Keep the Change: Why Obama Has No Use for Platinum Coins
The platinum coin has a future as a collector’s item but not, it would seem, as a way to avoid the debt ceiling.The Obama Administration announced late Saturday that it will not be minting a trillion dollar coin and depositing it in the Federal Reserve, thereby allowing the government to spend money even if Congress refuses to increase government's borrowing authority. That's potentially a big deal. Without the ability to borrow or spend, the government wouldn't be pay its bills. And, as you may have heard, the government has a lot of bills to pay—to Social Security recipients, for example, and to vendors who sell products to the government. The government also owes interest payments to the holders of U.S. bonds. Defaulting on those payments could, according to many economists, be catastrophic.Obama’s decision, first reported by Ezra Klein in the Washington Post, is not surprising. Obama did not avail himself of the coin option in 2011, the first time Republicans used the once-routine debt ceiling increase to demand cuts in the federal budget. Similarly, the administration has ruled out borrowing money on its own authority, by drawing on the 14th Amendment for justification. An array of legal scholars has indicated that one, if not both, of the options would be constitutional. But Obama has never shown even the slighest enthusiasm for these maneuvers. The interesting question is why. By refusing to increase the debt ceiling, the Republican Congress is practicing a form of economic extortion. The coin, like the 14th Amendment, seemed to give the administration a chance to stop that extortion from working. Just this week, Senate Democratic leaders issued a letter, made public by Greg Sargent in the Post, practically begging Obama to invoke this sort of authority. With Saturday's announcement, Obama basically said "no thanks." Is this yet another one of those concessions that congressional Democrats and other administration allies will come to rue? Perhaps. But the White House doesn't think it's backing down. Administration officials believe they are standing firm—that the coin option, if anything, was becoming a distraction. "There are no magic coins," one senior official told the Huffington Post. "There is no way to get out of this. We feel fine about the politics of it. We think we are in a stronger position if Republicans realize there is no out." READ MORE >>
Finished With Taxes? Not Even Close
Mitch McConnell appeared on three major networks Sunday morning. But the Senate Minority Leader had just one message to deliver: We’re done with tax increases. READ MORE >>
The Fiscal Cliff Deal's Biggest Winner May Be George W. Bush
Note: This item was revised to reflect news developments early Tuesday morning. First things first. At 12:00:00 a.m., we went over the fiscal cliff. And at 12:00:01 a.m., most Americans were talking about the new year, not the new fiscal regime. READ MORE >>
What's in the Deal? Your Fiscal Cliff Checklist
Over the Cliff? A Better Deal Would Be Worth the Wait
Will we get an agreement on the “fiscal cliff” before year’s end? Even after Friday’s developments, which included a meeting of congressional leaders at the White House, I really don’t know—and neither does anybody else. But when the deal materializes still matters less than what the deal entails. READ MORE >>
The Real Fiscal-Cliff Message Starbucks Should Put on Its Coffee Cups
Howard Schultz is frustrated. So am I. But Schultz is frustrated that the two parties can’t come to an agreement about fiscal policy. I’m frustrated that Schultz still thinks the two parties are equally to blame for the impasse. And I’m frustrated that Schultz isn’t the only one who thinks that way. READ MORE >>
In Fiscal Talks, It's Groundhog Day
Everybody Was Freaking Out Over the Fiscal Cliff Tuesday. Here's Why.
The most prominent "fiscal cliff" development on Tuesday was House Speaker John Boehner’s decision to introduce what he calls “Plan B.” The most interesting development was the liberal reaction to President Obama’s negotiating posture. Both deserve some attention, because both are going to shape the final deal. READ MORE >>
A Fiscal Deal Is Emerging—But Is It Any Good?
[UPDATED BELOW] READ MORE >>
No, Don't Raise the Retirement Age
President Obama hasn’t proposed increasing the eligibility age for Medicare. But would he agree to do so, in order to secure a broader agreement that raises taxes on the wealthy and avoids the automatic spending cuts set to take effect on January 1? Liberals are worried that he will—thanks in part to a pair of recent columns, one each by my friends Jonathan Chait and Ezra Klein. READ MORE >>
