The Bush-Obama intrusion into the auto industry is an illegal use of the Troubled Asset Relief Program (TARP) enacted by Congress in October, and it flatly violates a fundamental constitutional provision.
TARP authorized the treasury secretary to spend $700 billion, but it did not authorize him to spend it anywhere on anything. While the definition of what he could spend it on ("troubled assets") was broad, the definition of where ("financial institutions") was narrow.
"The secretary is authorized to establish the Troubled Asset Relief Program (or 'TARP') to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution,"
- says the law -
"The term 'financial institution' means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States ... ."
In other words, no matter how much wiggle room the law gives the secretary in defining "troubled assets," it does not give him the authority to purchase them from food, furniture or fishing rod makers - or car companies.
In our constitutional system, that should have activated a principle so simple a second-grader can understand it and so important that our system of government depends on our leaders respecting it:
"No money shall be drawn from the treasury, but in consequence of appropriations made by law."
says the Constitution. But for anyone not reading at a 2nd grade level, it means that because Congress did not authorize the president to spend money bailing out automakers, the president is not authorized to spend money bailing out automakers. [snip]
Gibbs essentially said it is legal because the Obama administration -- like the Bush administration before it -- says it is legal.
"I think that determination has been made, both in the previous administration and in the current administration, that this is assistance that is -- is legal," said Gibbs. "Our goal is to ensure that taxpayers in any instance where money is used feel confident that it's being done in a transparent and accountable way, and one that protects their interests."
What about our interest in having presidents who obey the Constitution?
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