Jan 19 2009
FreedomWorks to possibly challenge Constitutionality of the Bailout
Whether or not you believe the Bailout will help the economy or not, libertarians and some conservatives believe what needs to be asked is “Is the Bailout Constitutional?” The FreedomWorks Foundation, chaired by Dick Armey , said it is planning to file a lawsuit challenging the law.
The law creating the Bailout program was The Emergency Economic Stabilization Act of 2008 , quickly passed last October. The Bailout has since been known as TARP , or Troubled Assets Relief Program. The main constitutional argument against it is that it oversteps the amount of power legislators can delegate to the executive branch. Also, it has illegally grown far beyond its originally stated purpose of helping the financial services industry.
Last week the Foundation distributed a memo to Congress saying, “when Congress delegates so much authority to the executive branch with so few rules to guide its discretion, Congress unconstitutionally transfers its lawmaking power to the executive.” It continues, “As far as we can tell, Congress has never delegated so much power to an executive agency with so little to constrain the agency’s discretion.”
Robert Levy of the Cato Institute laid out the Constitutional arguments back in October, seeing three main reasons why it would be beneficial to find the law unconstitutional - “…a declaration of unconstitutionality, if justified, serves three vital purposes today. It imposes a heavy burden on proponents of the bailout to explain why the Constitution can be violated with impunity. It reinforces the case for abandoning the program once any true emergency has passed. And it helps establish a presumption against adopting similar measures that might be proposed to resolve future ‘emergencies.’”
And so he asks if it is Constitutional. His conclusion?
“It is not. The federal government has no constitutional authority to spend taxpayers’ money to buy distressed assets, much less to take an ownership position in private financial institutions. And Congress has no constitutional authority to delegate nearly plenary legislative power to the Treasury secretary, an executive branch official.
Congress can proceed only from legitimate authority, not from good intentions alone. That means we must find a constitutional pedigree for each proposed law.”
Yet there has been no debate on the subject, instead we have seen the numerous powers fighting over what they are going to do with the money they took from the taxpayers under the auspices of helping the taxpayers and saving the entire economy. Once again the fundamental issue is ignored.
Sources - ABA Journal Constitutionality of Bailout Law is Questioned January 16, 2009
New York Times Some Ask if Bailout is Constitutional January 15, 2009
Cato Institute Is the Bailout Constitutional? October 20, 2008
