Is the Bank Bailout Unconstitutional?

Only a bunch of law students or academics could enjoy a debate over arcane constitutional theories such as the non-delegation doctrine. Yet, George Will in his column today, writes about the possible unconstitutionality of last fall’s bailout bill under precisely that doctrine.

In short, the non-delegation doctrine is a little-referenced doctrine under separation of powers principles that prohibits one branch of government from delegating its responsibilities to another branch. The Vesting Clause in Article I vests all legislative powers in Congress, which in theory prevents Congress from passing broad laws granting broad discretion to the Executive. As Will puts it, “Although the text does not spell [non-delegation doctrine] 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.”

A robust non-delegation doctrine would render illegitimate many of the federal government’s activities, but since the New Deal, the Supreme Court has shown little willingness to use the doctrine to invalidate federal law.

According to Will, by enacting the Emergency Economic Stability Act (EESA, or the legislation implementing the TARP), “Congress did not in any meaningful sense make a law. Rather it made executive branch officials into legislators.”

There are two reasons Congress passes discretion to the executive branch. First, democracy is a messy process that requires deliberation, compromise, and time. Granting power to the executive end-runs those barriers. Secondly, much of the Congress faces reelection every two years, so passing as much responsibility as possible to other branches allows its Members to avert the blame.

However, as Will states, “Even in the unlikely event that the executive branch exercises its excessive EESA discretion efficiently, the mere exercise would nevertheless subvert the principle of separation of powers which, as Justice Louis Brandeis said, was adopted ‘not to promote efficiency but to preclude the exercise of arbitrary power.'”

The federal government would be more efficient without substantial Congressional involvement. Yet, as we have seen since the New Deal, the federal government often uses its efficiency to infringe upon the liberties of the American public. A basic principle of our constitutional structure is that power is spread among the three branches and between the states and federal government to limit the ability of any of those institutions from acquiring the concentrated power to overlord arbitrarily.

Will further argues, “The Supreme Court has said: ‘That Congress cannot delegate legislative power to the president is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution.’ And the court has said that properly delegated discretion must come with ‘an intelligible principle’ and must ‘clearly delineate’ a policy that limits the discretion. EESA flunks that test.”

Perhaps. Chief Justice Rehnquist and Justice O’Connor were relatively committed to federalism and separation-of-powers principles. It remains to be seen, however, how committed Chief Justice Roberts and Justice Alito are to these principles, and the likelihood of a successful challenge to the EESA is unfortunately slim.


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