The New Media Journal | Government

The New Media Journal | Government: "The U.S. Constitution vests all the 'legislative powers' it grants in Congress. The Supreme Court allows Congress to delegate some authority to executive officials provided an 'intelligible principle' guides such transfers. Congress quickly wrote and enacted the Emergency Economic Stabilization Act of 2008 in response to a financial crisis. The law authorized the secretary of the Treasury to spend up to $700 billion purchasing troubled mortgage assets or any financial instrument in order to attain 13 different goals. Most of these goals lacked any concrete meaning, and Congress did not establish any priorities among them. As a result, Congress lost control of the implementation of the law and unconstitutionally delegated its powers to the Treasury secretary. Congress also failed in the case of EESA to meet its constitutional obligations to deliberate, to check the other branches of government, or to be accountable to the American people. The implementation of EESA showed Congress to be largely irrelevant to policymaking by the Treasury secretary. These failures of Congress indicate that the current Supreme Court doctrine validating delegation of legislative powers should be revised to protect the rule of law and separation of powers.

The Emergency Economic Stabilization Act of 2008 created the Troubled Assets Relief Program, which is authorized to spend up to $700 billion buying financial instruments from banks and other institutions. Congress considered, wrote, and enacted EESA in nine days in the early fall of 2008. Those days passed in an atmosphere of crisis—if not panic. A few weeks earlier, the federal government had seized Fannie Mae and Freddie Mac, two government-sponsored enterprises tied to home mortgages, after weeks of speculation that the two might fail. Two weeks prior to passing the law, Lehman Brothers investment bank failed because of losses on mortgage securities, and Merrill Lynch, the nation’s largest brokerage, accepted a merger with Bank of America to avoid bankruptcy. A day later, federal officials took control of American International Group, a global insurance firm threatened by credit default swaps tied to mortgage investments. On September 25, as Congress considered EESA, the nation’s largest savings and loan association, Washington Mutual Bank, collapsed and was sold by federal regulators to JP Morgan Chase."