On January 13, Rep. Greg Walden of Oregon introduced H.R. 220: Stop the Coin Act. The bill seeks to amend current law to impose a limit on the highest denomination coins that the Treasury Secretary is allowed to mint and issue.
For weeks, the idea of minting a platinum coin with a face value of $1 trillion to avert the debt ceiling crisis had received a great deal of attention. Under a law passed to provide the Secretary with the authority to produce American Platinum Eagle bullion and proof coins, the Secretary was given unrestricted authority to produce platinum coins with any stated denomination. Many have argued that the Treasury could produce a platinum coin with a face value of $1 trillion, deposit it at the Federal Reserve, and have enough cash to sidestep the debt ceiling.
The potential use of this legal loophole was covered by mainstream media outlets and discussed seriously by some politicians noted economists. A Twitter hashtag #mintthecoin received significant buzz, and a White House petition to direct the United States Mint to mint the trillion dollar coin received more than 10,000 signatures.
The discussion was ultimately put to rest when the Treasury Department and Federal Reserve both concluded that the trillion dollar platinum coin was not a viable option for avoiding an increase in the debt ceiling. Nonetheless, as long as the current law stands, the trillion dollar coin idea will keep showing up as a potential solution to future fiscal crises.
The bill introduced by Walden would amend Section 5112 of title 31 to impose a limit on the denomination that the Treasury Secretary may assign to platinum coins. The current law reads:
The 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.
The law would be amended by inserting “having such nominal, or face, values as the Secretary may determine but not in any case exceeding $200” after “platinum coins” and striking the word “denominations.”
The bill goes a step further than simply eliminating the trillion dollar platinum coin loophole by also adding a new subsection: “(w) Limitation on Face Value- The Secretary may not mint or issue any coin having a nominal, or face, value exceeding $200.”
Some have pointed out that the Secretary also has broad authority to mint and issue bullion and proof gold coins with denominations at the Secretary’s discretion. The new subsection would eliminate the possibility of anyone coming up with a trillion dollar gold coin idea.
The Stop the Coin Act currently has 19 cosponsors and has been referred to the House Committee on Financial Services. In order to become law, the bill would have to be passed by the House of Representatives and Senate, and then signed by the President.