Remember during the budget fight there were rumblings the Obama Administration would use the so-called “Constitutional option” to mint a $1 trillion platinum coin to avoid having the U.S. default on its debts? Yeah, that almost happened.
The Huffington Post reports the administration went so far as to have Justice Department lawyers write up a legal justification for taking the controversial and unprecedented move.
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.”
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.