burying the constitution under a tarp

8/3/2019 Burying the Constitution Under a Tarp

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BURYINGTHECONSTITUTIONUNDERATARPGARYLAWSON*

AskingwhetherthemodernadministrativestateisunconstitutionalislikeaskingwhetherYaleLawSchoolhasatendencytoemphasizetheory.Yesdoesnotdojusticetothequestion.The modern administrative state is not merely unconstitutional; it is anticonstitutional.TheConstitutionwasdesignedspecifically to prevent the emergence of the kinds of institutions that characterize the modern administrative state. Thefoundinggenerationwouldhavebeendumbstruckbythegovernmental

edifice

that

has

arisen

from

its

handiwork.

Just

con

sider that, during the founding era, the grand constitutionaldisputes about administration involved such matters aswhetherCongresss enumeratedpower to establishPostOffices and post Roads1 allowed Congress to create new postroads or merely to designate existing statecreated roads aspostalroutes,2andwhetherCongresscouldletthePresidentorPostmasterdetermine the locationofpostal routes or insteadhaditselftodesignatetheroutestownbytown.3

*Professor

of

Law,

Boston

University

School

of

Law.

Iam

grateful

to

the

Abra

hamandLillianBentonFundforsupport.1.U.S.CONST.art.I,8,cl.7.2.See,e.g.,LetterfromThomasJefferson toJamesMadison(Mar.6,1796), in3

THEFOUNDERSCONSTITUTION28 (PhilipB.Kurland&RalphLernereds.,1987)(arguing that thepostal roadpower extends only to the ability to select fromthose [roads]alreadymade, thoseonwhich there shallbeapost).Thedebateover the scopeof thepostalpower extended throughout thenations firsthalfcentury,withThomasJeffersonandJamesMonroe,amongothers,arguing thatCongress had no power to create new roads, andJamesMadison andJosephStory,amongothers,takingtheotherside.TheissuedividedtheSupremeCourtaslateas1845.SeeSearightv.Stokes,44U.S.(3How.)151,181(1845)(Daniel,J.,dissenting). For abrief account of the debate, seeGary Lawson& Patricia B.Granger,The Proper Scope of FederalPower:AJurisdictional Interpretation of theSweepingClause,43DUKEL.J.267,29495(1993).

3.See

GARYLAWSON,FEDERALADMINISTRATIVELAW4950

(4th

ed.

2007).

The

SecondCongress,afterdebate,electedtodesignatetheroutestownbytown.SeeActofFeb.20,1792,1,1Stat.23233(repealed1794).


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56 HarvardJournalofLaw&PublicPolicy [Vol.33

The architects of themodern administrative state fully understoodtheconstitutionalobstaclesintheirpath.AdministrativelawstudentsandscholarsarefamiliarwithJamesLandiss

dismissiveattitude

toward

the

Constitutions

separation

of

powers, as articulated in TheAdministrative Process.4 EquallyrevealingaretheearliercommentsofFrankGoodnowin1911,whenprogressiveswerestillstruggling togiveadministrativegovernanceafirmfootholdintheAmericansystem:

[S]pecialcarewastaken[intheConstitution]tosecuretherecognition of the fact that thenew governmentwas oneonlyofenumeratedpowers,and thatpowersnotgrantedto such governmentwere reserved to the states or to thepeople.

ForonereasonoranotherthepeopleoftheUnitedStatescamesoontoregardwithanalmostsuperstitiousreverence

thedocument

into

which

this

general

scheme

of

government

wasincorporated....

...The question naturally arisesbefore thosewho havenobeliefinastaticpoliticalsocietyorinpermanentpoliticalprinciplesofuniversalapplication[:] Is thekindofpoliticalsystemwhichwecommonlybelieveourfathersestablishedonewhichcanwithadvantageberetainedunchangedinthechangedconditionswhichareseentoexist?5

These thinkers understood that validating the administrativestate requiredeitheranewconstitution,whichmodernscholarsarewillingtosupplyinabundance,6oranewtheoryofcon

4.See,e.g.,JAMESM.LANDIS,THEADMINISTRATIVEPROCESS2,1014(1938).5.FRANKJ.GOODNOW,SOCIALREFORMANDTHECONSTITUTION911(1911).For

additionalexamplesofprogressiveawarenessofconstitutionalproblemswiththeformationofthemodernadministrativestate,seeRonaldJ.Pestritto,TheProgressiveOriginsoftheAdministrativeState:Wilson,Goodnow,andLandis,24SOC.PHIL.&POLY16,21(2007).6.Somearewillingtosupplyitdirectly.See1BRUCEACKERMAN,WETHEPEO

PLE:FOUNDATIONS34(1991).OthersdosoindirectlybysubstitutingfortheConstitutionprecedentsorpractices.See,e.g.,DavidA.Strauss,CommonLawConstitutionalInterpretation,63U.CHI.L.REV.877,877(1996)(arguingthatinterpretationsof theConstitutionrelynotjuston thefoundingdocumentbutalso thebodyoflawssincelaidout,largelybythecourts).StillotherssubstituteabstractphilosophicalconstructsfortheConstitution.See,e.g.,JAMESE.FLEMING,SECURINGCONSTITUTIONAL DEMOCRACY: THE CASE OF AUTONOMY 36 (2006) (arguing for a

constructivistinterpretative

methodology

that

builds

from

the

principles

that

bestexplainandjustifyagivensetoffundamentallegalmaterials).Tobesure,iftheConstitutioncontemplateditsownreplacementbysuchnorms,thesethinkers


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No.1] BuryingtheConstitution 57stitutionalism,whichhasobliginglyemergedunderthenameoffunctionalisman interpretative theory that effectively takesthe constitutionality of the administrative state as its starting

pointand

goes

from

there.7

Whatever

method

of

validation

the

champions ofmodern governance choose, theConstitution of1788istheobstaclethatmustbeavoidedorobliterated.As a practical matter, of course, the New Deal firmly ce

mented the administrative state, and we remain in that cementJimmyHoffaliketothisday.MygoalinthisEssayisnottodissolvethatcementbutmerelytohighlightthefactualpropositionthattheadministrativestatehasburiedtheConstitutionbeneathit.To gaugejust how far modern administration has veered

from theConstitution,considerasa representativecasestudytheEmergencyEconomicStabilizationActof2008,8whichcre

atedthe

Troubled

Assets

Relief

Program

(TARP).

Stripping

awaytwohundredpagesofpork,taxpreferences,andvariousoversight,reporting,andfasttrackprovisions,thesubstanceoftheTARP legislation isquite simple.Section101(a)(1)authorizestheSecretaryoftheTreasurytopurchase...troubledassets from any financial institution, on such terms and conditions as are determinedby the Secretary.9 The Secretary isfurther empowered to take such actions as the Secretary

wouldbecorrectasaninterpretativematter.Butitdoesnot.SeeU.S.CONST.art.VI,cl.2(declaring[t]hisConstitutiontobethethesupremeLawoftheLand(emphasisadded)).IhappilygrantthatanyoralloftheseConstitutionsubstitutes

maywell

be

excellent

descriptions

of

modern

practice

or

interesting

normative

politicaltheoriesorboth.IobjecttothemhereonlyasaccountsoftheactualConstitutionsactualmeaning.

7.For an account of functionalism as a rationalization for the administrativestate, seeGary Lawson, Prolegomenon toAny FutureAdministrative Law Course:SeparationofPowersandtheTranscendentalDeduction,49ST.LOUISU.L.J.885,88890(2005).8.EmergencyEconomicStabilizationActof2008,Pub.L.No.110343,122Stat.

3765(2008)(tobecodifiedinscatteredsectionsof12&26U.S.C.).

9.Id.101(a)(1),122Stat.at3767(tobecodifiedat12US.C.5211).Troubledassets are (A) residential or commercialmortgages and any securities, obligations,orother instruments thatarebasedonor related to suchmortgages, that[were]originatedorissuedonorbeforeMarch14,2008,thepurchaseofwhichtheSecretarydeterminespromotesfinancialmarketstability;and(B)anyotherfinancial instrument that the Secretary, after consultationwith theChairman of the

Boardof

Governors

of

the

Federal

Reserve

System,

determines

the

purchase

of

whichisnecessarytopromotefinancialmarketstability....Id.3(9),122Stat.at3767(tobecodifiedat12U.S.C.5202).


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5/18

No.1] BuryingtheConstitution 59queandreprisal,18aneedfulregulationoftheterritoryorotherpropertybelongingtotheUnitedStates,19oranythingelsethatremotelycomeswithinCongresssenumeratedpowers.Noris

italaw

necessary

and

proper

for

carrying

into

Execution20

anyof thesepowers. Whatgrantedpowerdoes itnecessarilyandproperlycarryintoexecution?

Thereis,infact,aseeminglyobviousmodernanswertothislast question. The TARP statute spends moneya startlinglyhugepileofmoneysosurelytheSpendingClauseauthorizesit. That mightbe a good answer if the Constitution actuallycontained a Spending Clause. I suspect that it will surprisemany people to learn, however, that the Constitution simplydoesnotcontainaSpendingClause,inthesenseofaprovision specifically dedicated to authorizing federal spending.ThereareseveralclausesintheConstitutionthatquitesensibly

andcorrectly

assume

that

Congress

somewhere

has

the

power

tospend,suchastheprovisionstipulatingthatnomoneymaybe withdrawn from the Treasury except pursuant to a validappropriation,21but none of these provisions itself authorizesfederalspending.

TheprovisionmostoftencitedinmodernlawasaSpendingClause22 is actually nothing of the sort. Article I, Section 8,Clause1providesthatCongressshallhavePower[t]olayandcollectTaxes,Duties,ImpostsandExcises,topaytheDebtsandprovide for the common Defence and general Welfare of theUnitedStates;butallDuties,ImpostsandExcisesshallbeuniformthroughouttheUnitedStates.23Notwithstandingtheex

istenceof

asubstantial

body

of

jurisprudence

and

scholarship

treating this provision as a Spending Clause, it is a TaxingClause and nothing more. The only power granted by thisclause is the power to lay and collect taxes. The clause thenspecifiesthepurposesforwhichCongressmaylayandcollecttaxes. That specification is important,because it makes clearthat Congress can use taxes for purposes other than raising

18.U.S.CONST.art.I,8,cl.11.19.U.S.CONST.art.IV,3,cl.2.

20.U.S.CONST.art.I,8,cl.18.

21.

U.S.

CONST.

art.

I,

9,

cl.

7.

22.See,e.g.,Sabriv.UnitedStates,541U.S.600,605(2004).23.U.S.CONST.art.I,8,cl.1.


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revenue, such asprotectionism or regulatory objectives,24buttheclauseconfersnopowertospendthemoneyraisedthroughtaxes,muchlessafreestandingpowertopromotethegeneral

welfarethrough

spending

or

other

means.

In

the

case

of

TARP,

itisparticularlyproblematictoinferthepowertospendfromthepowertotax.Abigchunkofthebailoutmoneywillcomefromborrowing,25 and good luck inferring apower to spendborrowedmoneyfromtheTaxingClause.26ThepowertospendintheConstitutioncomesfromtheNec

essary and Proper Clause: appropriations of funds are lawsnecessaryandproper forcarrying intoExecutionother federalpowers.27Butthen,inthecontextofTARP,onehastofindsomeenumeratedpowerthatappropriationstobuymortgagescannecessarilyandproperlycarryintoexecution.Ifthewordsnecessary and proper require anything more than a delu

sionalconnection

between

the

appropriations

law

and

an

enu

merated federal power,28 this task is impossible. The entireTARPenterprisewasunconstitutionalfromthebeginning.

24.Thisspecificationaddressedacontentiousissueineighteenthcenturytheoriesoftaxation.ForafullaccountoftheTaxingClause,seethemagisterialJeffreyT.Renz,WhatSpendingClause?(orthePresidentsParamour):AnExaminationoftheViewsofHamilton,Madison,andStoryonArticle I,Section8,Clause1of theUnitedStatesConstitution,33J.MARSHALLL.REV.81,96136(1999).

25.See Emergency Economic Stabilization Act of 2008, Pub. L. No. 110343,118,122Stat.3765,378687(2008)(tobecodifiedat12U.S.C.5228)(authorizingtheTreasurySecretarytouse31U.S.C.chapter31,whichprovidesforpublicdebtfinancing).26.Iam indebted toDavidEngdahl for this simplebutprofound insight.See

DavidE.

Engdahl,

The

Basis

of

the

Spending

Power,

18

SEATTLEU.L.REV.

215,

222

(1995) ([T]he spending allusion in the TaxingClausedoes not even colorablyreachborrowedsums.);seealsoDavidE.Engdahl,TheSpendingPower,44DUKEL.J. 1, 49 (1994) ([N]othing in theTaxingClause even implicitly contemplatesspendingsuchfunds[fromsalesoflandorotherproperty].).

27.Professor Engdahl has tried to locate the federal spending power in thePropertyClause,whichempowersCongresstodisposeofandmakeallneedfulRulesandRegulationsrespectingtheTerritoryorotherPropertybelongingtotheUnited States....U.S.CONST. art. IV, 3, cl. 2. See Engdahl, The Basis of theSpendingPower,supranote26,at24351.ForastructuralcritiqueofthisargumentandadefenseoftheNecessaryandProperClauseasthemostplausiblesourceoffederalspendingpower,seeGARYLAWSON&GUYSEIDMAN,THECONSTITUTIONOFEMPIRE:TERRITORIALEXPANSIONANDAMERICANLEGALHISTORY2732(2004).

28.I have spentmuch ofmy professional life arguing thusly. See, e.g.,GaryLawson,Discretion asDelegation:The ProperUnderstanding of theNondelegation

Doctrine,73

GEO.WASH.L.REV.

235,

24248

(2005)

(arguing

that

anecessary

implementing lawmusthavesomeobviousandpreciseaffinitywith the implementedpower);id.at24960(arguingthataproperimplementinglawmust


7/18

No.1] BuryingtheConstitution 61In the modern administrative state, the only thing excep

tionalaboutTARPisitssize.Theadministrativestateroutinelyspendsmoneyonmattersentirelyunconnectedtoanyenumer

atedfederal

power;

indeed,

by

almost

any

measure,

unconsti

tutionallyspendingmoney issurely theadministrativestatesmost common activity. Everything from the Social SecurityAdministrationtotheDepartmentofEducation totheFederalEmergencyManagementAgency(FEMA)isamonumenttotheadministrativestateswarontheConstitution.TheFEMAexamplecalls forthanother instructivecompari

sonwith the constitutionalworld of the 1790s.A firedevastated the city of Savannah on November 26, 1796, leadingsouthernrepresentativestoaskCongressfor$15,000to$20,000in government aid.29NathanielMacon ofNorthCarolina answered:[H]ewishedgentlementoputtheirfingerupon that

partof

the

Constitution

which

gave

that

House

power

to

afford

them relief....He felt for the sufferers,...buthe feltas tenderly for theConstitution;hehadexamined it,and itdidnotauthorizeanysuchgrant.30AndrewMooreofVirginiaaddedthateveryindividualcitizencould,ifhepleased,showhisindividualhumanitybysubscribingtotheirrelief;butitwasnotConstitutional for them to afford relief from the Treasury.31Theaidbillwasdefeated.32

II.

Even assuming that Congress somehow has the power to

turn

the

Treasury

Department

into

a

subsidiary

of

Country

wide,thestatutoryauthorizationtotheTreasuryinTARPviolatestheconstitutionalnondelegationprinciple.UnderstandingtheprinciplesoriginandwhatitentailsiscriticaltoappreciatingfullytheunconstitutionalityofTARP.33

conformtobackgroundunderstandingsoffederalism,separationofpowers,andindividualrights).

29.See6ANNALSOFCONG.171214(1796)(statementofWilliamSmith).30.Id.at1717(statementofNathanielMacon).31.Id.at1718(statementofAndrewMoore).

32.

See

id.

at

1727.

33.Foralongerformofthefollowingbriefargument,seeGaryLawson,DelegationandOriginalMeaning,88VA.L.REV.327,334(2002)andLawson,supranote28.


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The Constitutions nondelegation principle flows from themorebasicprincipleofenumeratedpowers.Anyfederalactororinstitutioncanexerciseonlythosepowersgrantedtoitpur

suantto

the

Constitution.

The

President,

and

through

him

the

TreasurySecretary,isgiven[t]heexecutivePower,34whichisquintessentially thepower to execute laws,not the power tomakelaws.35Lawmakingisgenerallythepurviewofthelegislativepower,36asubsetofwhichisvestedinaCongressoftheUnitedStates.37TheexecutivedepartmentsonlysharesinthisgenerallawmakingpowerarethePresidentsvetopower,38andtheVicePresidentspower tobreak ties in theSenate.39 Ifexecutive actors are making laws, they are exercising powersotherthanthosetheConstitutiongrantsthem.Tobesure, it isdifficulttodrawprecisedistinctionsamong

legislative, executive, and judicial powers, especially at the

margins.As

James

Madison

put

it,

these

interpretive

problems

prove the obscurity which reigns in these subjects,and...puzzlethegreatestadeptsinpoliticalscience.40Tothisthe Constitution responds: Get over it. The Constitutionseparately identifies legislative power, executive power, andjudicialpower,41anditisthereforeincumbentuponhonestinterpreters todo thebest that theycanwith thosedistinctions,howevertoughthatmightbe.42Itcanbevery tough.Someelementofdiscretion in imple

mentationand interpretation is inherent inexecutiveandju

34.

U.S.

CONST.

art.

II,

1

(The

executive

power

shall

be

vested

in

a

President.).

35.See,e.g.,Lawson,DelegationandOriginalMeaning,supranote33,at33843.

36.Onemust say generallybecause there are specific contexts inwhichtheexecutivepowerdoesincludewhatcanonlybedescribedasalawmakingcomponent:ThePresidentmay (and,asamatterof international law,must)governoccupied territoryduringwartime, exercisingwhat looks to theoutsideworld like legislativepower. SeeLAWSON&SEIDMAN, supranote27,at12223.37.U.S.CONST.art. I, 1 (vesting [a]ll legislativepowershereingranted in

Congress).

38.U.S.CONST.art.I,7,cls.23.39.U.S.CONST.art.I,3,cl.4.40.THEFEDERALISTNO.37,at228(JamesMadison)(ClintonRossitered.,1961).

41.SeeLawson,DelegationandOriginalMeaning,supranote33,at33741.

42.Madisonhimselflaternotedthepossibilityandnecessityofdiscriminating,

therefore,in

theory,

the

several

classes

of

power,

as

they

may

in

their

nature

be

legislative,executive,orjudiciary.THEFEDERALISTNO.48(JamesMadison),supranote40,at308.


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10/18

64 HarvardJournalofLaw&PublicPolicy [Vol.33eralpowers,andastatutethattriestoturnanexecutive(orjudicial)agent intoa lawmaker isnotproper forcarrying intoExecution thosepowers.Or,put anotherway, the executive

poweris

not

apurely

formal

power

to

implement

statutes

but

rather a power to implement statutes that do not confer thekindandqualityofdiscretionthatwouldconverttheexecutiveactor into a lawmaker. Far from authorizing delegations, theNecessary and Proper Clause is a textual vehicle throughwhichthenondelegationdoctrineisconstitutionalized.The Emergency Economic Stabilization Act authorizes the

Treasury Secretary to purchase anymortgages ormortgagebackedsecuritiesoriginatedonorbeforeMarch14,2008,thepurchaseofwhichtheSecretarydeterminespromotesfinancialmarket stability.48On its face, this looks like an unconstitutionaldelegation to theSecretary.Onmorecarefulconsidera

tion,it

looks

even

more

like

an

unconstitutional

delegation

to

the Secretary. In exercising his authority, the Secretarymustprevent unjust enrichment of financial institutions.49 AndCongress instructs the Secretary to take into considerationninefactors,thoughtheSecretarydoesnotactuallyhavetodoanythingspecificwiththesefactorsotherthanconsiderthem.50

48.Pub.L.No.110343,3(9),122Stat.3765,3767 (2008) (tobecodifiedat12U.S.C.5202).49.Id.101(e),122Stat.at3768(tobecodifiedat12U.S.C.5211).50.Id.103,122Stat.at3770(tobecodifiedat12U.S.C.5213)(Theninefac

torstobeconsideredare:(1)protectingtheinterestsoftaxpayersbymaximizingoverall returns andminimizing the impact on the national debt; (2) providingstability

and

preventing

disruption

to

financial

markets

in

order

to

limit

the

im

pactontheeconomyandprotectAmericanjobs,savings,andretirementsecurity;(3)theneedtohelpfamilieskeeptheirhomesandtostabilizecommunities;(4)indeterminingwhethertoengageinadirectpurchasefromanindividualfinancialinstitution, the longterm viability of the financial institution in determiningwhetherthepurchaserepresentsthemostefficientuseoffundsunderthisAct;(5)ensuring thatall financial institutionsare eligible toparticipate in theprogram,without discriminationbased on size, geography, form of organization, or thesize,type,andnumberofassetseligibleforpurchaseunderthisAct;(6)providingfinancial assistance to financial institutions, including those serving low andmoderateincomepopulationsandotherunderservedcommunities,andthathaveassetslessthan$1,000,000,000, thatwerewelloradequatelycapitalizedasofJune30, 2008, and that as a result of the devaluation of the preferred governmentsponsoredenterprisesstockwilldroponeormorecapitallevels,inamannersufficient to restore the financial institutions to at least an adequately capitalized

level;(7)

the

need

to

ensure

stability

for

United

States

public

instrumentalities,

suchascountiesandcities,thatmayhavesufferedsignificant increasedcostsorlosses in the currentmarket turmoil; (8) protecting the retirement security of


11/18

No.1] BuryingtheConstitution 65Fairlyread,theseprovisionsessentiallyinstructtheSecretary

topromotegoodness andnicenessand toavoidbadnessandmeannesswhichmeans, in theend,thatthestatutedoesnot

actuallydo

anything

other

than

authorize

the

Secretary

to

spendthreequartersofatrilliondollarsonmortgagesandrelatedsecurities.Therecertainlyseem tobeplentyof, inChiefJusticeMarshallswords, important subjects left entirely totheSecretary,andthatkindofdiscretioncertainlyseemstoexceed the executivePower that theConstitutionpermits thePresident,andthereforetheSecretary,toexercise.51But,alas,thingsareoftennot thatsimplewith thenondele

gationdoctrine.Suppose thatCongressappropriates $50milliontotheTreasuryDepartmentforofficeoperations.IsthatanunconstitutionaldelegationunlessCongress specifieshowmanypaperclips, staplers,and secretaries theTreasurymust

purchasewith

the

money?

Lump

sum

appropriations

have

beenaround foravery long time,and itwouldbequitestartling even to narrowminded originalists such as myself ifCongress had to specify every individualpurchase for everyagency.And if lump sumappropriationsof this sortarepermissible,isTARPallthatdifferent?Itisdifferent:Distributingfundstobailoutthefinancialin

dustry is an important subject, although figuring outwhether staplers or paper clips will run the office moresmoothly is a matter of less interest. Why? Because. Ultimately,analysisunderthenondelegationprinciple isamatter

Americansby

purchasing

troubled

assets

held

by

or

on

behalf

of

an

eligible

re

tirementplandescribedinclause(iii),(iv),(v),or(vi)ofsection402(c)(8)(B)oftheInternalRevenueCodeof1986,exceptthatsuchauthorityshallnotextendtoanycompensation arrangements subject to section 409A of suchCode; and (9) theutilityofpurchasingother real estateowned and instrumentsbackedbymortgagesonmultifamilyproperties.).51.Inan importantstudyof theevolutionof theTARPbailout,StephenDavi

doff andDavidZaring argue that, although SecretaryPaulsons original threepageproposal forbailoutauthoritymighthaveraisedconstitutionalnondelegationconcerns, thoseconcernsarepresentedlessobviouslyby thecongressionalstatutes thatelaboratedTreasurysresponsibilitiesand thatfollowed it. StevenM.Davidoff&DavidZaring,RegulationbyDeal:TheGovernmentsResponsetotheFinancialCrisis,61ADMIN.L.REV.463,516(2009). Buttheoperativelegalauthority in theoriginalproposal, see id.at514,wasnomorevagueorunconstrainedthanwas theoperative legalauthority in the final legislation. All thatchanged

fromPaulsons

three

pages

to

the

final

legislation

was

the

addition

of

enough

pork towinpassagefromreluctantHousemembersandsomeoversightmechanismsthatdonotlegallyconstrainthediscretionoftheSecretary.


12/18

66 HarvardJournalofLaw&PublicPolicy [Vol.33ofjudgment rather thandeduction, and there is nothing onecandoabout it. If someone trulybelieves that theSecretarysauthorityunderTARPdoesnotconcernimportantsubjects,I

reallydo

not

know

what

to

say

to

him.

Aswith thespendingofmoney, theonly thingnoteworthyaboutthescopeofdiscretiongrantedtotheTreasurySecretaryinthecontextofthemodernadministrativestateisthesizeofthe relevant budget. From a constitutional standpoint, thegrant of authority is routine. The authorization to buy upmortgages, the purchase ofwhich the Secretary determinespromotes financialmarket stability, is nomore open endedthan,forexample,theauthorizationtotheAdministratoroftheEnvironmentalProtectionAgency (EPA) toadoptambientairqualitystandardstheattainmentandmaintenanceofwhichinthejudgmentof theAdministrator,basedon [certain]criteria

andallowing

an

adequate

margin

of

safety,

are

requisite

to

protect thepublichealth.52That latterauthorizationwasupheld as constitutionalby a unanimous SupremeCourt in anopinionauthoredbyJusticeScalia.53Similarly, the factors thatCongress instructs the Secretary of the Treasury to considerunderTARParenotmateriallydifferentfromthepasseloffactors and considerations that the United States SentencingCommission was supposed to consider when adopting sentencingguidelinesundertheSentencingReformActof1984.54An effectively unanimous Court found the SentencingCommissionsauthorityconstitutional.55There are perfectly good reasonswhy onemightwant to

celebratethe

demise

of

the

nondelegation

doctrine.

56

But

con

sistencywiththeConstitutionisnotoneofthem.

52.42U.S.C.7409(b)(1)(2000).

53.SeeWhitmanv.Am.TruckingAssns,531U.S.457,474(2001).

54.See28U.S.C.994(a)(1)(2000).55.SeeMistrettav.UnitedStates,488U.S.361(1989).JusticeScaliadissentedbe

causeof thepeculiarfunctionof theSentencingCommission,butwithregardtowhethergrantsofdiscretiontoexecutiveorjudicialactorscouldeverbesovagueastoviolatethenondelegationdoctrine,JusticeScaliawas,ifanything,moreinsis

tent

than

was

the

majority

on

the

fruitlessness

of

the

inquiry.

Id.

at

41517,

20.

56.PeterM.Shane,LegislativeDelegation,theUnitaryExecutive,andtheLegitimacyoftheAdministrativeState,33HARV.J.L.&PUB.POLY103,108110(2009).


13/18

No.1] BuryingtheConstitution 67

III.

Perhapsthemostintellectuallyintriguingconstitutionalques

tionsurrounding

TARPa

question

with

potentially

sweeping

consequences for the administrative stateis whether Secretaryof theTreasuryHenryPaulsonwas constitutionallyauthorizedtoadministertheprogramduringtheBushAdministration.HenryPaulsonwas sworn in asTreasury SecretaryonJuly10,2006afterbeingconfirmedby theSenateonJune28,2006.57PaulsonsappointmentwasinfullconformancewiththeConstitutionsAppointmentsClause,forhewasnominatedby the President and confirmedby the Senate.58But inwhatcapacitywashe confirmed?TheSenateconfirmedhimas theTreasurySecretary,notastheAdministratoroftheEPAortheSecretaryofDefense.Suppose thatonJuly11,2006,Secretary

of

the

Treasury

Paulson

was

put

in

charge

of

establishing

am

bientairqualitystandardsunder theCleanAirAct,runningtheIraqwareffort,andrepresenting theUnitedStates in theUnited Nations. Could Secretary Paulson lawfully performthosefunctionsbyvirtueofbeingconfirmedasafederalofficerundertheAppointmentsClause?OrdidhisappointmentandconfirmationasSecretaryof theTreasuryonlyauthorizehim to perform functions reasonablywithin the contemplation of the appointing authorities, including the Senate thatconfirmedhim?Thequestion isactuallyquiteprofound.Federalappointees

arealwaysconfirmedinthecontextofspecificsetsofstatutory

authorizations

that

accompany

their

offices.

But

Congress

often

changesthosestatutoryauthorizationsbyexpansion,contraction, ormodificationduring the tenure of the officers.59Dotheofficershavetobereappointedandreconfirmedeachtimethereisanychangeintheirduties?Noonehaseverthoughtso;theinitialappointmenthasalwaysbeenunderstood,quitesensibly,to includetheauthorityto implementnewandchanged

57.152CONG.REC.S6615,6624(dailyed.June28,2006).58.SeeU.S.CONST.art.II,2,cl.2(requiringPresidentialnominationandSen

ateapproval);UnitedStatesv.LeBaron,60U.S.(19How.)73,78(1856)(WhenapersonhasbeennominatedtoanofficebythePresident,confirmedbytheSenate,andhiscommissionhasbeensignedbythePresident,andthesealoftheUnited

States

affixed

thereto,

his

appointment

to

that

office

is

complete.).

59.DavidR.Stras&RyanW.Scott,AreSeniorJudgesUnconstitutional?,92CORNELLL.REV.453,496(2007).


14/18


statutoryauthorizations.60Butare thereany limits to thenewauthoritythatcanbegiventoanexistingofficer,eitherbythePresident through reassignment61 or by Congress through

statutoryamendments,

and

if

so,

what

are

those

limits?62

The Supreme Court and the community of separationofpowers scholars havemanaged largely toduck this questionformorethantwocenturies.DavidStrasandRyanScott,intheonlyextendedacademic treatmentof thisproblemofwhich Iamaware,63makeagoodtextualandfunctionalcasethattheremustbesomelimittotheextenttowhichCongresscanalterthedutiesofanofficer,64buttheydonotofferclearguidanceaboutthenatureofthat limit.TheSupremeCourtfaced the issue in1994,holdingthatmilitaryofficerscanserveasmilitaryjudgeswithoutreceivingspecialappointmentsforthatpurpose.65TheCourtwentoutofitsway,however,todecidethecasewithout

announcingany

broad

principles

for

the

future.

In

particular,

60.Id.61.Iamnotaddressinghere theverydifficultquestionwhether thePresident

hasunilateralauthority toreassigndutieswithin theexecutivedepartment.ThecaseforsuchapowerarguesthatallexecutivePowerisvestedpersonallyinthePresidentbyArticleII,sothatthePresidentcanpersonallyassumeandthendelegateanyexecutiveauthority locatedanywhere in theUnitedStatesgovernment.SeeStevenG.Calabresi&SaikrishnaB.Prakash,ThePresidentsPowerToExecutetheLaws,104YALEL.J.541,59395(1994).ThecaseagainstsuchapowerarguesthatCongress,byvirtueofitsNecessaryandProperClausepowertocreatefederaloffices, candesignatewhich subordinateswithin the executivedepartmentcanpermissiblyexercisecertainclassesofexecutivepower(thoughCongresscannot,underthetheoryoftheunitaryexecutive,forbidthePresidentfrompersonallyexercisingatleastavetopoweroveranyuseoffederalexecutivepower).See

GeoffreyP.

Miller,

The

Unitary

Executive

in

aUnified

Theory

of

Constitutional

Law:

TheProblemofInterpretation,15CARDOZOL.REV.201,205(1993).

62.Note thatadifferentquorumoftheSenate(nottomentionadifferentSenate)mightconfirmanappointeeandthenparticipateinchangingthatappointeesauthorityafterconfirmation.63.Stras&Scott,supranote59,at494506.64.Textually,theyarguethatonlythePresidentandSenatecanappointprinci

palofficersandonly thePresident, thecourtsof law,andheadsofdepartmentscanappoint inferiorofficers;Congress, including theHouseofRepresentatives,hasnoappointmentpower.Id.at49495.Butallowingunlimitedchangesinandreallocations of the authority of officers would effectively grant Congress appointmentpower.Id.at495.Functionally,theyarguethatunlimitedreallocationsof power can shift appointment authority from the President toCongress andunderminetheaccountabilityconcernsthatunderlietheAppointmentsClause.Id.at 49596. Iwouldonly add that thedistinctionbetweenprincipal and inferior

officers

written

into

the

Appointments

Clause

makes

no

sense

unless

each

ap

pointedofficerhasfunctionsdefinedinsomefashionbyhisorherappointment. 65.SeeWeissv.UnitedStates,510U.S.163,16364(1994).


15/18

No.1] BuryingtheConstitution 69themajorityassumed,withoutdeciding,thatnewdutiesmustbegermanetothepreexistingfunctionsoftheofficerinordertoobviatetheneedforanewappointment.66JusticesScaliaand

Thomasconcurred

on

the

ground

that

germaneness

is

the

un

avoidablekeytosuchquestionsandthatthemajorityhadcorrectlydeterminedthatservingasamilitaryjudgeisgermanetobeingamilitaryofficer.67JusticesScaliaandThomasarecorrectthatgermanenessanalysis isunavoidable,asnoonehascomeup with a better way to articulate the limits of Congressspowertochangeanofficersauthority.Is administering TARP germane in this sense to the pre

October 2008duties of the Secretary of theTreasury?By thenature of the inquiry, there canbeno slamdunk answer,butnoisatleastplausible.Thesheerscopeoftheprogrammaybeenoughtorequireanewappointmentforanyonewho isgoing

toadminister

it.

Even

if

scope

alone

does

not

make

the

appoint

ment unconstitutional, the federal governments purchases ofownershipstakes inprivatefinancial institutionsmaybesufficientlynoveltogobeyondthefunctionsoftheTreasurySecretarycontemplatedbyareasonablePresidentorSenatein2006.IfoneacknowledgesthattheEmergencyEconomicStabiliza

tionActpresentsaseriousquestionabout theneed foranewappointment for Secretary Paulson, the consequences for theadministrative state are large.68 If one retroactively examinestheNewDeal,itisquitepossiblethatmanyofthestatutesfromthateragaveauthoritytoexistingofficersfarbeyondthedutiesforwhich theywereconfirmed,providingyetanother reason

whythe

New

Deal

was

unconstitutional.

69

And

if

we

are

about

66.TheCourtfoundthatservingasamilitaryjudgewasgermanetoservingasamilitaryofficerbecauseallmilitaryofficers,consistentwithalongtradition,playaroleintheoperationofthemilitaryjusticesystem.Id.at17475.67.Id.at196(Scalia,J.,concurringinpartandconcurringinthejudgment).68.Theconsequencesareobviouslylargerforthoseappointeeswhoreceivedor

requiredSenateconfirmation. In thecaseofan inferiorofficerappointedby thePresidentalone,anovelexpansionofdutiescouldbeaccommodatedsimplybyanewpresidentialappointment,whichisreallyjustpaperpushing.Thereisalwaysachance,however, that someonewho startsoutasan inferiorofficercouldbecomeaprincipalofficerthroughexpansionofdutiesaslongasthedefinitionofaprincipalofficerreliesatleastinpartonthescopeoftheofficersdutiesandnotjustontheformalchainofcommand.

69.As

an

aside,

that

would

also

mean

that

if

Bruce

Ackerman

wants

to

rescue

theNewDealasconstitutional,hisconstitutionalmomentmustalso involveanamendmenttotheAppointmentsClause.SeeACKERMAN,supranote6,at11920


16/18

70 HarvardJournalofLaw&PublicPolicy [Vol.33toembarkuponanewNewDeal,witheverincreasing formsofgovernmentcontrol, the limitsof theAppointmentsClausemaybestretched in theprocess.Ataminimum, itseems like

somethingfor

which

to

watch.

IV.

OnefurtherfeatureofTARPbearsmention.WhenCongressfailedtobailouttheBigThreeautomakersandtheirunionsinthefallof2008,theBushAdministrationonDecember19,2008unilaterally extended loans totaling $17.4 billion to GeneralMotorsandChrysleroutofthefundsavailableunderTARP.70IndulgeforthemomenttheassumptionthatobtaininganIOUfromanautomaker,thoughnotthepurchaseofamortgageormortgagebacked security, is the purchase of any [non

mortgage

related]

financial

instrument

that

the

Secre

tary...determines thepurchaseofwhich isnecessary topromote financialmarket stability.71Themorebasicproblem isthatTARPonlyauthorizespurchasesofassets fromafinancialinstitution,72whichthestatutedefinesas:

[A]ny institution, including,but not limited to, anybank,savingsassociation, creditunion, securitybrokerordealer,or insurancecompany,establishedandregulatedunderthelawsof theUnitedStatesoranyState, territory,orpossession of theUnited States...and having significant operationsintheUnitedStates,butexcludinganycentralbankof,orinstitutionownedby,aforeigngovernment.73

Are

automakers

really

financial

institution[s]?

Conceivably,acasualtextualistcouldstopatthewordsanyinstitution in thedefinitionoffinancial institutionandsaythatautomakersare institutions,soendofstory.Thatreasoning,ofcourse,wouldalsosweepinasfinancialinstitution[s]antique dealers,ballet troupes, and theAssociation ofCom

(stating that President Roosevelt and theNewDealCongress let the SupremeCourtJusticesbringabout theNewDeals constitutional legitimacy rather thancodifytheirprinciplesthroughamendments).70.SeeJimPuzzanghera&MartinZimmerman, Bush extends aid to carmakers,

L.A.TIMES,Dec.20,2008,atA1.

71.EmergencyEconomicStabilizationActof2008,Pub.L.No.110343,3(9),

122

Stat.

3765,

376667

(2008)

(to

be

codified

at

12

U.S.C.

5202).

72.Id.101(a)(1),122Stat.at3767(tobecodifiedat12U.S.C.5211).73.Id.3(5),122Stat.at376667(tobecodifiedat12U.S.C.5202).


17/18

No.1] BuryingtheConstitution 71

munity Organizations for Reform Now (ACORN). I am asmuchofatextualistasthenextpersonprobablymoresothanmanyofthenextpeoplebutifIamapproachingthistextasa

reasonablereader,

Iwill

interpolate

some

synonym

of

the

word

financial inbetween thewords any and institution inthedefinitionoffinancial institution.Thegrounds for thisfeat of (as a criticmight call it) interpretative legislation arethat thewordsany institutionappear inadefinitionoffinancialinstitution,the(nonexhaustive)examplesgiveninthestatute all have something towith finance, the two hundredpagesofstatutesurroundingthisdefinitiondealwithfinancialmatters,andthecontextinwhichthestatutewasenactedfairlyscreamsthatfinancial institutionmeans institutionsthatareinsomeimportantsensefinancial.Inalllikelihood,thefinancing arms of the automakerswhich have obtained loans of

their

own

apart

from

the

initial

$17.4

billion74

would

qualify

asfinancialinstitutions.Pawnshopsmightevenmakeitin.Butautomakers are no more financial institution[s] under thisstatutethanIam.HowdidPresidentBush explain the legality of thisuse of

funds? InhisstatementofDecember19,2008announcing theautobailout,hesaid:

Unfortunately,despiteextensivedebateandagreementthatweshouldpreventdisorderlybankruptciesintheAmericanautoindustry,Congresswasunabletogetabilltomydeskbeforeadjourningthisyear.

Thismeans theonlyway toavoida collapseof theU.S.auto

industry

is

for

the

executive

branch

to

step

in

....So

today Im announcing that the Federal Government willgrant loans to auto companiesunder conditions similar tothoseCongressconsideredlastweek.75

PerhapsImmissingsomething,butthisstatementseemstobeaclaimthatifthePresidentconsiderssomethingimportantforthe country, thePresident cando itwhetherornotCongressauthorizes itby statute.Presidentshavemade such claims in

74.See, e.g.,NeilKingJr.&DeborahSolomon,GMFinanceArm toGetaFreshBailout,WALLST.J.,May21,2009,atA1;MartinZimmerman,U.S.togiveGMACa

$5

billion

bailout,

L.A.

TIMES,

Dec.

30,

2008,

at

C2.

75.Remarks on theAmericanAuto Industry, 44WEEKLY COMP. PRES. DOC.1568,1569(Dec.19,2008).


18/18


the past, sometimes with success,76 and sometimes meetingstrong legalresistance,77butsuchclaimsarealwaystotally inappropriateunder aConstitution of enumeratedpowers that

merelygives

the

President

executive

Power.

The

executive

powersimplydoesnot includethepowertodoanythingthatthePresidentthinksisimportantforthecountry.78

****

The unconstitutionality of large chunks of themodern administrativestate isafact.But it isalsoafact thatNeptune isoccasionally farther from Earth than Pluto. Both facts haveaboutequal relevance in thecontemporary legalworld.Whatdoestheirrelevanceofsignificantunconstitutionalitysayaboutthe roleof theConstitution inmodern life?Thatquestion re

quires

another

conference

and

another

essay.

For

today,

I

am

justthemessenger,andthemessage isthattheadministrativestateandtheConstitutiondonotmix.

76.See Gary Lawson & Guy Seidman, The Hobbesian Constitution: GoverningWithoutAuthority,95NW.U.L.REV.581,61516(2001)(describingsuccessfulexecutiveclaimsofemergencypowertogovernCaliforniawithoutstatutoryauthority).

77.SeeYoungstown Sheet&TubeCo.v. Sawyer, 343U.S. 579, 58586 (1952)(holding that thePresident couldnot seizedomestic steelmillsduringwartimewithoutstatutoryauthorization).

78.Interestingly, for eight yearsmany people complained about an imperialpresidency,but Ihavenotheardonepeepoutofanyone in the legalacademy

decryingthis

simply

outlandish

assertion

of

presidential

authority.

Professor

ChristopherSchroederassuresmethathe,too,wasappalledbythisassertionofpresidentialauthorityandevendraftedanopedcolumnaboutit.

burying the constitution under a tarp

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