{"id":430,"date":"2022-10-20T13:01:03","date_gmt":"2022-10-20T13:01:03","guid":{"rendered":"https:\/\/conservative-politics.com\/index.php\/2022\/10\/20\/fifth-circuit-torpedoes-cfpbs-self-financing-and-takes-aim-at-bidens-academia-bailout-hotair\/"},"modified":"2022-10-20T13:01:03","modified_gmt":"2022-10-20T13:01:03","slug":"fifth-circuit-torpedoes-cfpbs-self-financing-and-takes-aim-at-bidens-academia-bailout-hotair","status":"publish","type":"post","link":"https:\/\/conservative-politics.com\/index.php\/2022\/10\/20\/fifth-circuit-torpedoes-cfpbs-self-financing-and-takes-aim-at-bidens-academia-bailout-hotair\/","title":{"rendered":"Fifth Circuit torpedoes CFPB’s self-financing — and takes aim at Biden’s Academia bailout \u2013 HotAir"},"content":{"rendered":"


\n<\/p>\n

\n

This decision by the Fifth Circuit is, to quote our current president, a \u201cbig f***ing deal.\u201d And that\u2019s not just because it vindicates Republican opposition to the structure of the Consumer Financial Protection Board, although it certainly does that. And it\u2019s not just because it dismantles \u2014 for now \u2014 a bad policy that the CFPB was pushing at the moment, although it does do that, too.<\/p>\n

No, this decision<\/a> has far-reaching consequences in reminding everyone that the executive branch and its subordinate agencies cannot constitutionally generate its own funding separate from Congress. And that will be a very<\/em> big f***ing deal in a matter just getting into the courts at the moment:<\/p>\n

\n

A federal appeals court found the U.S. Consumer Financial Protection Bureau is funded through an unconstitutional method, a ruling that threw out the agency\u2019s regulation on payday lenders and struck a blow against how the agency operates.<\/p>\n

The decision, by a three-judge panel of the Fifth U.S. Circuit Court of Appeals in New Orleans, found the CFPB\u2019s funding structure violated the Constitution\u2019s doctrine of separation of powers, which sets the authority of the three branches of government. Congress has the sole power of the federal purse, and the bureau\u2019s funding structure undercuts that authority, the court said.<\/p>\n

When Congress created the CFPB through the 2010 Dodd-Frank financial overhaul law, it exempted the agency from the annual legislative appropriations process. Rather than having Congress review and vote on its budget, the bureau gets its money through transfers from the Federal Reserve, up to a certain cap. The Fed can\u2019t turn down requests under that cap.<\/p>\n

\u201cCongress\u2019s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution\u2019s structural separation of powers,\u201d Judge Cory Wilson wrote for the court. All three judges on the panel were appointed by former President Donald Trump.<\/p>\n<\/blockquote>\n

Why did Democrats structure the CFPB\u2019s financing in that manner in the first place? They knew that Republicans would defund the CFPB when they had enough control of Washington again. This funding mechanism essentially made the CFPB \u201ca fourth branch of government,\u201d as retiring Sen. Ben Sasse put it in a statement yesterday<\/a> celebrating the decision. The only way to eliminate funding for the CFPB would have been to repeal it by statute, and Democrats would have blocked such an effort in the Senate through the filibuster.<\/p>\n

No other agency has that kind of autonomy from Congress. Constitutionally speaking, the CFPB \u2014 or at least its funding \u2014 is an abomination to the concept of checks and balances. Elizabeth Warren and her allies explicitly designed it to be free of any sort of accountability, an expression of (Woodrow) Wilsonian rule-by-elites that is extreme even in a bureaucracy long operating for its own benefit and purposes rather than under the strict control of elected officials in the legislature.<\/p>\n

However, it\u2019s not the\u00a0only<\/em> example of such arrogance. In August, Joe Biden announced that he would unilaterally forgive student loans, committing several hundred billion dollars to buying it out without any authorization or appropriation from Congress. This decision sends a shot across Biden\u2019s bow on his Academia bailout, especially since at least one of the lawsuits against it will take place in the Fifth Circuit\u2019s jurisdiction in Texas.<\/p>\n

Judge Cory Wilson\u2019s logic<\/a> in dismantling the CFPB\u2019s autonomy clearly applies directly to the core issue in Biden\u2019s loan-forgiveness plan:<\/p>\n

\n

Drawing on the British experience, the Framers \u201ccarefully separate[d] the \u2018purse\u2019 from the \u2018sword\u2019 by assigning to Congress and Congress alone the power of the purse.\u201d Tex. Educ. Agency v. U.S. Dep\u2019t of Educ., 992 F.3d 350, 362 (5th Cir. 2021). 8 The Framers\u2019 reasoning was twofold. First, they viewed Congress\u2019s exclusive \u201cpower over the purse\u201d as an indispensable check on \u201cthe overgrown prerogatives of the other branches of the government.\u201d The Federalist No. 58 (J. Madison). Indeed, \u201cthe separation of purse and sword was the Federalists\u2019 strongest rejoinder to Anti-Federalist fears of a tyrannical president.\u201d Josh Chafetz, Congress\u2019s Constitution, Legislative Authority and the Separation of Powers 57 (2017).<\/p>\n

The Framers also believed that vesting Congress with control over fiscal matters was the best means of ensuring transparency and accountability to the people. \u2026<\/p>\n

The text of the Constitution reflects these foundational considerations. First, even before enumerating how legislation becomes law (i.e., passage by both houses of Congress and presentment to the President for signature), the Constitution provides that \u201c[a]ll Bills for raising Revenue shall originate in the House of Representatives . . . .\u201d U.S. Const. art. I, \u00a7 7, cl. 1. It then grants the general authority \u201c[t]o lay and collect Taxes\u201d and spend public funds for various ends\u2014the first power positively granted to Congress by the Constitution. Id. art. I, \u00a7 8, cl. 1. Importantly though, that general grant of spending power is cabined by the Appropriations Clause and its follow-on, the Public Accounts Clause: \u201cNo money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.\u201d<\/p>\n

The Appropriations Clause\u2019s \u201cstraightforward and explicit command\u201d ensures Congress\u2019s exclusive power over the federal purse. OPM v. Richmond, 496 U.S. 414, 424 (1990). Critically, it makes clear that \u201c[a]ny exercise of a power granted by the Constitution to one of the other branches of Government is limited by a valid reservation of congressional control over funds in the Treasury.\u201d Id. at 425. Of equal importance is what the clause \u201ctakes away from Congress: the option not to require legislative appropriations prior to expenditure.\u201d Kate Stith, Congress\u2019 Power of the Purse, 97 Yale L.J. 1343, 1349 (1988). Given that the executive is forbidden from unilaterally spending funds, the actual exercise by Congress of its power of the purse is imperative to a functional government. The Appropriations Clause thus does more than reinforce Congress\u2019s power over fiscal matters; it affirmatively obligates Congress to use that authority \u201cto maintain the boundaries between the branches and preserve individual liberty from the encroachments of executive power.\u201d All Am. Check Cashing, 33 F.4th at 231 (Jones, J., concurring). \u2026<\/p>\n

Justice Scalia similarly observed that, while the requirement that funds be disbursed in accord with Congress\u2019s dictate and Congress\u2019s alone may be inconvenient, \u201cclumsy,\u201d or \u201cinefficient,\u201d it \u201creflect[s] \u2018hard choices . . . consciously made by men who had lived under a form of government that permitted arbitrary governmental acts to go unchecked.\u2019\u201d NLRB v. Noel Canning, 573 U.S. 513, 601\u201302 (2014) (Scalia, J., concurring) (quoting INS v. Chadha, 462 U.S. 919, 959 (1983)). In short, the Appropriations Clause expressly \u201cwas intended as a restriction upon the disbursing authority of the Executive department.\u201d Cincinnati Soap Co. v. United States, 301 U.S. 308, 321 (1937).<\/p>\n<\/blockquote>\n

Given the highly controversial nature of Biden\u2019s bailout, this looks like a serious effort at throat-clearing by the Fifth Circuit at this particular moment in time. Biden\u2019s loan forgiveness plan explicitly violates everything Judge Wilson writes about the constitutional framework dealing with appropriations and disbursement.<\/p>\n

And in the case of Biden\u2019s unilateral declaration, the crisis is even more acute. The CFPB\u2019s structure threatened to make it a fourth branch of government with no accountability to the other three. Biden\u2019s action threatens to effectively reduce government to\u00a0one<\/em> branch \u2014 the executive \u2014 by ending Congress\u2019 \u201cexclusive power over the federal purse.\u201d That would be the\u00a0biggest<\/em> f***ing deal in constitutional order since the Civil War, if not in the history of the United States, triggered by a demented fool who wanted to buy votes in an election.<\/p>\n

Let\u2019s hope that the plaintiffs in these lawsuits against Biden\u2019s Academia bailout take a page from\u00a0CFSAA v CFPB<\/em> and make that point explicitly in their arguments \u2014 especially in the Fifth Circuit\u2019s jurisdiction. And\u00a0soon<\/em>.<\/p>\n<\/div>\n