be really, really very serious if they can't meet the payroll for these people.

HORSLEY: Munson's Social Security payment is directly deposited into her checking account each month. And some of the $1,605 goes right back out again for supplemental health coverage, her car insurance, and her homeowners' dues. Munson knows exactly when her government payment is supposed to show up in her bank account and she'll definitely know if the money is held up.

MUNSON: I'm a pretty good budgeter. I try and not get down low. But it depends what happens to you. You know, the stove blew up last spring. And I had to buy a new stove. You may have to go to the emergency room for your blood pressure, whatever. But, you know, you have to always plan for the unknown.

HORSLEY: Munson's son, who's a firefighter for the U.S. Forest Service, doesn't know if he'll get a paycheck this coming month. Some two million federal employees are in that same position, including George McCubbin.

GEORGE MCCUBBIN: I'm a Border Patrol agent assigned to the Casa Grande Station, out in Arizona, Tucson sector.

HORSLEY: Border guards are considered essential and will probably have to keep working no matter what happens in Congress. But McCubbin, who heads the National Border Patrol Council, says there's no guarantee they'll be paid.

MCCUBBIN: I think for a lot of the younger folks that are already, you know, cash-strapped because of what's been happening, it's just going to magnify the problem.

HORSLEY: Government bondholders will likely be first in line for their payments: $29 billion worth of interest this coming month. But defense contractors, veterans, even the active duty military may have to scramble. The biggest bill on the government's desk - $50 billion in August - comes from Medicare and Medicaid providers, like the Henry Ford Health System in and around Detroit.

CFO Jim Connolly says nearly half the patients in that system rely on Medicare or Medicaid, which is not unusual. So the system relies on timely government payments to buy medicine and supplies, and to pay its 23,000 employees.

JIM CONNOLLY: It's imperative that all of our physicians and our clinical staff be doing what they do every day for patients. We cannot afford to have an economic disruption somehow interrupt that important patient care.

HORSLEY: Connolly, McCubbin, and Munson all say they're counting on Congress to reach an agreement. Otherwise, the government will soon find itself with just 60 cents in cash for every dollar it owes. And like it or not, somebody will not get paid.

Scott Horsley, NRP News, Washington. Transcript provided by NPR, Copyright NPR.