Republicans are seizing on Press Secretary Jay Carney's reluctance today to totally disavow a Democratic proposal that would allow the government to void the debt ceiling debate by having the U.S. Treasury issue a trillion dollar coin.
Carney dismissed the proposal saying there "is no plan B. There is no backup plan." But Republicans contend he didn't entirely rule out the proposal -- and that Democrats aren't interested in cutting spending: "They simply want to print more money," charged the National Republican Congressional Committee -- the chairman of which has filed a bill to prevent the creation of trillion dollar coins.
The White House has dismissed using the 14th Amendment to raise the limit, and Carney said of the coin that there's "no alternative to Congress raising the debt ceiling.
"Congress has to pay the bills of the United States," he said. "That is an obligation they assigned to themselves.
Asked whether he was leaving room for the possiblity of a trillion dollar coin fix, Carney said "the only option here is that there is no backup plan. The only option is for Congress to do its job."
A Bank of America Merrill Lynch research report titled, "The Trillion Dollar Tooth Fairy," contends that the legality of the coin is questionable and that it would "worsen the coming battle over spending cuts," deepen distrust between the parties and "risks being the first step down a slippery slope of debt monetization."
The report -- which suggests the proposal is "more debt limit desperation," -- says the idea for a coin comes from a "broad interpretation of law that gives the Treasury Secretary the ability to mint and issue commemorative platinum coins." The proposal would have the coin stored at the Fed and allow the agency to draw upon the account.