My last post discussed the possibility of separating the offices of President and Attorney General. Now on to the Treasurer and Auditor.
The Treasurer: The current US Treasury Department collects taxes, pays government expenses, manages government accounts, supervises banks, enforces tax law, and issues and enforces financial regulations.
In many ways, the federal government's real source of power is not law enforcement, but money. Law enforcement in the US is extremely diffuse, most of it under city or county control with no central command. Non-federal law enforcement is not allowed to interfere with the feds, but neither is it required to act on their behalf. Rather, state and local law enforcement step aside and do nothing with respect to federal law. In that case, the big restriction on federal law enforcement would be the lack of personnel. That is why all elections matter. And selective attempts to criminalize the opposition with bogus prosecutions would be constrained by an independent judiciary and trial by jury.
But the federal budget is immense. Most of the federal budget takes the form of payments to individuals or organizations, whether through transfers, contracts, loans, grants, or the like. Countless individuals, non-profits, local governments, etc. rely on federal funding and would be devastated if it were withdrawn. This was what Elon Musk attempted to do. It continues, albeit on a less dramatic scale and in a less flamboyant manner.
Congress determines the general rules of how federal funds are to be spent, but executive agencies have significant discretion within the limits of their budgets. Individuals or organizations seeking federal contracts, grants, loans, reimbursements, etc. apply, not to the Treasury, but to the specific federal agency and the agency, not the Treasury, makes the payment. Under the Impoundment Control Act, if the President does not want to spend money appropriated by Congress, he must notify Congress. The money will be held for 45 days. At the end of that time, the funds must be released unless Congress rescinds payment. Enforcement is by the Comptroller General of the Government Accountability Office (GAO). However, Trump has thwarted such action by not appointing a Comptroller General. (The holdover is not clear whether she has authority to bring suit).
Then there is the matter of the use of federal funds as a means of coercion. Furthermore, federal funds are, quite property, conditional on various terms. The ability to claim that conditions have not been met and withhold funds is an immense source of leverage. The best-known recent example involves Trump's showdown with universities. It is clear that during the Gaza protests, many universities allowed the protesters to engage in behavior that was inappropriate at best and illegal at worst. Recipients of federal money may not engage in racial or ethnic discrimination. Universities were allowing protesters to engage in such discrimination against Jews. Withholding federal money seems appropriate, but subject to strict conditions. Termination of funds requires "an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement." Furthermore:
[S]uch termination or refusal shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made and, shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found.
Notice must be given to the recipient; it must be determined that compliance cannot be secured by voluntary means. A report must be filed with relevant Congressional committees, and withholding cannot take place until 30 days after the report is filed. Needless to say, the Trump Administration has ignored all of these requirements. And there have been other withholdings of funds as a means of political retaliation or coercion. And there have been all manner of bizarre rules and regulations attached to grants that are cutting off funding from uncontroversial programs, such and cancer and Alzheimer's research. And, while allowing the executive some discretion in moving funds about is necessary, Trump has engaged in grossly inappropriate fund shifting.
What can be done about all of this?
I would do much the same with federal money as I proposed with federal law enforcement. Just as an independently elected Attorney General would whole separate the enforcement of laws and regulations from issuance and adjudication of regulations, an independently elected Treasurer would separate spending decisions from disbursement of money. Congress would appropriate funds. Executive agencies under the office of the President would make appropriate decisions about who should receive grants, contracts, etc. in accordance with the President's policy preferences. The Treasury would actually disburse the funds.
If the President wished not to spend funds appropriated by Congress, he would give the suitable notice to Congress and the Treasurer. Congress would have 45 days to pass a rescission, or the Treasurer would disburse. A good case could be made for giving the recipient power to sue for the release of funds. If a federal agency under the control of the President wishes to disburse money in the form of a grant, contract, loan, etc., it would notify the Treasurer, and the Treasurer would make payment. Most of the time this would be routine.
If an executive agency believes there is a good reason to deny a payment (such as fraud) or a good reason to cut off an ongoing grant or contract (see the university situation, for instance), it would notify the Treasurer and give the justification. The recipient could then challenge the withholding. The Treasurer would have an administrative adjudicator to decide whether the withholding was legally justified and disburse if it finds the withholding is not justified, presumably with appeal to the courts. If the executive agency attempts to bypass this arrangement by simply not notifying the Treasury of the payment to be made, the recipient could make a claim with the Treasury and go through the same process.
Finally, if any executive agency seeks funds for an unauthorized purpose, the Treasurer could withhold the funds and the agency could challenge the withholding in court. (Not with an administrative adjudicator because the Treasurer would be a party).
The Treasurer would also pass financial regulations and have an enforcement role for tax collection and financial regulation. This could be handled in the general manner I proposed, which is already the system in place. The Treasurer would investigate tax and financial crimes, and the Attorney General would prosecute them. The Treasurer might continue to undertake civil tax collections.
Shameful as it is to say, it is unfortunately necessary to add that the President, Attorney General, and Treasurer would all have separate IT departments so that they could deny unauthorized physical or computer access to the others. (See Elon Musk). I would also add that all of these things could probably be achieved by internal and statutory reforms to increase the independence of the Treasury Department. But given the disposition of MAGA types these days, they would probably dismiss any sort of Treasury independence as machinations of the Deep State. Making the Treasurer elective is a protection against such accusations.
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