More about the unconstitutional bailout legislation

There has been a lot of interest in the constitutionality of the Emergency Economic Stabilization Act of 2008 (EESA) and the TARP funds. I see a lot of Internet searches about this. George Will has a very good piece in the Washington Post about this topic:

By enacting it, Congress did not in any meaningful sense make a law. Rather, it made executive branch officials into legislators. Congress said to the executive branch, in effect: "Here is $700 billion. You say you will use some of it to buy up banks' 'troubled assets.' But if you prefer to do anything else with the money -- even, say, subsidize automobile companies -- well, whatever."

FreedomWorks, a Washington-based libertarian advocacy organization, argues that EESA violates "the nondelegation doctrine." Although the text does not spell it out, the Constitution's logic and structure -- particularly the separation of powers -- imply limits on the size and kind of discretion that Congress may confer on the executive branch.

One of the beauties of the U.S. Constitution is separation of the three branches of power: Executive, Legislative, and Judicial. With EESA, Congress is giving the president unconstitutional powers by allowing him to write the specifics of the law, i.e. how the money is to be appropriated. That should be Congress' job!

Taxpaying citizens like you and I ought to be enraged by this! It's evident that we have a lazy Congress bowing to the demands of a fear-mongering President. And now the next two or more generations of Americans are to pay for the astronomical debt -- bought up by the billions by Communist China. The consequences of ignoring the Constitution is grave...

Is TARP constitutional?

The Trouble Asset Relief Program was passed by Congress and signed into law to thaw the credit crisis. At least that was its initial plan. But in reality the law gave much broader authority to the Treasury Secretary in using TARP funds, some hundreds of billions of dollars. In drafting the legislation, members of Congress met with Secretary Paulson and Chairman Bernanke to learn more about the problem. It was evident that either Paulson and Bernanke weren't able to adequately explain the situation, or lawmakers had no intention of fully understanding the crisis. The bill was passed within a few days, amid some lawmakers' admission of not really knowing what's going on, but "something had to be done."

George Will writes in Newsweek:

John Locke's "Second Treatise of Civil Government" (1609), which deeply influenced America's Founders, says: "The legislative cannot transfer the power of making laws to any other hands: for it being but a delegated power from the people, they who have it cannot pass it over to others." And: "The power of the legislative ... being only to make laws, and not to make legislators, the legislative can have no power to transfer their authority of making laws, and place it in other hands."

But that is essentially what TARP has done. It has made Treasury Department bureaucrats into legislators; or perhaps it has made Secretary Hank Paulson the fourth branch of government...

Our lawmakers sort of gave up on learning in detail about the crisis, and just lazily pressed for a vote on TARP. They threw up their arms and decided that letting the Treasury do all the work would be easier. And look at the situation now: more bailouts, more companies and municipalities asking for monetary aid, and more uncertainty from Paulson and Bernanke.