Treasury on platinum coin: Thanks, but no thanks

The U.S. Treasury Department and Federal Reserve oppose the idea of minting platinum coins as a way to avoid the U.S. debt ceiling, according to a statement from Treasury spokesman Anthony Coley. “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,” Coley said in an e-mailed statement yesterday. Amid Republican opposition to raising the debt ceiling without spending cuts, some Democrats including House Democratic leader Nancy Pelosi have proposed invoking the Constitution's 14th amendment and minting a platinum coin with a face value of $1 trillion to pay government bills. The U.S. reached its statutory borrowing limit Dec. 31 and the Treasury Department is using what it calls “extraordinary” measures to finance the government. The Congressional Budget Office estimates those steps will be exhausted by mid-February. “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,” according to a statement issued by the White House yesterday. “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,” the e-mailed White House statement says. “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.” --Bloomberg News--