Give Treasury Secretary Jacob Lew credit for a modicum of restraint in using the “D” word. That’s “D” as in default, a prospect the Obama administration says is fast approaching should Congress fail to raise the $18.1 trillion statutory debt ceiling by Nov. 3.

In an Oct. 15 letter to Congress, Lew told lawmakers that the government’s cash balances will be too low at that point to meet all of its obligations. He mentioned “default” only once, in the very last sentence: “And there is no way to predict the irreparable damage that default would have on global financial markets and the American people,” Lew wrote.

You can predict the near-term damage if the U.S. government, with $13 trillion in publicly held debt, were to miss a single interest payment, something that hasn’t happened since the Great Depression (except for one back-office, “technical” snafu in 1979.) It would be chaos.

Look what happened during the 2013 debt-limit showdown. Lew and President Barack Obama tried to use the threat of default to their political advantage: to get the Republicans to stop holding the debt limit hostage to other priorities; and to get the public to blame the Republicans.

The strategy succeeded, even as it raised the Treasury’s cost of borrowing. Yields on the shortest T-bills TMUBMUSD01M, 0.078% jumped as much as 30 basis points as money-market mutual funds dumped their holdings, hoping to avoid a repeat of 2008 when the Reserve Fund “broke the buck.” Perhaps that explains why Lew has been more reserved this time around. Even so, yields on bills maturing in November have started to inch up.

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The U.S. Treasury can’t cover all its monthly payments with incoming monthly revenue. But it can avoid default, defined by credit-rating agencies Moody’s and Standard and Poor’s as a failure to make timely payment of principal and interest.

In any given month, the tax revenue flowing into the Treasury far exceeds interest payments — by a lot. Last month, for example, the Treasury took in $365 billion in tax receipts and made $21 billion in interest payments. For fiscal 2015, which ended Sept. 30, those figures are $3.2 trillion in tax receipts versus $402 billion in net interest.

The U.S. government’s ability to service its debt — the principal can be rolled over — should not be an issue. But Treasury has made it one, claiming in 2011 and 2013 that it lacks the authority to prioritize debt payments, something households do all the time. Confronted with insufficient funds for both the monthly mortgage payment and credit-card interest, guess what they do? They pay the mortgage because the consequences of missing a payment are much more serious.

Treasury publicly denies it has the authority to pick and choose among 80 million monthly payments, saying its computerized system would have to be re-programmed.

Treasury Secretary Jack Lew is warning again that the government might default if Congress doesn’t increase the debt ceiling. Getty Images

Not everyone in authority agrees. In 1985, Senate Finance Committee Chairman Bob Packwood asked the then-General Accounting Office to determine if the Treasury secretary has the authority to prioritize payments should Congress fail to raise the statutory debt limit. The GAO answered in the affirmative: Treasury can determine the order in which obligations should be paid to “best serve the interests of the United States.”

Treasury’s stance seems somewhat disingenuous for two reasons. First, debt and non-debt payments are handled separately. Debt payments go out via Fedwire, the Fed’s electronic funds-transfer system, while other payments go through Treasury’s Financial Management Service. Second, in written communications with the House Financial Services Committee in May 2014, the Treasury admitted that it would be “technologically capable” to prioritize debt payments.

No one says it would be easy for Treasury to prioritize to avoid default. But it’s better than the alternative. Most private-sector policy analysts come down on the side of the GAO, if only because the consequences of missing an interest payment would be so dire.

(The idea of stiffing grams and gramps to pay the People’s Bank of China probably won’t play well in Peoria.)

The Bipartisan Policy Center outlines various options for the Treasury, absent the authority to borrow. It could elect to make what are considered to be essential payments in November: interest on the debt, Social Security, Medicare, Medicaid, military salaries, unemployment compensation and food stamps, totaling $147 billion. But it would have to forego things like tax refunds, federal salaries and spending for various departments, all of which would have a cascading effect.

So what would you do? Here’s my advice to all parties involved. The Republicans should pass a clean debt-limit increase, which merely enables the U.S. to pay for previously approved spending. It can deal with other priorities at a more appropriate place and time.

The Treasury should avoid threats of default. The U.S. may be proprietor of the world’s reserve currency, but it can learn something from less-creditworthy nations. They work hard to convince potential bond buyers that their top priority is servicing sovereign debt. Credibility, once lost, is hard to reclaim.