Is the way Trump and Musk are running the economy even legal?
Is the way Trump and Musk are running the economy even legal?
Over the weekend, various news outlets reported that the Department of Government Efficiency gained access to a Treasury Department payment system that distributes trillions of dollars a year. Monday evening, federal employee unions sued to stop Elon Musk’s team from accessing the system.
As the story continues to evolve, “Marketplace” host Kai Ryssdal spoke with Blake Emerson, a professor of law and political science at the University of California, Los Angeles, to ask the question: Is this even legal? The following is an edited transcript of their conversation.
Kai Ryssdal: I think it’s important to avoid euphemism and innuendo in this conversation and all the conversations that are being had about this. What is happening in the federal government right now — Elon Musk, his minions, what the executive branch is is doing and doing to itself, I suppose — how is this not illegal? Or is it illegal?
Blake Emerson: Yeah, so I do think we’re dealing with a serious and systemic set of constitutional violations right now that include several clear violations of both statutory law passed by Congress, as well as provisions of the Constitution. Just to give give one example, the way that Musk and the Trump administration have attempted to shut down government agencies like [U.S. Agency for International Development] and to take control of the Treasury payment system really takes away Congress’ power to make the laws, which includes the power to spend money, the power to create administrative agencies. And these actions really strike at the core of those constitutional powers that are held by Congress and not by the executive branch.
Ryssdal: I wonder if what’s happening here actually is that they are trying to set up an extraconstitutional way to run this chunk of the American economy.
Emerson: That’s right. I mean, I see a risk that there is a kind of shadow executive branch that’s operating alongside of and within and maybe displacing the structure that is set up by the Constitution and by the laws enacted by Congress. And so when you have Musk and Musk’s assistants taking over a system that’s housed in the Treasury without meeting the requirements for appointments that are set up in the Constitution, that subverts the accountability structures that the framers designed. What’s not clear now is who exactly is running the show. That includes questions about whether the Treasury Secretary is in charge, or is Musk in charge? But also, more fundamentally, who holds the executive power right now? I mean, the Constitution says that the executive power shall be vested in a President of the United States, and at the moment, with this kind of sweeping delegation of executive power to Musk, I think there’s some genuine doubt about whether that executive power is where it’s supposed to be.
Ryssdal: One wants government to be as best as possible, risk free. And it seems to me, by doing all of this, they are exposing the United States, writ large, all of us and our interactions and negotiations and contracting and all of this, to an immense amount of risk.
Emerson: That’s right, so I think one problem here is that transactions and decisions that the government routinely makes, concerning payments, concerning regulations, that would not have been in doubt previously are now uncertain, right? So it’s uncertain what decisions have been made, whether those decisions are going to hold up when courts review them, and when you have that degree of systemic uncertainty, it creates really grave risks, I would say, for market stability, but also more profound risks about political stability. When the the usual structures of government that have been in place for over a couple hundred years now are being displaced with a new system that we don’t understand, that seems to be going outside the law, the results of that become quite unpredictable and, frankly, scary.
Ryssdal: You are a professor of law also, though, a professor of political science at UCLA. So put on your political scientist hat for me here for a second. The institutions of this economy work, it seems to me, in no small measure, because the institutions of this democracy work. That is to say, the rule of law, fair and adequate regulation. What’s the macro threat to the economy by the dysfunction of politics right now?
Emerson: So I’d say the macro risk is a basic breakdown in the predictable enforcement of federal law. That touches really every nook and cranny of the economy. So you have actions, for instance, like Trump removing officials from the National Labor Relations Board, which he is not permitted by law to do. The statute says you have to provide some kind of a good cause reason for that, which he did not provide. And that’s just one example of myriad violations of impairing the functioning of regulatory agencies up and down the line, from the board to something like the Federal Reserve, that I think are now in question. And when that happens, you lose that basic predictability that enables people to make transactions in the marketplace based on reasonable expectations about what’s going to happen in the future and what the laws really are. So we’re losing that stable framework and replacing it with something much more discretionary and even arbitrary and unaccountable.
Ryssdal: This is a little bit sideways, but roll with me here. You probably have some classes this afternoon out at UCLA. What’s it like teaching the law at this moment in the law?
Emerson: Yeah, it’s a moment where you’re trying to teach a moving target. And I think one of the things that’s really interesting and challenging about this moment is that the law around the executive branch is already in flux. So the Supreme Court has already been over the past 10 to 15 years or so, changing rules around presidential power, around judicial review of administrative agencies, and now Trump is stepping into that space and trying to exploit some of those ambiguities and and changes. And when you look at what’s happening now, I think that Trump’s actions fly in the face of the kind of Constitution that the Supreme Court has been trying to defend. One that when agencies act, they are bound by the laws enacted by Congress, and that also when agencies act, there is a clear line of accountability to the White House and to the President. The seizure of Treasury payments and the like create this risk that that hierarchy of accountability is being displaced by something that is very difficult to challenge and to hold to account. And these are problems that the Supreme Court ought to take seriously, given its recent preoccupation with the administrative state and problems around presidential power.
Ryssdal: Let’s talk about accountability here for a second before I let you go off to class. If we don’t know who’s in charge, if we don’t know who is making these decisions and what the lines of authority are, and yes, lawsuits have been filed, but how do you know who to hold accountable?
Emerson: Yeah, and that is a tough question. What we can do is that there are officials who, by law, are vested with authority, right? So if we’re talking about the Treasury system, we have the Secretary of the Treasury, and we have assistants to the secretary, and so we can rely on, on kind of the official chain of command. It’s just going to be hard for the courts to get their grip on what’s really happening if the people who are being sued are not the true decision makers. Because, if the true decision maker is somebody else, then your injunction on the on the Treasury Secretary is not going to be super useful.
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