Americans are rightly concerned about the nation’s current fiscal problems. Congress simply spends too much money. Even beyond that, there are the outlays that Congress did not authorize or appropriate. For example, the Consumer Financial Protection Bureau (CFPB), a putatively independent agency authorized by the Dodd–Frank Act, is self-funding. The CFPB sets its own budget – independently of Congress – limited only to 12 percent of whatever the Federal Reserve’s operating expenses are. This funding scheme likely violates the Constitution’s appropriations clause, which gives Congress the power of the purse. As such, it is currently under review at the Supreme Court.
Even still, the CFPB recently gave its top officials a raise. The agency is embroiled in a further wage dispute with its union – making possible further, more broad-based raises. Top officials received bumps of up to five figures; those in the highest pay bracket will make as much as $269,000 in 2024. “[T]he CFPB—like the Federal Reserve and other federal banking regulators—is authorized to pay its employees more than counterparts at other federal agencies,” reports Bloomberg Law. “But compensation at the CFPB still lags behind the Fed, and the agency has ranked low among its federal peers on surveys asking employees if they’re satisfied with their pay.”
The National Treasury Employees Union (NTEU) is making the most of the situation, arguing that raises for rank-and-file staff are only fair considering senior officials’ recent pay boosts. “The escalating tensions mark the first-ever expiration of a union contract in the CFPB’s history, and add to budget-related concerns at the agency as the US Supreme Court weighs its independent funding,” Bloomberg Law notes.
For taxpayers, the stalled negotiations highlight the unaccountability at play at the CFPB. The agency has enjoyed multi-layered insulation from congressional and democratic accountability. Indeed, the Supreme Court in 2020 declared part of this insulation to be unconstitutional.
This unaccountable agency is now negotiating with NTEU – an organization whose interests (getting federal dollars into its members’ paychecks) are at odds with fiscal responsibility. Public sector unions widely promote unaccountability in government. They protect their members at the expense (literally, in this case) of the American taxpayer.
Looming over the entire dispute are the Supreme Court’s ongoing deliberations. If the Supreme Court returns the CFPB appropriations process to the rightful institution (the legislative branch), it remains to be seen how much money Congress believes the agency actually needs to carry out its mandate. As CFPB Mission Creep has documented extensively, the agency has engaged in rampant overreach, and Congress may well decide that the rogue regulator needs a severe fiscal haircut.
Ultimately, the lesson Congress must learn is that delegating extensive discretion and quasi-legislative powers to unaccountable bureaucrats inevitably presents grave dangers to America’s fiscal, political, and constitutional health.