Jonathan Zasloff ponders the question:
Unlike Grossman, however, McConnell has an answer for what the Public Debt Clause means: if the President can't issue new debt, how can he ensure that the government doesn't go into default? Easy, says McConnell: he can make unilateral spending reductions in order to pay off the bondholders:At most, it means that paying the public debts and pension obligations of the United States, as they become due, has priority over all other spending. Each month, the Treasury takes in about $175 billion in new revenues. These are more than sufficient to pay principal and interest when due, as well as pension obligations...This argument isn't necessarily wrong, but it creates as many problems as it solves. In Clinton v. New York, the Supreme Court struck down the line-item veto, arguing that the President is not allowed to pick and choose among provisions of a duly enacted piece of budget legislation even if Congress has given him to power to do so. So what McConnell appears to be arguing is that the President can pick and choose between spending only if Congress has not authorized him to do so, and in fact, by previously passing spending measures, has instructed him to spend it. That hardly makes sense.
If we reach the debt limit, the Treasury will be compelled to reduce spending (other than payments on the public debt and pensions) to bring current expenditures in line with current receipts, just as a family has to do when it has maxed out on its credit cards.
Maybe we just hack 40% off every single expenditure. Or maybe we have a constitutional crisis. Either way, hours of fun for the entire family--if that family consists of political pundits who want to do more television spots.