Spending is out of control and no one seems to care about it, except, of course, for President Donald Trump.
Every year, hundreds of billions go out the door of the DC spending outhouse, only to be wasted or stolen.
As a thrifty businessman and now president, Trump has continually expressed his disdain for this unacceptable state of affairs.
But expecting the Congress to do the right thing is like hoping that a meth addict will take good care of their teeth.
It isn’t going to happen. Every wasteful dollar spent is some congressman’s political payoff to a contributor or special interest.
At some point in the very near future, Trump will take matters into his own hands, but there will be blood.
A bit of historic perspective is helpful. During his presidency, Nixon raised Congress’ ire by refusing to expend appropriated funds, justifying it by his impoundment power.
President Jefferson first used this power in 1801. From that time on, it was always considered an inherent presidential power, until passage of the Congressional Budget and Impoundment Control Act of 1974.
The president could still impound funds, but both houses of Congress had 45 days to affirm its use. This effectively ended the practice. Note, it became law at the height of the Watergate Scandal.
Nixon had more pressing matters to worry about and he reluctantly signed on. In Train v. City of New York, which predated the act, the Supreme Court upheld Congress’s prerogative, never to revisit the matter again.
Every president since Nixon has called for a restoration of impoundment authority. The line item veto seemed like the answer and was passed during Clinton’s tenure. He used it over 80 times. It appeared to be a valid means to help throttle back spending, until the Supreme Court overruled it as a violation of the Presentment Clause, bringing us back to square one.
However, the measure’s constitutionality has always been dubious.
Now it’s Trump’s chance to take a shot at it. As we head into his second year in office with his power consolidated, he can afford to take some additional risks for large potential gains/savings.
Expect to see him refusing to spend wasteful dollars on countless ridiculous items.
He’ll get away with it for a while, but eventually it’s going to wind up in court in a test case.
Today’s Court looks quite different than 1974’s. Their eventual decision could help determine the nation’s future solvency or lack thereof.
Kerry Lutz has been a student of Austrian Economics since 1977. While attending Pace University, he stumbled upon an extensive cache of Austrian Economic Literature in a dark, musty, abandoned section of the school’s library. After graduating from The New York Law School, he became an attorney and life long serial entrepreneur. His diverse career has included: running a legal printing company, practicing commercial law and litigation and founding a successful distressed asset investment company.
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