Debt deadlock leads Democrats to turn to unconventional 1T dollar coin idea or total elimination limit
AAs the debt ceiling standoff intensifies on Capitol Hill, some Democrats are offering alternatives such as a $ 1,000 billion coin to avoid a budget crisis and consider how Congress can avoid another fight for the debt ceiling in the future.
Repeatedly in recent days, House Speaker Nancy Pelosi has asked why the debt limit system is structured in such a way that Congress must take action on the debt ceiling.
“The 14th Amendment says that the full faith and credit of the United States of America are not to be questioned. For some reason we’ve put ourselves in a situation to vote on this every year, ”Pelosi said at a press conference last week. “We will have to look at this process.
Pelosi also told reporters that while the current impasse must be resolved with congressional action, the Democratic caucus is exploring ways to avoid falling into a future political deadlock with the credit of the United States hanging in the balance.
She mentioned a invoice Democratic Rep. Brendan Boyle and House Budget Committee Chairman John Yarmuth of Kentucky, who would transfer authority to set the debt limit to the Treasury Secretary, which Pelosi called a “great idea.” Boyle also proposed eliminating the debt ceiling altogether, as hardly any other Western country has a similar system.
“There are others – Jerold Nadler wants to have a coin, a trillion dollar coin,” Pelosi said, referring to the New York Democrat who is chairman of the House Judiciary Committee. “It doesn’t require congressional approval. So we talked about a range of things.
The unconventional idea of exploiting an oddity in federal law to tackle the debt limit without going through a divided Congress first surfaced about a decade ago.
A few sentences of the law passed in the 1990s authorize the secretary of the treasury to strike platinum coins, in order to give coin collectors improved access to US platinum coins. But the wording of the law allows the secretary of the treasury to mint coins of any “quantities, denominations and inscriptions that the secretary, in his discretion, may prescribe from time to time.”
Some thinkers envisioned the idea as a solution to the debt ceiling freezes in 2011 and 2013: just minting a trillion dollar coin, or more of them.
Nadler explained the concept to the Washington Examiner: “You hit the coin. Platinum, because of everything else. You say it’s a trillion dollars. You put it in the treasury. And you can borrow against that trillion dollars. And that eliminates that debt limit. Just eliminate it, so you don’t have to worry about voting in Congress. “
But Nadler did not define all the details of the play. When asked what face he would like to see on a trillion dollar coin, Nadler replied, “I don’t care. It does not matter.
Other scholars Argue that the 14th Amendment may allow the president to continue borrowing money without congressional approval. One section says that “the validity of the public debt of the United States, authorized by law, including debts incurred for the payment of pensions and bonuses for services rendered in suppressing insurgency or rebellion, does not must not be called into question. “
The White House has would have circulated memos about possible debt limit workarounds in case Congress doesn’t take action on time, like continuing to pay down debt while pointing to the 14th Amendment, or even the idea of the $ 1 trillion coin. But the executive branch has publicly stopped doing anything without Congress.
“We are obviously looking at a range of options, and none of those options were viable, either because they would not be accepted by the Federal Reserve, by the advice of our Secretary of the Treasury, or simply by legal restrictions.” , said the White House press secretary. Jen Psaki told reporters on Monday.
Senate Minority Leader Mitch McConnell is at the center of the debt ceiling fight unfolding in Congress this week. He thinks the limit should be increased but wants Democrats to do it themselves. McConnell warned Democrats have known for months that Republicans will not vote to raise the debt ceiling as long as Democrats pursue their budget reconciliation spending bill of up to $ 3.5 trillion. Last week, Republicans blocked raising the debt ceiling.
President Joe Biden and Senate Majority Leader Chuck Schumer on Monday urged McConnell not to block a procedural vote on the debt ceiling and allow Democrats to raise the limit themselves without forcing them to follow. the same kind of longer budget reconciliation process they use to adopt their broad social spending plan. Schumer rejected the plan, saying he wanted to send Biden a debt limit increase this week.
Treasury Secretary Janet Yellen warned Congress that unless it acts by October 18, the United States will no longer pay its debts, causing “irreparable damage to the United States economy and global financial markets. “.
Senate Majority Whip Dick Durbin on Monday launched the elimination of the possibility of obstructing debt ceiling votes, although the change could not be made for this ongoing fight.
“The idea that you can obstruct the debt ceiling is an outrage,” Durbin told reporters. “This, to me, discredits the argument that filibuster is, in fact, the way to get two-party politics. Baloney.”
Eliminating the debt ceiling is unlikely to win the backing of Republicans, who both fear runaway debt and see an opportunity to use debt ceiling votes as leverage or to make a point. political view.
“So, can we just spend more and more?” Minority Parliamentary Leader Kevin McCarthy said last week when the Washington Examiner asked whether Democrats were considering eliminating the debt ceiling. “It’s interesting to me that the credit cards are completely depleted, and the Democrats’ response is not to find a way to pay them off, but to find a way to get another credit card and get a higher limit. “
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Original author: Emily brooks