section 8 and constitutional rights

[Howard Schweber]

I apologize if this is a duplication -- for some reason my messages do 
not seem to be getting through.

hs





All true.  But I can't get my head around a certain element of 
circularity here:  various people have suggested that there is no 
problem in cutting off judicial review so long as no constitutional 
rights are being infringed upon.  I had thought that the purpose of 
judicial review was to determine *whether* constitutional rights are 
being infringed upon.  Under this scheme, if the Secretary violates 
someone's constitutional rights, what is the remedy? 

Frank Cross is undoubtedly correct that there is reason to doubt courts' 
ability to judge what constitutes "arbitrary and capricious" action, but 
the provision is not so limited.  That is, Section 8 does not say "the 
Secretary's discretion is not reviewable by any court on the basis of a 
claim that it is arbitrary or capricious," it says that any action taken 
by the Secretary cannot be reviewed by anyone for any reason.  Can there 
be an administrative agency whose actions are not subject to review to 
determine whether they fall within the scope of the agency's authority 
in the first place?  For /anything/? 

I am reproducing the original proposal below:  take a look at the 
incredible range of actions the Secretary is authorized to undertake.  
See, especially, 2b, 2b(3), and 5(c).  Note, to take just one example, 
that the "agent of the government" language means that gag rules could 
be imposed without the possibility of judicial review of First Amendment 
Rust/Velazquez issues.  I have taken the liberty of putting some of the 
key phrases in bold.

hs





LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS


Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and 
to make and fund commitments to purchase, on such terms and conditions 
as determined by the Secretary, mortgage-related assets from any 
financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take *such 
actions as the Secretary deems necessary* to carry out the authorities 
in this Act, *including, without limitation*:

(1) appointing such employees as may be required to carry out the 
authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized 
by section 3109 of title 5, United States Code, without regard to any 
other provision of law regarding public contracts;

(3) designating financial institutions as financial *agents of the 
Government*, and they shall perform all such reasonable duties related 
to this Act as financial agents of the Government as may be required of 
them;

(4) establishing vehicles that are authorized, subject to supervision by 
the Secretary, to purchase mortgage-related assets and issue 
obligations; and

(5) issuing such regulations and other guidance as may be necessary or 
appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall 
take into consideration means for--

(1) providing stability or preventing disruption to the financial 
markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in 
section 2(a), and semiannually thereafter, the Secretary shall report to 
the Committees on the Budget, Financial Services, and Ways and Means of 
the House of Representatives and the Committees on the Budget, Finance, 
and Banking, Housing, and Urban Affairs of the Senate with respect to 
the authorities exercised under this Act and the considerations required 
by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any 
rights received in connection with mortgage-related assets purchased 
under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have 
authority to manage mortgage-related assets purchased under this Act, 
including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, 
*upon terms and conditions and at prices determined by the Secretary*, 
sell, or enter into securities loans, repurchase transactions or other 
financial transactions in regard to, any mortgage-related asset 
purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.--The authority of 
the Secretary to hold any mortgage-related asset purchased under this 
Act before the termination date in section 9, or to purchase or fund the 
purchase of a mortgage-related asset under a commitment entered into 
before the termination date in section 9, is not subject to the 
provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary's authority to purchase mortgage-related assets under this 
Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the 
costs of administering those authorities, the Secretary may use the 
proceeds of the sale of any securities issued under chapter 31 of title 
31, United States Code, and the purposes for which securities may be 
issued under chapter 31 of title 31, United States Code, are extended to 
include actions authorized by this Act, including the payment of 
administrative expenses. Any funds expended for actions authorized by 
this Act, including the payment of administrative expenses, shall be 
deemed appropriated at the time of such expenditure.

*Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are 
non-reviewable and committed to agency discretion, and may not be 
reviewed by any court of law or any administrative agency.
*
Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities 
granted in sections 2(b)(5), 5 and 7, shall terminate two years from the 
date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is 
amended by striking out the dollar limitation contained in such 
subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 
2(a) of this Act shall be determined as provided under the Federal 
Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term "mortgage-related assets" means 
residential or commercial mortgages and any securities, obligations, or 
other instruments that are based on or related to such mortgages, that 
in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term "Secretary" means the Secretary of the Treasury.

(3) United States.--The term "United States" means the States, 
territories, and possessions of the United States and the District of 
Columbia

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