Obama misled Congress on debt limit: House report

The government could have continued to pay Social Security and other critical payments in the event it reached its debt limit, but the Obama administration intentionally misled Congress about that to force Republicans to hike the borrowing ceiling, a House panel said Monday, citing internal Treasury Department documents.

The stunning revelation could fundamentally change the battleground between Capitol Hill and the White House heading into the next debt showdown early next year, because it means a president could no longer use the threat of a full government shutdown to win a debt hike.

For conservatives, it could make a high-risk maneuver to limit spending more palatable.

According to the documents released by the House Financial Services Committee, even as the Obama administration was publicly warning it had no way to prioritize payments, it was privately making plans to do exactly that.

“At the same time that Treasury was insisting to Congress and the American people that prioritization is unworkable, Treasury and New York Fed officials were working behind the scenes on a prioritization plan,” the Financial Services Committee said in an exhaustive 322-page report detailing stunning duplicity on the part of Treasury Secretary Jacob Lew.
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