I haven’t followed all of the tidbits emerging from Dick Cheney’s new book, but I was struck by a report that the Bush White House briefly considered bypassing Congress on the financial-industry bailout in 2008. The former VP wrote that officials feared that lawmakers may not want to do the right thing, so the administration might have to rescue the economy on its own.
As it turns out, Federal Reserve Chairman Ben Bernanke wasn’t comfortable with unilateral White House action, and the idea was scrapped, but it got me thinking about what an administration can do in a time of economic crisis to work around Congress.
It seems like a relevant issue right about now.
In the case of the Wall Street bailout, Cheney believed the Federal Deposit Insurance Corporation Act of 1991 gave the administration power to inject federal funds into the banking system, even if Congress hasn’t authorized the appropriations. (I imagine lawmakers wouldn’t have cared for this interpretation of the law.) Are there other laws the Obama administration can use to boost the economy now, without going through the dysfunctional legislative branch? Suzy Khimm took a look, and concluded the White House doesn’t really have many options.
Any new spending or tax changes would have to receive the green light from Congress, including infrastructure spending, job training, tax credits and other measures that Obama has touted. For all intents and purposes, his hands are tied.
Even so, Obama has made a push to expedite infrastructure projects already in the pipeline. On Wednesday, he issued an order to the Departments of Agriculture, Housing and Urban Development, Commerce, Interior and Transportation, instructing them to prioritize “high-impact, job-creating infrastructure projects” to boost job growth “in the near term,” reports the National Journal. The objective would be to cut through bureaucratic red tape and speed up the process for infrastructure projects that can be completed under federal purview.
But economists who support the president’s ideas say that the White House’s push for expedition won’t be enough to have an appreciable effect on jobs. “It’s nibbling around the edges — no one’s deliberately holding things up,” adds Dean Baker, co-director of the Center for Economic and Policy Research.
The Federal Reserve and the Federal Housing Finance Agency have the ability to act without congressional approval, but both are legally independent from the administration — Obama, no matter what he may prefer, can’t tell them what to do. Indeed, both tend to recoil when administrations even try to push them in one direction or the other.
So, we’re left with an executive branch that needs the cooperation of the legislative branch. In theory, that’s a good thing — the system was designed so that a White House (or a Congress) is limited by checks and balances. But in practice, right now, we’re facing severe economic threats, and we’re stuck with a House run by extremists who seem a little too eager to drag the economy down on purpose, and who aren’t willing to compromise.
If Americans wanted their government to be able to improve the economy, they should have thought of that before November 2010.