Debt Limit Showdown: Congress' Risky Game of Chicken with Wall Street.
As Congress approaches a debt limit showdown, a new debt limit workaround called premium bonds is gaining attention. The government would renew old, expiring bonds at higher coupon rates, allowing Treasury to raise more money without technically adding to the nation's debt. The idea has gained support from some big names, but it could face legal challenges or damage the United States' reputation in the eyes of investors. Another workaround that could garner broader support is leveraging a clause in the Constitution that says the validity of public debt should not be questioned.
