FedSoc Online Debate- The Pay Czar & Appointment Clause with Profs. McConnell and Flaherty

I have blogged a bit about the President’s Czars and the appointments clause. Recently Professor McConnell posted a great WSJ Op-Ed on this point.

The Federalist Society is hosting an ongoing online debate between McConnell and Professor Flaherty.

Here are the opening salvos.

McConnell thrusts:

There is no doubt that Mr. Feinberg is an “officer” of the United States. The Supreme Court has defined this term (Buckley v. Valeo, 1976) as “any appointee exercising significant authority pursuant to the laws of the United States.” Mr. Feinberg signed last week’s orders setting pay levels for executives at Bank of America, AIG, Chrysler Financial, Citigroup, GMAC, General Motors and Chrysler. They have the force of law and are surely an exercise of “significant authority” pursuant to an Act of Congress. He is not a mere “employee,” acting at the direction of a superior. That means his office is subject to the requirements of the Appointments Clause.

While somewhat more disputable, Mr. Feinberg’s is probably an “inferior” officer, defined as one subject to supervision and removal by a member of the cabinet. Although he has substantial discretion and independence, Mr. Feinberg reports to the secretary of the Treasury, who can fire him any time for any reason. This means that Congress could, if it wished, vest the appointment of the pay czar in the secretary, without any need for Senate confirmation.

Flaherty parries:

Unless one is a Wall Street solipsist, the power to reduce executive compensation does not place Feinberg on par with Hillary Clinton or above Kenneth Starr. It follows that Congress should have had a role in determining the appointment process, either by vesting the power in the Secretary of the Treasury, the President alone, or even a court, such as the D.C. Circuit.

One point, however, calls for clarification. Judge McConnell at first says that “Congress may, if it wished, vest the appointment of the pay czar in the secretary [as Head of a Department], without any need for Senate confirmation.” So far so good. Yet he adds that, in lieu of Congressional action, he could only delegate the Pay Czar power to someone who is subject to Senate confirmation. On one hand, why could he sub-delegate at all? On the other, why not sub-delegate to someone subject to appointment in one of the three ways that the lower track of the Appointments Clause calls for?

 

Is the Pay Czar Unconstitutional? Professor McConnell says Yes!

Professor, Former Judge McConnell writes in the WSJ that the The Pay Czar Is Unconstitutional (H/T WSJLawBlog). I have written about the Regulatory Czars before and have also queried whether they are Constitutional.

Mr. Feinberg’s ukase is the most prominent example (and not just by the Obama administration) of the exercise of power by an individual unilaterally appointed by the executive branch without Senate confirmation—and thus outside the ordinary channels of Congressional oversight.

The Appointments clause of the Constitution, Article II, section 2, provides that all “Officers of the United States” must be appointed by the president “by and with the Advice and Consent of the Senate.” This means subject to confirmation, except that “the Congress may by Law vest the Appointment” of “inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.”

There is no doubt that Mr. Feinberg is an “officer” of the United States. The Supreme Court has defined this term (Buckley v. Valeo, 1976) as “any appointee exercising significant authority pursuant to the laws of the United States.”

. . .

While somewhat more disputable, Mr. Feinberg’s is probably an “inferior” officer, defined as one subject to supervision and removal by a member of the cabinet. . . . This means that Congress could, if it wished, vest the appointment of the pay czar in the secretary, without any need for Senate confirmation.

But Congress has not done so. On the contrary, it vested the authority to implement TARP’s compensation provision in the secretary of the Treasury. The secretary may sub-delegate that power to someone else—but that someone must be an “officer” properly appointed “by and with the advice and consent of the Senate.”

The Supreme Court observed in Buckley v. Valeo that the provisions governing appointments under the Constitution reflect more than “etiquette or protocol.” They embody the Founders’ conviction that all power under U.S. laws must be exercised by officers with constitutional authority.

This makes sense. McConnell concludes:

The power to set compensation at large American businesses is especially subject to potential abuse, favoritism, arbitrariness, or political manipulation. It is no reflection on Kenneth Feinberg, who has a sterling reputation and who appears to have approached these sensitive duties with a spirit of commendable integrity, to say that the checks and balances of the Constitution should be scrupulously observed. They were not. Because he is not a properly appointed officer of the United States, Mr. Feinberg’s executive compensation decisions were unconstitutional.

This is a far cry from articles proclaiming that President Obama is ineligible to receive the Nobel Prize. The Constitution does put valid checks on the separation of Powers, and the Executive must obey them.

This is also on my works in progress list, and I am glad McConnell seems to agree with me.

Update: Check out Johnathan Adler’s take on Volokh.

Thomas Sowell: Czars Dismantling America

Thomas Sowell has a fantastic articled titled Dismantling America (H/T Instapundit). It discusses the influence of the administrative state on our freedom, and particularly the role of President Obama’s “czars.”

Just one year ago, would you have believed that an unelected government official, not even a Cabinet member confirmed by the Senate but simply one of the many “czars” appointed by the President, could arbitrarily cut the pay of executives in private businesses by 50 percent or 90 percent?

Did you think that another “czar” would be talking about restricting talk radio? That there would be plans afloat to subsidize newspapers– that is, to create a situation where some newspapers’ survival would depend on the government liking what they publish?

I am working on some research on the appointments clause, and whether the role of Czars is so significant that i should require advice and consent of the senate. See some of my thoughts here.

Regulatory Czars and the Appointment Clause. Why doesn’t the Senate have advice and consent over the Czars?

I realize the topic of Obama’s czars has been exhausted Ad Nausuem, both from the political blogosphere, and the legal blogosphere, mainly at Volokh.

Pajamas TV has a hilarious video featuring Glenn Reynolds discussing the many Czars currently in the Obama adminstration.

Today, the USA Today ran a great story dealing with the Czars (H/T Heritage Morning Bell). A few choice quotes:

“In the Senate, Democrats, such as Robert Byrd of West Virginia, are questioning the constitutionality of the advisers the White House says it needs to coordinate policy and advise the president on issues from health care to the Middle East. Republicans, such as Susan Collins of Maine, are trying to curb funding for them.”

Limiting funding may be one way to skin the cat, but I have been wondering for some time now how these Czars fit in the Humphrey’s Executor and Morrison v. Olson line of cases. What exactly do these czars do (other than sign 9/11 Truther statements)? Although in many cases their qualifications for the job are inferior, would their fiat and power qualify them as principle officers? If so, would advice and consent be required?

I’ll likely dig into the legal issues at some later point, and maybe a law review article if I get around to it, but I just wanted to throw this out there for thoughts and comments.