Felix Salmon has an excellent post up today about how Obama won’t issue the coin (h/t reader Kris Smith):
”There’s a reason why the proponents of the platinum-coin approach are generally economists, or at least economically-minded. The idea makes gloriously elegant economic sense, and attempts to shoot it down on economic grounds generally fail miserably. You can try a legal tack instead, but that doesn’t work much better: the coin is as logically robust as it is Constitutionally stupid.
No one in the executive branch has any real desire to mint a trillion-dollar coin — you can be sure of that. But the coin-minting advocates are OK with that: they just want to use the threat of the coin to persuade Congress that it should just go ahead and allow Treasury to pay for all the spending that Congress has, after all, already mandated. As a result, while no one intends to actually mint a coin, any statement to that effect would constitute unilateral disarmament in the war between the executive and the legislature.”
But this thinking runs counter to what the Secretary of the Treasury will be forced to do. Obama doesn’t have any legal standing to avoid using the coin, especially now that he knows about the coin. Here is beowulf on how the Treasury must act:
“…the Secretary has no legal discretion in this matter whatsoever. His path is laid out by Congress like he’s the mechanical rabbit at a dog race.
- Congress tells the Secretary (as supervisor of the IRS) how much to collect in tax receipts and (with somewhat less effort) in miscellaneous receipts.
- Congress tells the Secretary as signatory of every single appropriation warrant how much money to transfer to federal agency sub-accounts (called “appropriation symbols” for some obscure reason).
- Congress tells the Secretary he MAY borrow on the credit of the United State to fund expenditures but not for one penny more than the debt ceiling.
- Congress tells the Secretary he SHALL mint coins such coins as he decides are necessary to meet the needs of the United States.
When Congress orders the Secretary to spend appropriations in excess of the receipts they’ve ordered him to collect, the unavoidable budget deficit must be filled by the combination of the Secretary’s powers to borrow (debt limit-constrained) money and to mint (debt-free) money. If Congress refuses to increase receipts or cut appropriations or extend the debt limit, the Secretary has only one and only one path to comply with all of his legal duties. Maybe I’m naive, but I’m confident the path to salvation will never be ruled unconstitutional by any United States Court. [Bold Mine]
Wow! That’s interesting. The legal path gets even tighter because of John Roberts, and his ruling on Obamacare. In this Justice Roberts lays out if a law has more than one possible meaning, the Court must choose the meaning which follows the Constitution:
Chief Justice Roberts wrote that if there two possible meanings of a law— one path constitutional and the other unconstitutional, the court must pick the meaning that prevents a breach of the Constitution. I’d extend the point to when there’s two possible meanings of a combination of laws (after all, Obamacare itself is actually a combination of two separate Acts of Congress), the Court must choose the path of salvation. To coin a term, we can call this the razor’s edge doctrine.
“The text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads “no vehicles in the park” might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. Justice Story said that 180 years ago: “No court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the constitution.” Parsons v. Bedford, 3 Pet. 433, 448-449, 7 L.Ed. 732 (1830). Justice Holmes made the same point a century later: “[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.” Blodgett v. Holden, 275 U.S. 142, 148, 48 S.Ct. 105, 72 L.Ed. 206 (1927) (concurring opinion).”
Taking these two into account, the path for the Secretary of Treasury is crystal clear – he must mint the coin to fulfill his legal duties under the law. The court must rule these actions constitutional.
So while Felix might not want the coin to be minted, and heck – I have some reservations about the coin myself – it appears we are compelled to issue the coin.