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A U.S. government default (some bills unpaid) looks possible but unlikely. By my count, the topline difference is only about $50B in Nondefense Discretionary spending. Not enough to take the risk of tanking the economy. But there will be plenty of showmanship.

                [$B]    [$B]                GOP      WH     [$B]
               FY2022  FY2023  change    FY2024  FY2024  difference
Discretionary   1,659   1,712   3.2%      1,659   1,712
   Defense        747     792   6.0%        792     792
  Nondefense      912     919   0.8%        867     919      52

A government shutdown (employee furloughs) looks more likely. The longest government shutdowns were in 1995, 2013, and 2018. Congress is now more narrowly split (Senate 51-49, House 222-213), and so reaching a decision will be more difficult. But the longest government shutdown was 35 days from December 22, 2018, to January 25, 2019, and the US stock market did not change much during the previous shutdowns.

days     US        US        US
from  equities  equities  equities
shut    VFINX     VFINX     VFINX
down   sd1995    sd2013    sd2018
-56     33.38    131.99    228.51
-49     32.95    131.86    234.10
-42     33.59    128.67    239.27
-35     33.74    126.99    235.58
-28     34.17    127.78    226.70
-21     34.18    131.27    237.82
-14     34.61    132.95    226.99
 -7     35.22    132.41    224.19
  0     35.17    132.26    208.42
  7     34.92    129.24    214.45
 14     35.18    132.60    218.53
 21     35.23    137.04    224.14
 28     34.40    138.40    230.63
 35     34.98    137.73    230.13
 42     35.53    138.22    233.84
 49     36.37    139.89    234.10
 56     37.57    141.11    240.10

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https://www.cbo.gov/system/files/2023-05/59096-Bud...

"There will be some bills unpaid if we do not raise the debt ceiling."
https://www.nbcnews.com/politics/white-house/janet...

"We recommend that corporates begin to discuss contingency plans for a U.S. government default with their boards of directors."
https://www.clearygottlieb.com/news-and-insights/p...

https://www.vox.com/policy-and-politics/2018/1/19/...

"Shutdowns of the type experienced by the United States are nearly impossible in other forms of government:
Under the parliamentary systems used in most European and Asian nations, stalemates within the government are much less likely, as the executive head of government (i.e. the prime minister) must be a member of the legislature majority, and must maintain the approval of the legislature to remain in power (confidence and supply). Typically a legislature is suspended if a budget fails to pass (loss of supply), and the head of government must resign. Then the head of state may either appoint another member of legislature who can garner majority support, or dissolve the legislature and conduct fresh general elections.
In other presidential systems, the executive branch typically has the authority to keep the government functioning even without an approved budget."
https://en.wikipedia.org/wiki/Government_shutdowns...

The United States federal government shut down from midnight EST on December 22, 2018, until January 25, 2019 (35 days) was the longest government shutdown in history.
https://en.wikipedia.org/wiki/2018%E2%80%932019_Un...

"Republicans want to roll back next year's spending to 2022 levels, but the White House has proposed keeping 2024 the same as it is now, in the 2023 budget year. Republicans initially sought to impose spending caps for 10 years, though the latest proposal narrowed that to about six. The White House wants a two-year budget deal... GOP lawmakers are also seeking cuts in IRS money and, by sparing Defense and Veterans accounts from reductions, would shift the bulk of spending reductions to other federal programs. The White House has countered by keeping defense and nondefense spending flat next year,"
https://apnews.com/article/debt-limit-default-bide...

A U.S. government default (some bills unpaid)

Not making debt payments would be default. Not paying other bills isn't defaulting, it's just not paying other bills. The value of our currency and of our debt--which underlies the value of our currency--is centered on paying our debt.

Not meeting our contractual obligations--not paying IAW contract terms--would call into question the value of the government's word in its relationship with the various companies with which it does business, along with those business' ability to meet their own contractual obligations (payroll, suppliers, etc), and those are themselves very serious, but they're more domestic economy than international relations and power.

Eric Hines

Treasury bonds are Public Debt (also known as government debt). Other bills or obligations to pay are Debt (Social Security payments, Medicare payments to hospitals, defense contract payments, NIH grant payments, federal employee pay).

Congress is considering raising the public debt limit. The U.S. will make all public debt payments on time, but Fitch Ratings agency placed the U.S. on 'ratings watch negative'. Not making public debt payments would be a credit default. Even with the public debt ceiling, the Treasury needs access to the markets to rollover debt, and will prioritize making bond payments on time. The 14th amendment directs the Treasury to pay public debt.

The value of the U.S. currency is based on economic strength, monetary policy, legal stability, and political stability. Making bond payments on time is an important part of that.

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The 14th amendment says "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

31 U.S. Code § 3101 - Public debt limit
"The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury) may not be more than $14,294,000,000,000, outstanding at one time"
https://www.law.cornell.edu/uscode/text/31/3101

default
1: neglect
2 archaic : fault
3 economics : failure to pay financial debts
4a law : failure to appear
4b : failure to compete
5a : a selection made usually automatically
5b computers : a selection automatically used
https://www.merriam-webster.com/dictionary/default

debt
1: something owed : obligation
2: a state of being under obligation to pay
3 law and business : the common-law action for the recovery of money held to be due
4: sin, trespass
https://www.merriam-webster.com/dictionary/debt

Public Debt (also known as government debt): obligations of governments, particularly those evidenced by securities, to pay certain sums to the holders at some future time.
https://www.britannica.com/money/topic/public-debt

Court sets hearing to consider suspending debt limit law as unconstitutional, May 23, 2023
"The hearing, set for May 31 at 2 p.m... If the limit is reached, NAGE contends Biden would be forced to take over Congress's spending authority by deciding which payments to prioritize over others. It also would effectively amount to a line-item veto, the union argues, which the Supreme Court has previously rejected."
https://thehill.com/regulation/court-battles/40174...

Debt ceiling talks teeter on the brink, as lawmakers leave town for weekend without a deal, May 25, 2023
"Fitch Ratings agency placed the United States' AAA credit on 'ratings watch negative,' warning of a possible downgrade because of what it called the brinkmanship and political partisanship surrounding the debate over lifting the debt ceiling."
https://apnews.com/article/debt-limit-biden-mccart...

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