Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.
The fantastic attempt at a work-around has worked its way from academic circles into the political mainstream, so much so that Republican Rep. Greg Walden (Ore.) has seen fit this week to introduce legislation to prevent such a maneuver.
Much of the coverage over the last month or so has focused on whether the idea is legally feasible. But it's also worth a look at how politically feasible it would be because that, arguably, is the bigger hurdle. (Plus, The Fix is hardly a Constitutional scholar.)
Put simply: Minting a trillion dollar coin would ratchet up the partisanship and gamesmanship in Washington to a level we haven't seen (though we know that's hard to believe). And it also would open up Obama and the White House to charges of manipulating the political system in an underhanded way.
"I seriously doubt the president would risk jamming the Congress and the American public with the coin," said Republican former congressman Tom Reynolds (N.Y.).
In a lot of ways, the idea mirrors the current debate about changing the Senate's filibuster rules.
As with the debt ceiling, Republicans in Congress have gone to great lengths to use the filibuster (which requires 60 votes to pass a bill in the Senate) as a means of exercising the power available to them.
But even as that has occurred, Senate Democrats have been hesitant to eliminate or roll back filibuster rules. The current effort seems to be gaining some steam, but even now, it will require some (ahem) creative legislating to pass the reform and wouldn't actually alter the 60-vote threshold -- instead requiring filibustering senators to actually speak during the filibuster, Mr. Smith Goes to Washington-style.
As the filibuster fight shows, while the two sides may seem to be willing to do just about anything to gain partisan advantage, the idea of manipulating the process is still considered beyond the pale by many in Congress.
Just as with reforming the filibuster, the trillion-dollar coin idea presents all kinds of potential unintended consequences, including opening the door to other practices that have thus far been off the table. And while that would benefit the Democrats in this particular instance, there will be a day when the roles are reversed (the filibuster being case-in-point).
"It isn’t just a nuclear option, it is opening up the Book of Revelation," GOP consultant Dan Hazelwood said of the trillion dollar coin. "Laws, Constitution and common sense merely cease to exist."
And regardless of whether you think it's a good idea, the trillion dollar coin would undoubtedly further poison the political well of a federal government whose well is already downright toxic.
Which is why the "nuclear" metaphor is particularly adept in this case.