There are four ways Treasury can avoid a near-term default on any of its obligations: Democrats and Republicans reach a compromise between the House-passed debt limit bill and Democrats’ demand for a clean debt limit hike; policymakers kick the can down the road with a short-term debt limit increase; a bipartisan coalition in the House uses a discharge petition to enact a scaled back debt limit bill; or Treasury effectively ignores the debt limit and continues to borrow to pay its obligations on time.
