The Trillion Pound Cudgel

We haven’t written many stories about large-denomination platinum coins here at TPM because, bluntly, this White House has been reluctant to address major domestic policy challenges outside of normal legislative channels and the Mint The Coin bubble has therefore amounted to a whole lot of speculation and advocacy. There’s just not much to write about that other than to acknowledge that it’s out there.

Today’s White House press briefing changes things.

If I had to, I’d still bet against the Obama administration minting a platinum coin to meet payment obligations, even if we breach the debt ceiling. But that’s just a feeble attempt at mind reading. By contrast, the fact that Jay Carney neither foreclosed on the seigniorage option nor questioned its legality today is actually meaningful.Remember, he and Obama (and Obama’s lawyers) have explicitly rejected the argument that the 14th Amendment empowers the administration to ignore debt limit. They haven’t left themselves any wiggle room on that idea.

Maybe that means they’ve drawn different conclusions about the constitutional option and the coin option. Who knows. But the seigniorage idea has been kicking around long and visibly enough that it’s hard to imagine they haven’t formed some opinion about its legitimacy. And if that’s the case then Carney’s answer today suggests they want to keep their private views ambiguous, at least for now, while insisting there’s no plan B if Republicans don’t raise the debt limit.

Carney ultimately referred all questions about the platinum coin to Treasury. A Treasury spokesman said the department is declining comment.

That strikes me as the smartest way to approach the standoff with the GOP. It makes them pay a political price for their recklessness while sowing real doubt about whether they can even exact consequences if Dems don’t accede to their demands.