Does any bank have a vault big enough to hold a coin that could help the Treasury Department cover the U.S. debt?
That question is a joke, but the super-coin idea has gained some serious, er, currency in Washington, and a U.S. lawmaker is trying to stop it from becoming reality.
Rep. Greg Walden (R-Ore.) on Monday announced plans to introduce legislation to take away the Treasury Department's ability to mint money to pay the federal government's bills. The measure ties to a 1996 law that authorizes the Treasury secretary to mint and issue platinum coins in any quantities and denominations he chooses.
Though Congress included the provision to enable Treasury to produce commemorative coins and other collectibles, advocates of its broader use say it authorizes the secretary to mint a coin in a denomination sufficient to allow the government to avoid the debt ceiling — regardless of whether President Obama can win congressional support for lifting the limit.
"This coin scheme would be laughable if some weren't so serious about it as a solution," Walden tweeted on Monday. "My bill will stop it in its tracks."
The issue has gotten attention since Dec. 31, when the U.S. reached its $16.4 trillion borrowing limit. Though the Treasury may shuffle spending to forestall the government's inability to honor its obligations, Secretary Timothy Geithner has advised congressional leaders that the department expects to exhaust such measures by March.
A Treasury spokesman did not respond immediately to a request for comment about whether the secretary is considering invoking his authority to mint a coin as a way around a debt limit fight.
In a news release Monday, Walden compared the suggestion that the Treasury can overcome the debt limit by manufacturing a coin to a small business Walden and his wife owned. "When it came time to pay the bills, we couldn't just mint a coin to create more money out of thin air," he said. "We sat down and figured out how to balance the books."
Andrew Malcolm, a spokesman for Walden, says the congressman plans to introduce the measure when the House reconvenes on Monday. "What the congressman believes we need to do is sit down, take a look at the books, and figure out how to reduce spending and balance the budget instead of coming up with these crazy schemes that do nothing to get our fiscal house in order," Malcolm told American Banker.
The seeds of the current impasse were sowed in August 2011, when the President signed an increase in the debt limit despite the House's objections. The recent bargain that delayed the fiscal cliff sidestepped the debt-limit issue. President Obama on New Year's Day told reporters he would "not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they passed." House Republicans have said that increases in the debt limit should be linked to spending cuts.
Not surprisingly, a squabble over whether to mint the coin also has busted out in social media. Supporters and opponents of the idea have taken to Twitter with dueling hashtags — #mintthecoin and #stopthecoin — to rally public opinion.
Proponents also have posted a petition on the White House's "We the People" website that calls on the White House to "direct the United States Mint to make a single platinum trillion dollar coin!" The petition as of midday Tuesday had garnered roughly 6,400 signatures. Advocates will need roughly 18,600 more signatures by Feb. 2 to reach the 25,000 threshold that triggers an official review.