WASHINGTON (AP) — On the brink of hitting the nation’s legal borrowing limit on Thursday, the government is resorting to “extraordinary measures” to avoid a default.
Sounds ominous, right?
But — take a breath — the phrase technically refers to a bunch of accounting workarounds. Yes, accounting.
Because the debt cap limits the issuance of government bonds — a way the U.S. borrows money — these workarounds shift money among accounts and should keep the government open through at least June, according to a letter last week by Treasury Secretary Janet Yellen.
In theory, President Joe Biden and Congress are supposed to use that additional time to work out an agreement to raise the nation’s legal $31.38 trillion debt ceiling. These talks often grow heated and go down to the wire, with major economic damage in the balance. But there have been roughly 80 deals to raise or suspend the borrowing cap since the 1960s.