Secretary of Treasury Geithner can almost instantly decrease the national debt by two-trillion dollars without borrowing, taxing, or putting new money into circulation.
The Federal Reserve already owns two-trillion dollars worth of Treasury bonds that it bought from banks by simply incrementing their Fed accounts by the sale price of the bonds --- they call that "Quantitative Easing." So, in essence, the Fed has already paid off two trillion of the national debt with freshly printed money.
Unfortunately, Treasury bonds held by the Fed are technically part of the national debt. So, to reflect this decrease in the national debt, the Treasury must buy those bonds from the Fed. But how?
At FDL, Beowulf and letsgetitdone have pointed out that the Treasury can't print money but can mint it. Per TITLE 31, SUBTITLE IV, CHAPTER 51, SUBCHAPTER II, Section 5112 of the U.S. Code:
(h) The coins issued under this title shall be legal tender as provided in section 5103 of this title.
(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
All Geithner has to do is mint two trillion-dollar platinum coins with which to buy up two-trillion dollars worth of Treasury bonds from the Fed. If he did that, the GOP would lose their debt-ceiling leverage, and the Democrats could tell them to go to Hell.
Do you think Obama will let him do that?