Through open-market operations (e.g., QE1 and QE2), the Fed has purchased (monitized) $2T of Treasury bonds, i.e., the Fed has paid off $2T of the national debt with money from its (virtual) printing press. But, Treasury bonds held by the Fed still count as part of the national debt. The Secretary of the Treasury can, however, buy them from the Fed with a single freshly minted $2T platinum coin, and then retire (burn) them. This plan is based on one proposed at FDL by Beowulf and letsgetitdone.
1) As a one-time transaction, the Treasury would present the Fed a $2T coin, which by law is "legal tender for all debts, public and private," in payment for $2T of Treasury bonds (debt) that the Treasury now owes the Fed. The Fed cannot refuse.
2) The Fed gets paid in full and winds up with an asset, namely $2T of additional "vault cash." So the books balance and no debt gets “repudiated.”
3) A $2T coin in impractically large for the Fed to circulate, so it will remain vault cash. Nor does the Fed have any motivation to circulate it. They are charged with controlling inflation and have the ability to virtually print money by crediting accounts in exchange for other assets.
4) Some people insist that the Fed's purchases of Treasury bonds (quantitative easing) "debase" the dollar by increasing the amount of money in circulation. This proposal is to purchase bonds that the Fed already owns. This coin would increase the M0 money supply but not the measures of money in circulation (M1, M2, M3, and M4), which specifically exclude vault cash. So, this transaction cannot (further) debase the dollar.
5) The relevant section of the U.S. Code is TITLE 31, SUBTITLE IV, CHAPTER 51, SUBCHAPTER II, § 5112:
(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.
So, this plan is both legal and binding. And, per Beowulf: “[E]ven if Congress passes a law to strip the Secretary of his coin seigniorage power by veto-proof majorities, the 10 days the President is given to sign or veto a bill is more than enough time to mint away the entire public debt.”