It's interesting to see the left wing echo chamber in action, but since Prof. Tribe didn't do his homework he got the wrong answer.
(k) 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.
People like Prof. Tribe are focusing on the Treasury Secretary's discretion in setting denominations without worrying that the phrase "bullion coin" might actually have meaning. Here we go, from the US Mint:
A bullion coin is a coin that is valued by its weight in a specific precious metal. Unlike commemorative or numismatic coins valued by limited mintage, rarity, condition and age, bullion coins are purchased by investors seeking a simple and tangible means to own and invest in the gold, silver, and platinum markets.
Well, that is the common, widely understood definition. Do words lose their meaning when Congress puts them in a law? Probably not. And that might be why people who read the law and know what the words mean realize we are talking about one large coin.
With gold, silver and palladium coins Congress specified that the sales price must be the bullion value plus a premium to cover striking and marketing costs. That language was dropped for platinum, leaving the phrase "bullion coin" to carry the meaning. We hope it is up to the challenge!
Well. On one side is Congressional intent (as illustrated by the first draft of the bill), historic practice, and the conventional meaning of the phrase "bullion coin". On the other side is a burning desire to slide past the debt ceiling. Treasury lawyers will never sign off on the sale of this coin; even if they do, Fed lawyers will never sign off on the Fed purchase.
And lest anyone hope to hang their Trillion Dollar hat on the phrase "proof coin", that won't work either - a 'proof coin' in this context is an enhanced version of the bullion coin. From the Mint glossary:
Proof: a specially produced coin made from highly polished planchets and dies and often struck more than once to accent the design. Proof coins receive the highest quality strike possible and can be distinguished by their sharpness of detail and brilliant, mirror-like surface.
[Or let me cite this handy defintion from "The Coin Site":
Proof Coins are specially made examples of regular issue coins historically used as gifts or for presentation.]
More on the history of proof coins issued in the US here. The gist - as best I can tell (but I have only paged through two books at the library and do not claim to be a numismatist), there are examples of conventional coins being struck without accompanying proof versions for collectors, but there are no examples of proof coins being struck for which there is no conventional circulating, commemorative or bullion counterpart. So more than two hundred years of Mint history and practice is consistent with the defintion provided above.]
My suggestion is that Prof. Tribe ask one of his students to take ten minutes to study this. Then we will get an answer that reflects the language used in the law.
LEGAL ADVICE FROM JON ADLER: Prof. Adler of the Volokh Conspiracy likes the bullion coins argument (in an update to his post) but thinks I am waving my hands on the "proof coins" concept. Well, halfway home is well begun!
At CNBC, a former mint director (Edmund Moy was the 38th director of the United States Mint, serving under Presidents Bush and Obama) makes the bullion coin argument then also waves his hands when he comes to proof coins. Troubling...
First, it may be legal to mint a platinum bullion coin with a $1 trillion face value, but it's not legal to pass it off as actually worth $1 trillion if there isn't $1 trillion of platinum in it. That's because it's a bullion coin and not a legal circulating coin.
...Third, the current law does allow the Mint to make a platinum proof coin and does not specify whether this applies to a bullion coin or a circulating coin. A proof coin refers to a mirror-like finish and is made for coin collectors. However, a proof coin must be accepted at face value. Some have argued that the law can be stretched to allow for a platinum circulating coin, but this would not be consistent with the intent of the original legislation.
I think we all agree as to intent. My question, or point, would be that normally a proof coin parallels the 'regular' version - proof quarters look like better quarters, proof gold coins look like better gold bullion coins, and so on. Are there any examples or anything at all to suggest that a fair reading of "platinum bullion coins and proof platinum coins" would refer to bullion coins and distinct circulating proof coins that have no bullion or base counterpart?
In support of my position I will cite the "proof silver quarters" that were beautiful silver versions of the circulating state commemorative quarters. The silver version had a face value of $0.25, but the market value was much higher (then and now). [I continue to belabor this 'proof' question in an update below.]
WOW: Here is a very deep legal objection to the coin that reflects a lot more research than Laurence Tribe did, and which I am not qualified to evaluate in short order. The gist:
The Federal Reserve would receive a coin on which would yield a profit of $1 trillion dollars based on the concept of seigniorage, which is the difference between the cost to produce the coin and the "face value" of the money stamped on it by the U.S. Mint. However, under the rules of both the American Eagle program and other commemorative programs, the coin does not become "legal tender" until the U.S. Mint is paid for the coin with other legal tender or an appropriately valued amount of bullion. Until the U.S. Mint was paid, the Federal Reserve would possess a rather beautiful coin worth only about $1,700, representing the intrinsic value of the platinum contained therein.
Who knew? Well, I can't confirm that. Apparently there are court cases:
In the recent case of the government confiscation of 1933 Saint-Gauden Double Eagle gold coins from the heirs of Israel Swift, the court ruling confirmed the validity of the legal tender concept. In the court ruling, Judge Davis cites precedents, including the government's original case against Israel Swift in 1934, and confirmed that until a U.S. Mint coin is bought and paid for, the coin is not considered to be legal tender. The concept of a coin not becoming legal tender until it was paid for was further confirmed in the sale of the Fenton-Farouk 1933 Double Eagle gold coin. When the Double Eagle was sold on July 30, 2002, for $7.6 million, an additional $20 was required to be paid to "monetize" the face value of the coin in order for it to become legal currency.
More on the Farouk-Fenton Double Eagle at Wikipedia, including this:
On July 30, 2002, the 1933 double eagle was sold to an anonymous bidder at a Sotheby's auction held in New York for $6.6 million, plus a 15-percent buyer's premium, and an additional $20 needed to “monetize” the face value of the coin so it would become legal currency, bringing the final sale price to $7,590,020.00, almost twice the previous record for a coin [link to CNN].
Moving on, one wonders how the Treasury could pay the mint for a Trillion Dollar coin?
To offset the liability to the U.S. Mint, the U.S. Treasury would have sell $1 trillion in bonds which can’t legally be done due to the limits placed on its borrowing capacity by the debt ceiling limit. The idea of a $1 trillion platinum coin becomes a fatally flawed solution that solves nothing.
Hmm, could the Fed buy it direct from the Mint? I think that any change in the standard rules and procedures for moving coins and money would invalidate the whole concept, but I am not by any means up to speed on just what the standard practice and bookkeeping looks like when moving coins from the Mint to the Treasury to the Fed. Some law starts here.
(4) Sale of bullion coins.—Each bullion coin issued under this subsection shall be sold by the Secretary at a price that is equal to or greater than the sum of—
(A) the face value of the coins; and
(B) the cost of designing and issuing the coins (including labor, materials, dies, use of machinery, overhead expenses, marketing, and shipping).
DO REMEMBER THE GROUND RULES: The Coiners carry the legal day if they can demonstrate that the text of the law is clear as read. The Intentionalists (my side) win if we can muddy the waters as to the meaning of the text sufficiently to oblige a judge (or opining attorney) to open the door to Congressional intent to resolve the language dispute. Let me quote Laurence Tribe:
Of course, Congress probably didn’t have trillion-dollar coins in mind, but there’s no textual or other legal basis for importing this probable intention into the statute. What 535 people might have had in their collective “mind” just can’t control the meaning of a law this clear.
Well, the textual basis for arguing that "bullion coins" means something important has been established. As to "proof platinum coins", the Intentionalists don't need to show that "proof coins" must mean something more than "coins" and that the distinction disqualifies the Trillion Dollar coin; we only need to show that such a construction is reasonable, and that Congressional intent and past practice must be referenced to clarify the meaning.
So, a definition: at About.com we learn that:
Definition: A proof coin is a coin struck using a special, high-quality minting process, and made especially for collectors...
You should never see proof coins in circulation, because they are made for collectors, and sold by the mint for more than face value.
That helps the Intentionalists.
Here is the US Mint describing their 'proof' gold coins:
The term "proof" refers to a specialized minting process that begins by manually feeding burnished coin blanks into presses fitted with special dies. Each coin is struck multiple times so the softly frosted, yet detailed images seem to float above a mirror-like field.
Nothing to suggest that some coins are struck only in 'proof' condition. In fact, the clear suggestion is that proof coins are a subset of a larger coin group. That helps the Intentionalists, since the Trillion Dollar plan seems to be to strike one (or more) 'proof' platinum coins that have no circulating or bullion counterpart. Very unusual practice, and probably not what 'proof' means.
Here is the US Mint describing their platinum proof coins (and you can't make this up):
In 2009, the United States Mint introduced a new six-year platinum coin program. This new series explores the core concepts of American democracy by highlighting the preamble of the U. S. Constitution. It will examine the six principles found in the preamble beginning with "To Form a More Perfect Union" in 2009, followed by "To Establish Justice" in 2010, "To Insure Domestic Tranquility" in 2011, "To Provide for the Common Defence" in 2012, "To Promote the General Welfare" in 2013...
Cool - a trillion dollar coin to "promote the general welfare". And to compound the ironies, the 2012 coin was totally not PC:
The 2012 reverse (tails) design is emblematic of the principle "To Provide for the Common Defence," the fourth of six principles of American democracy found in the Preamble to the United States Constitution....it features a vigilant minuteman from the Revolutionary War representing the protection and defense of the country during its early days. The minuteman carries a rifle and a book, which symbolizes the importance of knowledge in defending our Nation.
I am pretty sure the rifle signifies the importance of an armed citizenry. Awkward messaging. But I digress. None of these proof coins exist independently of underlying bullion coins, so again, score one for the Intentionalists.
Finally, let's turn to the law on coins. The phrase "proof" appears a few times, and I think we can reasonably attempt to infer its meaning from its other uses. Here we go, the first of many cites:
(C) The Secretary may continue to mint and issue coins in accordance with the specifications contained in paragraphs (7), (8), (9), and (10) of subsection (a) and paragraph (1)(A) of this subsection at the same time the Secretary in minting and issuing other bullion and proof gold coins
The next cite contemplates proof and conventional versions of a coin:
(j) General Waiver of Procurement Regulations.—
(1) In general.—Except as provided in paragraph (2), no provision of law governing procurement or public contracts shall be applicable to the procurement of goods or services necessary for minting, marketing, or issuing any coin authorized under paragraph (7), (8), (9), or (10) of subsection (a) or subsection (e), including any proof version of any such coin.
Next, our headliner:
(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins...
The next cite contemplates proof and conventional issuance:
(A) Quality of coins.—The Secretary may mint and issue such number of quarter dollars of each design selected under paragraph (4) in uncirculated and proof qualities as the Secretary determines to be appropriate.
So far, so good for the Intentionalists. The next is another pairing of proof and conventional coins:
(7) Issuance of numismatic coins.—The Secretary may mint and issue such number of $1 coins of each design selected under this subsection in uncirculated and proof qualities as the Secretary determines to be appropriate.
The next cite is another pairing of proof and conventional coins:
(6) Quality of coins.—The bullion coins minted under this Act shall be issued in both proof and uncirculated qualities.
Yet another pairing of proof and conventional coins:
(q) Gold Bullion Coins.—
(1) In general.—Not later than 6 months after the date of enactment of the Presidential $1 Coin Act of 2005, the Secretary shall commence striking and issuing for sale such number of $50 gold bullion and proof coins as the Secretary may determine to be appropriate...
More - this is a bit of nuts and bolts:
(B) Design.—The protective covering required under subparagraph (A) shall be readily distinguishable from any coin packaging that may be used to protect proof coins minted and issued under this subsection.Yet another pairing of proof and conventional coins:
(4) Issuance of numismatic coins.—The Secretary may mint and issue such number of $1 coins of each design selected under this subsection in uncirculated and proof qualities as the Secretary determines to be appropriate.
The next cite addresses the Washington DC coin with another pairing of proof and conventional coins:
(5) Quality.—The Secretary may issue the coins described in paragraph (1) in both proof and uncirculated versions...
Where's the proof? West Point:
(7) Mint facility.—Any United States mint, other than the United States Mint at West Point, New York, may be used to strike coins minted under this subsection other than any proof version of any such coin. If the Secretary determines that it is appropriate to issue any proof version of such coin, coins of such version shall be struck only at the United States Mint at West Point, New York.
Here is a finding in the 1997 amendments that brought us to this unhappy place; the context is the proposal to do a silver proof version (at a nice premium) of the conventional quarter:
(3) a circulating commemorative 25-cent coin program could produce earnings of $110,000,000 from the sale of silver proof coins and sets over the 10-year period of issuance, and would produce indirect earnings of an estimated $2,600,000,000 to $5,100,000,000 to the United States Treasury, money that will replace borrowing to fund the national debt to at least that extent.
Finally, a comment on the 50 States program, again keyed off of conventional quarters:
(A) Quality of coins.—The Secretary may mint and issue such number of quarter dollars of each design selected under paragraph (4) of this subsection in uncirculated and proof qualities...
I think it is more than fair to argue that "proof coins" meant something to Congress when it was written, and if we respect the meaning of those words the Trillion Dollar coin is out of bounds. In virtually every other usage "proof" is taken to mean an enhanced subset of a larger coin series. Yet there is no way this law allows a trillion dollar bullion coin (absent a trillion dollars worth of platinum) and there are no circulating trillion dollar coins awaiting their proof partners, as we have with the silver poof editions of conventional quarters.