Only Congress Can Spend Federal Monies

“No Money shall be drawn from the Treasury, but in consequence of Appropriations made by Law.”
-U.S. Constitution, Article I, section 9

Congress and the White House have been at loggerheads for weeks on the next phase of federal aid to those suffering financially and who lost jobs because of governor-mandated lockdown orders in response to the COVID-19 pandemic. At last count, more than 30 million Americans who had full-time jobs a year ago are today unemployed.

All states have unemployment compensation for which employees and employers make regular contributions. The payments of compensation are calculated as a percentage of income earned in the year before the job loss. Obviously, this number is different for all people, and it varies from state to state.

Embarrassed that it was caught flat-footed in the failure of leadership over the COVID-19 pandemic, the federal government — pursuant to appropriations made by law — borrowed $3 trillion in April, May and June of this year and shipped out nearly all of it to small businesses and individuals. It gave $600 a week in unemployment compensation to those out of work, irrespective of their 2019 earnings and in addition to whatever state funds these folks received.

This is the worst way out of this politically induced recession. Borrowing and giving away money will just postpone the day of reckoning. Rather, the feds should cut taxes and spending drastically, and give tax credits to businesses for each person hired. The states, in turn, should permit those who want to operate their businesses to do so, with their customers and employees assuming the risk of patronage or employment.

But don’t hold your breath for these free market solutions to happen. It would mean a loss of control for the government.

Shortly before the $600 weekly payments ended two weeks ago, Congress began negotiating with the White House for a continuation of the payments. The House Democrats want to borrow and give away another $3 trillion, much of it to bail out cities and states hard hit by the loss of tax revenue. The White House wants to borrow and give away $1 trillion, but only in direct payments to businesses and individuals.

When it became apparent that a compromise could not be reached and Congress would not vote to extend the federal unemployment compensation to individuals, President Donald Trump ordered the Treasury to pay all unemployed people $300 a week, provided the states pay them $100 a week, in addition to their state unemployment compensation.

How can the president spend money that has not been appropriated by law?

Here is the backstory.

The Constitution champions the well-accepted structures of government known as the separation of powers and federalism.

Under the separation of powers, Congress writes the laws, the president enforces them, and the judiciary decides what the laws mean and if they are constitutional. Since federal monies can only be spent by legislation, and since only Congress writes federal laws, only it can enact legislation that spends federal monies.

I use the phrase “federal monies” rather than “federal funds” or “taxpayer dollars” because the federal government is broke. It owes $26.5 trillion to its creditors. So, whatever monies Congress gives away, it must first borrow.

But whether Congress is giving away taxpayer dollars, buying battleships or borrowing money, it must do so by legislation. We know this because the separation of powers prohibits the president or the courts from doing Congress’ job. We also know this because the Constitution expressly states in Article I, section 9, that no money shall be spent except when appropriated by law.

Stated differently, the Treasury cannot legally borrow or spend a nickel unless it has been expressly authorized to do so by law — meaning by legislation enacted by Congress. This is neither a novel nor a political observation. It is Constitutional Law 101.

Thus, when the president — no matter his goals — attempts to exercise power that the Constitution has given exclusively to Congress, it is the duty of the courts to stop him.

It is similarly the duty of the courts to enjoin the president from enforcing any law or taking any action that violates the principle of federalism. This principle mandates state sovereignty and independence in areas of governance reserved to the states. Federalism is mandated as well by the Guarantee Clause of the Constitution.

According to the Supreme Court, that clause means that state officials decide how to employ state assets and spend state funds. Stated differently, neither the president nor Congress can tell the states that they must spend $100 a week on unemployed people in their states.

Inasmuch as Trump’s executive order has the state contribution of $100 a week per person as a trigger for individuals to receive the federally borrowed $300 a week, the executive order is not only doubly unconstitutional, it is functionless as an instrument of aid. Rather, it is an instrument of politics only.

Not too long ago, an American president asked Congress to change immigration laws. When it refused to do as this president asked, he boasted that he could govern more effectively than Congress using his phone and pen. He then signed 24 executive orders purporting to accomplish what he had requested of Congress. One of the candidates running to succeed him blasted this unconstitutional presidential behavior and denounced this president.

The president was Barack Obama and the candidate was Donald Trump. How different the world must look from inside 1600 Pennsylvania Ave. when looking out than from outside looking in. Yet, the Constitution remains the same. It is the supreme law of the land. And, as such, all government behavior is only lawful when it is subordinate to it, no matter what any president says.