The idea of creating a $1 trillion platinum coin to evade the debt ceiling may be unwise — even “idiotic” — but is it legal? Proponents of the idea point to the following language in the U.S. Code:
The Secretary may mint and issue bullion 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.
This statutory text plainly authorizes the treasury Secretary to have platinum coins issued in any amount or denomination he wishes so that settles the matter, right? Not really, because it’s not clear this is what the statute means. Does it authorize the Secretary to issue actual currency? Or merely to issue commemorative coins to be sold and marketed to collectors? Either is a plausible reading of the text.
The plain text of a statute is and should be controlling, but what does the statute mean? To answer this question it is best not to look at a single provision in isolation. The meaning of a given statutory provision is often best understood in context and looking at the statute as a whole. Consider a statute providing that “Teachers shall not bear arms on school grounds.” Would such a statute prohibit gun possession?
Sleeveless shirts? Displays of armorial bearings? The text of the statute could mean any of these things, so we look to the statute as a whole. If it were titled the “Gun-Free School Zones Act” and otherwise concerned gun-related issues, this would indicate one meaning of the text, whereas if it were titled “Teacher Modesty Act,” the “Uniform Uniform Code,” [the "Armorial Bearings in Education Act" or a "Code of Heraldry"], we would recognize that the statute is really about something else.
Back to the platinum coin statute. As Dylan Mathews recounts here, the relevant statutory language comes from the Commemorative Coin Authorization and Reform Act of 1995, which exclusively concerned the issuance and marketing of commemorative coins. This original proposal was not adopted, but it was incorporated into a later law, retaining the same exclusive focus on the issuance of commemorative coins, and then subsequently amended by the United States Mint Numismatic Coin Clarification Act of 2000. Throughout, the relevant statutes and bill language always concerned the issuance of commemorative coins, and did not implicate the money supply. So while the statutory interpretation offered by platinum coin ploy proponents is superficially plausible, it is not an easy fit with the actual statute from which the relevant provision was born.
For this reason, I am quite skeptical that the platinum coin ploy would be legal. My skepticism is enhanced by my belief that delegated authority of this sort should be explicit. The Treasury Secretary has no inherent authority to issue currency. Insofar as Congress has delegated such authority to the Treasury Secretary, I believe such delegation should be explicit. As the Court has often remarked, we should not presume Congress hides elephants in mouseholes. Yet that is precisely what platinum coin ploy proponents suggest Congress did here. But don’t expect a court to reach this conclusion. For the reasons I noted in my prior post, I doubt whether this question could ever be subject to judicial review.
UPDATE: One question I overlooked, but raised in the comments, is whether commemorative coins are legal tender. According to the U.S. Mint, they are, even though they are sold to the public for more than their face value. This fact undermines my argument that the authorization of commemorative coins in any denomination should not be construed to entail the authority to alter the money supply.
SECOND UPDATE: Harvard’s Larry Tribe thinks the platinum coin ploy would be perfectly legal. Tom Maguire disagrees, pointing out the statute only authorize “bullion” coins — those valued by their weight in a specific metal — and “proof” coins. I think he’s correct about the former, but not so sure about the latter. While proof coins are typically used as commemoratives, they are not necessarily a form of bullion coins. [Added: Maguire makes a more plausible argument that a proof coin must be a counterpart to either a circulating or bullion coin, but I don't know whether that's correct.] Kevin Drum also has more here. He notes that the point of the statutory revision was to allow the Treasury to authorize the issuance of smaller denomination platinum coins for collectors. That may be so, but I don’t believe that’s determinative.
How would this issue be settled? As I’ve noted repeatedly, if the Administration goes down this road it is hard to see how the action would ever be challenged in court. So if the Administration believes it has the authority to take this step — and presumably the Administration would rely upon a legal memorandum to this effect — that would be that.
UPDATE: And here’s some commentary from a precious metals blog that suggests some additional wrinkles.