In the wake of Department of Commerce v. New York, administrative law may now be permanently changed.
Chris DeMuth, an occasional contributor to this site, and yours truly have penned an exploratory article on “Agency Finance in the Age of Executive Government.” I think I’ve peddled it before but it’s now available on ssrn and my professional status is measured by ssrn downloads and that calls for desperate measures. For some reason the authors’ affiliations got mangled: I’m not with AEI (although I used to be) and Chris, while “Independent” in spirit, is with the Hudson Institute. The rest, though, is true and correct. Excerpt from the Abstract:
The rise of “executive government” has prompted a great deal of public debate and scholarly theorizing. This article examines one aspect of that very large subject: agency budgets or, more precisely, revenues. To an unprecedented extent, regulatory agencies have come to rely on non-appropriated funds for their ordinary operations. Many have become self-financing; some have become profit centers for wider executive exertions—and for Congress. We trace this development in two areas: agencies’ delegated authority to tax, and agency finance through settlement with private parties in criminal or civil enforcement proceedings.
We explore why this might be happening. One reason, not explored at any length in the paper: it’s surprisingly hard to think of robust institutional barriers to either trend. Your gut tells you that Congress shouldn’t be able to delegate the power of the purse even if it can delegate regulatory powers. Turns out, though, constitutional arguments to that effect are hard to come by. (See Dan Hemel’s recent, characteristically informative and thought-provoking article on “The President’s Power to Tax.”) Similarly, it’s very hard to prevent agencies from funding themselves, their friends, and their favorite projects through settlements in enforcement proceedings. Under the Constitution and longstanding, near-constitutional statutes, enforcement proceeds are supposed to go to the general Treasury, and agencies can’t spend monies that haven’t been appropriated by law. Almost by definition, though, the agency and its enforcement targets are better off by negotiating settlements that divert the cash to other uses. The funds never become “monies of the United States,” so they don’t have to be appropriated.
Lots of agencies work that way nowadays. They have delegated powers to legislate, and they can tax and spend. Once the FCC gets its own air force, it’ll be a truly independent agency.