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Will the Bailout Bill Be Unconstitutional? (Unlikely)

By Jack M. Balkin

The purported "agreement on principles" is here.

The bill would authorize expenditure of $700 billion, "with $250 billion available immediately and an additional $100 billion released upon [the Treasury Secretary's] certification that funds are needed," and the "final $350 billion is subject to a Congressional joint resolution of disapproval."

That final provision has led some to suggest that the bill would violate the Presentment Clause of Article I the Constitution, because it (allegedly) would be a "legislative veto," i.e., because Congress could cancel the authorization by a vote of both Houses, without the signature of the President.

Not so fast. For one thing, the Supreme Court has never held directly that a two-House (as opposed to the one-House veto declared invalid in INS v. Chadha) is unconstitutional. But it has summarily reversed judgments upholding such two-house vetoes -- see, e.g., United States Senate v. FTC, 463 U.S. 1216 (1983) -- and so it's quite likely that such two-House vetoes would be held invalid, at least on the assumption that the appropriation here (or its withdrawal) would have "the purpose and effect of altering the legal rights, duties, and relations of persons . . . outside the Legislative Branch," Chadha, 462 U.S. at 952.

More to the point, however, there's no reason to think that this bill will include a two-House veto. The agreement on principles refers to the $350 billion being subject to a "joint resolution of disapproval." A joint resolution -- as opposed to a "concurrent" resolution -- is a variant of a plain ol' law: it's presented to the President for his signature, and does not become effective without that signature (or a veto override by two-thirds of both Houses).

Thus, all that the agreement on principles seems to be indicating is the fairly unremarkable proposition that if Congress passes a subsequent law withdrawing the appropriation for the final $350 billion, that later-enacted law will govern. No constitutional problem there.

(NOTE: The reference to the joint resolution might suggest that the drafters are intending to impose some sort of fast-track procedure within Congress, e.g., requiring an additional up-or-down vote on the final $350 billion, perhaps without some of the usual procedural prerequisites. But, if so, the result would nonetheless be a law presented to the President.)

Full post as published by Balkinization on September 25, 2008 (boomark / email).