The Consumer Financial Protection Bureau (CFPB) has an unusual funding mechanism. The law says it can draw funds “reasonably necessary to carry out” its operations without an annual appropriation. This has been challenged on the grounds that it violates the Appropriations Clause of the Constitution which provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” To the great surprise of many the Supreme Court has just upheld the CFPB funding mechanism.
This decision suggests that it would be constitutional if there were a similar funding mechanism in the Social Security Act for agency operations, such as a certain small percentage of benefits paid. If I remember correctly, the National Council of Social Security Management Associations (NCSSMA), an organization of agency management personnel, has called for this in the past.
Would such a thing ever come to Social Security? Only if Democrats control the White House, House of Representatives and Senate and want to do it and can get past the filibuster in the Senate. This could not be done at the moment. Maybe it will never be possible. However, my guess is that this will be proposed. What we've got at the moment is seriously dysfunctional.
By the way, if CFPB had lost this case, doubt would have been thrown on the funding mechanism for Social Security benefits themselves. Annual appropriations might have been required for benefit payments, so this CFPB case was a big win for Social Security.
Another issue with the alternative funding mechanism is that, just because this court upheld it doesn't mean a future court won't go back the other way.
ReplyDeleteIf nothing else, this particular Supreme Court of self-indulgent conservative ideologues has demonstrated that nothing decided in the past is safe.
@7:58
ReplyDeleteTrue, but the actual argument is silly, and not even particularly a politically divisive one. Thomas wrote the decision. The issue was whether Congress can provide authority to an agency to be funded through requests to the federal reserve as opposed to congressional budgeting. Congress can withdraw that authority if they see fit. If Congressional action is required for any agency expenditure, what would allow budgeting? Why shouldn't Congress be responsible for sending biweekly paychecks out? Or at a minimum, why shouldn't Congress have to sign off on them every pay period? (Cause it's silly.)