Treasury Secretary Janet Yellen dismissed the idea of minting a $1 trillion platinum coin to raise the debt limit without Congress as a 'gimmick' that the Fed may not agree with.
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The White House has joined Yellen in pushing back on calls to mint the coin, as Press Secretary Karine Jean-Pierre told reporters earlier this month that "we're not considering any measures that would go around Congress." While the idea is often floated as a way to skirt gridlock in Congress during impasses over the debt limit, it has also been suggested as a means of funding broad spending plans. Progressive Rep. Rashida Tlaib previously proposed a bill to mint $2 trillion worth of platinum coins to fund recurring monthly stimulus payments during the COVID-19 pandemic.
Critics of the plan to mint the $1 trillion coin note that it would further fuel inflation by injecting additional fiscal stimulus into the economy. It could also spark concern in bond markets as participants begin to doubt the ability of the U.S. government to address its fiscal issues and make payments on the debt.
With the $1 trillion coin likely off the table, lawmakers in Congress will have to reach a bipartisan compromise with the Biden administration to address the debt limit before the Treasury's extraordinary measures run out this summer.
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