WASHINGTON (AP) — Some politicians think they’ve found a silver bullet for the impasse over the debt limit, except the bullet is made of platinum: Mint a $1 trillion coin, token of all tokens, and use it to flood the treasury with cash and drive Republicans crazy.
Even its serious proponents — who are not that many — call it a gimmick. They say it is an oddball way out of an oddball accounting problem that will have severe consequences to average people’s pocketbooks and the economy if it is not worked out in coming days.
But despite all the jokes about who should go on the face of the coin — Chuck E. Cheese? Donald Trump, to tempt or taunt the GOP? — there’s scholarship behind it, too. However improbable, it is conceivable the government could turn $1 trillion into a coin of the realm without lawmakers having a say.
How is this possible when the treasury secretary can’t simply print money to pay public debts? It’s because a quirky law from more than 20 years ago seems to allow the administration to mint coins of any denomination without congressional approval as long as they’re platinum.
The intent was to help with the production of commemorative coins for collectors, not to create a nuclear option in a fiscal crisis. Oops.
Specifically, the law says the treasury secretary “may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
This is that time, in the view of coin advocates. But Treasury Secretary Janet Yellen, the White House and some Democrats slapped down the idea Tuesday, just as past leaders have done when the going got tough and radical quick-fixes emerged.
“The only thing kookier would be a politically inflicted default,” Sen. Mark Warner, D-Va, said of the coin.
Said Yellen, “What’s necessary is for Congress to show that the world can count on America paying its debt.” A platinum coin, she told CNBC, “is really a gimmick.”
Sure it is, said Rohan Grey, a Willamette University law professor and expert on fiscal policy.
“The fact that (the coin) represents an accounting gimmick is a source of its strength, rather than a weakness,” Grey wrote in a 2020-21 study in the Kentucky Law Journal. “The