Two Democrats expressed support for a plan to mint a $1 trillion platinum coin to avert a potential default on the national debt, Insider reports.
Congress has less than three weeks to raise the debt limit to continue paying the country’s bills or default on the debt and spark a potential economic crisis.
Democrats pressured Republicans to back a bill to raise the debt limit but the GOP filibustered the legislation.
Democrats are now racing to avert a potential catastrophe and Republicans refuse to help.
Democrats are considering using the budget reconciliation process to lift the limit on their own but procedural hurdles could take a long time to clear and it is not certain that the party can finish the effort in time.
$1 trillion coin:
Under a loophole in federal law, the Treasury Department can mint a $1 trillion platinum coin and deposit it at the Federal Reserve to continue paying the country’s debt.
New York Rep. Jerry Nadler raised the possibility of doing just that during a meeting with Democrats, according to House Speaker Nancy Pelosi.
Nadler previously floated the idea in 2013 when Republicans refused to lift the debt ceiling during the Obama era.
Michigan Rep. Rashida Tlaib appeared to back the idea on Twitter, writing, “Mint the coin.”
Tlaib previously called for the Treasury to mint two $1 trillion coins to distribute $2,000 to every American during the pandemic.
Yellen dismisses plan:
Treasury Secretary Janet Yellen dismissed the idea on Thursday.
Yellen stressed that the “only way” to avoid a default is for Congress to raise the debt ceiling.
South Carolina Rep. William Timmons told Yellen during a hearing that Pelosi “gave oxygen” to the idea and asked her to "please tell me this is not a legitimate policy proposal."
"I believe that the only way to handle the debt ceiling is for Congress to raise it and show the world, financial markets and the public that we're a country that will pay our bills,” Yellen said.