The Supreme Court is done talking about the CFPB

Andrew Harrer/Bloomberg

WASHINGTON — When I went to the Supreme Court today to hear oral arguments in the case challenging the Consumer Financial Protection Bureau's funding structure, I fixed my gaze on one person: Justice Brett Kavanaugh.

Kavanaugh has a history with the CFPB. He was the author of a D.C. District Court opinion that struck the "for cause" provision from the CFPB director's description in Dodd-Frank, effectively saying that a single director who cannot be fired at will by the president is unconstitutional, but a single director who can be removed at will would be.

Kavanaugh had been kicked upstairs to the D.C. Circuit Court in time for that court to hear an appeal of the earlier ruling, in which case the CFPB prevailed — and to which Kavanaugh dissented. Kavanaugh once again managed to get elevated to the Supreme Court in time to hear the ultimate appeal on the matter and got the last laugh, with the high court deciding — surprise! — that striking the "for cause" provision resolves the constitutional problem without completely unwinding the agency.

So it was with this history in mind that I sat there staring at Kavanaugh, trying to divine his inner thoughts via ESP, expecting him to be the bellwether that indicates which way the wind was going to blow on this very consequential case for not only the bureau but any number of other federal agencies that are funded outside of the formal appropriations process. But if I was prepared for a squeaker, what we ended up with was a blowout.

Just to set the table, the Supreme Court as currently constituted should be a warm room for litigators making the argument that the government has gone too far. The 6-3 conservative majority has finer contours, to be sure — Justice Neil Gorsuch's evident affection for tribal sovereignty being just one notable example — but as a general matter the door seemed open for a challenger to the CFPB's constitutionality to walk through. Instead, the argument posed by plaintiff's counsel Noel Francisco didn't seem to make it past the threshold.

At issue in the case is the appropriations clause of the Constitution, which states in part that "no Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." Francisco posited that the CFPB's funding structure — which requests funds from the Federal Reserve subject to a statutory cap — is uniquely insulated from Congress' annual appropriations practices (or lack thereof) because not only is it not directly subject to appropriations, but the agency from which it draws funding isn't, either. That uniqueness of funding is unconstitutional, and the court must agree.

What is more, Francisco argued, if the CFPB's structure is constitutional, then nothing prevents Congress from delegating its entire appropriations power to the executive branch by giving the president an omnibus budget of $1 quintillion and allowing executive agencies to take whatever they want.

Supreme Court skeptical of CFPB funding challenge

But the justices didn't have to play that logic forward very far to encounter inconsistencies between that vision and the way the republic has functioned for much of its history. Solicitor General Elizabeth Prelogar pointed out that many agencies — including names you know, like the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and National Credit Union Administration — are funded outside of congressional appropriations.

And going all the way back to the beginning of the republic, Congress has delegated its power over the purse to federal agencies to allow them to make their own way — the first Congress in 1789 created the Customs Administration, which had not only the power to collect customs but also the power to levy fees, impound ships and develop regulations around international commerce. That's a lot of power for a single federal agency, and it wasn't subject to congressional appropriations.

Kavanaugh didn't say much during oral arguments, but what he did say was telling. At one point he took exception to the argument that the CFPB was independent of the president — he saw to that one personally. And as for the permanence of CFPB's funding, he pointed out that whatever Congress makes, a future Congress can unmake with a sufficient majority.

"The word 'perpetual' I'm having trouble with, because it implies that it's entrenched and that a future Congress couldn't change it," Kavanaugh said. "But Congress could change it tomorrow, and there's nothing perpetual or permanent about this."

But as I said, even as Kavanaugh was speaking those words, the writing was on the wall. Justice Amy Coney Barrett said the infinity funding problem invites the Supreme Court — rather than Congress — to divine some kind of rule or principle stating how much funding for an agency is excessive.

"I think we're all struggling to figure out, then, what's the standard that you would use, just assuming that you're right that there has to be something more than the $600 million," Barrett said. "How do you decide how much is too much or how specific is specific enough?"

And that is to say nothing of the liberal justices on the court, whose skepticism of the plaintiff's arguments was palpable. Justice Ketanji Brown Jackson said that the idea that the appropriations clause requires every federal dollar to be spent in accordance with a line item in a congressional spending bill would render much of the federal budget unconstitutional.

"I've heard you say repeatedly that the problem here is that Congress is giving away the power of the purse in the way that it has set this up," Jackson said. "My answer is maybe that it depends on what the power of the purse is in order for us to know whether or not it's being given away."

I have no doubt that there are members of the Supreme Court who would like for the CFPB not to have been created and who disapprove of the way it is structured and run. But that inclination does not appear to be sufficiently strong to allow them to muster a majority to upend a couple of centuries-worth of accumulated legal precedent and established governmental functions upon which the public has come to rely. And if this is the length to which CFPB's opponents will require the Supreme Court to go to kill the agency and its rules, then I suspect it will be the last.