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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

Document Type


Publication Date

Winter 2010




Harvard University




The Emergency Economic Stabilization Act of 2008, a.k.a. 'the bank bailout bill,' engendered a fair degree of political controversy during and after its enactment but relatively little constitutional controversy. That is unfortunate, and at least a bit puzzling, because, as a matter of original meaning, the statute raises important constitutional questions along at least four dimensions: it is questionable whether Congress had the enumerated power to authorize the Treasury Department to purchase securities, the specific authorizations were sufficiently vague to raise serious questions under the nondelegation doctrine, the expansion of the powers of the Secretary of the Treasury under the statute make it quite possible that then-Secretary Henry Paulsen could not implement the Act in 2008 without a new appointment under the Appointments Clause, and President Bush’s unilateral decision to use some of the bank bailout money to subsidize automobile companies and unions reflects a truly stunning assertion of executive power. This essay, which is an extended version of remarks delivered on a panel on 'The Administrative State and the Constitution' as part of the Federalist Society’s February 27-28, 2009 student symposium entitled 'Separation of Powers and American Constitutionalism,' sketches these four legal problems with the EESA and relates them to broader themes regarding the place of the modern administrative state in the constitutional order.


A Working Paper (earlier) version of this paper had the title: “Are Tax and Accounting Rules Discriminating against Discounted Employee Stock Options” This paper can be downloaded without charge at:

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