Keeping the bailout constitutional
September 26, 2008| By Nathaniel Ward
The draft bailout legislation is deeply troubling from a constitutional perspective, Heritage legal scholars Todd Gaziano and Andrew Grossman write.
They outline four principal constitutional concerns:
- Congress's enumerated power—or lack thereof—to intervene with private markets in the manner contemplated;
- The lack of meaningful standards to guide the extremely broad grant of discretion to the Treasury secretary (the "legislative delegation" problem);
- Limitations on judicial review over the exercise of that almost limitless discretion; and
- Related separation of powers concerns.
Instead of "employ[ing] narrow legalistic arguments" to bypass the Constitution, Gaziano and Grossman argue, lawmakers must be cautious and ensure they think through these very serious questions.
"To satisfy the substantial constitutional and policy concerns," they explain, "the draft legislation must cabin the scope and character of the Treasury secretary's discretion, connect the exercise of that discretion to legitimate government purposes, and allow Americans adversely affected to seek meaningful judicial review."
