The Treasury Department has once again ruled out the potential use of a platinum coin as a way to break the nation’s debt ceiling in the event Congress fails to raise its limit.
Treasury Secretary Jack Lew told congressional leaders earlier this week that Congress would need to raise the nation’s borrowing cap by Nov. 3 to avoid a potential default on obligations.
As an ultimate resolution is still unclear with less than three weeks before the “X date,” speculation has popped up once again about two popular theorised “work-arounds” — the 14th Amendment and the trillion-dollar platinum coin.
“Some commentators have suggested that the President could invoke the Fourteenth Amendment of the Constitution as a justification for issuing debt in excess of the debt limit. Others have suggested that Treasury could mint and issue a large-denomination platinum coin to obtain cash without exceeding the debt limit,” the Treasury Department’s Daniel Watson wrote in a blog post Friday.
“But as we’ve said before, the Fourteenth Amendment does not give the President the power to ignore the debt ceiling. And neither the Treasury nor the Federal Reserve believes that the law can or should be used to produce platinum coins for the purpose of avoiding an increase in the debt limit.”
The trillion-dollar coin option gained popularity at the start of 2013 (with the help of outlets like Business Insider), when the US was brushing up against another debt-ceiling deadline. The hashtag “#MintTheCoin” became a popular rallying cry on Twitter.
The idea is simple: It would take an extreme reading to an arcane law dealing with platinum bullion coins. That law specifies that the secretary of the Treasury has discretion over the denomination of those platinum coins.
But the Treasury Department argued, again, that Congress and only Congress could raise the nation’s debt ceiling. It also rejected the idea that it could “prioritise” certain payments in the event of a breach, pointing to a quote from Lew in 2013.
“How can the United States choose whether to send Social Security checks to seniors or pay benefits to veterans? How can the United States choose whether to provide children with food assistance or meet our obligations to Medicare providers?” he said.
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