People tend to associate democratic erosion with election interference and violent police crackdowns. But there’s a quieter tell that a democracy is endangered: the dissolution of laws that protect public money.
In Turkey a state-controlled fund now runs one of the country’s main messaging apps. In Hungary the government has used its tax-enforcement powers to harass dissidents. In India companies can discreetly fill the governing party’s campaign coffers in exchange for favorable tax treatment. All these regimes snatched the tax-and-spend power from their legislatures and so gained a blank check to reward friends, punish dissenters and undermine political foes.
It is too late to ask if the same could happen here: It is already happening. Article I of the Constitution clearly states that Congress ought to control how public money is raised and how it’s spent. At startling speed, that essential element is crumbling.
It is difficult to estimate the White House’s off-the-books revenue. There’s no comprehensive public accounting of this money, only dubious assertions from administration officials and President Trump’s social media posts. But by any measure, he is raking in billions of dollars, bypassing Congress and the law.
Consider his unlawful attack on Venezuela. It yielded some $500 million in the country’s oil revenue that officials initially deposited in a Qatari bank. Although these funds are Venezuela’s, Mr. Trump exerted a broad right to control them. He has also claimed emergency powers to impose tariffs at will, raising some $132 billion. The use of those funds is supposed to be governed by legislation, but he has asserted that he can use the money at will, without consulting Congress.
Then there are Mr. Trump’s private deals. Agreements with Nvidia and Intel will generate tens of billions of dollars for the federal government. None of that money will be subjected to legislative controls or oversight, and deals the White House is inking with at least nine other companies may yield billions more. In one deal with Nvidia, the government will make its money by waiving export controls on sales of powerful A.I. chips to China in exchange for 15 percent of revenue. Federal export law bars any such license fee, but paradoxically, that works in Mr. Trump’s favor: Since Congress banned the collection of that money, there’s also no statute directing how the funds can be spent.
The president is not only creating off-the-books accounts that sideline Congress. He is also undermining the institutional tools our government uses to raise public funds. Over the past year, about one-quarter of the I.R.S.’s work force has been eliminated. Most of its leadership has left or been ejected. Thanks to cuts in enforcement capacity, hundreds of billions of dollars in tax revenue will probably be lost, eroding the government’s fiscal dependency on the public and further weakening the electoral tethers on presidential power.
The flight of neutral civil servants allows the I.R.S. to become a weapon of the state. Already, the Trump administration has threatened to rescind the tax status of Harvard University, Wikimedia and other nonprofit institutions. Some nonprofit leaders may well fall in line with presidential priorities or avoid criticism of the administration to preserve their tax status.
The White House has also weaponized its spending powers, and its attacks on universities, states and nonprofits are just the beginning. It recently froze billions of dollars in federal funding for five blue states, which sent tremors through the bond market. Those states may now have to pay higher interest rates. The Government Accountability Office has also identified multiple violations of a law barring the president from refusing to disburse federal funding, and it has started dozens of investigations. Instead of blocking Mr. Trump from unlawfully grabbing such sweeping fiscal power, the Supreme Court’s conservative majority has narrowed the ways in which impoundments can be challenged, all but inviting the White House to claim more of Congress’s fiscal powers for itself.
The collapse of the Constitution’s appropriations framework imperils not only blue states. The Trump administration threatened to yank Indiana’s federal funding in an effort to persuade its Republican legislators to adopt a new, highly gerrymandered map, an effort that ultimately failed. As the midterms approach, what’s to stop the White House from pulling harder on these fiscal levers to skew election results — say, by threatening to strip federal dollars from districts that vote for Democrats?
Our Constitution’s framers recognized these dangers. The principle that a representative body should constrain the executive’s fiscal power dates to Magna Carta in 1215. Extending this tradition, the framers gave Congress alone the power “to lay and collect taxes.” They knew that untrammeled executive power over public money opens the door to tyranny.
A presidency that simply ignores legal and constitutional limits presents a novel and daunting challenge for our democracy. This term, Congress has not seriously considered using its powers of impeachment and removal, abdicating, for now, its most basic oversight responsibility.
But short of impeachment, there are steps Congress can take to hold the president accountable. It could refuse to appropriate funding for the administration’s unconstitutional agenda. It could deploy its investigative tools to identify off-the-books funding streams and then use the congressional budget process to reassert control over these funds. And it could hold in contempt officials who violate appropriations statutes by refusing to disburse funds on partisan grounds.
In the longer term, Congress needs to build a new tool kit not only to check the executive but also to empower the legislature with stronger instruments to carry out its fiscal powers. The inflation of executive power is, to a large degree, a consequence of legislative dysfunction. Building a functional and effective budget process, with stronger ties between Congress and federal bureaucracy, will reinvigorate Article I of the Constitution and, with it, the bedrock republican principle that entrusts fiscal power to the legislature.
Aziz Huq teaches at the University of Chicago; his book “Into the Dual State” will be published next year. Vanessa Williamson is a senior fellow in governance studies at the Brookings Institution.
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