US representative Greg Walden (R-Ore.) is introducing a bill to prevent the trillion dollar platinum coin dodge, a loophole that would allow the executive to raise funds without going through congress.
Lawmakers will be required to lift the debt ceiling soon, so the Obama administration can borrow and pay bills. The Republican dominated House of Representatives is only willing to go along if it sees steep spending cuts, cuts the administration may not be able to swallow.
With the two at an impasse, a possible loophole for the administration is printing a collector coin, a special limited run coin with a trillion dollar valuation. The coin could be deposited in the US Treasury and the administration would be flush again, and it will have circumvented congress and the debt ceiling.
Walden wants to stop the possible work-around.
"My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order," Walden says.
The congressman perceives that the trillion dollar platinum coins are gaining traction.
"Rep. Jerrold Nadler, the ranking member of the Judiciary Committee’s Subcommittee on the Constitution, touted the proposal last week," says Walden's news release.
"New York Times columnist and Princeton professor Paul Krugman suggested the idea in an article as well."
In his column Krugman says the coin idea isn't all that ridiculous given what is going on legislatively.
It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years.Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin.
Walden's full press release:
Greg Walden plans to introduce bill to stop U.S. Treasury from creating trillion dollar platinum coins to pay bills and expand debt
January 7, 2013
THE DALLES, Ore. – U.S. Rep. Greg Walden (R-Ore.) today announced plans to introduce a bill to stop a proposal to mint high-value platinum coins to pay the federal government’s bills.
“Some people are in denial about the need to reduce spending and balance the budget. 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,” Rep. Walden said.
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well. My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order,” Rep. Walden said.
Within the last week, numerous media reports (example here) have suggested that the U.S. Mint could create trillion dollar platinum coins, which would then be deposited into the Federal Reserve to be used to pay the federal government’s bills or avoid hitting the debt ceiling. Rep. Jerrold Nadler, the ranking member of the Judiciary Committee’s Subcommittee on the Constitution, touted the proposal last week (story here).New York Times columnist and Princeton professor Paul Krugman suggested the idea in an article as well (click here). Other leaders in Washington, including House Minority Leader Nancy Pelosi, have urged the President to raise the debt limit unilaterally without permission from Congress.
Representative Walden, a member of the House Republican leadership, represents the Second District of Oregon, which includes 20 counties in the southern, central and eastern regions of the state.
Greg Walden standing in front of House Speaker John Boehner. House GOP Leader posted this photo under Creative Commons licence