There’s no consensus on how to interpret White House Press Secretary Jay Carney’s response to the avalanche of platinum coin questions he was hit with at a briefing yesterday.
At issue is the #MintTheCoin campaign, which is urging President Obama to order to the Treasury department to produce a $1 trillion platinum coin that would then be deposited in the Federal Reserve Bank. This way, the government wouldn’t have to borrow money to pay its bills and Republican threats to allow a debt ceiling default would vanish. It sounds far-fetched, but there is actually is a loophole that seems to allow the Treasury to create platinum coins of any value, and the idea has attracted some reputable backers, including Paul Krugman and Rep. Jerry Nadler.
Carney, though, refused to line up with the platinum crowd on Wednesday. That’s about all that was made clear by his remarks, though. Here are a few of the indirect answers he provided: “Nothing needs to come to these kinds of speculative notions”; “I would refer you to the Treasury”; “There is no Plan B. There is no backup plan. The only option is for Congress to do it’s job.”
Some think there’s nothing to read into here – that Carney’s refusal to engage in the debate over the legitimacy of a theoretical trillion dollar coin is part of the White House’s effort to make clear that responsibility for raising the debt ceiling rests solely on congressional Republicans, and no one else.
Others note that he passed up numerous opportunities to put the White House on record ruling the coin option out. As TPM’s Brian Beutler noted, the lack of a firm disavowal was a departure from last month, when Carney flatly ruled out the idea of Obama invoking the 14th Amendment to circumvent the debt ceiling.
So what to make of it?
The biggest reason to doubt the coin idea is at all on the White House’s radar is that minting one would be out of character for Obama. He’s pursued an expansive agenda as president and racked up some serious achievements, but he’s also demonstrated an aversion to singular acts of boldness and risk-taking.
This is what led the White House to take the 14th Amendment option off the table last month. The concern was that even though invoking it might well be constitutional, it would precipitate a legal battle that would deeply unsettle the markets, causing the sort of panic that the 14th Amendment option is supposed to prevent. That same concern applies with the platinum coin. It may well be legal for the Treasury to mint one, but there’s no way Republicans would let the matter go without a fight.
Moreover, Obama was just working against a much less harsh deadline than the debt ceiling – the January 1 fiscal cliff – and had some real leverage. With all of the Bush tax cuts set to expire and polls showing Americans much more likely to blame Republicans if no deal was reached, Obama had an opportunity to wait the GOP out until it moved closer to his demands – including a long-term debt ceiling fix. But he didn’t even test his leverage, preferring to cut a last-minute deal with Mitch McConnell that deferred the fight over entitlement programs and left the GOP vowing to again use the debt ceiling as a bargaining instrument.
As I wrote last week, the fiscal cliff deal may yet prove to be a wise move by Obama; what transpires over the next few months will determine that. But it’s a bit hard to see the president who took the 14th Amendment off the table last month and who didn’t want to push his luck on the fiscal cliff suddenly ordering his Treasury secretary to mint a $1 trillion coin.
For now, the White House is probably hoping that Greg Sargent is right and that Republicans are beginning to fracture over how to handle the debt ceiling. Much attention is paid to the way-out-there true-believers who have gained to power to define what conservatism means in the Obama-era. But there are still many Republicans in Congress – and in influential positions outside of Congress – who recognize the catastrophe that would be unleashed by a default. And in the wake of the November election, they may be more assertive in reining in the crazies now than they were during the debt ceiling showdown in 2011.
Of course, if that doesn’t happen and we find ourselves three days away from the default date, then two, then one… well, then who knows – maybe then the White House will have no choice but to mint the coin, no matter what it’s thinking now. After all, even if it roils the markets, that probably wouldn't be as bad as the consequences of a full-scale default.