White House Cool to $1T Platinum Coin Plan
The White House on Wednesday sees little profit in the notion of minting $1 trillion platinum coin as an escape hatch to avoid a debt default if Congress balks at raising the U.S. debt limit.
With another standoff with Congress over raising the debt ceiling looming as early as mid-February, a petition on the White House website asks the administration to create a single platinum coin worth $1 trillion to avoid a stalemate over lifting the borrowing cap. The petition has garnered more than 7,100 signatures.
An asset of that value would place the United States well within its $16.4 trillion borrowing limits, the argument goes.
Pressed to rule out the idea, White House Press Secretary Jay Carney on Wednesday passed the buck.
“I would refer you to Treasury for the specifics of this question,” Carney told reporters. “I can tell you that the president does not believe that there is a backup plan or a Plan B or an off-ramp.”
Carney would only say the president doesn’t believe there are alternatives to raising the debt limit.
Congress’ refusal in 2011 to raise the debt ceiling unless the White House agreed to large spending cuts brought the United States close to the brink of a debt default and dealt the weak recovery a setback.
With the need to raise the debt limit again on the horizon, Obama has this time taken the position that doing so is Congress’s responsibility and that because a debt default would cause widespread economic damage, he does not need to offer lawmakers incentives to do so.
However, given the past willingness of some congressional Republicans to entertain a default rather than raise the borrowing cap – which they say puts the nation on a fiscally unsustainable path – observers have proposed emergency measures.
Some have urged the administration to cite the 14th amendment to the U.S. Constitution, which says the validity of the public debt should not be questioned, and ignore the limit if Congress fails to raise it. The White House says it does not believe that approach would stand up legally.
Enter the trillion-dollar coin idea. Liberal columnist and Nobel-winning economist Paul Krugman wrote that the while the notion may be “undignified,” it would avoid catastrophic economic developments by taking the debate over the debt ceiling off the table. Representative Jerrold Nadler, a New York Democrat, has said he supports the idea.
Carney, meanwhile, wasn’t buying.
Pressed repeatedly on whether the administration has reviewed the idea, he would only say that it is Congress’s responsibility to raise the debt ceiling, and that the White House is not mulling any contingency plans.
“I have no coins in my pockets,” he said.