While the White House has ruled out the much promoted option of the 14th Amendment as a way to raise the debt ceiling with or without the approval of the Congress, it has avoided ruling out the option of minting a $1 trillion coin to avoid a debt default.
The Huffington Post reports that White House press secretary Jay Carney, avoided ruling out the option during his Wednesday briefing. When he was asked about the possibility of Obama relying on the option if Congress refuses to raise the debt ceiling by the mid-February deadline, Carney fell short of endorsing it but was also careful not to rule it out as he did the 14th Amendment option.
According to The Washington Post, Republicans have attacked the White House for refusing to rule out the possibly of resorting to the economic skulduggery of minting a trillion-dollar coin. In spite of the general interpretation of Carney's response as indicating that the White House has not ruled out the coin option, The Washington Post's Greg Sargent comments that Carney was simply declining to take a position on whether such a measure would even be legal.
Sargent gives a transcript of Carney's response to questions by NBC's Chuck Todd:
TODD: Do you believe you have the power to mint a trillion dollar coin?
CARNEY: There is no Plan B, there is just Congress’ responsibility to pay the bills of the United States.Talking Points Memo reports that when he was asked repeatedly whether the White House has ruled out the platinum coin option, Carney avoided giving a direct answer:
"You can speculate about a lot of things, but nothing needs to come to these kinds of, you know, speculative notions about how to deal with a problem that is easily resolved by Congress doing its job."
According to Business Insider, in the last question of the press conference, ABC reporter Jon Karl asked Carney for definite answer. Carney said: "I would refer you to the Treasury."
The Washington Post's Greg Sargent summarizes his interpretation of Carney's responses:
"All that Carney is saying is that the White House isn't even engaging the question of whether the coin is a viable or legal option. More broadly, his response is just in keeping with the White House’s overall posture, which is that the debt ceiling is Congress’ problem — period, full stop — and that there’s really no need to discuss the matter further."
He concludes: "I guess this constitutes 'not ruling out' use of the coin, but it just doesn't seem like there’s anything here."
According to Digital Journal, the idea that Obama should mint a trillion-dollar coin to solve the debt-ceiling crisis has gained popularity on liberal financial blogs. Republicans are demanding major spending cuts in exchange for raising the debt-ceiling, but in the standoff the country faces the risk of a default crisis.
In a recent blog post Dr. Paul Krugman urged President Obama to go ahead and mint the platinum coin to prevent Congressional Republicans forcing the US economy into a default crisis. Krugman argued in The NY Times blog post: "Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous."
Digital Journal reporter explained that:
"The idea [the trillion-dollar coin option] really amounts to a devil's advocate game of brinkmanship for the Obama administration in confrontation with its Republican opponents. Everyone with a basic knowledge of how economies work can understand that It really makes no sense to suggest that the Obama administration fund spending by minting a coin, but the proposal for an economic brinkmanship approach insists that it is even sillier to suggest the possibility of defaulting, so why not make a feint for the better of two foolish options and hope your opponents will come to their senses?"Digital Journal notes that meanwhile, House Republicans are making moves to block any possible decision to print the trillion-dollar coin with a plan to introduce a legislation that prohibits it.
The Hill reports that Rep. Greg Walden (R-Ore.), said: "This scheme to mint trillion-dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren't so serious about it as a solution. I’m introducing a bill to stop it in its tracks."