Friday, October 30, 2009

Is the pay czar position constitutional?

Former federal judge and Stanford Law professor Michael McConnell makes a pretty persuasive argument that the position of a pay czar who has the authority to determine salaries at private institutions receiving federal bailouts is not a constitutional position. What is lacking is having the position designated by Congress as a position that doesn't need Senate approval. Otherwise, his position, regardless of who occupies it, violates the constitutional provisions for the legislative branch's check over the executive branch.
The Founders understood that the president and heads of the executive departments could not single-handedly carry out the law, so they required Senate confirmation as what the Federalist Papers call "an excellent check" on abuse or favoritism by the president. Yes, there are some offices so inferior that this check may be eliminated—but it is for Congress to judge which ones these may be. Congress and Congress alone has power to dispense with the safeguard of the confirmation process.

The power to set compensation at large American businesses is especially subject to potential abuse, favoritism, arbitrariness, or political manipulation. It is no reflection on Kenneth Feinberg, who has a sterling reputation and who appears to have approached these sensitive duties with a spirit of commendable integrity, to say that the checks and balances of the Constitution should be scrupulously observed. They were not. Because he is not a properly appointed officer of the United States, Mr. Feinberg's executive compensation decisions were unconstitutional.
What happens if one of those executives challenges the pay cuts in court? Will the senators submit a brief in the case defending their constitutional prerogatives?