If the U.S. defaults, thousands to go unpaid

Here's one measure of how cash-strapped the U.S. Treasury is: As of Saturday, the Treasury has just $36 billion in cash on hand. That's well short of the $76 billion computer maker Apple had in the bank at the end of June.

A lot of Americans are asking, if a debt deal is not made in the next few days, who gets paid and who gets paid first?

CBS News correspondent Sharyl Attkisson reports that, for every dollar America owes, it'll only bring in 60 cents. That means 40 percent of the bills wouldn't get paid in the event of a default.

In August alone, the US would run $134 billion short of what it needs, with no way to borrow more. So how would we spend what there is? Would we pay granny or G.I. Joe?

The Treasury Department isn't talking about contingency plans, but a group called the bipartisan policy center did its own analysis.

After Tuesday, the US will bring in $172.4 billion in taxes and other revenue during the month...but will owe more than $306 billion.

Let's say for the sake of argument you use the cash to pay interest on treasury securities, Social Security, Medicaid and Medicare, defense vendors and unemployment insurance.

Then you won't have anything left to pay active duty military, federal salaries and benefits, the departments of Education, Labor, Justice, Energy, EPA or anything else.

White House spokesman Jay Carney said: "Choices then have to be made. And it's a sophie's choice, right? Who do you save? Who do you pay?"

Experts told CBS News that neither Treasury nor the White House has the legal authority to make those decisions. The power of the purse belongs to Congress alone, and it's hard to imagine they'd have an easier time agreeing on what bills to pay than they have on the debt ceiling.

Jay Powell of the Bipartisan Policy Center describes another scenario:

"We're gonna pay the bills in the order in which they're due out of available cash flow, as it becomes available. And everything can stand in line on an equal basis. Social Security will stand in line with active duty military pay and veterans benefits and everything else," Powell said.

Can the government operate on faith, telling federal employees come to work and you'll get paid eventually? They're not legally allowed to do that. You could do that with defense contractors or Medicare providers, but then we'd have to pay penalties and interest on the late bills so it would drive up the deficit.

In case you're wondering, the government cannot just print more money. That's under the mandate of the Federal Reserve, which has no mandate to finance the operation of government.

Sharyl Attkisson

Sharyl Attkisson is a CBS News investigative correspondent based in Washington.

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