It’s not just American taxpayers who face looming financial obligations and reach out to their accountants for creative - yet legal - solutions. The Treasury Department has been preparing to avoid today’s debt ceiling default, which now stands at $31.4 trillion. But this time, they’re considering some new legal tactics that are right out of an accountant’s handbook.

The Biden administration is working on using “extraordinary measures” to prevent the feds from breaking the US debt barrier, since this historic breach would be devastating. If the US defaults on its debt, the markets could hurl toward destabilization; the economy would be ravaged, and the very fiscal credibility of America could crumble.

In essence, “extraordinary measures” for the federal government means that numerous tactics, many of which are based in basic accounting, would be utilized to avoid a debt ceiling default. Money could be moved around between government agencies, from one to another, to pay bills. Or the US might suspend numerous investments in accounts created for government workers, or even suspend the large daily investments in the treasury’s Exchange Stabilization Fund, used to finance foreign countries and also for dealing in global currencies.

Treasury Secretary Janet L. Yellen announced that they will “reprioritize” funds to protect the nation’s credit. But if you imagine piles of fresh cash being trucked into US federal bank accounts, you’d be wrong. Instead, the Treasury Department will utilize technical tools to support new legislation to pass. These new laws would determine how much the US government is allowed to borrow, going forward.

An agreement between the Republicans and Democrats, however, will not be easy. The political divide in the US is newly changed, with Republicans facing off with Democrats and calling for spending cuts to major areas including Medicare, Veterans’ programs and Social Security.

The Biden administration is clear: they won’t make deals with the Republicans over the looming debt ceiling. In a press conference a few days ago, The White House press secretary Karine Jean-Pierre said, “We will not be doing any negotiations over the debt ceiling.”

Yet, the Democrats and the White House have legal limitations on what they can do to avoid the breach.

The Constitution weighs in on this very issue, stating, “The validity of the public debt of the United States . . . shall not be questioned.”

Now, federal officials and attorneys are asking: Does this Constitutional passage mean that it’s unconstitutional for the country to default on its debt? Can Congress legally create a debt limit without running afoul of this Civil War-era provision enacted in the 14^th Amendment?

If new laws are instituted to prevent the debt ceiling breach, will this legislation violate the Constitution and then be challenged in the Supreme Court as unconstitutional?

With the political battle underway, the House Republicans are planning their own way to deal with an emergency debt breach. Simultaneously, the Biden Administration is attempting to avoid the default, and some ideas include:

• President Biden may order the U.S. Mint to create a $1 trillion token and deposit it into the Federal Reserve. This money would be allotted to pay the looming credit payments. Recently, Yellen called this idea, as proposed by the Biden administration in 2021, a “gimmick.”
• The Biden Administration is now pushing for “extraordinary measures” to deal with the debt crisis, stalling until June by adopting a new law that would suspend or raise the US borrowing cap from its current $31.4 trillion.
• Using “extraordinary measures,” the government can put a cap on how much money the US can borrow, meaning the debt ceiling would not be breached. Just as any accountant works with her clients and instructs them to only spend up to their agreed-upon budget, so too would the US government stick to a specific spending plan this week, and perhaps on to more weeks, as the crisis looms.

In reality, the US operates under a budget deficit. But experts are clear: breaching the debt ceiling would be catastrophic.

Yellen said that a debt breach would create “irreparable harm to the U.S. economy.” As she noted in a letter to Republican Speaker of the House Kevin McCarthy, “Failure to meet the government's obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”

Experts believe a long battle between both political parties is only sure to heat up, and that new legislation may trigger a Supreme Court hearing.