Chabot on The Founders' Purse @KexelChabot @mulaw

Christine Kexel Chabot, Marquette University Law School, has published The Founders' Purse as Marquette Law School Legal Studies Paper No. 23-03. Here is the abstract.

This Article addresses a new and impending war over the constitutionality of broad delegations of spending power to the executive branch. In an opening salvo, the Fifth Circuit held that Congress unconstitutionally delegated its power of the purse to the Consumer Financial Protection Bureau, and the Supreme Court has agreed to review its decision this term. Notwithstanding the fact that Congress authorized the Bureau’s budget “by law,” the Fifth Circuit held that this law violated the Appropriations Clause because it granted the Bureau substantial budgetary independence in two key respects: first, it afforded the Bureau broad discretion to self-direct its budget for an unlimited duration, and second, it granted the Bureau permanent funds that were drawn from interest-based earnings of the Federal Reserve system. The Fifth Circuit supported this conclusion with an ambitious but highly selective originalist interpretation of Article I, section 9’s Appropriations Clause. Defenders of the Fifth Circuit’s ruling have likewise justified its holding with formalist and originalist arguments that the Bureau’s budgetary independence amounts to an unconstitutional delegation of legislative spending power. The broader debate about delegation of spending power extends beyond the Bureau and calls into question laws awarding similar budgetary independence to financial regulators such as the Federal Reserve as well as the Biden Administration’s ability to forgive student loans (and spend debt owed the government) “without specific statutory authorization.” Originalist claims to a nondelegation doctrine that limits the duration, generality, and source of spending in laws passed by Congress have missed a critical body of contrary historical evidence introduced by this Article. First, records of the Constitutional Convention show that the delegates approved new and durable congressional revenue and spending powers to support the U.S. government and its credit while declining proposals for general temporal limitations on Congress’s revenue and spending powers. Second, early congresses repeatedly put these new and durable spending powers to use in laws that bypassed all three proffered limitations on duration, generality, and source of funding. To support U.S. credit, and upon the recommendation of Secretary of the Treasury, Alexander Hamilton, early congresses granted an agency known as the Sinking Fund Commission power to self-direct a permanent fund that was drawn from interest-based earnings on debt held by the United States. To establish an affordable new federal government, early congresses also funded a majority of federal officers including core law enforcement officials and even a new agency through permanent and independently directed fees that were paid by private parties. This history shows that Article I, section 9 means what it says and requires only that Congress authorize spending “by law.” Critics who have questioned the constitutionality of broad delegations of spending power have strayed from the lessons of both text and history.

Download the article from SSRN at the link.