Supreme Court hears case against CFPB, including unusual claim concerning government powers: CEI analysis

Today, the Supreme Court heard oral argument in CFPB v. CFSA, in which the Court will decide if the CFPB’s funding structure, which bypasses congressional appropriations in favor of funding through the Federal Reserve, is constitutional. CEI Attorney Devin Watkins attended oral argument and criticized the government’s position as a significant change in our understanding of the power wielded by government.

“At oral argument today, the Supreme Court considered: Can Congress authorize agencies to spend unlimited sums on a perpetual basis without further action by Congress? If that occurs, the deliberately crafted separation of the ‘power of the purse’ in Congress and the ‘power of the sword’ in the Executive—a well-established principle in American government—would be abruptly over. Yet that was the position that the government was arguing for, that nothing in the Constitution’s appropriation clause would limit the ability of Congress to authorize unlimited funds to any federal agency—and several Justices appeared to agree.

“But here’s a problem: suppose a future Congress wants to regulate CFPB spending and passes a bill to do so. If (hypothetically) the bill gets vetoed, that eliminates congressional control of the nation’s finances – not just for a limited time but until the President agrees to give up his power, an unlikely occurrence. It is critically important that only Congress specifies the amount of tax dollars that is appropriated to regulatory agencies.”