The House Financial Services Committee is demanding that the Justice Department turn over its legal analysis of using a large-denomination platinum coin to raise the debt ceiling.
{mosads}In a letter to Attorney General Eric Holder last month, committee Chairman Jeb Hensarling (R-Texas) and Rep. Patrick McHenry (R-N.C.) asked the department to produce “all records within the custody and control of DOJ which relate to the coin issuance proposal.”
The move follows a report by The Huffington Post about documents the news organization received suggesting 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.
Questions about the coin center on 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.
But the documents provided to The Huffington Post withheld the Justice Department’s ultimate determination, leaving the administration’s determination on the legality of such a move an open question. House Republicans are now seeking the content of those memos.
An official for the Financial Services Committee said that the Justice Department has not responded to the Dec. 20 request for the documents, telling the panel that the experts on the issue were out for the holidays.
The White House shot down the idea of deploying the platinum coin last year, with White House press secretary Jay Carney insisting 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?’ “
The nation will again approach a debt ceiling crisis in February, with a bipartisan deal struck following the government shutdown last October suspending the limit on borrowing through Feb. 7.
In a letter to Speaker John Boehner (R-Ohio) last month, Treasury Secretary Jack Lew asked Congress to “take action to raise the debt limit at the earliest possible moment.”
In the letter, Lew said his department’s “extraordinary measures” that would keep the government paying its bills would be exhausted within a few weeks after Feb. 7.
“We do not foresee any reasonable scenario in which the extraordinary measures would last for an extended period of time,” Lew said.
At an end-of-year news conference, Obama again insisted he would not negotiate with congressional Republicans over the limit.
“No, we’re not going to negotiate for Congress to pay bills that it has accrued,” the president said.
But some Republicans, including House Budget Committee Chairman Paul Ryan (R-Wis.), have said they want concessions in exchange for the vote.