The US Treasury Department has ruled out minting a trillion-dollar coin so as to address the debt issue in case the Congress fails to increase the debt limit.
“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,” Department of Treasury spokesman Anthony Coley said.
With this the Treasury put to rest all speculation that a $1 trillion coin could be a viable option to overcome the debt limit crisis. This had engulfed the social media and the internet this past week.
What fuelled speculation is the fact that the White House early this week did not ruled out going for such an option.
Soon after the Treasury clarification, the White House said that 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.
“When Congressional Republicans played politics with this issue last time, putting us at the edge of default, it was a blow to our economic recovery, causing our nation’s credit rating to be downgraded,” White House Press Secretary Jay Carney said.
“The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job,” Carney said in a statement.
The US hit the debt ceiling on December 31. Treasury Secretary Timothy Geithner told the Congress in a letter that he is using “extraordinary measures” to keep the government from default. But he warned the lawmakers that those measures are likely to run out by mid-February or early March.
Experts had earlier said that the Obama Administration, taking the benefit of a loophole in the federal law, can overcome the problem of debt limit, if the Congress does not increases the debt limit.
The Treasury Department — under a loophole in the federal law — which was originally designed to allow for manufacture of collectible coins; can hypothetically mint a $1 trillion coin, deposit it at the Federal Reserve and continue paying bills even if the $16.4 trillion debt ceiling is reached in a few weeks, experts said.
Keywords: US debt ceiling, US Treasury, US fiscal cliff, Barack Obama, US Congress, US debt limit, $1 trillion coin, US democrats, US Republicans, US Federal Reserve, Timothy Geithner, collectible coins, US 14th Amendment, US default, US economy, US taxes,