WASHINGTON — In the summer of 2011, when a debt crisis like the current one loomed, President Obama warned Republicans that older Americans might not get their Social Security checks unless there was a deal to raise the nation’s borrowing limit.

After weeks of brinkmanship, Republicans consented and Obama agreed to a deficit-reduction plan the GOP wanted. Crisis averted, for a time.

Now that there’s a fresh showdown, the possibility of Social Security cuts — and more — is back on the table.

The government could run out of cash to pay all its bills in full as early as Feb. 15, according to one authoritative estimate, and congressional Republicans want significant spending cuts in exchange for raising the borrowing limit.


Obama, who was forced to negotiate an increase in 2011, has pledged not to negotiate again. Without an agreement, every option facing his administration would be unprecedented.

Such an outcome would require a degree of financial creativity that could test the law, perhaps even the Constitution.

It could shortchange Social Security recipients and other people, including veterans and the poor, who rely on government programs.

It also could force the Treasury to contemplate selling government assets, a step considered but rejected in 2011. In short, the Treasury would have to create its own form of triage, drawing up a priority list of its most crucial obligations, from interest payments to debtors to benefits to vulnerable Americans.

In such a debt crisis, the president would have to decide what laws he wants to break. Does he breach the borrowing limit without a congressional OK? Does he ignore spending commitments required by law?

In a letter to Obama on Friday, Senate Democratic leaders urged him to consider taking any ‘‘lawful steps that ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary.’’


The White House has resisted that path. It has rejected recommendations that it invoke a provision in the 14th Amendment to the Constitution that states that ‘‘the validity of the public debt of the United States . . . shall not be questioned.’’

‘‘There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default,’’ White House press secretary Jay Carney said. ‘‘Congress needs to do its job.’’

So what is left if Congress does not act in time?

Technically, the government hit the debt ceiling at the end of December. Since then, Treasury Secretary Timothy Geithner has halted full payments into the retirement and disability fund for government workers and to the health benefits fund of Postal Service retirees.

The Treasury can stop payments to a special fund that purchases or sells foreign currencies to stabilize world financial markets. Past administrations have taken such steps to buy time awaiting a debt ceiling increase.

Those measures and others could keep the government solvent, perhaps as far as early March, according to an analysis by the Bipartisan Policy Center.

The federal government also could sell some of its assets, from its gold stockpile to its student loan portfolio. Treasury Department officials in 2011 considered and rejected the idea, concluding that gold sales would destabilize the international financial system, that selling off the student loan portfolio was not feasible, and that such ‘‘fire sales’’ would buy only limited time.


Once all efforts are exhausted, then the government would be in uncharted territory.

It would continue to get tax revenue, but hardly enough to keep up with the bills. According to the Bipartisan Policy Center, the federal government between Feb. 15 and March 15 will get $277 billion in revenue and face $452 billion in obligations. The Treasury would have to decide whether to pay some obligations and not others or to simply pay for one day’s bills as tax revenue rolls in, exponentially delaying payments the longer the debt ceiling is not raised. Under virtually every approach contemplated, payment of interest on the debt takes precedence to put off a calamitous default.