The Obama administration has finally put to rest the absurd plan to mint a $1 trillion coin to evade spending limitations, but the idea remains a sad sign of the times. Congressional Republicans renewed their demand for dollar-for-dollar cuts in federal outlays in return for any increase in the debt ceiling next month. President Obama’s Democratic allies imagined a special platinum coin might be used to avoid any interruption in their spending spree.
On Friday, Senate Majority Leader Harry Reid and his leadership team encouraged Mr. Obama 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 letter did not specify the form these executive actions might take, but some Democrats are running with the idea of minting big money.
“There is specific statutory authority that says that the Federal Reserve can mint any non-gold or silver coin in any denomination,” Rep. Jerrold Nadler of New York told the website Capital New York on Jan. 2. “All you do is you tell the Federal Reserve to make a platinum coin for $1 trillion, and then you deposit it in the Treasury account, and you pay your bills.” When the the ranking member of the Judiciary Committee’s Subcommittee on the Constitution was asked if he was serious, he replied, “It sounds silly but it’s absolutely legal.”
Rep. Greg Walden intends to introduce a bill early as Monday to block this scheme. “People are looking for phony ways out of serious problems facing this country,” the Oregon Republican told The Washington Times. “My bill will take the coin gimmick off the table so we can seriously get to work on reducing spending and balancing our budget.”
The threat of the super-coin comes from a 1996 law granting the Treasury secretary power to mint platinum commemorative coins in any denomination for collectors. Democrats saw this as a loophole allowing the president to simply keep borrowing without the need to compromise with House Republicans who want some restraint on spending before they’ll agree to another bill increasing the government’s borrowing limit.
The National Republican Campaign Committee mocked the ploy with an image of Mr. Obama on a giant coin that says “spending.” White House Press Secretary Jay Carney stoked speculation by refusing five times in a press conference Wednesday to rule out minting a trillion-dollar coin to pay down our debt, prompting the campaign committee to ask in a release, “Now that President Obama won’t say no to this coin — will Jerry Nadler?”
Even liberal TV host Jon Stewart found the idea ludicrous. “How about a $20 trillion coin?” said Mr. Stewart on Thursday’s “Daily Show” on Comedy Central. “Or, maybe do one of these — I was digging through the White House couch cushions and Eisenhower must have left one of these $100 quillion bills laying around.”
What’s not a joke is the 55 percent increase in the national debt on Mr. Obama’s watch. This year will be the fifth in a row in which the federal government has spent $1 trillion more than it took in. It’s a relief that the Treasury has finally ruled out this shell game, but at the same time it is an apt symbol of how Washington has grown so out of control that such a plan could be entertained.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.