The Bank Bailout is Unconstitutional
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.
The Vesting Clause of Article I says, "All legislative powers herein granted shall be vested in" Congress. All. Therefore, none shall be vested elsewhere.
Will proposes a hypothetical to make his point.
Suppose Congress passes the Goodness and Niceness Act. Section 1 outlaws all transactions involving, no matter how tangentially, interstate commerce that do not promote goodness and niceness. Section 2 says that the president shall define the statute's meaning with regulations that define and promote goodness and niceness and specify penalties for violations.
Surely this would be incompatible with the Vesting Clause. Where would the Goodness and Niceness Act really be written? In Congress? No, in the executive branch. Lawson says that nothing in the Constitution's enumeration of powers authorizes Congress to enact such a statute. The only power conferred on Congress by the commerce clause is to regulate. The Goodness and Niceness Act does not itself regulate, it just identifies a regulator.
The Constitution empowers Congress to make laws "necessary and proper" for carrying into execution federal purposes. But if gargantuan grants of discretion are necessary, are the purposes proper? Indeed, such designs should be considered presumptively improper. What, then, about the Goodness and Niceness Act, which, as Lawson says, delegates all practical decision-making power to the president? What about EESA?
These articles are interesting, and as one opposed to the bailouts, they add to my arguments against them. But I don't see the issue ever coming before a court. I am not sure who would have standing to challenge such a law, and the articles don't purport to provide an answer to that question. My main hope is that once TARP II inevitably comes around, these constitutional arguments can give legal teeth to public bailout fatigue adding another hurdle to he administration's attempt to pass legislation.