WASHINGTON — As quickly as the so-called “constitutional option” appeared as a way to resolve the debt ceiling showdown, top White House officials have apparently closed that door.
During Thursday’s talks between the president’s team and congressional leadership, Treasury Secretary Tim Geithner reportedly revealed that he believed the administration did not have the constitutional authority under the 14th Amendment to simply ignore the debt ceiling and continue borrowing money.
From the very end of a New York Times report, comes the following nugget:
In addition to his warnings about the cost of a default, officials said, Mr. Geithner told the lawmakers the White House did not believe it had the authority, under the Constitution, to continue issuing debt if it reached the debt ceiling. Nobody in the room disputed Mr. Geithner’s bleak assessment, the officials said.
The report comes less than 24 hours after Reuters reported that Treasury officials were discussing whether to use the option …
Other than sacrificing Medicare, Medicaid, and Social Security to the Tea Party, so far as I can tell we’re down to three plans, each of which involves the Fed’s $1.6T of Treasury bonds that are part of the national debt:
- * The Baker/Paul plan: “destroy them”
- * Reverse QE: sell them and the profit will accrue to the Treasury
- * The jumbo-coin plan: the Treasury buys them from the Fed with a freshly minted $1.6T platinum coin, which by law is “legal tender for all debts” and by law the treasury can mint.
I have no idea how to keep books on the first two plans, nor do I have a reference on the second plan. The third plan seems to be a slam-dunk, but I’m getting no traction with it.