Townhall.com, Where Your Opinion Counts
Talk Radio:   Bill Bennett   Mike Gallagher   Dennis Prager   Michael Medved   Hugh Hewitt   
BREAKING NEWS  LeftArrow - Townhall.com : Conservative, Political, Republican   RightArrow - Townhall.com : Conservative, Political, Republican  
Columns, funnies & more in your inbox!
  • Check the boxes and send us your email address to receveive your free newsletter
  • Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
  • Townhall.com’s weekly inside scoop on what’s happening behind the scenes in the world of politics. When news breaks, we report.
  • Signup to receive the latest daily Townhall cartoons
Wednesday, December 17, 2008
Jacob Sullum :: Townhall.com Columnist
Illegal Lending Practices
by Jacob Sullum
Vote on It:
Average Vote:
[+] Text [-]
 
Poll
Will Sarah Palin make a run at the GOP Nomination in 2012?


Even Americans whose knowledge of the legislative process is limited to the "I'm Just a Bill" episode of "Schoolhouse Rock" know about the veto: If Congress approves legislation the president doesn't like, he can refuse to sign it, in which case the law can be enacted only by a two-thirds vote of each chamber. President Bush's plan to aid the auto industry relies on a more obscure maneuver: If Congress rejects a bill the president likes, he can act as if the vote went the other way.

This maneuver, unlike the veto, is illegal by definition, not to mention unconstitutional, violating the separation of powers and the rule of law. But it is business as usual for Bush, who has shown no compunction about ignoring the law when it prohibits him from doing what he considers necessary in response to what he considers an emergency.

The day after the Senate declined to approve a bill giving General Motors and Chrysler what one Republican senator aptly called "a bridge loan to nowhere," White House Press Secretary Dana Perino observed: "Congress spoke last night. They don't have the votes to do anything." Perino said the administration therefore was looking for "a short-term mechanism to help prevent a disorderly bankruptcy that we think could devastate further an already very weak economy."

In other words: Congress spoke; we have decided not to listen. A Treasury Department spokeswoman put it even more clearly than Perino did. "Because Congress failed to act," she said, "we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry."

This is the argument of every strongman, dictator and president-for-life who has ever overridden uncooperative legislators: They won't let me do what I want to do, and this is an emergency, so I'm going to do it anyway.

The one "short-term mechanism" that Perino mentioned, using money from the Troubled Asset Relief Program (TARP), is plainly at odds with the intent of Congress. The Emergency Economic Stabilization Act, which created TARP, authorized Treasury Secretary Henry Paulson "to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution," the aim being "to restore liquidity and stability to the financial system."

Paulson already was stretching the law when he decided instead to purchase stakes in banks (presumably on the theory that shares of their stock constituted "troubled assets"). But a carmaker is not a "financial institution," and loaning it money is not purchasing "troubled assets."

In case anyone wants to argue that G.M. and Chrysler are financial institutions because of their car loan divisions, it's worth noting that GMAC and Chrysler Financial are no longer wholly owned subsidiaries of the automakers. A consortium of investors owns a controlling interest in GMAC, while Chrysler Financial became an independent company in 2007.

At any rate, a manufacturer with a finance division clearly is not what Congress had in mind when it authorized TARP. By the same logic, all businesses that extend credit, including department stores, jewelers, cosmetic surgery practices and neighborhood bars would qualify as financial institutions eligible for TARP money.

President Bush himself, while urging Congress to approve loans to G.M. and Chrysler, repeatedly rejected suggestions that he use TARP funds for that purpose, saying the money was intended for the financial sector. Now he has reversed himself, confirming that he views the law as clay to be molded for whatever purpose is at hand.

President-elect Obama, who claims to have a less expansive view of executive power and a greater respect for the law than his predecessor, has not weighed in on the propriety of Bush's plan to help the automakers, instead urging the White House and Congress to work together on a loan package. But if Obama, under pressure to keep the nearly bankrupt carmakers afloat, resorts to unilateral action when he takes office, we will know his promises of change were empty.

Share:
Vote on It:
Average Vote:
 
About The Author
Jacob Sullum is a senior editor at Reason magazine and a contributing columnist on Townhall.com.
 
TOWNHALL DAILY: Be the first to read Jacob Sullum's column. Sign up today and receive Townhall.com daily lineup delivered each morning to your inbox.
 
©Creators Syndicate
Obama's pledge of change

Obama's pledge of change is already empty.

We are not a nation of laws. Men decide what the law is as needed or politically expendiant.
We might as well go back to Kings. I'd rather pay the salery of one King than the saleries of 1 President, 9 Supreme Court Justices, and 535 Congressman.

It's been over two days
since the Electoral College started working on the results of the election, and the members haven't announced, "Halleluia, It's the Obamessiah". Do you think they might be looking at answering the questions about Obama's citizenship before starting the vote count?
Sign Up to Post Your CommentsSign Up to Post Your Comments
If you are already registered, click here to login. Otherwise, please take a few seconds to register with Townhall.com. Once you sign up, you’ll be able to post your comments immediately, use the action center, get podcasts, and more!
Note: Fields marked with a red asterisk (*) are required.
Salutation:
First Name:
*
Last Name:
*
Email:
*
Nickname:
*
Note: Nick name will be shown when you post comments.
Address 1:
*
Address 2:
City:
*
State:
*
Zip:
*
Phone:
      
Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
(Bi-Weekly) We highlight the best opportunities from our partners for surveys, action items and more.