As it does almost every year lately, the United States government is bumping up against the debt ceiling. Congress sets the maximum limit on how much debt the federal government can issue. Congress also commands the president to spend more than the government receives; that is, to run a deficit. The administration can finance the deficit either by printing money or by borrowing more money, which increases the national debt. Congress has approved raising the debt ceiling 11 times since 2001.
Within a few months the government will have to print or borrow more money to pay for the spending that Congress has approved. Several Republican representatives are making noises that the nation would be better off if the government shuts down when it hits the debt ceiling than if it borrowed to pay its bills.
Jerrold Nadler, a Democratic representative from New York, found a way in which the government could pay its bills without borrowing more money. Possibly inspired by Mark Twain's story "The Million Pound Bank Note," and after some searching through our laws on coin and currency, he proposed that the Treasury mint a trillion-dollar coin in platinum and deposit it with the Federal Reserve. Why the Treasury? And why platinum?
The Federal Reserve Banks, not under the administration's control, print and issue our currency. The Treasury hasn't issued paper money since 1968 when it gave up printing United States Notes. The Treasury does, however, issue our coins, in denominations and with metal content strictly prescribed by statute. All gold and silver coins, for example, must contain gold or silver that is worth more than the face value of the coin. A $50 gold coin, for example, must contain 1.09 troy ounces of gold. There's no profit to be made in making gold or silver coins.
The Treasury Department may, however, mint platinum coins of any denomination and weight that pleases the Secretary of the Treasury, including, in Mr. Nadler's proposal, a platinum coin with a face value of $1,000,000,000,000.
Republicans in Congress (including Oregon's own Greg Walden) have lined up to oppose the trillion-dollar coin, though it's not clear whether they also oppose the government paying its bills. An administration less charitable than the current one might offer to avoid the debt ceiling cliff by cutting federal spending in those states whose representatives vote against raising the debt ceiling.