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The Power of the Purse

George Will excoriates President Bush for his unauthorized use of TARP funds on the auto industry. Lost in the holiday shuffle and hollering from the Right has been any adequate discussion of the decision’s legality. Will writes:

On Friday the president gave the two automakers access to money Congress explicitly did not authorize. More money — up to $17.4 billion — than had been debated, thereby calling to mind Winston Churchill on naval appropriations: “The Admiralty had demanded six ships: the economists offered four: and we finally compromised on eight.”

The president is dispensing money from the $700 billion Congress provided for the Troubled Asset Relief Program. The unfounded assertion of a right to do this is notably brazen, given the indisputable fact that if Congress had known that TARP — supposedly a measure for scouring “toxic” assets from financial institutions — was to become an instrument for unconstrained industrial policy, it would not have been passed.

And it’s more brazen than that, of course. President Bush himself for weeks asserted that he hadn’t the authority to spend TARP funds on an industrial firm’s bailout. Will sees this as part of a larger Bush pattern of aggrandizement of power in the executive branch, largely in the realm of national security.

Regardless of legitimate disputes regarding the extent of the commander-in-chief’s powers in wartime, it is hard to argue that the power to appropriate billions for a new domestic venture (propping up car companies) doesn’t entirely reside in Congress.  There is nothing in the powers, purpose, and definitions set out in the TARP statutory language that remotely applies to loans to two failing car companies. (You don’t need to read all 451 pages to see that the car companies don’t meet the definition of “financial institutions.”) It is a blatant bait-and-switch, transforming a bill for purchasing “troubled assets” from financial institutions into a cash give away to car companies. (And for those getting into the weeds of TARP, the broad “considerations” sketched out in Section 103 do not constitute additional free-floating powers for the Treasury Secretary. They are just that — factors to be considered by the Treasury Secretary whose powers are circumscribed by “the authorities granted in this Act.”)

Will sums up:

With the automakers, however, executive branch overreaching now extends to the essence of domestic policy — spending — and traduces a core constitutional principle, the separation of powers.

Most members of the House and Senate want the automakers to get the money, so they probably are pleased that the administration has disregarded Congress’s institutional dignity. History, however, teaches that it is difficult for Congress to be only intermittently invertebrate.

It is unlikely given the time of year, the Republicans’ weakened condition, and the dawning of a new administration that any brave soul in Congress would attempt a legal challenge to the usurpation of the legislative branch’s spending power. But it would be nice to know that someone still cares about such things. In the past, executive attempts to grab power in the form of the line item veto and “impoundment” of budgeted funds were defeated in court actions. But there is nary a voice now to confront  even an egregious usurpation of Congressional authority (i.e. Congress refuses to pass authorizing legislation the President says is needed, so the President spends the money anyway). It’s a shame — some day Congressmen may regret that they did not defend their power of the purse.


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