Professor Buchanan's post yesterday explained why the "big coin gambit"--which the Obama Administration has now ruled out--would very likely have been unlawful anyway under the debt ceiling statute. Here, in a second post-mortem, I want argue why it would have also been unlawful under the statute that authorizes the minting of platinum coins. But first, kudos to Neil for his summary of our trilemma argument for the NY Times yesterday. Okay, now back to those coins.
Why a second post-mortem? Because, as with the Administration's ruling out of the "Fourteenth Amendment option," so too here, the conclusion that an option is illegal or even unconstitutional is not enough to rule it out if all of the other available options are also illegal or unconstitutional. So big coins are dead for now, but if Congress fails to raise the debt ceiling in time, they could come back to life as less unconstitutional than the other options--as "zombie big coins," if you will. For reasons I shall explain, I still wouldn't favor zombie big coins, but the journey to that conclusion is somewhat complex (and hopefully interesting).
My analysis here is inspired by a recent hallway suggestion from my colleague Jeff Rachlinski. Professor Rachlinski said that, from the perspective of administrative law, the problem with the platinum coin gambit is that minting the coins would exceed the scope of the delegation of authority to the Secretary of the Treasury, in light of the Ur-admin-case, Chevron, U.S.A. v. NRDC. I think he's onto something. Let's see how the proposed minting and depositing of two $1 trillion coins comes out under Chevron.
Chevron is now understood to require a two-step inquiry. First, does the statute speak directly to the question? If so, and it forecloses the agency's reading, that is the end of the matter. But if the statute is ambiguous, then the courts read that ambiguity as a delegation to the agency to fill in the gaps, so long as it satisfies step two: Is the agency interpretation reasonable?
Here's the relevant statutory language:
The [Treasury] Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.As I read the argument that was made last week by Professor Tribe and others, this language contains no limit and therefore it is clear that the Treasury Secretary can mint and issue coins of unlimited denominations. I think that's wrong for two reasons.
First, silence is not clarity. The post-Chevron cases ask at step 1 whether Congress has addressed the "precise" question at issue. Congress has not addressed the precise question of whether 31 U.S.C. sec. 5112(k) permits the minting and issuing of two trillion dollars worth of platinum coins, not to be offered to the public, but to be deposited in the government's account as a means of generating revenue.
Second, as Justice Scalia (relying in part on a 2009 article by Professors Matt Stephenson and Adrian Vermeule) observed in a recent concurrence in a case decided last Term, "'Step 1' has never been an essential part of Chevron analysis." The core of Chevron is deciding whether an agency interpretation of a statute is within the scope of the delegation of authority by Congress, and if the agency interpretation is unreasonable, then it falls outside the scope of the delegation, regardless of whether there is or is not ambiguity in the statute as an abstract matter.
So we come to the core question: Is it reasonable to read 31 U.S.C. sec. 5112(k) as having delegated to the Treasury Secretary the authority to mint two trillion-dollar coins as a means of evading the debt ceiling? In light of the overall context, the answer is surely no.
That overall context includes: (1) A limit on the face amount of paper currency the government can print; (2) limits on the Secretary's discretion to mint coins made of other metals; and (3) the debt ceiling. Professor Tribe says that the fact that Congress put limits on the executive's ability to create money using paper or metals other than platinum implies, under the expressio unius canon, that there is no limit on the executive's authority to issue platinum coins. But purposivism implies just the opposite. As Hart & Sacks famously put it, statutes should be construed with the assumption that the legislature consists of "reasonable people pursuing reasonable purposes reasonably." No reasonable person would legislate so as to constrain the executive's discretion to borrow or to create money, unless the executive mints super-high-value platinum coins, in which case all bets are off. And thus, it is unreasonable under Chevron step 2 to interpret 31 U.S.C. sec. 5112(k) as authorizing the jumbo coins gambit.
Indeed, textualists as well as purposivists should embrace my reading. For one thing, textualists accept Chevron step 2, with its incorporation of a reasonableness constraint. For another, as Justice Scalia has repeatedly pointed out, textualism is not literalism. It includes a role for context in construing text, and that's really all I'm doing in the foregoing paragraph: locating 5112(k) in the overall statutory context.
One might object (as one commenter objected to one of Professor Buchanan's posts on the coins) that there is a line-drawing problem here. If Treasury can mint $100 platinum coins--as I concede that it can--why not $200? Or $500? And so on all the way up to a trillion dollars. This is what philosophers call the sorites paradox, typically attributed to Eubulides of Miletus: One grain of sand is not a heap ("soros" in Greek); neither are two grains; nor three; but if you keep adding grains one by one, eventually you have a heap. Where do you draw the line?
Paradox shmaradox. In a case like this one, the answer is straightforward: Reasonable people can differ about whether Treasury can mint a $100,000 coin (which is the highest value U.S. currency ever printed), but no reasonable person would put a trillion-dollar coin on the permissible side of the line. Ah, but what if the govt were to mint 20 million $100,000 platinum coins or 200 million "mere" $10,000 platinum coins? Because the conclusion that the platinum coin option violates the statute rests on the obvious fact that it is an effort to evade the statutes that limit money creation and borrowing, these variations would also rest on unreasonable interpretations of the statute and thus should be deemed invalid.
Another objection might go like this: Chevron is a tool that courts use to defer to agencies but Professor Tribe says (and I agree) that no one is likely to have standing to challenge the platinum coins; thus, Chevron is irrelevant.
This objection also strikes me as wrong. Whatever Chevron's origins, it is now understood as a tool for measuring the scope of authority conferred on the executive by congressional delegations. In other words, it's a tool that can be used--and should be used--by the executive to measure the legality of its own actions. And anyone but the most cynical legal realist would agree that the executive must follow the law, even when it can get away with violating the law due to the limits of judicial redress.
The upshot is that the jumbo coins are not merely illegal but unauthorized. And since Article I commits to Congress the power to coin money--just as it commits to Congress the other relevant powers of taxing, spending and borrowing--minting and depositing jumbo platinum coins would also be unconstitutional. The erstwhile proponents of the jumbo coins plan did not find a legal escape hatch; they converted the trilemma into a quadrilemma in which the President must choose among four unconstitutional options: tax without authorization; cut spending without authorization; borrow in excess of the debt ceiling's limit on authorization; or create money without authorization.
Notwithstanding the important worry that Professor Buchanan raised on Friday regarding undermining confidence in money, perhaps I could be persuaded that creating money without authorization would be less unconstitutional than directly borrowing in excess of the debt ceiling, based on an assessment of how the markets would react, but--and this is a crucial point--if the best argument for the jumbo platinum coins is that they are unauthorized but less unauthorized than direct unauthorized borrowing, then this argument points in favor of something else entirely: Print actual money to be deposited with the Fed. Once we understand that jumbo coins are unauthorized per Chevron as applied to 31 U.S.C. sec. 5112(k), then we should see them as no different from any solution that creates money for the government without authorization. And because just printing money would not look cartoonish in the way that minting the jumbo coins would, it would likely have less of a destabilizing effect on the economy.
So . . . if and when the day of reckoning arrives, big coins could properly re-enter the discussion as zombies: as one of a variety of proposed illegal/unconstitutional options. But if that happens, anybody who thinks big coins are a better option than direct issuance of new bonds should abandon big coins in favor of simply printing money. Thus we have the answer to the riddle "How many pictures of Benjamin Franklin (aka hundred dollar bills) does it take to kill two zombie big coins?" Answer: 20 billion.