They might not pay out on time. The Treasury will have incoming cash and will have discretion over which obligations it does and doesn't pay. T-bills might ve

They might not pay out on time. The Treasury will have incoming cash and will have discretion over which obligations it does and doesn't pay. T-bills might very well get priority but I don't know. If they don't pay there will be a market for them. Everyone will believe the debt ceiling will be somehow fixed and many players will be willing to buy T-bills at some discount -- probably very slight, but who knows? The Fed might also step in to buy them. The general expectation is that Washington will avoid this in the first place but they're all getting dumber and I think the possibility of it happening eventually is no longer zero.