The Justice Department conducted a formal review of the platinum coin option to avert hitting the debt ceiling, according to documents obtained by The Huffington Post.
The documents suggest that the Justice Department’s Office of Legal Counsel, which is responsible for advising the president and Executive Branch agencies, wrote memos weighing the legality of the platinum coin option.
{mosads}But the contents of those memos remain a mystery. The documents, provided in response of a Freedom of Information Act request, withheld the Justice Department’s ultimate determination on the legality of the move.
Questions about the coin center around a loophole in a 1996 law that allows the Treasury Department to mint a platinum coin of any denomination. Under the proposal, the Treasury would deposit the coin in the Federal Reserve and use it to meet spending obligations without needing to raise the congressionally mandated debt ceiling.
Doing so would allow the country to continue paying its bills, averting the threat of default were the debt ceiling to be breached.
The White House shot down the idea earlier this year, when White House press secretary Jay Carney said there was no “Plan B” if Congress failed to raise the debt ceiling.
“There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default,” Carney said at the time.
Later in the year, President Obama said that questions about the legality of the move would likely spook investors, undermining the intended purpose of the platinum coin. But the president didn’t say whether he believed the administration had the legal authority to mint the coin.
“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?’ “