Discussions are rife in US circles regarding trillion-dollar coin if ceiling on debts is not lifted

Washington: – There is a lot of talk in US circles that if the US Congress fails to raise the debt ceiling, the Biden administration has a trillion-dollar coin option. Some analysts claimed that in addition to the coin, President Joe Biden could use the Public Debt Clause, which is a part of the 14th Amendment to the US Constitution. The US Treasury Department officials said that the available funds would suffice only till October 15 and 16.

Former US President Barack Obama’s tenure had been marked by a period of ‘partial shutdown’ over the debt ceiling term. There are indications that it could repeat even during Biden’s tenure. Various options are being discussed in the US political and administrative circles to avert a possible shutdown. The trillion-dollar coins and the use of Public Debt Clauses have caught the media’s attention.

The US Treasury has the authority to issue trillion-dollar coins. If Congress does not pass a bill to limit debt, the funds can be raised by depositing the trillion-dollar coin in the US Federal Reserve. Former officials informed that the coin is made of platinum and its mould is ready with the US mint. Former US President Barack Obama stated in an interview that this option had been explored even during his tenure.

But Secretary of Treasury, Janet Yellen, has clarified that she is opposed to this option. Yellen said, ‘This option is just a trick. I oppose it.’ Opposition Republicans have also opposed the move, saying it could lead to higher inflation. It is also being pointed out that this option has never been used in the history of the United States.

Some experts and analysts also mentioned the 14th Amendment to the Constitution. Experts claim that according to the Public Debt Clause in the amendment, the President can approve a new loan by directly cancelling the previous US debt. The decision could be challenged at the legal level, but experts say it will take a long time to reach a verdict. However, analysts have warned that there is a difference of opinion among the legal experts regarding implementing this law. The analysts have warned that the President cannot encroach on the rights of Congress.

The discussion regarding the trillion-dollar coin and the 14th Amendment option indicates that the Biden administration has become helpless over the debt ceiling issue. Although the talks are being held since the last month, the Biden administration has failed to find a solution. The picture is that the Biden administration is instead wasting time in presenting bills for expenses and discussing the provisions. It has been revealed that Mitch McConnell, leader of the Republican party in the US Senate, has submitted a proposal on Wednesday to defer the debt ceiling for a two-month period. If this is concurred upon, the expense crisis faced by the US administration could be alleviated for two months.

Two years ago, former US President Donald Trump had decided to defer the debt ceiling. The decision was taken to postpone it till 31st July this year. Since 1st August, the US Treasury department has been operating based on emergency measures and special provisions. If a decision on the debt ceiling is not forthcoming, there could be major upheavals in the US economy. Secretary of Treasury, Janet Yellen, has repeatedly pointed this out through her letters written to the US Congress.