Do government bailouts violate the Constitution?

Judge Andrew Napolitano seems to think so.

Treasury Secretary Paulson argued for the $700 billion bank bailout in order to acquire damaged mortgage assets. He initially claimed that the acquisition of these damaged assets would help to remedy the credit crunch. Paulson apparently had a change of heart and instead did something completely different with the bailout money - bought stock in banks that were operating in the black.

Not only does Napolitano take issue with the Constitutionality of the bailout itself, he also takes issue with the Constitutionality of Congress essentially delegating, to Paulson, the power of determining how to spend the bailout money.

The Bitter Fruit of an Unconstitutional Bailout

"Bailouts violate the Equal Protection doctrine because the Congress can’t fairly pick and choose who to bail out and who to let expire; they violate the General Welfare Clause because they benefit only a small group and not the general public; they violate the Due Process Clause because they interfere with contracts already entered into; and they turn the public treasury into a public trough. Worse still, Congress lacks the power to let someone else decide how to spend the peoples’ money. In effect, the Congress delegated to the Secretary of the Treasury some of the power the Constitution has delegated to the Congress: The power to decide when, how, for whose benefit, and in what amounts taxpayer dollars should be spent.

This delegation of power to the secretary directly violates a basic principle of constitutional law: Delegated powers cannot be delegated away. The Constitution delegates to the Congress the power to write all federal laws specifically related to spending, to the president the power to enforce those laws (and he must spend as the Congress ordains), and to the courts the power to interpret the laws (and they usually stay away from issues of spending).

Congress can’t cede power to the executive branch because Congress and the president are powerless to change the delicate balance among the three branches of government which the Constitution created.

The secretary of the treasury can spend all the peoples’ money he can get his hands on. He can buy all the stock he wants in all the solvent banks that don’t need it and don’t want government investments and the strings that come with them. He can bail out and try to manage all the corporations his advisers recommend whose executives made millions but lost billions. But he is exercising power unconstitutionally given to him by the Congress, procured with only ten hours of debate and hearings, and the very premise of which he unilaterally rejected afterwards."

Just wait until the TV networks come begging for bailout money. And we wonder why our economy and country are in the shitter.