Matthew Yglesias has an interesting scenario in which Obama would be REQUIRED by law to mint the trillion dollar coin if the House GOP insist on not authorizing Obama to borrow enough to pay for the money they ordered him to spend.
Details below the orange squiggle ...
The facts are these:
1. Under the Congressional Budget and Impoundment Act of 1974 it's illegal for the president to spend less money than congress has appropriated—the Nixon administration had this idea that it could enact unilateral spending cuts, but it can't.No debt ceiling raising, what is the President to do? The Congressional Budget and Impoundment Act of 1974 prohibits the President from spending less than what Congress ordered. He cannot pick and choose who or what to spend money on ... he cannot simply on his own decide that he will not pay the defense contractor in John Boehner's district for the $50,000 toilet seat they developed (not a real example, but you get the idea). Similarly, he cannot unilaterally decide that food stamp cards will all be 10% lower next month. The law simply prohibits such unilateral picking and choosing by the President.
2. Under the terms of the statutory debt ceiling, the president can't borrow extra money without congressional authorization.This is self explanatory ... Treasury cannot sell bonds without Congressional authorization, at least under current law.
Result: paralysis. No checks being sent out.
And lawsuits by people expecting those checks:
On its face that leads to the conclusion that if the federal government's financing needs exceed its borrowing authority, the secretary must mint the coin. Many people have observed that it's difficult to see who would have standing to mount a legal challenge to the validity of the coin, but it's easy to see who would have standing to challenge failure (emphasis added) to mint the coin—whoever didn't get paid.For example, let's say Obama decided to skip payments to the tactical toilet seat factory in Boehner's district ... said factory would be understandably upset for not getting the money owed to them, and would sue.
... if the Solicitor General tries to say the government had "no choice" but to skip payments, the plaintiffs' attorney will argue that they did in fact have a choice—they could have minted a large denomination platinum coin.What are the options for the Courts?
They could order Obama to mint the magic trillion dollar coin and circumvent the debt ceiling nonsense, as the plaintiffs demand.
Another possibility is to rule the Impoundment Act unconstitutional. However, ruling the Impoundment Act unconstitutional would vastly increase presidential power and give the President the authority to undo Acts of Congress unilaterally, radically altering the system of checks and balances.
Maybe there is another ruling the Courts could give that don't involve Platinum coins or converting us to a (presumably benevolent) dictatorship ... but, since I'm not a lawyer, none jumps to mind.
In short, the courts could decide that Platinum coin option is the only reasonable choice, and order the President to make it so.