Moody’s Clashes With Treasury’s Lew on Prioritizing Payments

The U.S. will likely prioritize debt payments ahead of other obligations, should Congress fail to raise the nation’s $16.7 trillion debt ceiling, according to Moody’s Investors Service. Treasury has signaled less optimism on the department’s ability to “pick and choose” payments.

Moody’s, which rates the U.S. a stable Aaa grade, reiterated yesterday that it expects the debt ceiling to be raised, averting a default. The company also expects “that the U.S. government will pay interest and principal on its debt even if the statutory debt limit isn’t raised.” Fitch Ratings and Standard & Poor’s have also said they expect the U.S. to avoid default.