With each passing hour, the nation edges closer to slamming against the debt ceiling. Everyone is pretty sure that this completely avoidable economic calamity will, in fact, be avoided — there’s simply too much at stake for Congress and President Obama to let it happen. But how, exactly, will catastrophe be averted? Here are all eight possible scenarios, in descending order of plausibility.
1. Boehner Caves: President Obama has repeatedly vowed not to negotiate over the debt ceiling. John Boehner has made private assurances that he’s not insane enough to let the nation default. He’ll hold out for as long as he can, but Boehner will ultimately bring a clean ceiling bill to the floor and pass it with a lot of help from Democrats.
- Plausibility: High. Boehner has privately admitted he has no choice.
- Ted Cruz Reaction: Anger.
2. Obama Caves: Obama claims he will never negotiate over the debt ceiling. But when it comes down to it, would he really stand firm if doing so meant the certain destruction of the nation’s (and, indeed, the world’s) already fragile economy? With no other options, Obama will grudgingly agree to some kind of token, face-saving concession — small cuts to entitlement programs and no new taxes on the rich, for example — to the GOP in exchange for raising the debt ceiling.
- Plausibility: Medium-low. Obama has taken a clear line and is loath to confirm the accusation he lacks negotiating skills, which he viscerally resents.
- Ted Cruz Reaction: Feels betrayed that Obama was not forced to destroy his health-care plan, vows to redouble efforts next year.
3. Premium Bonds: This is the hottest, newest default-avoidance scheme. Matt Levine explains:
The debt ceiling applies to the face amount of bonds, not the amount raised, so selling a $100 bond for $275 only counts $100 against the debt ceiling and gets you $175 in debt-ceiling-free money. There are rules against issuing premium Treasury bonds, but the rules are just Treasury rules and they can be changed unilaterally by Treasury with no notice and no Congressional approval. So Treasury could do an auction tomorrow seeking to sell $100 billion of 23 percent bonds for $275 billion and as far as I can tell no one could stop them.
- Plausibility: Medium-low. Risks triggering populist backlash against profiteering financiers.
- Ted Cruz Reaction: Retreats to mountains, forms guerilla insurgency.
4. The Grand Bargain: Obama has long dreamed of sealing the deal on a so-called “grand bargain” — a compromise that would cut entitlement spending and reform the tax code in one fell swoop, in addition to possibly rolling back the sequester — but Boehner has never been able to deliver the GOP votes. Now the “grand bargain” is being floated as a way out of the current impasse. Obama would prefer not to negotiate with a gun to his head, but if Boehner can finally somehow scrounge up the votes, he won’t be able to resist such a legacy-making achievement.
- Plausibility: Low, though maybe Boehner wants to go out in a blaze of glory and settle into a post-Speakership career as a lucrative lobbyist with a side gig delivering $40,000-a-pop speeches about political courage to audiences of worshipful businessmen.
- Ted Cruz Reaction: Berserk, eye-popping, furniture-hurling rage.
5. Mint the Coin: Even if the Treasury is statutorily barred from borrowing more money, it could simply mint a large-denomination platinum coin — say, one worth a trillion dollars — and deposit it in the Federal Reserve. Presto chango, the government can continue paying its bills. The law that would allow this to happen was only meant to help the government sell commemorative coins to lonely old people, but hey, it’s not Obama’s fault that it was worded so vaguely.
- Plausibility: Low. Politicians hate silly ideas. Jon Stewart doesn’t like it, which kills your messaging.
- Ted Cruz Reaction: Incredulity, quickly turning to rage.
6. The Fourteenth Amendment: The Fourteenth Amendment states that “the validity of the public debt of the United States, authorized by law … shall not be questioned.” This has nothing to do with the debt ceiling, but it kind of sounds like it could, right? Consequently, some political observers propose that Obama could simply invoke the Fourteenth amendment and raise the debt ceiling himself to avoid a supposedly unconstitutional default on the debt. The White House has said repeatedly that it doesn’t believe Obama has this power, but at the eleventh hour, in an Oval Office address, Obama will tell the American people, “Whatever, I’m doing it anyway.”
- Plausibility: Very low. Obama has repeatedly disavowed the legality of it, which would make it hard to defend even with his mad law-school-prof skillz.
- Ted Cruz Reaction: Calls for impeachment proceedings.
7. Boehner Gets Blackmailed: Did you know that John Boehner once [something incredibly scandalous]? The White House does, and if all else fails, it is willing to use that information to blackmail Boehner into raising the debt ceiling.
- Plausibility: Surprisingly high! Why do you think the White House keeps mentioning “blackmail”? It’s a subtle threat to bring up [redacted].
- Ted Cruz Reaction: Epic, 47-hour speech on Senate floor.
8. Obama Disguises Debt Ceiling As Canadian Film Crew, Brings in Ben Affleck to Sneak It Past House Republicans: This a proven solution to foil hostage schemes, and it’s especially useful against angry, suspicious but unsophisticated mobs of religious extremists.
- Plausibility: Minuscule, with Affleck committed to relaunching the Batman franchise.
- Ted Cruz Reaction: Discovers ruse at last minute, races to House floor to stop the vote, fires weapons at locked security doors, but it was too late. Vows revenge, renounces Canadian citizenship again in protest.