Word: “Trillion Dollar Coin”
Definition: An obscure law gives the Treasury Secretary the power to mint platinum coins in any denomination he chooses. Recently, some have suggested that Treasury Secretary Geithner mint a coin worth a trillion dollars, deposit it at the Fed, and use that cash instead of raising the debt ceiling.
Used in a sentence: “Trillion dollar coin: Funny money or real solution?”
History: In 1996, the 104th Congress passed H.R. 3610, the Omnibus Consolidated Appropriations Act. When H.R. 3610 became law, it included the following language:
“The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”1
Though the law was originally intended to apply to the minting of commemorative coins, theoretically, there is no limit to the amount which the Secretary can mint.
What it Means: The idea of the trillion dollar platinum coin has been floated (by some, seriously, by others, not so much) as a potential solution to the debt ceiling. Secretary Geithner minting such a coin would conceivably sidestep the debt ceiling debate altogether. What started off as a joke has, in recent weeks, garned lots of media attention – New York Times economic columnist Paul Krugman has endorsed the idea; so has Rep. Jerrold Nadler (D-NY). A petition in support of the coin is circling on the White House’s “We The People” website – with over 7,000 signatures. And of course, a Congressional bill to ban the minting of the trillion dollar coin, calling it “absurd and dangerous,” has already been introduced.
So, is the Obama administration really going to mint a “trillion dollar coin” to save the country from default? Probably not – but unlike other proposed solutions to the national debt, such as the use of the 14th Amendment, White House press secretary Jay Carney has not ruled it out.
Regardless, the question remains… who should have the honor of having their face minted on the U.S.’s first trillion dollar coin?