Is Treasury legally required to do the thing bloggers happen to be talking about after thinking about the problem for a few minutes and coming up with no other ideas?
January 9, 2013 2 Comments
Matthew Yglesias, Is The Platinum Coin Legally Required?
1. Under the Congressional Budget and Impoundment Act of 1974 it’s illegal for the president to spend less money than congress has appropriated—the Nixon administration had this idea that it could enact unilateral spending cuts, but it can’t.
2. Under the terms of the statutory debt ceiling, the president can’t borrow extra money without congressional authorization.
3. I don’t believe there’s a specific statutory prohibition on collecting taxes that congress hasn’t authorized, but this principle is pretty literally the foundation of the entire fabric of common law.
4. The Treasury Secretary can instruct the mint to create platinum coins of any denomination.
On its face that leads to the conclusion that if the federal government’s financing needs exceed its borrowing authority, the secretary must mint the coin.
To boil the logic down, Treasury could mint a platinum coin, they have no other traditional way to pay Congress-required payments, and so they must mint a platinum coin.
Bless him, he’s almost on the right track here.
One problem is that if this logic were correct we could imagine replacing his #4 above with something like
4. The Treasury Secretary can hold a bake sale.
What? He can’t hold a bake sale? Or how about,
4. The Treasury Secretary can go on TV and hold an indefinite telethon begging from rich-folk till he gets the money.
4. The Treasury Secretary can launch a tech startup whose profits are directed toward the US Treasury, and then invent something really, really awesome that makes a lot of money, and sell it by the millions.
So, is he legally required to do that?
It’s all well and good to observe that Treasury has no traditional means of satisfying these two conflicting obligations (a debt ceiling, and payments). However, that doesn’t help us figure out what the ‘right’ nontraditional means is, since there are infinity of them. Who says platinum-coin is the only one? And if there’s no ‘right’ nontraditional means, I’m not sure how one of them can be ‘legally required’. Because it’s the one that Bloggers Happen To Have Heard Of And Be Talking About?
So, to answer Matthew’s question: no.
(Once again, I am not a “constitutional lawyer”.)
But going down this road at least gets you halfway to recognizing the nature of the problem, which is simply that Treasury has been given conflicting commands both of which it cannot comply using traditional means, with no obvious way to distinguish which command is ‘better’ or ‘more important’. C’est la vie. And once you’re there, you’re halfway to recognizing the brilliance of the Split The Difference solution.
It really is the only logical and honorable way.