Supreme Court Questions SEC, Taxpayer Fund Appropriations
April 19, 2017
The U.S. Supreme Court will hear arguments on Wednesday in a case regarding the constitutionality of appropriating taxpayer funds to religious entities; Justices Grill SEC Over Limiting Power to Make Wrongdoers Give Back Gains; U.S. crude oil inventories decreased by 1.0 million barrels last week as total crude reserves stood at 532.2 million barrels.
- The U.S. Supreme Court will hear arguments on Wednesday in a case regarding the constitutionality of appropriating taxpayer funds to religious entities, as the American Civil Liberties Union has backed the defendant’s argument for separation of church and state. The case was brought forth after the Trinity Lutheran Church in Columbia, MO sued the state of Missouri, as the state’s constitution bars any church or denomination of religion from receiving taxpayer funds, language that goes further than that established under the First Amendment of the U.S. Constitution. Governor Eric Greitens (R-MO) reversed the state policy last Thursday, though officials at the Trinity Lutheran Church continued their lawsuit in favor of having the Supreme Court decide the outcome of the policy, even though they can now apply for funds. A victory at the Supreme Court for Trinity Lutheran could help religious organizations nationwide win public dollars for certain other purposes, such as health and public safety. It could also add fuel to the argument for school choice programs, as it would legally enable families to access taxpayer money to send their children to religious schools. [Reuters]
- U.S. Supreme Court justices expressed skepticism toward a claim from the Securities and Exchange Commission that clawing back fraudulent gains from financial wrongdoers is subject to a five-year limit on the government’s power, which Chief Justice John Roberts called “utterly repugnant.” Roberts evoked language used by Chief Justice John Marshall regarding the policy, which dates to 1839, and was joined in his opposition to the SEC’s argument by Obama administration appointee Justice Elena Kagan, who said that the regulator’s claims were “a little bit artificial.” The SEC’s case centers around the issue of disgorgement, which allows the body to claw back gains from wrongdoers and re-appropriate them to victims of financial crimes. The case, Kokesh v. SEC, alleges Charles Kokesh, a fund manager, illegally withdrew $45 million in 2009 from client accounts to pay his and other corporate officers’ salaries and to fund office expenses, as Kokesh claims he is not entitled to punishment given the five-year window has now passed. The case should be decided by June and has meaningful implications on the SEC’s regulatory enforcement operations. [WSJ]
Economic Indicators & News
- U.S. crude oil inventories decreased by 1.0 million barrels last week as total crude reserves stood at 532.2 million barrels, near the upper limit of the average range for this time of year, as American petroleum imports were up by 68,000 million barrels to 7.8 million barrels per day. Petroleum refinery inputs rose by 241,000 barrels per day to 16.9 million as refineries operated at 92.9% of their available capacity. Gasoline production declined by 100,000 barrels last week to average 9.8 million barrels per day while distillate fuel production rose to 5.2 million barrels per day. Total product supplied to end users was down by 0.8% over the year ago period to 19.7 million barrels per day. Motor gasoline supplied dropped 0.7% over the same period last year to 9.3 million barrels per day. The prior week’s crude inventory levels declined by 2.2 million barrels. [EIA]