Yesterday the Supreme Court heard oral argument in Consumer Financial Protecion Bureau v. Community Financial Services Association of America, a case challenging the constitutionality of the manner in which the CFPB is funded. According to the respondents, the CFPB's funding mechnism violates the Appropriations Clause because the CFPB is funded through the Federal Reserve Board, in amounts requested by the CFPB, rather than through the usual annual appropriations process through Congress. (For more on how the CFPB is funded, see here and here.)
At oral argument, Justice Barrett asked the Solicitor General about an argument made in defense of the CFPB in an amicus brief submitted on the government's side. Interestingly enough, SG Prelogar unequivocally rejected the amicus brief's argument.
Here's the exchange (slightly cleaned up):
JUSTICE BARRETT: General, can I ask you a question about . . the Treasury? So the professors of constitutional law and history say, listen, the Appropriations Clause doesn't even apply here at all because these funds aren't being drawn from the Treasury. Do you agree with that argument? It's not the argument that you made.
GENERAL PRELOGAR: We are not making that argument. We accept that the Appropriations Clause applies here. The reason for that is we understand the term in the Constitution to refer to the public treasury as a general matter, not specifically to the Treasury Department.
Of course, at the time of the founding, ratification, the Treasury Department hadn't even been created, and that's also how this Court has described the scope of the Appropriations Clause in cases like OPM versus Richmond, where it referred to public monies generally.
And, of course, the –the contrary approach would expose a gaping loophole in Congress's authority here because it would mean the executive, if it has funds that aren't held in the general treasury, could spend even without Congress appropriating it or providing that authority in the first place.
It seems in the SG's view, the amicus' argument would raise (or exacerbate) some of the accountability concerns made by those challenging the CFPB's funding structure, and thus sought to distinguish those arguments from those the government is actually making on the CFPB's behalf.
UPDATE: Some commenters read this post as a criticism of the SG. Far from it. I think the SG handled the matter properly and prudently. Based upon my read of the briefs and argument, the arguments made by the SG were both more grounded in history and practice and more likely to appeal to potential swing justices than were the arguments in the amicus brief. At the same time, the presentation of more "extreme" arguments in the amicus brief may help make the SG's arguments look more moderate and reasonable.
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