Bailout Bill Is Unconstitutional Delegation

by Hans Bader on September 25, 2008 · 10 comments

in Bailout Watch, Economy, Legal, Politics as Usual

Constitutional experts have concluded that that the $700 billion bailout bill is an unconstitutional delegation of power, in violation of constitutional separation-of-powers safeguards.  I earlier reached the same conclusion in pronouncing the bill “dangerous, inflationary, unnecessary, and unconstitutional.”  One of the experts calling its constitutionality into question is Civil Rights Commissioner and Heritage Foundation scholar Todd Gaziano, a separation-of-powers expert who, as a Justice Department lawyer in the Clinton and Bush administrations, “developed the argument adopted by the Supreme Court in Weiss v. United States, 510 U.S. 163 (1993) to uphold the constitutionality of judges detailed to hear cases in the military court system.”  Gaziano and Andrew Grossman argue that the bill is likely unconstitutional because it lacks meaningful standards and bars judicial review.

As we noted earlier, the bailout may risk creating future bubbles, and it ignores less costly ways of rescuing financial markets, like the RSC plan, and fails to consider reforms of burdensome regulations that might reduce the need for a bailout.  Why should we trust government officials with $700 billion to buy up bad loans, without any clear standards, given that government incompetence and regulations (like affordable housing mandates) helped spawn the crisis?  Many economists oppose it.

CEI has been warning of the need for reform of mortgage giants Fannie Mae and Freddie Mac for years, as Michelle Malkin noted back in 2004, but Congress turned a deaf ear to our pleas, and taxpayers are now paying the price.

Jarl Osbiorn September 25, 2008 at 7:31 am

You abdicated the right to claim any act is UNCONSTITUTIONAL by supporting, for 7 years now, an administration which has attempted at every turn to eviscerate the very document you now exhort. Did you stand up and decry all of the unconstitutional aggrandizing of authority by the Executive branch over the past two terms? Where were your separation of powers arguments back then?You free marketeers are all the same: hypocrites blinded by insatiable greed.

Dave September 25, 2008 at 9:07 am

Jarl, I take it then that you agree the bill is unconstitutional? All else is irrelevant, including your opinion of the Bush administration.

Nancyf September 25, 2008 at 11:13 am

Class-action lawsuit by the citizens of the U.S. So let it be written, so let it be done…

Hans Bader September 25, 2008 at 11:58 am

Well, I did criticize the Bush Administration's use of torture in this blog, and elsewhere, repeatedly. Alas, lawmakers of both parties were apprised early on about the use of coercive techniques, and they did not even object (according to the Washington Post), at least until after the Administration's popularity declined. Never mind that torture produces unreliable intelligence and bogus orange alerts. (By the way, "extraordinary rendition" began under Clinton). Don't assume that things would have been any different under an administration with a different ideology. The stupidity crosses party lines, unfortunately. The temptation to cut corners in intelligence gathering is always present.

David Johnston October 21, 2008 at 6:10 pm

On Wednesday, October 14, 2008, the eyes of the world were fixed on Hempstead, New York and the third and final U.S. Presidential Debate. Sen. Barack Obama of Illinois entered the arena with an eight-point lead according to an average of national polls as compiled by CNN, and it appeared that he was content to sit on that lead. Sen. John McCain of Arizona took advantage of Obama’s laurel resting and brought the fight to him regarding the younger candidate’s policies, judgment and qualities of character. When Obama did adopt a more critical stance regarding the economic policies of the past eight years, McCain was quick to point out that he is “not President Bush.” He stated that he would enact an “across the board spending freeze,” take a hatchet to some programs and use a scalpel on the remainder once the dust settled. Obama’s stance sounded more conservative; he would “go through the federal budget page by page, line by line” in order to close programs that aren’t working as they should. Both candidates claim their economic plans will bring needed change to a broken America, but will it leave consumers with the ability to choose where and when they’ll have access to payday loans? That remains to be seen. Just because Americans see themselves as living in “the land of the free” doesn’t mean that interest groups (i.e. banks and credit unions) want them to have the freedom to choose.Post Courtesy of Personal Money StoreProfessional Blogging TeamFeed Back: 1-866-641-3406Home: http://personalmoneystore.com/NoFaxPaydayLoans……Blog: http://personalmoneystore.com/moneyblog/

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