Let’s imagine that the debt limit passes without any bill, and Obama decides not to simply ignore it and dare Justice Kennedy to stop him. In that case, and assuming that we continue to service the debt, which we will, Obama will have to start ignoring some combination of spending allocations that are written into law.
In practice, ‘mission critical’ stuff will go on, for example funding current wars/military readiness and keeping the doors open at federal prisons (or closed, as the case may be). That will leave a smaller pot for incidental things like military salaries, government agencies and the social safety net. Obama will have almost no choice but to cut funds for Medicare, Medicaid and Social Security. We already know that. Although that sucks*, at places like this we tell ourselves that at least it will focus the public’s attention on the batshit crazy GOP.
For my part I would not even count on that. Look at it this way. For decades now Republicans and their allies have tried to sell the idea that some adverse relationship exists between government programs and Americans’ well being. The logic was usually pretty convoluted, but that won’t be the case here. Every government agency that Obama keeps open will necessarily mean less money to give directly to people entitled to government aid.
Most analyses show that Obama will have to cut Social Security checks if he wants to have any activity at the FCC, the EPA, the NIH and so on. Slimy PR firms like Karl Rove’s Crossroads GPS dream of days like this. President Obama cares more about some endangered beetle than about your mortgage payment. How do you feel about that? The rationale for zeroing out huge chunks of government will suddenly go from nil to life-threateningly urgent for quite a lot of people.
The opportunities look plenty sweet if you are a creative destruction, lemons from lemonade kind of party.
(*) by ‘sucks’ I mean absolutely fucking catastrophic.