Credit Rater Believes US Default Unlikely

If debt ceiling isn't raised

A major credit rater expects the Treasury Department would avoid default if the $16.7 debt limit is not raised.

In a document dated Oct. 7, Moody's Investors Service said it believes that if the borrowing cap is not increased, the government would prioritize making interest and principal payments on its outstanding debt above other government bills, even though the Treasury Department has repeatedly called prioritization plans unworkable.

"We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact," the rater said.