Politics

The Case Against Minting a Trillion-Dollar Coin

The latest debt ceiling fight has revived a goofy, legally dubious idea.

Capitol dome seen from a distance on a foggy morning, with red stoplights in the foreground
The U.S. Capitol on Wednesday. Drew Angerer/Getty Images

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Everyone in Congress, including Senate Minority Leader Mitch McConnell, agrees the debt ceiling needs to be lifted. But that hasn’t stopped McConnell and Republicans from playing a dangerous game of chicken with it. They had Democrats backed into a corner up until midday Wednesday, when McConnell offered a short-term suspension of the debt limit pending a more permanent solution in December. The proposal would avert a financial crisis that Treasury Secretary Janet Yellen predicted could strike by Oct. 18, but it doesn’t address the fundamental lunacy of the debt ceiling, which has been causing these do-or-die standoffs since 2011. On Thursday’s episode of What Next, I talked to Slate senior editor Jordan Weissmann about congressional Democrats’ options—and why minting a trillion-dollar coin isn’t one of them. Our conversation was recorded Wednesday morning, before McConnell’s offer was on the table, and is condensed and edited below for clarity.

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Mary Harris: Let’s talk about how we got into the mess we’re currently in. The latest increase on the debt ceiling was back in August 2019. It was suspended until July 2021. That’s passed. But the Treasury’s been doing what it calls “extraordinary measures” to prevent a default—cut a little bit here, cut a little bit there, delaying payments to federal employees’ retirement accounts. This is already happening.

Jordan Weissmann: Yeah, “extraordinary measures” aren’t that extraordinary anymore. And this actually speaks to how ridiculous the debt ceiling is—the first time they started using extraordinary measures was like the 1980s. They’re actually sort of a regular part of the process now.

Last week, Janet Yellen testified before Congress. She gave a deadline of Oct. 18 for raising or suspending the debt limit.

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Oct. 18 is the drop-dead date, according to the Treasury. We don’t know that for certain. There’s a little bit of fuzziness there. It actually might be a little bit before, it might be a little bit after. We don’t know for certain when the cash totally runs out or when we won’t have enough cash to meet all of our obligations. And that’s part of the reason why doing all this at the last second and pushing this confrontation to the brink is a really bad idea.

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Maybe it’s more like Oct. 17 or 16.

Yeah, maybe something goes wrong. It’s possible. That’s part of the reason I think Chuck Schumer is saying we need a bill by the end of this week or we need to at least start moving in that direction. And so it’s really not a good idea to be working on this assignment the night before. Let’s put it that way.

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It seemed to me that as soon as Janet Yellen spoke, there was immediate energy behind, OK, let’s get on it, let’s fix it, we have this spending bill already moving through the House because we were going to have a government shutdown. But last week we did pass this spending bill, agreeing to keep the government open until December. Why would the Republicans agree to that, but not raising the debt limit?

Because they want to make raising the debt limit painful. It’s mostly about campaign ads. It’s also about wasting floor time in the Senate so that Democrats can’t pursue other aspects of their agenda.

But Democrats could avert a fiscal crisis all on their own. One option is a procedural tweak: If you create a filibuster loophole, you can raise the debt limit with a straight-up party-line vote. The question with this fix, though, is whether all Democrats can get behind it.

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The main reason that Joe Manchin, senator from West Virginia, and Kyrsten Sinema, the senator from Arizona, the two rulers of the Senate, have said they support the filibuster is because it supposedly encourages bipartisan cooperation.

That is not what’s happening right now.

That’s not what’s happening right now. Mitch McConnell has in fact announced a new rule—as he tends to—where he says as a matter of principle that if one party controls all of Congress and the presidency, it should be on them to raise the debt ceiling on their own. So Mitch McConnell has said this, from here on out, should be a partisan exercise whenever possible. So that really kills the rationale for having a filibuster. If there’s no possibility of bipartisan agreement, you might as well just carve out an exception saying we can suspend the debt ceiling with just a pure, bare majority vote in the Senate.

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But to change this rule, don’t you need a majority vote? So you’d need Manchin and Sinema to agree to get rid of this rule in order to get them to raise the debt ceiling?

Right. And that’s the question about this approach. Will Manchin and Sinema give any ground on the filibuster? Manchin at one point was talking to reporters and said this has nothing to do with the filibuster. … He suggested he would rather do it through budget reconciliation, which is what Mitch McConnell wants. But lately, he’s been a little bit more quiet about it. So it seems like it’s at least up for discussion, but I wouldn’t bet a lot of money on it happening that way.

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Another possible solution is the idea of raising the debt limit through reconciliation, and this is Mitch McConnell’s preferred plan. I often don’t agree with Mitch McConnell, but I have to say that using budget reconciliation to fix the budget kind of makes sense to me. So why is this a bad idea?

It’s not a bad idea. It’s just unappealing if you’re a Democrat. It’s distasteful. It’s unpleasant. It’s icky. There are a lot of hoops you have to jump through to do reconciliation. You have to pass a budget resolution and then you need to have two vote-a-ramas where the other party can just throw up amendment after amendment after amendment and make you vote on them, and usually it’s stuff that’s kind of designed to embarrass the other party. There’s also committee time you have to devote to it. And that has been the excuse that Democrats have made, that this would take too much time, it would be drawn-out, there are all sorts of questions procedurally about whether we could do it. …

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The main concern among Democrats is that if you do it through reconciliation, the conventional wisdom is that you have to actually say how much you want to raise the debt limit by. You have to put a number on it. The way Congress has been dealing with the debt limit recently is they’ve just been “suspending” it ever since essentially 2013. Basically they’re saying, “Until the 10th of whenever, the debt limit is suspended.” They give a date. They don’t give a number. And the problem with giving a number is that someone can then put a number in a campaign ad against you.

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My personal feeling on this is that Democrats should be much less concerned about whether someone runs a campaign ad about whether they raise the debt ceiling. I don’t think many voters would fundamentally care, but there are enough moderate Democrats in difficult districts who think that their voters care about debt and deficits that they are a little freaked out by that, and so they really, really don’t want to. Plus, there’s the sense of just being kind of aggrieved that Republicans are making them do this dance all over again. They’re really just resentful. They still remember 2011 and are mad about it. … But unfortunately, this is where we are, and frankly, it is in their power to do it through budget reconciliation. And one of the upsides is that if they were to go that route, they could raise it high enough that you would essentially eliminate the debt limit.

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What kind of numbers are we talking about here?

I mean, just however high you want it, people pick their favorite.

One zillion dollars.

One quadrillion numbers. One favorite on Twitter is $69 sextillion. There are all sorts of options. The question is, if Democrats actually did just bite the bullet and do it through reconciliation, would Joe Manchin and Kyrsten Sinema agree to effectively eliminate the debt limit for good? Would they go the 69 sextillion route, or would they just want to raise it enough to get us through December 2022? And my guess, because we’re on the worst of all possible timelines, is that they would want the more modest hike that just puts off our next conflict over this issue until a year or two from now.

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You’ve laid out a couple of quote-unquote solutions that feel at best uncomfortable and at worst impossible. And that’s how we get to these crazy ideas, like mint a trillion-dollar coin. How does that help?

So here’s the story of the trillion-dollar coin. Years ago, a commenter on a blog noted that there was this obscure federal law that allowed the Treasury to mint platinum coins in essentially whatever denomination they wanted. So in 2011, when we had the first debt ceiling crisis, people had this idea: If we hit the debt ceiling, we should take advantage of the loophole in this platinum coin law and just mint one or two trillion-dollar coins. And then what would essentially happen is that the Treasury Department would take those over to the Fed and deposit them in their account at the Fed, and that would allow us to pay our bills. This came up in 2011. Some people got really into the idea. And then it really caught fire in the 2013 standoff, where #MintTheCoin became this hashtag on Twitter. People were talking about it.

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It sounds like something you talk about in your dorm room when you’re really high.

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Yeah, but serious people—Paul Krugman got behind this. A lot of people. It became a real media thing, and the Obama administration eventually had to come out and say, We don’t think this is legal and the Federal Reserve wouldn’t go along with it anyway. It would not accept the damn coin. This is not happening. We’re not doing this clown shit. Like, We’re going to come up with an adult solution. And what a lot of people say is like, the coin sounds stupid, but so is the debt ceiling. And this is a way to short-circuit the debt ceiling and get around it.

Another option that people have talked about is just invoking the 14th Amendment, for Joe Biden to say that the debt ceiling is unconstitutional because the 14th Amendment says very specifically the debts of the United States shall not be questioned. The issue here is that he doesn’t have to do any of this stuff. Democrats could just raise the debt ceiling. It’s in their power to do it.

So, take the sane option.

Yeah. I think part of the issue with minting the coin, too, is it doesn’t really solve the problem the Democrats are looking at right now. The thing that Democrats are worried about is that they’re going to take political heat for raising the debt ceiling. If the Biden administration literally resorted to minting money to deal with the situation, there would be attack ads over that instead. You would see hysterics about, oh, God, we’re Zimbabwe now. People don’t like the idea of just running printing presses. So it doesn’t actually resolve the political problem that we are currently facing. If you’re worried about taking political heat, if that’s why you’re not doing this by a reconciliation, well, the truly extraordinary, goofy, cartoonish measures that still might legally pass muster aren’t actually going to solve the political issue.

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