Indiana Lawsuit Challenges the Constitutionality of the Auto Bailout

  I am so happy to read this news about Indiana challenging the constitutionality of the automaker bailout and subsequent takeover of General Motors that I don’t think that I can put it into words, but I am going to try.

  It is about time that someone stepped up and filed a lawsuit questioning whether the government has illegally taken over a private industry. Indiana is questioning whether the president had the authority to use the TARP money to bailout the auto industry and it is headed to a federal appeals court. (The same court that Sotomayor claimed makes policy.)

  Due to this lawsuit a New York court has halted the sale of Chrysler to Fiat pending testimony from Indiana which is arguing that the TARP money was not allocated to any business that was not a financial institution. Congress denied President Bush the authority to use TARP money for this purpose but he unconstitutionally did it anyway. Finally a challenge has come forward.

The administration misappropriated funds because it is stated in the law this is for financial institutions,” Indiana State Treasurer Richard Mourdock told CNSNews.com. “Is Chrysler a financial institution? Clearly not.

  I previously asked the question, “Where did the president get the authority to take over General Motors?” The answer is that he does not have that authority.

The Indiana pension funds added: “The Government’s action is not authorized by any statute, including TARP, and violates the unambiguous provisions of the Emergency Economic Stabilization Act (the “EESA”) and the Constitution of the United States.”

  This is going to be very interesting to watch as it is played out. I have always believed that this was a power grab of epic proportions and an unconstitutional act and now there is legal action being taken against it.

  In the end is anything going to change? I doubt it but maybe if Indiana wins this case the president will have second thoughts before he tries something like this again.

   However there could be negative repercussions. If the court rules in favor of the government this could possible embolden the president and make it possible for him to take over even more private businesses.

  We learned just yesterday that the Treasury Department bullied banks that were not in trouble to take bailout money or face the threat of  a hostile takeover by the government, what is to stop the Treasury Department from threatening other institutions that the president would like to control?

  While I don’t see a victory in this case changing anything in General Motors situation, hopefully a win would stop this from happening to another company.