Social Security, Medicare, and other key programs Americans rely on could become 'vulnerable' depending on an upcoming Supreme Court ruling, a former federal official says
The nation's highest court is about to hear arguments in a case that could have major implications for consumers nationwide.
On Tuesday, the Supreme Court will hear oral arguments in the case Consumer Financial Protection Bureau v. Community Financial Services Association of America Ltd., which argues the CFPB's independent funding structure is unconstitutional.
Since its establishment in 2011, the CFPB has relied on the Federal Reserve for funding rather than Congress' annual appropriations process, which the Fifth Circuit ruled last year is illegal. The Supreme Court is now taking on the case, and Sheila Bair — the former chair of the Federal Deposit Insurance Corporation — raised the risks of an adverse ruling in a Politico opinion piece last week.
"The opinion could lead to a sea change in how essential government agencies function — and to potential chaos every time Congress engages in brinkmanship over funding," Bair said.
Essential government agencies and programs, including Social Security and Medicare, both of which are administered by independently funded bodies, would see their sources of independent funding vulnerable to challenge," she added. "The Federal Reserve, responsible for monetary policy and our payments system, would be particularly at risk, given that it runs on fees and profits from its market operations just like the CFPB."
Essentially, Bair said, deciding the CFPB can no longer be independently funded would open the floodgates for legal challenges against every other agency with a similar funding struct
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