The Obama Administration Took The Platinum Coin Option More Seriously Than It Let On

The Obama Administration Took The Platinum Coin Option More Seriously Than It Let On

WASHINGTON -- The Obama administration was serious enough about manufacturing a high-value platinum coin to avert a congressional fight over the debt ceiling that it had its top lawyers draw up a memo laying out the legal case for such a move, The Huffington Post learned last week.

The Justice Department's Office of Legal Counsel, which functions as a sort of law firm for the president and provides him and executive branch agencies with authoritative legal advice, formally weighed in on the platinum coin option sometime since Obama took office, according to OLC's recent response to HuffPost's Freedom of Information Act (FOIA) request. While the letter acknowledged the existence of memos on the platinum coin option, OLC officials determined they were "not appropriate for discretionary release."

HuffPost submitted the FOIA request when there was increased speculation about the use of the platinum coin option ahead of the debt ceiling crisis this fall. Under the compromise reached between the House and Senate following the government shutdown, the U.S. will hit the debt ceiling once again on Feb. 7, though the Treasury can use extraordinary measures to extend that deadline.

Supporters of the platinum coin option say that under a 1996 law allowing the Treasury Department to mint a platinum coin in any denomination, the president could order the manufacture of, say, a $1 trillion coin that would be deposited in the Federal Reserve. The Treasury Department would then use the platinum coin funds to meet government obligations without the need for Congress to grant any additional spending powers.

The administration previously stated that both the Treasury Department and the Federal Reserve did not believe that manufacturing a platinum coin could or should be used as a way to avoid raising the debt ceiling. The OLC has also weighed in on whether the 14th Amendment allows the president to ignore the debt ceiling, but the Justice Department has declined to make any memos on that topic public.

At a press conference in October, Obama said that the legal controversy surrounding either option would make investors nervous, since the issue would likely be tied up in litigation for a long time.

"So a lot of the strategies that people have talked about, well the president can roll out a big coin, or he can resort to some other constitutional measure," Obama said. "What people ignore is that ultimately what matters is, 'What are the people who are buying Treasury bills think?'"

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Timothy Geithner

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