By Brendan Sasso - 01/12/13 09:49 PM EST
The Obama administration said on Saturday that it will not mint a trillion-dollar platinum coin to sidestep the debt ceiling.
"Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit," Treasury spokesman Anthony Coley said in an email.
Congress needs to approve most new borrowing, but an obscure provision of a 1997 law allows the Treasury secretary to mint platinum coins of any value.
The law was intended to allow for collectible coins, but some argued the president should use the power to prevent the government from defaulting on its debt.
Paul Krugman, a Princeton economist and columnist for The New York Times, acknowledged that the coin proposal was "silly," but said failing to raise the debt limit would be "equally silly but both vile and disastrous."
The idea was popularized by Joe Weisenthal, an editor for Business Insider, and Josh Barro, a writer for Bloomberg View, and was endorsed by Rep. Jerry Nadler (D-N.Y.).
White House press secretary Jay Carney said in a statement on Saturday that there are only two options for dealing with the debt limit: "Congress can pay its bills or it can fail to act and put the nation into default."
Carney said the last battle over raising the debt limit was a blow to the economic recovery.
"The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy," Carney said. "Congress needs to do its job.”
At a press conference on Wednesday, Carney said there was "no substitute" to raising the debt limit, but he declined to explicitly rule out minting a platinum coin.
Congressional Republicans say any increase in the debt ceiling should be offset by equal spending cuts.
—Updated at 5:03 p.m.