The justices begin unraveling the administrative state.
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The Supreme Court’s conservative supermajority has pacified the Republican base. The justices overturned Roe v. Wade, struck down long-standing limits on gun possession, and banned affirmative action in college admissions. The new term, which starts this week, is for the paying customers — the megadonors who want a conservative Supreme Court to help them neuter the government regulators who hold power over their businesses.
The justices heard oral argument today in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited. It concerns the way the consumer watchdog agency gets funded.
The CFPB gets its funding directly from the Federal Reserve; it doesn’t have to seek an annual appropriation from Congress. Lawmakers chose this approach in 2010, when they established the CFPB, for two primary reasons. First, the CFPB inherited some of the Fed’s work, so it made sense to inherit some of its money. Second, an independent source of funding insulates the CFPB from the influence of the same wealthy lobbyists it’s supposed to be regulating.
In a case brought by the payday lending industry, the Fifth Circuit Court of Appeals ruled that this arrangement violates Article I, Section 9 of the Constitution, which states that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” In other words, according to the Fifth Circuit, Congress may not establish a permanent source of funding outside the annual budgeting process.
If the Supreme Court endorses this reasoning, the repercussions will be far-reaching. The Federal Reserve itself does not receive an annual budget from Congress, so its funding would be presumptively unconstitutional. Interest payments on the national debt are also permanently appropriated. The funding for Social Security would come into question. The payday lenders are asking for a decision explicitly limited to the CFPB, but it’s not clear on what constitutional principle such a distinction could be made. A decision against the CFPB would put it all into doubt. While the oral argument was promising for the agency, this dangerous legal theory never should have made it to the Supreme Court.
The CFPB case is the first of many this term that threaten to erase decades of constitutional interpretation and roll back the federal government’s regulatory authority. In Loper Bright Enterprises v. Raimondo, the Court will decide whether to discard entirely the idea that courts should defer to the expertise of federal agencies when a statute is silent or ambiguous on an issue. This principle, known as Chevron deference after a unanimous 1984 decision, has given flexibility to government regulators in areas like climate change. Those who oppose Chevron deference present themselves as advocates for Congress; in fact, this is a power grab for judges.
The Court will also hear SEC v. Jarkesy, in which the Fifth Circuit — yes, them again — struck down the Securities and Exchange Commission’s power to administer enforcement proceedings within the agency rather than in federal court. The case threatens to slow the SEC’s work to a near standstill. In Moore v. U.S., the justices may look to block a federal wealth tax before it’s ever enacted.
The longer you stare into the Court’s docket, the clearer the endgame becomes: unraveling the administrative state, blocking financial reform, and reversing the New Deal. Overturning the progressive decisions of the Warren Court is just a side hustle.
SCOTUS’s Ongoing ‘Originalism’ Fallacies
The Supreme Court supermajority is using originalism to justify radical decisions. The justices claim they’re looking at history, but it’s not a past recognized by historians. “Historians write about the past, using methods and tools they’ve developed over time to make statements that are reliable,” Thomas Wolf and Harvard Kennedy School scholar Alexander Keyssar write in Newsweek. “To do their job well, historians must acknowledge the complexity of the past and the importance of context for making sense of things, among many other considerations. The Court isn't following those same standards.” Read more
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Safeguarding Government Science
The Covid-19 pandemic shined a light on the dangers of politicizing public health. Across the country, state and local elected officials meddled in research and data and attacked experts, leading to mismanagement and driving many public health officials to quit. A new Brennan Center report outlines the main threats to science-based policymaking and how to guard against them. Read more
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Ohio’s Redistricting Debacle Continues
Last week, Ohio’s political redistricting commission passed its fifth set of gerrymandered legislative maps after its four prior attempts were deemed unconstitutional by the Ohio Supreme Court. The commission’s repeated failure to put partisan considerations aside and draw maps that reflect voters’ political preferences is proof that politicians should not be in charge of redistricting. “Ohio can join the growing number of states opting for a better approach to redistricting — a transparent, democratic process led by impartial individuals,” Gabriella Sanchez and Yurij Rudensky write. Read more
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A Test of Victims’ Rights in Maryland
On Thursday, Maryland’s supreme court will hear arguments about whether the process of throwing out Adnan Syed’s murder conviction, made famous by the Serial true crime podcast, violated legal protections for victims’ rights. The court will consider whether the conviction should have been reinstated, as well as a separate appeal by the victim’s brother arguing that he has a right to speak at Syed’s next hearing. The ruling could help define the scope of crime victims’ rights under state law, Rex Bossert writes for State Court Report. READ MORE
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Coming Up
VIRTUAL EVENT: A Supreme Fact-Check: How the Supreme Court Gets U.S. History Wrong
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Thursday, October 12, 6–7 p.m. ET
The Supreme Court’s conservative supermajority has appealed to history to justify its recent opinions that have eviscerated reproductive freedom, gun control, and affirmative action. But should history be the sole source of rights? And what if the history that the Court has relied on is flat-out wrong? Join us to examine these issues with historians Laura Edwards of Princeton University, Kate Masur of Northwestern University, and Karen Tani of the University of Pennsylvania. The discussion will be moderated by the Atlantic’s Adam Serwer. RSVP today
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Produced in partnership with the Society for Historians of the Early American Republic
Want to keep up with Brennan Center Live events? Subscribe to the events newsletter.
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News
Kareem Crayton on the upcoming revisions of Alabama’s congressional maps // ASSOCIATED PRESS
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Douglas Keith on campaign spending in judicial elections // BLOOMBERG
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Elizabeth Goitein on surveillance reform recommendations from a privacy watchdog // THE HILL
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Rachel Levinson-Waldman on police social media monitoring // PHILADELPHIA INQUIRER
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Joanna Zdanys on small donor public financing // NY DAILY NEWS
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