Congress Should Not Give Any Government Agency Financial Free Rein
Lawmakers should proactively retake the power of the purse from the Consumer Financial Protection Bureau, regardless of how the Supreme Court rules.
Can Congress give away its power of the purse to a regulatory agency? That's the important constitutional question the Supreme Court decided it will take on earlier this week. Regrettably, the Court can't answer the obvious follow-up question: Why would a legislature give away its own core authority?
Congress created the Consumer Financial Protection Bureau (CFPB) in 2010, in the wake of the Great Recession. The agency wields sweeping authority over "consumer finance," including everything from credit cards and car payments to mortgages and student loans. To this end, the agency writes and enforces rules imposing even billion-dollar penalties. Thus, the CFPB regulates millions of private citizens and businesses.
In this manner, the CFPB is no different than scores of other alphabet-soup agencies—the EPA, the SEC, etc.—with similar powers over different sectors of the economy (alas). With the CFPB, however, Congress tried something new: They gave a blank check to the regulatory powerhouse.
Rather than pleading with Congress for appropriations, like other agencies of its ilk, the CFPB simply takes what it wants from the Federal Reserve (up to 12 percent of the Federal Reserve's operating expenses, or $734 million in 2022). The CFPB, moreover, may roll over any unused funds into the next year. Last year, the CFPB took $641.5 million, and the agency has another $340 million in rollover money. Indeed, the CFPB's architects believed it was "absolutely essential" that the new regulator be "independent of the Congressional appropriations process."
But does the Constitution allow this sort of bureaucratic "independence" from Congress?
The Constitution's appropriations clause gives the power of the purse exclusively to Congress. On this, the Framers were quite deliberate. "The legislative department alone has access to the pockets of the people," explained James Madison in The Federalist Papers: No. 48. The general idea was that the people, through their representatives, should have a say in the disposition of their money. In addition, the appropriations clause also plays an important role in the separation of powers. As George Mason put it in Philadelphia in 1787, "the purse and the sword ought never to get into the same hands." Among other benefits, making agencies dependent on Congress for their annual budget allows elected representatives to police bad behavior by taking away money when the agencies act contrary to congressional intent.
In 2018, a group of lenders challenged the CFPB in federal district court, arguing that the agency's funding mechanism contravenes the appropriations clause. Although the district court sided with the government, the 5th Circuit reversed that decision, holding that "Congress's decision to abdicate its appropriations power … violates the Constitution's structural separation of powers." Subsequently, the government sought review by the Supreme Court, which was granted earlier this week. Next term, the Court will consider the constitutionality of the CFPB's blank check from Congress.
For more than a century, Congress has given away, or "delegated," much of its lawmaking authority to the federal bureaucracy. Last year, for example, regulatory agencies issued 3,168 final rules, while Congress passed 247 bills, according to regulatory scholar Wayne Crews.
Throughout much of the 20th century, lawmakers tempered these delegations through oversight and control of the purse strings. In the last few decades, however, an increasingly polarized Congress has abandoned meaningful engagement with the federal bureaucracy. In part, this decline is owed to the ascension of political party over institutional pride, such that half of Congress loses interest in runaway executive power whenever "their guy" occupies the Oval Office. And in part, it's due to electoral calculus: By avoiding hard decisions, lawmakers can evade political accountability. Adding it all up, the result is a modern Congress that does something as feckless as yielding its power of the purse to the CFPB.
Congress' hands-off approach to the CFPB reflects a fundamental breakdown in the Framers' design. A Congress that gives away its most important authority may be said to lack ambition. That's a big problem, because the Constitution's structure assumes that lawmakers would act the opposite. To prevent a dangerous concentration of power, the Framers divided government into three branches (legislative, executive, and judicial) and gave each the means to check the others. The animating principle, as James Madison famously explained in The Federalist Papers: No. 51, is to let "ambition … counteract ambition." A supine Congress undermines the separation of powers, which is a crucial bulwark for liberty.
Congress must rediscover its ambition, period. A good place to start would be for lawmakers to proactively retake the power of the purse from the CFPB, regardless of how the Supreme Court rules.
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>>>Why would a legislature give away its own core authority?
plausible deniability of ill-gained funds easier if an agent does it for me.
Or they just don’t give a shit.
Oh no. They give a shit. Thing is, they know that they’d be kicked out of office if they passed the rules that they want. So instead they delegate lawmaking to the executive so they can say it wasn’t their fault. That way they can get reelected.
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That’s exactly it. When unelected bureaucrats create rules with the power of law, and we complain to our elected representatives, they get to say their hands are tied.
It’s about time for a new revolutionary slogan.
I propose “No Legislation without Representation!”
Got news for you, bud, representatives DID legislate.
But if you mean no authority except as passed by representatives, it’s already there, in the Constitution, and that’s what this Supreme Court case is about.
I’ve got news for you, bud, executive rules have the power of legislation. Yet no representation. One Supreme Court case isn’t going to change that, especially since they tend to make their rulings as narrow as possible.
I got news for YOU. Are representatives DID NOT legislate. The created an agency and UNCONSTITUTIONALLY said they agency could legislate. That IS NOT in the Constitution.
What the Supreme Court case is about IS NOT the authority to legislate. It is about the authority to appropriate funds from the Treasury. Even merely reading ONE paragraph of THIS article would make you far more informed than you are.
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“Next term, the Court will consider the constitutionality of the CFPB’s blank check from Congress.”
Something to look forward to; hopefully it will not be so damned narrow as to be essentially useless regarding the rest of the swamp that Congress has abdicated its responsibility and accountability to.
This was, after all, Chief Warren’s little brain child.
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The Fed funds its own operations. The CFPB is part of the Fed which was a regulatory entity prior to 2010.
Case closed.
(The SCOTUS is a political entity and may well rule as such)
In related news, the Biden Administration just announced its 33rd aid package for Ukraine in the past 53 weeks.
https://twitter.com/theblaze/status/1631722309890330624
Yes, that’s almost 3 per month.
Introduced in the House as “The Wall Street Reform and Consumer Protection Act of 2009” (H.R. 4173) by Barney Frank (D–MA)
Ron Paul should have been in charge. All these problems wouldn’t exist starting with the Fed.
They should also take the power of the purse away from the President and his executive orders, so he doesn’t buy votes by paying off the debts of his supporters with taxpayer funds (really with new taxpayer debt, since there are no funds.)
Oh wait, he already doesn’t have that power, he just thought he did.
Congress Should Not Give Any President Including Joe Biden Financial Free Rein
But will the courts enforce?
Congress has consistently delegated its power, because it’s institutionally chickenshit. It’s why we had Roe v Wade, why presidents can go to war with no declaration. CFPB is just another instance.
BTW there shouldn’t be a standing army either, but, as Kermit says, that’s none of my business.
The standing army is becoming a joke as rural white Christian kids have no reason to join a woke/trannie military who promote folks based on equity not capability. Do you really want to go into combat with Admiral Levine leading you? And now the political commisars (equity advisors) being embedded at the company and soon platoon level will be the final straw. No youngster should even consider enlisting anymore.
i prefer a General like Milley who states his contempt and betrayal of the country outright saying he would warn the enemy of a first strike! Lead On!
(sarc)
Don’t worry, like the USSR the Political Commissars will be behind the lines to shoot and kill any soldiers that retreat or surrender. That is how you get snowflakes to fight.
It all starts with the Fed. End it and the whole welfare/warfare house of cards goes down taking along the ever growing grifter class of public sector elites, diversity consultants, defense consultants, education consultants and on and on…all parasites draining America. Love to see Yellen (who is an idiot) try and fund trillion-dollar deficits without the Fed. Foreign interventions would stop, the MIC/Education/Healthcare complexes would take a great hit, and the grifter class would probably flee back to whatever former communist eastern european country their ancestors came from.
Ukraine just had its Verdun. All over for corn pops buddy the corrupt Zelinsky. All the neocon/neolibs in the Biden admin can visit the old country and discuss how the czar was a bad guy to their ancestors and how Troytsky should have won but it’s pretty much over. The Big Red Machine is rolling …take that to the bank baby…