WASHINGTON – The U.S. Treasury and the Federal Reserve said Saturday that they wouldn’t pursue a proposal to mint a $1 trillion dollar coin as a means of dealing with the federal debt ceiling.
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” said Treasury spokesman Anthony Coley.
Federal law gives the Treasury the authority to mint platinum coins – via legislation that envisioned commemorative coins. With the Treasury bumping up against the $16.4 trillion debt ceiling, there’s been speculation that the administration might mint a $1 trillion coin, deposit it at the Fed and then withdraw to pay bills in the event that Congress doesn’t raise the borrowing limit.
The Bipartisan Policy Center’s number crunchers say the Treasury will run out of maneuvering room between Feb. 15 and March 1. Republicans have sought spending cuts matching any increase in the debt ceiling.
In a statement issued Saturday afternoon, White House spokesman Jay Carney said, “There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default. … Congress needs to do its job.”
The White House also has rejected another escape clause: invoking the Fourteenth Amendment to the Constitution and borrowing more even if Congress hasn’t acted.
But a letter from Senate Majority Leader Harry Reid and three senior colleagues released earlier in the week said: “In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of an unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis, without congressional approval, if necessary.”
The Treasury currently is taking what it calls “extraordinary measures” to conserve cash so that it can keep paying bills without doing additional borrowing.