On the surface, the Supreme Court’s recent decision in Consumer Financial Protection Bureau v. Community Financial Services Association represents a triumph of originalism. Justice Thomas’s majority decision for seven members of the Court expertly employs originalist methodology. The dissent, by Justice Alito, is also written from an originalist perspective, adopting a different view of the original meaning. But below the surface, the case raises a host of important issues concerning originalism: the conflict between following the original meaning and pursuing good policy; a dispute about how to determine the original meaning; and the question of whether the Court should follow the original meaning alone or supplement it with a form of living constitutionalism or history and tradition. Despite these concerns, Community Financial Services ultimately represents a significant victory for originalism.

The case concerned a challenge to the funding mechanism for the Consumer Financial Protection Bureau (CFPB) that was enacted as part of the Dodd-Frank banking reform act. Most agencies are funded through an annual appropriations process which allows Congress to annually adjust appropriations as a means of checking executive agencies. But in an effort to insulate the CFPB from congressional checks, Congress enacted an unprecedented funding mechanism. Congress authorized the CFPB to direct on an annual basis an amount, subject to a maximum, that should be paid to it from the financial resources available to the Federal Reserve.

This funding mechanism was challenged as unconstitutional on the grounds that it did not satisfy the Appropriations Clause, which provides: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” The argument was that this funding mechanism did not constitute an appropriation, because it did not sufficiently constrain the executive’s discretion as to spending. The Fifth Circuit agreed.

The Original Meaning of Appropriation

Justice Thomas’s opinion for the Court rejected this challenge, concluding that “appropriations were [originally] understood as a legislative means of authorizing expenditure from a source of public funds for designated purposes.” So long as it specified the source of the funds and the purposes for which they could be spent, even if those purposes were very broad, that was sufficient.

Both the majority and the dissent seemed to acknowledge that the question largely turned on history. After all, the language of an appropriation made by law is ambiguous. It could mean simply a law that authorizes spending from a source of public funds (and therefore could permit significant executive discretion) or it could require a much greater constraint on the executive.

Justice Thomas concluded that the former definition constituted the original meaning. He provided evidence from England, the independent American states, and the early years of the federal government, that appropriations sometimes were lump sum (allowing the executive discretion to allocate the funds to specific purposes), permissive (allowing the executive discretion how much to spend up to a maximum amount), funded from fees that were charged by the agency, and not time limited. The constitutional text helps to confirm this last point, as it states that appropriations for armies cannot last longer than two years, strongly implying that other appropriations can.

The dissent, written by Justice Alito and joined by Justice Gorsuch, took issue with the majority, arguing that history suggested that the funding mechanism was not authorized by the Appropriations Clause. While the dissent acknowledged much of the evidence that the majority offered, it argued that the spending authority conferred on the CFPB differed from historical appropriations in certain ways and thus there was no overall historical analogy for that spending authority.

But the need to find a precise historical analogy is mistaken. There is no reasonable argument that the meaning of appropriation at the time of the Constitution was limited to the precise characteristics of appropriations that had previously existed. Instead, it is the basic features of historical appropriations—being lump sum, permissive, based on agency fees, and not time limited—that are more likely to be relevant to how the term appropriation was understood. It is quite unlikely that the term was understood to exclude all combinations of these basic features that had not been previously employed. As Justice Thomas states, the dissent failed to offer any plausible meaning of the term appropriation that supported its conclusion.

Good Law, Bad Policy

While the argument that the funding mechanism complies with the original meaning of the Appropriations Clause seems strong, that of course does not mean that this mechanism is good policy. The Dodd-Frank Act that established the CFPB embraced a view of government structure that sought to strongly insulate an agency from political controls to allow it free reign to pursue its preferred regulatory policies. The funding mechanism was only part of this design. The provision that rendered the Director of the CFPB independent of the President—which was held unconstitutional in Seila Law v. CFPB in 2020—was another. In my view, such insulation is abominable policy. Allowing basic regulatory policy to be made by agencies who are not politically accountable is not only anti-democratic but is often an engine for expansive regulation since it eliminates checks on agency preferences for additional regulation.

But not every bad policy is unconstitutional. A constitution is a set of rules and procedures that regulate how governments operate. Even a good constitution—one that imposes good rules and policies—will not be able to prevent all bad laws and policies. Legislatures often make poor decisions. The only way to attempt to prevent that would be for courts to have ample discretion to reverse those decisions. But that “solution” would be even worse, since it would transfer the power to make bad policy to an entity that is even less accountable. It is an inevitable feature of good constitutions that not all laws passed under them will be desirable. And originalism embraces this feature, as it is based in part on the view that judges must enforce the Constitution as originally written, even if that leads to bad policy.

Despite its undesirable policy result—or perhaps because of it—Justice Thomas’s decision appears to be evidence of the Court’s commitment to originalism. After all, one strongly suspects that Thomas and the other originalists disagreed on policy grounds with the bureaucratic insulation that the statute employed. Yet they still concluded that the funding mechanism was constitutional. But unfortunately viewing the case as evidence of the Court’s commitment to originalism is complicated by the concurrence written by Justice Kagan and joined by Sotomayor—both nonoriginalists—but also joined by two originalists, Justices Barrett and Kavanaugh.

Subsequent Practice or Original Meaning

Kagan wrote separately to note that discretionary appropriations had been employed throughout American history and that this “long settled and established practice” may have “great weight in interpreting constitutional provisions about the operation of government” (emphasis added). Since practice from, for example, the twentieth century does not inform the original meaning, should it be relied upon by originalists like Barrett and Kavanaugh?

The practices of the political branches, in contrast to prior judicial decisions which are more firmly rooted by stare decisis, have an uneasy relationship to originalist jurisprudence. Some commentators have justified practice through the theory of liquidation, often associated with James Madison, which is understood as political practice that was followed only after its legality was debated by the political branches. But Kagan’s opinion does not provide any evidence that the political branches debated this issue.

Another possible justification for considering practice is the traditional interpretive canons that placed weight on contemporary exposition (early interpretation) and customary interpretation (consistent interpretation over time). Contemporary exposition is obviously consistent with originalism as it considers views of the meaning at the time of enactment. But customary interpretation less obviously comports with originalism. Still, since it was a traditional interpretive rule, one might regard it as an original method that would have been deemed to determine the meaning (or a type of precedent originalist courts can consider).

But customary interpretation without contemporary exposition—that is, a consistent interpretation that only begins many years after enactment—is considerably weaker than when both canons apply. Thus, it seems unlikely that such customary interpretations would even be relevant except where the matter is a close one. It would not have, as Kagan claims, “great weight.” Since Thomas shows the original meaning is clear, it is arguably not even appropriate to consider later practice. Just as someone, who believes legislative history is only relevant to resolve an ambiguity, would not consult it to interpret an unambiguous provision, so an originalist should not consider a customary interpretation to interpret an unambiguous provision.

If Thomas’s majority decision had included a brief section noting that the early interpretation had continued to be followed throughout American history, this inclusion might have been acceptable (although not required) from an originalist perspective. But joining a separate opinion, written by a nonoriginalist, emphasizing that later American practice also allowed discretionary appropriations seems more problematic for an originalist. It risks signaling that a practice-oriented, living constitutionalism is permissible. And one wonders whether this willingness to join the opinion is not unrelated to the forces that have led many observers to view this Court as conflating tradition and history with genuine originalism.

In the end, Community Financial Services is a significant victory for originalism. In a rare occurrence, the Court’s leading originalist wrote an originalist opinion for a majority—in fact, for seven members—of the Court. While there was a dissent, it also was originalist, simply taking a different view of the original meaning. It is true that two originalist justices joined a questionable concurrence but as compared to the importance of the majority decision, this departure seems minor. Overall, then, Community Financial Services can be securely added to a growing list of important modern originalist decisions.