By David Lawder and Susan Heavey
WASHINGTON (Reuters) – The U.S. Deputy Treasury Secretary on Monday dismissed the idea of minting a platinum coin as a way to avoid a U.S. default, saying the only workable solution was for Congress to raise the federal debt ceiling.
Asked in a National Public Radio interview about the possibility of minting a $1 trillion platinum coin to circumvent the debt ceiling, Adeyemo said “creative, inventive” ideas have been floated in the past but are not workable.
“What I can tell you is the only thing that we can do that will maintain our credibility for investors in the United States, our credibility with the people who we’ve made commitments to, is for Congress to raise the debt limit,” Adeyemo told NPR’s 1A program.
U.S. Treasury Secretary Janet Yellen also has rejected the idea of a platinum coin to skirt the debt ceiling and fund government expenses. Treasury was given the authority to mint platinum coins in any denomination in a 1997 law meant to allow the U.S. mint to raise revenue by issuing collectible coins.
Adeyemo said a default would harm the U.S. and global economies for years to come, raising borrowing costs and making people less willing to invest in dollar-based assets.
The debt ceiling standoff was already having an impact on the U.S. economy, Adeyemo said, hurting the University of Michigan’s consumer sentiment surveys “because the American people are starting to worry about whether the government is going to pay the bills.”
He repeated a Moody’s Analytics estimate that a default would cost the U.S. around 8 million jobs and lead to recession.
“So it would, in lots of ways, throw our economy off track and throw the global economy off track in a way that would impact America a great deal not just for the next several weeks, but for years to come,” Adeyemo said.
(Reporting by David Lawder and Susan Heavey; editing by Jasper Ward and Chris Reese)
