Trillion dollar coin: The new nuclear option
Posted by Aaron Blake on January 9, 2013 at 9:34 am
The trillion dollar coin is emerging as a surprisingly serious proposal by the political left to avoid the looming fight over the debt ceiling.
It’s also the political equivalent of the nuclear option — something that may be technically practical, but would lead to all kinds of unpredictable political fallout. So much so that it’s very likely to remain in the realm of liberal fantasy.
The idea of minting a trillion dollar coin (or two) has started to catch on in liberal Democratic circles as a means of circumventing the looming debt ceiling brinksmanship, with Republicans intent on using the negotiations over raising Congress’s borrowing authority to secure big spending cuts — and President Obama is not having any of it. The Post’s Wonk team sums it up as follows:
Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.
Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.
The fantastic attempt at a work-around has worked its way from academic circles into the political mainstream, so much so that Republican Rep. Greg Walden (Ore.) has seen fit this week to introduce legislation to prevent such a maneuver.
Much of the coverage over the last month or so has focused on whether the idea is legally feasible. But it’s also worth a look at how politically feasible it would be because that, arguably, is the bigger hurdle. (Plus, The Fix is hardly a Constitutional scholar.)
Put simply: Minting a trillion dollar coin would ratchet up the partisanship and gamesmanship in Washington to a level we haven’t seen (though we know that’s hard to believe). And it also would open up Obama and the White House to charges of manipulating the political system in an underhanded way.
“I seriously doubt the president would risk jamming the Congress and the American public with the coin,” said Republican former congressman Tom Reynolds (N.Y.).
In a lot of ways, the idea mirrors the current debate about changing the Senate’s filibuster rules.
As with the debt ceiling, Republicans in Congress have gone to great lengths to use the filibuster (which requires 60 votes to pass a bill in the Senate) as a means of exercising the power available to them.
But even as that has occurred, Senate Democrats have been hesitant to eliminate or roll back filibuster rules. The current effort seems to be gaining some steam, but even now, it will require some (ahem) creative legislating to pass the reform and wouldn’t actually alter the 60-vote threshold — instead requiring filibustering senators to actually speak during the filibuster, Mr. Smith Goes to Washington-style.
As the filibuster fight shows, while the two sides may seem to be willing to do just about anything to gain partisan advantage, the idea of manipulating the process is still considered beyond the pale by many in Congress.
Just as with reforming the filibuster, the trillion-dollar coin idea presents all kinds of potential unintended consequences, including opening the door to other practices that have thus far been off the table. And while that would benefit the Democrats in this particular instance, there will be a day when the roles are reversed (the filibuster being case-in-point).
“It isn’t just a nuclear option, it is opening up the Book of Revelation,” GOP consultant Dan Hazelwood said of the trillion dollar coin. “Laws, Constitution and common sense merely cease to exist.”
And regardless of whether you think it’s a good idea, the trillion dollar coin would undoubtedly further poison the political well of a federal government whose well is already downright toxic.
Which is why the “nuclear” metaphor is particularly adept in this case.
http://www.washingtonpost.com/blogs/the-fix/wp/2013/01/09/trillion-dollar-coin-the-new-nuclear-option/
Posted by Aaron Blake on January 9, 2013 at 9:34 am
The trillion dollar coin is emerging as a surprisingly serious proposal by the political left to avoid the looming fight over the debt ceiling.
It’s also the political equivalent of the nuclear option — something that may be technically practical, but would lead to all kinds of unpredictable political fallout. So much so that it’s very likely to remain in the realm of liberal fantasy.
The idea of minting a trillion dollar coin (or two) has started to catch on in liberal Democratic circles as a means of circumventing the looming debt ceiling brinksmanship, with Republicans intent on using the negotiations over raising Congress’s borrowing authority to secure big spending cuts — and President Obama is not having any of it. The Post’s Wonk team sums it up as follows:
Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.
Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.
The fantastic attempt at a work-around has worked its way from academic circles into the political mainstream, so much so that Republican Rep. Greg Walden (Ore.) has seen fit this week to introduce legislation to prevent such a maneuver.
Much of the coverage over the last month or so has focused on whether the idea is legally feasible. But it’s also worth a look at how politically feasible it would be because that, arguably, is the bigger hurdle. (Plus, The Fix is hardly a Constitutional scholar.)
Put simply: Minting a trillion dollar coin would ratchet up the partisanship and gamesmanship in Washington to a level we haven’t seen (though we know that’s hard to believe). And it also would open up Obama and the White House to charges of manipulating the political system in an underhanded way.
“I seriously doubt the president would risk jamming the Congress and the American public with the coin,” said Republican former congressman Tom Reynolds (N.Y.).
In a lot of ways, the idea mirrors the current debate about changing the Senate’s filibuster rules.
As with the debt ceiling, Republicans in Congress have gone to great lengths to use the filibuster (which requires 60 votes to pass a bill in the Senate) as a means of exercising the power available to them.
But even as that has occurred, Senate Democrats have been hesitant to eliminate or roll back filibuster rules. The current effort seems to be gaining some steam, but even now, it will require some (ahem) creative legislating to pass the reform and wouldn’t actually alter the 60-vote threshold — instead requiring filibustering senators to actually speak during the filibuster, Mr. Smith Goes to Washington-style.
As the filibuster fight shows, while the two sides may seem to be willing to do just about anything to gain partisan advantage, the idea of manipulating the process is still considered beyond the pale by many in Congress.
Just as with reforming the filibuster, the trillion-dollar coin idea presents all kinds of potential unintended consequences, including opening the door to other practices that have thus far been off the table. And while that would benefit the Democrats in this particular instance, there will be a day when the roles are reversed (the filibuster being case-in-point).
“It isn’t just a nuclear option, it is opening up the Book of Revelation,” GOP consultant Dan Hazelwood said of the trillion dollar coin. “Laws, Constitution and common sense merely cease to exist.”
And regardless of whether you think it’s a good idea, the trillion dollar coin would undoubtedly further poison the political well of a federal government whose well is already downright toxic.
Which is why the “nuclear” metaphor is particularly adept in this case.
http://www.washingtonpost.com/blogs/the-fix/wp/2013/01/09/trillion-dollar-coin-the-new-nuclear-option/
» utube 7/25/24 MM&C Iraq Dinar Update - IQD Revaluation-Key Indicators - Deposit Insurance -Arbitra
» utube 7/23/24 MM&C Iraq Dinar-Prime Minister Advisors-Saleh-Al-Nusairi-Facts bringng facts-Reforms
» Al-Jawahiri: Iraq continues to increase its oil production.. Is this OPEC’s role?
» Al-Sudani pressures factions to calm escalation against Americans, seeks Tehran's support
» A 40 km deep void threatens Iraq.. Baghdad and Erbil agreed but "without training, a base and an air
» Iranian sources to Baghdad Today: Tehran has not reached an agreement with Baghdad regarding the ent
» China accuses NATO of stirring up strife in 4 countries, including Iraq
» Within a week.. more than one billion dollars in sales from the Central Bank of Iraq
» "Billions of Dinars" Disbursed to Political Parties from 2024 Budget as "Financial Grants" (Document
» "An ill-considered decision".. The heart of Baghdad is exposed to financial losses
» With documents.. Billions of dinars in grants were disbursed to parties from the current year’s budg
» "He returned from Iraq doubtful." Will Vance change his country's policy in its wars outside its bor
» Quadripartite meeting in Baghdad stresses the need to support the development road project
» The Minister of Oil inaugurates the first phase of the central processing station in the Al-Faiha oi
» Bitcoin regains $67,000 level... and Ethereum jumps 4%
» Oil Products launches a fuel card to provide citizens with kerosene in Nineveh
» "Criticism" haunts the work of the Iraqi negotiating committees in Washington regarding the presence
» Ministerial Swaps: The High Price of Being Speaker
» Hussein Arab: Parliamentary bodies added 2.5 trillion dinars to the governorates in the budget, whic
» Four countries meet in Baghdad to support the development road project
» Call for investigation after the overthrow of a smuggling network in the North Oil Company
» Oil MP rules out oil and gas law
» Rule of Law: General amnesty includes those who committed ordinary crimes, not terrorists
» MP identifies the paragraph that delays the settlement of the salary scale
» The Kurdistan National Party welcomes Al-Sudani's initiative to end the Kirkuk problem
» 42 projects allocated to the second largest district in Basra
» Wasted budgets.. Estimates reach 450 billion dollars and the money of "Iraq's rich" is equal to 9 co
» Within months.. Al-Imar: The amount of loans disbursed amounted to about 750 billion dinars
» $100 million Iraq's citrus imports in 6 months
» Pilot plan in Erbil: Electricity for all citizens within 24 hours
» Contrary to expectations: The Iraqi passport is in its best condition in 8 years
» Parliamentary exclusion of the legislation of the oil and gas law during the current year
» The National Union announces to the region’s employees: The salary crisis has ended after linking it
» Immigration confirms the increase in the number of people wishing to return to their original areas
» Baghdad.. Launching a link to work as a researcher in the general population census
» Three suspects arrested for receiving 6 million dinars in exchange for completing a retirement trans
» Report highlights Trump's vice president's shifts in Iraq war
» Al-Sudani stresses the importance of putting the interests of Kirkuk people first in any agreement b
» Due to illusory political achievements.. Warnings of Sinjar people being displaced again - Urgent
» Warning and fears of the exploitation of political money in the Kurdistan Parliament elections
» During a week.. more than 15 billion dinars in "non-oil" imports for two governorates and two local
» Mazhar Muhammad Salih points to the weakness of the cash credit ratio in private banks
» Parliamentary efforts to amend the investment law to improve the Iraqi economy and attract foreign c
» Economist reveals reasons for rising prices of goods and products: lack of government support and ex
» Al-Halbousi imposes “difficult conditions” on the ruling coalition
» Requesting 25 million to close the case of a drug suspect.. Integrity arrests an impersonator in a “
» Government attempts to rescue Iraqi industry from imports.. Will local support succeed?
» Political parties control the sale of the dollar.. A new threat to the stability of the national eco
» Water scarcity and environmental degradation threaten cotton in Iraq.. Farmers demand urgent solutio
» In a Security Council session, Iraq calls for an immediate ceasefire in Gaza
» Stability of dollar prices in local markets
» New jobs in Baghdad
» Alsumaria News publishes the link to apply for "new jobs"
» Parliamentary Investment: Amending the Investment Law will eliminate exceptions
» Dollar exchange rates in Iraqi stock exchanges
» MMK&C 7/21/24 Government Advisor: Adopting auditing of foreign transfers contributes
» MM&C 7/21/24 Proposed measures to address the rise of the dollar
» Iraq ranks high in income inequality among citizens
» Within months.. Al-Imar: The amount of loans disbursed amounted to about 750 billion dinars
» Parliamentary Integrity confirms the start of opening the files of former officials
» Iraq and the German Development Bank sign an amendment to the loan agreement to finance a number of
» Regional oil...between export ban and smuggling suspicions
» Economist: Faw Port is an important step towards sustainable economic development and a major gatewa
» Parliamentary Investment "Mocks" Solution to Housing Crisis in Complexes: "Joke" and Government Must
» Multi-million dollar agreement to support Iraqi agriculture
» From Chaos to Law.. The Crowd Breathes with the First Reading of “Service and Retirement”
» Oil Minister inaugurates first phase of associated water injection project in Rumaila field
» Water Resources: The reality of desertification in Iraq is better than before
» Disappearance of 50,000 Pakistani tourists in Iraq.. Government position: We will start the investig
» Iraq reveals the value of its agricultural exports: 400 thousand tons in 6 months
» Electricity directs the rapid implementation of the solar power plant project in Khanaqin
» Worth $20 billion.. Iraq is second in trade exchanges with Iran
» (56) megawatt card.. Opening of the gas power plant in Majnoon field
» Parliamentary Committee: Amending this law will address many problems
» Iraq and the German Development Bank (KFW) sign an amendment to the loan agreement to finance a numb
» Finance discusses regulating the work of government banks with international auditing firm Ernst & Y
» The Prime Minister receives the approval of the coalition of companies that won the investment oppor
» US Ambassador: We helped Iraq with $3.6 billion in the displaced file
» In two stages.. The Minister of Oil inaugurates the associated water injection project in the Rumail
» Who manipulated the budget settings? Adding 15 trillion dinars for the benefit of the people or for
» Statement of the Iraqi Communist Workers’ Party on the “Personal Status Law Amendment” Project
» The American arm has become short.. Iraq will eradicate the “SDF” from Syria
» The idea of the “Sunni region” is maturing again.. The insistence of Western politicians collides
» Iraq takes its share of negative development and faces “electronic blackmail”
» Education in Iraq: Between the lack of schools and the delay in providing supplies
» Economist lays out solutions to get rid of the dollar’s dominance: moving towards a currency baske
» The Presidency of the Republic issues a special pardon for a bank manager accused of embezzlement
» The Ministry of Agriculture reveals the volume of its exported products in numbers
» Transport reveals its latest steps towards lifting the European ban on Iraqi Airways
» "Doors are closed" in Parliament.. Will political pressures result in the election of a new presiden
» Prime Minister's Advisor: Kirkuk government formation will be decided within 20 days
» US dollar exchange rate stability in Baghdad
» Reconstruction: New applications for Housing Fund loans will be opened when liquidity is available
» The US Federal Reserve adopts a new strategy towards Iraq.. The dollar is threatened with rising to
» First government comment on the leakage of 50 thousand Pakistanis in Iraq
» Parliamentary Integrity Committee announces keeping the session hosting the Minister of Water Resour
» Parliamentarian reveals the reason for the recent talk about the Sunni region
» Secrets of the Coordination Framework meeting with the Sunni forces.. Three proposals to resolve the