\n
Comment on this story<\/title><path d=\"M14 14V2H2v9.47h8.18L12.43 13ZM3 10.52V3h10v9.23l-2.5-1.66Z\"\/><\/svg><\/button><\/p>\n<p>Comment<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"teaser-content grid-center\">\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">President Biden and House Republicans are locked in a showdown over the nation\u2019s debt ceiling, with the administration ruling out negotiations over conservative demands to cut government spending in exchange for increasing the federal borrowing limit. But some economists, lawyers and academics say the administration has options that could let the White House dodge the debt limit entirely \u2014 without needing to worry about the GOP at all.<\/p>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">These experts want to convince the Biden administration to try to end the standoff unilaterally, circumventing Congress, and have proposed at least seven different ideas for doing so. Their ideas have been fiercely challenged by more mainstream experts, who have identified myriad financial, political and legal risks in all the suggested solutions. And Biden and his advisers have been adamant, at least so far, that the only viable outcome is for House Republicans to raise the debt ceiling without concessions. (White House officials have reviewed executive options but are publicly maintaining they are unworkable.)<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Failure to successfully resolve the standoff \u2014 or trying a unilateral action that goes awry \u2014 could have devastating consequences for the U.S. economy. The Treasury Department this month <a href=\"https:\/\/www.washingtonpost.com\/us-policy\/2023\/01\/13\/debt-limit-extraordinary-measures-treasury\/?itid=lk_inline_manual_3\" target=\"_blank\" rel=\"noopener\">announced the beginning of \u201cextraordinary measures\u201d<\/a> to shuffle money around as the federal government hits the ceiling on its borrowing limit. But those measures are only expected to sustain the government\u2019s operations until June, reviving the debate over other potential resolutions.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p><span class=\"font--article-body font-copy hide-for-print ma-0 pb-md db italic interstitial\"><a data-qa=\"interstitial-link\" href=\"https:\/\/www.washingtonpost.com\/us-policy\/2023\/01\/13\/debt-limit-extraordinary-measures-treasury\/?itid=lk_interstitial_manual_4\">U.S. will begin \u2018extraordinary measures\u2019 to stay under debt limit<\/a><\/span><\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Some academics argue that the solution is within the administration\u2019s grasp, even if their options might sound far-fetched.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cThese aren\u2019t technical problems, but problems with politics and perception: The people in the administration are uncomfortable violating norms of how things are done,\u201d said J.W. Mason, an economist at the City University of New York who supports some of the workaround ideas. \u201cThe problem is that everything in this space is a gimmick. That\u2019s the nature of the problem. It\u2019s just a question of which gimmick you prefer.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Other experts, however, are more skeptical that any of these ideas would work without significant downsides. Many economists are concerned that unilateral action could lead investors to demand a higher rate of return on new government bonds because there would be legitimate worries about whether the debt was issued properly, leading to hundreds of billions of dollars in additional borrowing costs for the federal government. Other experts worry that unilateral actions could backfire even more dramatically by undermining the value of the U.S. dollar, throwing global financial markets into a panic.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cInvestors and other economic actors will likely be very uncomfortable with an environment where Treasury is either failing to meet some of its obligations or unilaterally moving in a direction that is totally unfamiliar. There are severe risks in any unilateral action that Treasury decides to take,\u201d said Shai Akabas, the director of economic policy at the Bipartisan Policy Center, a nonpartisan think tank. \u201cWe don\u2019t know what the outcomes would be. But there are many, many questions.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Here are seven of the ideas being pushed for responding to the debt limit unilaterally, as well as why some experts \u2014 and White House aides \u2014 are skeptical of them.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-M6TXHIGOVBE5HKXK4J6O3A2KRU-0\">\n<div id=\"list-headline-M6TXHIGOVBE5HKXK4J6O3A2KRU-0\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Mint the $1 trillion coin<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">The most headline-grabbing proposal calls for the Treasury Department to mint a new platinum coin, declare its value to be $1 trillion, then deposit that coin in its account at the Federal Reserve. Assuming the central bank accepts the deposit, the $1 trillion would allow the federal government to finance its obligations. Crucially, it would not involve issuing new debt and thus would not violate the borrowing limit.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Proponents say the government is legally authorized to \u201cmint the coin\u201d under a <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/31\/5112\" target=\"_blank\" rel=\"noopener\">1997 law <\/a>that gives the U.S. Mint the ability to make money off sales of novelty coins. That law specifies that it is \u201cin the Secretary\u2019s discretion\u201d to mint and issue platinum coins of any denomination and quantity.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Even some skeptics of putting the idea into effect believe in its legality. \u201cIt\u2019s technically within the president\u2019s authority to mint a huge coin,\u201d said Laurence Tribe, a Harvard law professor who is influential with the Biden administration. The director of the Mint when the 1997 law was passed <a href=\"https:\/\/www.businessinsider.com\/mint-the-coin-former-mint-director-philip-diehl-explains-why-the-trillion-dollar-coin-law-would-work-2013-1\" target=\"_blank\" rel=\"noopener\">has said<\/a> the coin idea would be legal under the law, although the GOP congressman who helped write the platinum coin provision <a href=\"https:\/\/www.washingtonpost.com\/news\/wonk\/wp\/2013\/01\/04\/michael-castle-unsuspecting-godfather-of-the-1-trillion-coin-solution\/?itid=lk_inline_manual_14\" target=\"_blank\" rel=\"noopener\">has said<\/a> it is not.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Beyond questions that make fodder for barroom banter (Whose face goes on the coin? Would it be comically large? How do you make sure it isn\u2019t stolen by Ocean\u2019s 11 in the middle of the night?), legal experts have posed a range of questions about the idea. One key challenge is that the Federal Reserve may not accept the coin. (A Federal Reserve spokeswoman did not respond to requests for comment on how the central bank would react to a hypothetical attempt by Treasury to deposit a $1 trillion coin.)<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cIt truly is not by any means to be taken as a given that the Fed would do it, and I think especially with something that\u2019s a gimmick,\u201d Treasury Secretary Janet L. Yellen <a href=\"https:\/\/www.wsj.com\/articles\/janet-yellen-dismisses-minting-1-trillion-coin-to-avoid-default-11674417541\" target=\"_blank\" rel=\"noopener\">told the Wall Street Journal<\/a> in an interview last week. \u201cThe Fed is not required to accept it; there\u2019s no requirement on the part of the Fed.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Some experts have suggested that the conservative majority on the Supreme Court could rule the coin illegal, forcing the administration back to the negotiating table with the GOP. More aggressive commentators, such as modern monetary theorists Nathan Tankus and Rohan Grey, have argued that the Biden administration could respond by ignoring the courts<b> <\/b>and somehow forcing the central bank to deposit the coin.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Don\u2019t expect Biden to do anything that dramatic. A <a href=\"https:\/\/crsreports.congress.gov\/product\/pdf\/R\/R45011\/5\" target=\"_blank\" rel=\"noopener\">2021 report by the nonpartisan Congressional Research Service<\/a> raised several objections to the coin proposal: that fiscal and monetary policy are supposed to be separate, and this kind of interaction between the Fed and Treasury would blend them; that such a move would undermine congressional authority; and that doing so could undermine faith in the U.S. dollar.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-352TFBJRMVD5BAY4C6RTKJTXQM-1\">\n<div id=\"list-headline-352TFBJRMVD5BAY4C6RTKJTXQM-1\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Declare the debt ceiling incompatible with spending laws<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">A less flashy plan \u2014 one viewed by at least some administration officials as more feasible than the coin \u2014 is for the Biden administration to simply declare that it has no choice but to break the debt limit because abiding by it would mean violating spending laws Congress has also enacted.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">The reason is simple: Congress passes, and the president signs, <a href=\"https:\/\/www.forbes.com\/sites\/rhockett\/2023\/01\/19\/stop-the-charade-the-federal-budget-is-its-own-debt-ceiling\/?sh=45f194817bc9\" target=\"_blank\" rel=\"noopener\">legally binding<\/a> appropriation laws specifying what the executive branch is required to spend. There would be no way, the administration could argue, to stop borrowing money without breaking the spending laws.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cThere is very clearly a conflict between the debt ceiling on the one hand and the law that is the federal budget itself on the other hand,\u201d said Bob Hockett, a former Federal Reserve official and congressional economic policy adviser who teaches public finance at Cornell and Georgetown. \u201cPeople seem to forget that the federal budget is itself a legally effective enactment. Budgets are legal requirements that Congress duly passes, and our legal system has a wealth of interpretive principles for resolving conflicts between various applications of laws, which in this case preempt the debt ceiling.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Constitutional lawyers refer to this kind of scenario as a \u201ctrilemma,\u201d in which all of the president\u2019s potential decisions \u2014 including inaction \u2014 would potentially pose a constitutional crisis. Michael Dorf, a constitutional law professor at Cornell, has <a href=\"https:\/\/scholarship.law.cornell.edu\/facpub\/591\" target=\"_blank\" rel=\"noopener\">argued in articles<\/a> with Neil Buchanan, of the University of Florida\u2019s Levin College of Law, that in this event, \u201cthe president will have literally no way to comply with all the laws and will have to violate at least one of them.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cIf the president faces one of these crises, he should minimize the violation,\u201d Dorf added in an interview. \u201cAnd our view is that the way to do so is to exercise the least amount of legislative direction by violating the debt ceiling rather than picking and choosing which bills to pay.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-VGK7K6EVXZBCDOQMHQGRLBDIYA-2\">\n<div id=\"list-headline-VGK7K6EVXZBCDOQMHQGRLBDIYA-2\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Raise cash by selling federal land (then buy it back)<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">If Congress and the White House are at a stalemate over the debt limit into the summer, the administration may have other options to buy more time to find a resolution.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">To take one potentially dramatic example: Some scholars say the White House could move to auction off federal property, such as public lands, to raise immediately needed cash. That land could be reacquired after the impasse, although it is unclear how much additional time that would give the Treasury Department.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cThere are things you can do to delay,\u201d Dorf said. But he added: \u201cAll that does is buy you a little bit of time.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-VGK7K6EVXZBCDOQMHQGRLBDIYA-3\">\n<div id=\"list-headline-VGK7K6EVXZBCDOQMHQGRLBDIYA-3\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Buy back old bonds at a discount<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Alternatively, some White House allies have said the Treasury could repurchase government bonds issued with lower interest rates, such as those issued during the pandemic, that are now available on the secondary market for less than face value because the Federal Reserve has raised interest rates. Since such a maneuver would reduce the amount of outstanding<b> <\/b>debt at a cheaper rate than its official value, it would give the administration more time to avoid hitting the borrowing limit.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cIt changes nothing in terms of government being better or worse off; it\u2019s purely an accounting trick,\u201d said Dean Baker, an economist at the Center for Economic and Policy Research, a left-leaning think tank, who has pitched the administration on the idea. \u201cBut if we\u2019re playing games, it\u2019s totally legal.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">White House officials are not expected to support these ideas for finding money, especially months before the government exhausts its borrowing capacity, and they\u2019ve emphasized that the only permanent solution is for Congress to raise the nation\u2019s borrowing limit \u2014 as it has during every prior impasse.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-MXQKB2CQQBBOHPPJUQNZGKSUEI-4\">\n<div id=\"list-headline-MXQKB2CQQBBOHPPJUQNZGKSUEI-4\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Invoke the 14th Amendment<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">In the aftermath of the Civil War, Congress approved the 14th Amendment to the Constitution, which stipulates in Section 4 that the federal government\u2019s public debts must be repaid. The purpose of this part of the amendment, passed by the radical Republicans in the 1860s who feared a revived South, was to make clear that the federal government was responsible for honoring the national debt incurred during the war \u2014 even if former Confederate states didn\u2019t want to pay their share of it.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Some scholars have argued that this provision would enable the president to ignore the debt limit. Congress\u2019s actions during the debt ceiling standoff of 2011, under this interpretation, violated the Constitution, according to a 2013 academic paper by Jacob D. Charles, a law professor at Pepperdine Caruso School of Law. \u201cA conclusion of this nature would be the basis for the president to ignore the debt limit when congressional actions create unconstitutional doubt about the validity of the public debt,\u201d Charles wrote.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Tribe, the Harvard law professor, added: \u201cSection 4 of the 14th Amendment says the threat to default is itself unconstitutional. The country has to stand behind its word in terms of all of its debt obligations, and that is not something that is a matter of opinion. It\u2019s very explicitly in the Constitution.\u201d<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">In its 2021 report, the Congressional Research Service noted that this part of the Constitution has been tested only once by the Supreme Court, adding that it is \u201cunclear how the provision might apply to the statutory debt limit in particular.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-JSA3NL7IDFADLNH4ANTHQPEFH4-5\">\n<div id=\"list-headline-JSA3NL7IDFADLNH4ANTHQPEFH4-5\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Issue \u2018consul bonds\u2019 that keep paying interest but never mature<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">Other solutions lean more heavily on financial wizardry.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">To fund the federal government, the Treasury Department sells bonds for cash. These bonds yield an annual interest rate, and they promise repayment of the principal at an agreed-upon time known as the maturity date.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">It\u2019s this second part \u2014 the principal \u2014 that technically counts against the government\u2019s borrowing limit. At least theoretically, the United States could issue debt that consists solely of interest payments in perpetuity and do not have a maturity date, which could be sold into the secondary market because of guaranteed interest payments. This debt would bring in cash to fund the government without counting against the borrowing limit, according to Carlos Mucha, an Atlanta attorney who also first came up with the $1 trillion coin idea.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cWith this kind of bond, there is no principal the government is guaranteed to repay,\u201d Mucha said. \u201cSo it would not count under the debt limit.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<div id=\"listicle-card-6PZWMBQQVFESXGBVSG644VIG3E-6\">\n<div id=\"list-headline-6PZWMBQQVFESXGBVSG644VIG3E-6\" tabindex=\"0\" class=\"wpds-c-kiwQNE\">\n<h3 class=\"wpds-c-dRkUEp listicle-headline\" data-qa=\"list-headline\">Ask the Fed for an advance<\/h3>\n<\/div>\n<p><a href=\"#secondary-nav\" class=\"skip-link sr-only sr-only-focusable black underline brad-md pa-lg mb-xs border-box font-sans-serif font-bold\">Return to menu<\/a><\/p>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">On Jan. 14, 2022, the Federal Reserve Board announced that it was transferring $107 billion into Treasury\u2019s accounts as required under the law. This transfer was routine and unremarkable, but it reflected a part of the financial plumbing that some experts say could help defuse the debt-ceiling crisis.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">The Federal Reserve routinely sends to Treasury the income from interest payments made on government bonds that the Fed holds on its balance sheet. But there\u2019s nothing that would appear to prevent it from doing so ahead of time, according to Mason, the CUNY economist. Prepaying these \u201cremittances\u201d could give the federal government some fiscal wiggle room.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">A spokeswoman for the central bank declined to answer hypotheticals about this kind of scenario.<\/p>\n<\/div>\n<div class=\"article-body grid-center grid-body\" data-qa=\"article-body\">\n<p data-testid=\"drop-cap-letter\" data-el=\"text\" class=\"wpds-c-cYdRxM wpds-c-cYdRxM-iPJLV-css font-copy\">\u201cI don\u2019t think there would be an obstacle for the Fed to prepay remittances,\u201d Mason said. \u201cIt\u2019s silly. But everything in this space is going to be silly.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n<br \/><a href=\"https:\/\/news.google.com\/__i\/rss\/rd\/articles\/CBMiSmh0dHBzOi8vd3d3Lndhc2hpbmd0b25wb3N0LmNvbS91cy1wb2xpY3kvMjAyMy8wMS8yOS9kZWJ0LWxpbWl0LXVuaWxhdGVyYWwv0gEA?oc=5\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Comment on this story Comment President Biden and House Republicans are locked in a showdown over the nation\u2019s debt ceiling, with the administration ruling out negotiations over conservative demands to cut government spending in exchange for increasing the federal borrowing limit. But some economists, lawyers and academics say the administration has options that could let …<\/p>\n","protected":false},"author":1,"featured_media":48143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/48142"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=48142"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/48142\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/48143"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=48142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=48142"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=48142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}