According to Ezra Klein at the Washington Post:
The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.The ball is back in the corner of [insert name of favorite responsible branch].
That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me [Klein] today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.
Is this the Constitutional crisis pundits would have us believe, cousin to the "Fiscal Cliff?" Or, as President Obama declared - and press secretary Jay Carney repeats daily to inquiring media - Congress racked up the bills and it's up to Congress to see that they are honored.
Two calm observers, law professors Neil Buchanan at George Washington in DC and Michael Dork at Cornell, have surveyed the field. They point out that the President has three options, all of which violate Congressional statutes and Constitutional prerogatives. He can't unilaterally cut spending that Congress has authorized. He can't raise taxes to add revenues. And he can't ignore the debt ceiling law and keep paying bills when the Treasury exhausts its borrowing authority and Congress has not raised the limit. All the powers to tax, borrow and spend rest initially with Congress.
What's a President to do?
Buchanan and Dorf conclude: "[I]f Congress leaves the President no constitutional options, he must choose the least unconstitutional one: borrowing money beyond the debt ceiling." In so concluding, they give no weight to the 14th Amendment, Section 4, which says, in part:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.Writing during the last debt ceiling debacle in 2011, Jack Balkin, professor of law at Yale, made a compelling argument that the 14th Amendment - as a post Civil War Reconstruction command not to let partisan politics interfere with the credit of the United States - speaks to the crises at hand.
Whatever President Obama does, the GOP-controlled House may threaten impeachment. Someone - a creditor perhaps or members of Congress - will probably take a case to the courts. Meanwhile, it seems highly likely that financial markets worldwide will react adversely to this failure to deal with an obvious problem. How adversely is anyone's guess.
The obvious realistic choice is to begin conducting serious negotiations over the sequester. Perhaps adults in both the Executive and Legislative branches will rise to the occasion, remove the debt ceiling as overkill and reassure the rest of the world that we have not gone totally out of our collective minds, at least not on these issues.
8:58 PM PT: errata with apology: The Cornell law professor is Michael Dorf.