Former federal appellate judge Michael McConnell, now a professor at Stanford, argues that the “Pay Czar” is unconstitutional. Specifically, he argues that the “Pay Czar,” aka the Treasury Department’s “Special Master” for executive compensation, is an “officer” of the United States for purposes of the Appointments Clause (albeit likely an inferior officer) because he is an “appointee exercising significant authority pursuant to the laws of the United States.” Article II, section 2 of the Constitution provides in relevant part:
He [the President] . . . by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.
Under this provision, all officers must either be nominated by the President and confirmed by the Senate with one exception. Congress may vest the power of appointment of an inferior officer in the President or a “Head of Department.” It did not do so here. As a consequence, the “Pay Czar” cannot exercise “significant authority pursuant to the laws of the United States,” such as the authority to set executive compensation levels for TARP recipients . Congress delegated this authority to the Treasury Secretary. While the Secretary may sub-delegate this authority, he may only do so to a duly appointed officer of the United States, and the “Pay Czar” does not qualify.
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