A Treasury Department spokesman announced today that the department will not mint a platinum coin to sidestep raising the federal government's borrowing limit, telling the Washington Post that "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."
The idea, which had gained traction among some congressional Democrats and political analysts as a way of defanging the debt ceiling as a bargaining chip, was that the Treasury Department could simply mint a platinum coin, declare the value at $1 trillion, and deposit it into the Federal Reserve to allow continued spending in the absence of a vote to raise the debt ceiling.
With the idea now buried by Treasury, the stage is set for a full-on fight about the debt ceiling. President Obama and congressional Democrats have signaled that they simply will not negotiate on a vote to raise the borrowing limit, saying that it is Congress's duty to pay bills it has already accrued.
But congressional Republicans have given every indication that they plan to use the debt limit as a bargaining chip to extract deep spending cuts from reluctant Democrats.
Treasury: No $1 trillion coin
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Treasury: No $1 trillion coin
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Treasury: No $1 trillion coin
