Yesterday the Supreme Court heard oral argument in Consumer Financial Protection Bureau v. American Community Financial Services Association, a case challenging the constitutionality of the way the CFPB is funded. According to respondents, the CFPB’s funding mechanism violates the Appropriations Clause because the CFPB is funded through the Federal Reserve, in amounts requested by the CFPB, rather than through the usual annual appropriations process through Congress. (For more information about how the CFPB is funded, see here and here.)
in Oral argumentJustice Barrett asked the Solicitor General about the argument presented in defense of the CFPB in the case Amicus curiae brief filed by the government. Interestingly, SG Prelogar unequivocally rejected the amicus curiae brief argument.
Here’s the exchange (cleaned up a bit):
JUDGE BARRETT: General, can I ask you a question about… . Cabinet? So the professors of constitutional law and history say, listen, the appropriations clause doesn’t apply here at all because this money is not being drawn from the treasury. Do you agree with this argument? It’s not the argument I made
General Introduction: We do not make this argument. We accept that the provisions clause applies here. The reason is that we understand that the term in the Constitution refers to the public treasury as a general matter, not to the Treasury Department specifically.
Of course, at the time of incorporation and ratification, the Department of the Treasury had not yet been created, and this is also how this Court has described the scope of the Appropriations Clause in cases like OPM v. Richmond, where it referred to public funds generally.
Of course, the opposite approach would expose a major loophole in Congress’ power here because it would mean that the executive branch, if it had unreserved money in the general treasury, could spend even without Congress appropriating or providing it. Power in the first place.
It appears in the Secretary-General’s view that the amicus argument would raise (or exacerbate) some of the accountability concerns raised by those challenging the CFPB’s funding structure, and thus sought to distinguish those arguments from those actually being advanced by the government on behalf of the CFPB.