Burying the Constitution under a TARP

Article excerpt

Asking whether the modern administrative state is unconstitutional is like asking whether Yale Law School has a tendency to emphasize theory. "Yes" does not do justice to the question. The modern administrative state is not merely unconstitutional; it is anti-constitutional. The Constitution was designed specifically to prevent the emergence of the kinds of institutions that characterize the modern administrative state. The founding generation would have been dumbstruck by the governmental edifice that has arisen from its handiwork. Just consider that, during the founding era, the grand constitutional disputes about administration involved such matters as whether Congress's enumerated power to "establish Post Offices and post Roads" (1) allowed Congress to create new post roads or merely to designate existing state-created roads as postal routes, (2) and whether Congress could let the President or Postmaster determine the location of postal routes or instead had itself to designate the routes town by town. (3)

The architects of the modern administrative state fully understood the constitutional obstacles in their path. Administrative law students and scholars are familiar with James Landis's dismissive attitude toward the Constitution's separation of powers, as articulated in The Administrative Process. (4) Equally revealing are the earlier comments of Frank Goodnow in 1911, when progressives were still struggling to give administrative governance a firm foothold in the American system:

   [S]pecial care was taken [in the Constitution] to secure the
   recognition of the fact that the new government was one only of
   enumerated powers, and that powers not granted to such government
   were reserved to the states or to the people.

      For one reason or another the people of the United States came
   soon to regard with an almost superstitious reverence the document
   into which this general scheme of government was incorporated....

      ... The question naturally arises before those who have no
   belief in a static political society or in permanent political
   principles of universal application[:] Is the kind of political
   system which we commonly believe our fathers established one which
   can with advantage be retained unchanged in the changed conditions
   which are seen to exist? (5)

These thinkers understood that validating the administrative state required either a new constitution, which modern scholars are willing to supply in abundance, (6) or a new theory of constitutionalism, which has obligingly emerged under the name of "functionalism"--an interpretative theory that effectively takes the constitutionality of the administrative state as its starting point and goes from there. (7) Whatever method of validation the champions of modern governance choose, the Constitution of 1788 is the obstacle that must be avoided or obliterated.

As a practical matter, of course, the New Deal firmly cemented the administrative state, and we remain in that cement--Jimmy Hoffa-like--to this day. My goal in this Essay is not to dissolve that cement but merely to highlight the factual proposition that the administrative state has buried the Constitution beneath it.

To gauge just how far modern administration has veered from the Constitution, consider as a representative case study the Emergency Economic Stabilization Act of 2008, (8) which created the "Troubled Assets Relief Program" (TARP). Stripping away two hundred pages of pork, tax preferences, and various oversight, reporting, and fast-track provisions, the substance of the TARP legislation is quite simple. Section 101(a)(1) authorizes the Secretary of the Treasury "to purchase ... troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary." (9) The Secretary is further empowered "to take such actions as the Secretary deems necessary to carry out the authorities in this Act. …