January 10, 2013
Theater of the Absurd: Administration won't rule out minting $1 trillion platinum coin
Much of the last 4 years has been a nightmare for conservatives. But there is a crazy, stupid, absurd idea being seriously discussed in Washington that makes previous nightmares from the White House pale in comparison.
The idea is for the Treasury Department to mint a platinum coin and declare it to be worth $1 trillion. If Congress won't raise the debt ceiling, the coin would be deposited at the Federal Reserve and Obama could continue to spend money.
Congress passed a bill allowing for the minting of platinum coins several years ago. But it was a bill designed to aid investors and collectors. Unfortunately, someone forgot to put in a limit on how much a platinum coin could be minted for. Thus, a gigantic loophole that liberals see as a way to stick to the GOP while spending money as fast as it can be printed.
Is it legal? Partisan constitutional scholar Lawrence Tribe says yes:
I don't think it makes sense to think about this as some sort of "loophole" issue. Using the statute this way doesn't entail exploiting a loophole; it entails just reading the plain language that Congress used. The statute clearly does authorize the issuance of trillion-dollar coins. First, the statute itself doesn't set any limit on coin value. Second, other clauses of 31 USC §5112 do set such limits, but §5112(k)-dealing with platinum coins-does not. So expressio unius strengthens the inference that there isn't any limit here.
Of course, Congress probably didn't have trillion-dollar coins in mind, but there's no textual or other legal basis for importing this probable intention into the statute. What 535 people might have had in their collective "mind" just can't control the meaning of a law this clear.
It's also quite clear that the minting of such a coin couldn't be challenged; I don't see who would have standing.
Bottom line: This is a situation where the political and economic considerations, not the legal considerations, have to drive the decision-making about this option. It's certainly a lot better from just about every perspective than having the nation stuck on either horn of the very real dilemma you outlined below, which I agree offers no plausible way out as long as enough leaders in Congress insist on playing Russian Roulette with our economy and risking our full faith and credit by using the debt ceiling as a bargaining chip as they are threatening to do.
There are dissents to this opinion, but Megan McCardle's is the best:
As we once again approach the legal limits, left-liberal commentators, most notably Paul Krugman, are now getting behind the idea that the President ought to exploit his own loophole: a law passed allowing the government to mint platinum coins of any denomination. If the GOP won't raise the debt ceiling, they say, the president should simply mint a $1 trillion coin, deposit it at the Fed, and continue paying the nation's bills. Never mind that the law was never intended for this, and that these sort of hypertechnical legislative games might trigger the very political and financial crises they are supposed avert. Seemingly, the most important thing is for the president to defeat intransigent Republicans-even if that means that the president "for all Americans" who once spoke of winning the future and healing the planet will be reduced to presiding over the Franklin Mint.
The Great Platinum Coin Caper is everything that is wrong with Washington: a stupid partisan maneuver that erodes the institutions of our government for no gain other than an immediate political win. The only good thing that can be said about it is that the President seems to be too sensible to actually consider doing it. Nonetheless, the fact that intelligent people like Professor Krugman are even discussing this debacle, much less endorsing it, is a depressing reminder of just how nasty and short-sighted our nation's capital has become.
And incredibly, the White House refuses to rule out using the coin gambit:
The White House on Wednesday declined to rule out minting a "platinum coin" to avoid default if Congress fails to raise the debt ceiling.
Press secretary Jay Carney on Wednesday said there is "no substitute" for Congress raising the borrowing limit but declined to explicitly rule out issuing new currency to pay the government's debts.
"The option here is for Congress to do its job and pay the bill," Carney said. "There is no Plan B, there is no backup plan. There is Congress's responsibility."
Carney was asked repeatedly to clarify the White House's position on the platinum coin during his daily press briefing, but seemed to downplay - although not completely proscribe - the idea.
"You can speculate about lots of things," Carney said. "Nothing needs to come to these kinds of speculative notions about a problem that can be resolved by Congress doing its job."
House Republicans are taking note of the chatter about sidestepping Congress and plan to introduce legislation to "take the coin scheme off the table."
"This scheme to mint trillion-dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren't so serious about it as a solution," said Rep. Greg Walden (R-Ore.). "I'm introducing a bill to stop it in its tracks."
Imagine - stamping "$1 trillion" on a coin and calling it money? Have they completely lost their minds? And what about Congress? If the executive branch can mint its own money why can't it authorize its expenditure as well?
Washington isn't a circus. It's Dante's "Inferno" where we are working our way through the nine circles of hell one at a time, with each level being more absurd and surreal.
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at January 10, 2013 - 01:53:58 PM CST