Jim Rogers of Texas A&M responds to Charles Krauthammer’s argument that the Congressional response to the AIG bonuses are unconstitutional (posted here last weekend):
“I agree that Congress’s action w.r.t. the AIG bonuses is bad policy. I’m always baffled by the need to read unconstitutionality into bad policies. Stupid laws are not necessarily unconstitutional.
“In any event, Krauthammer is flat-out wrong as to the illegality and the unconstitutionality of what Congress is attempting to do.
“[1] There is no federal common law, therefore the common law does not restrict Congress.
“[2] Congress can break a contract outside of its bankruptcy power. Article 1, section 10 prohibits states (not Congress) from enacting bills of attainder, ex post facto laws, and laws impairing the obligation of contracts.
“[a] From the wording of this clause we therefore know that a law impairing the obligation of a contract is necessarily different than a bill of attainder or an ex post facto law. (A standard rule of interpretation is that every phrase must be given meaning. If laws impairing the obligation of a contract are bills of attainder or ex post facto laws, then the contract clause in art. 1, section 10 would be superfluous.
“[b] Relatedly, from [a], bills-of-attainder and ex-post-facto-law provisions in both art. 1, sec 9, and sec 10 have long been held to restrict criminal laws only, not regulatory or tax laws.
“[c] Congress is prohibited from enacting bills of attainder and ex post facto laws (art. 1, sec. 9, cl. 3). Unlike states, the Constitution does not restricted Congress from enacting laws that impair the obligation of contracts. Because we know (from [a]) that bills of attainder and ex post facto laws do not also prohibit a legislature from impairing the obligation of a contrast, therefore Congress does have the authority, if they choose to use it.
“[3] Taxes are necessarily confiscatory, so that hardly makes this tax more illegal or unconstitutional than any other tax. And the “ex post” nature of the tax was covered in [2].
“What the policy does is make contractual rights more variable and uncertain. That’s generally a bad thing, at least in my opinion. But that doesn’t make the law unconstitutional.”
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