The Fed Takes One on the Chin

‘At the end of a momentous Term, this much is clear: The tsunami of lawsuits against agencies that the Court’s holdings in this case and Loper Bright have authorized has the potential to devastate the functioning of the Federal Government.’ The defeat today of the Federal Reserve at the Supreme Court is certainly striking a panic among the liberal judges. Feature Justice Ketanji Brown Jackson’s lament above in her dissent in Corner Post v. Board of Governors. Her concerns follow the Times’s warning that a “Slew of Anti-Regulatory Suits May Be Next” after the high court struck down the doctrine of obeisance to federal bureaucrats known as “Chevron deference.”The end of that 40-year-old precedent “threatens the authority of many federal agencies to regulate the environment and also health care, workplace safety, telecommunications, the financial sector and more,” the Times warns. It’s more accurate to view the rulings against the administrative state as a restoration of the constitutional balance of power. Checking the authority of bureaucrats will be a boon to the rights of Americans and our system of free enterprise. Corner Post, besides offering some welcome accountability for the Fed, “could amplify the effect” of the ruling against Chevron deference, the Times says. The dispute emerged from a North Dakota truckstop that was harmed by a Fed regulation on debit card transaction fees. The Fed’s rule set a higher cost for the fees than the law allows, the truckstop said. Tough luck, the Fed claimed, arguing the truckstop was too late to complain.That’s because the Fed’s rule was imposed in 2011. The truckstop didn’t even open for business until 2018, though. A lower court sided with the central bank, saying the truckstop would have had to sue the Fed within six years of the rule going into effect. That is to say, 2017, before the truck stop even existed. Such is the “Through the Looking-Glass” logic of bureaucracy. It’s the arrogance that characterizes the unelected and unaccountable.In Corner Post, the high court cuts through this welter, explaining that the truck stop had the right to sue the Fed starting from the day it was first harmed by the regulation that the central bank imposed on businesses across America. It doesn’t matter when the regulation was published, but rather “when the plaintiff is injured by final agency action,” is how Justice Amy Coney Barrett, writing for the majority, puts it. The decision in Corner Post, especially when viewed alongside the end of Chevron deference in Loper Bright Enterprises v. Raimondo, offers tantalizing prospects for Americans looking to scale back some of the most egregious overreaches by the regulatory state. The Times is among those fretting, though, that the court opened a Pandora’s Box, opening hundreds or thousands of rules to scrutiny. If the regulations are grounded in legal authority, what’s the worry?That doesn’t keep Justice Jackon from griping that “there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face.” She warns that this “wreaks havoc on Government agencies, businesses, and society at large.” Her appraisal seems to flow from a sense that the only thing holding civil society together is the web of regulations stitched by the small army of bureaucrats operating at Washington, D.C.This is inside-the-Beltway thinking at its most obtuse. Seen in a broader perspective, the court’s rulings are a chance to cut miles of baseless red tape. It’s not hard to imagine this new wave of scrutiny again reaching the Fed and its regulations. More broadly, what law let the central bank set a goal of inflating the currency by 2 percent a year? On what basis did it rack up trillions of dollars under the guise of Quantitative Easing? Critics of the Fed will want to stay tuned.

The Fed Takes One on the Chin

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