Ignoring the fact that the Contracts Clause binds the states (not the federal government)...
How is this different from Blaisdell, where the court found that Minnesota could extend the time needed to redeem a mortgage from foreclosure, on account of the Great Depression?
Under Kansas Power & Light, there's a three part test:
- extent of the impairment of the contract
- a significant and legitimate purpose behind the regulation, such as the remedying of a broad and general social or economic problem
- reasonable and appropriate for its intended purpose.
Point #2 is a slam dunk, and I think you could make the case, under #1, that the mortgage holder will still get paid slightly later, the time value of that money is very low (the yield on a 3 month T-Bill is a comically low 0.09%), and there are programs to tide over anyone who might be in a bind.
This post piqued my interest so I went and read the two rulings you mentioned, Blaisdell and Kansas Power & Light. These are my (a layman) musings about them in case anyone else is interested:
The Court in Blaisdell basically recognized that passing any law can potentially interfere with a contract and refused to let the state's emergency authority be trumped by the contracts clause. In that case, the law in question extended the time a person has to "redeem" their mortgage but also required the person to pay rent to the bank in the interim, which seemed important as they cited other similar laws that were ruled "repugnant to the constitution" which lacked a similar provision. They also highlight the difference between modifying a contract and modifying your remedies, which applies now to California (and other states) because we've suspended processing of evictions. CA didn't modify anyone's rental agreement to extend the eviction process, they just refuse to give landlords a remedy.
Kansas Power & Light was a lot more straight-forward but it basically brushed away the Contracts Clause forevermore. That case was about a natural gas contract that had been governed by Federal regulation but then the fed said "we don't want to deal with this any more, let the states regulate the price of gas" and the court ruled that Kansas hadn't interfered with the contract because the contract assumed regulation and it didn't matter much who was doing that regulation. I actually thought the court's reasoning here was pretty weak, but I support the outcome. They basically read the Contracts Clause out of the Constitution unless the state itself is party to the contract or has passed something openly nefarious, which should have been done via an amendment to the Constitution, but I have some extreme views around that.
After reading these two cases and considering whether a state government could pause mortgages/rent for a month in light of the contracts clause, I think that mattkrause's opinion is correct, that they could get away with it as long as the banks are made whole in some way.
That depends on what word “unconstitutional” means.
Would people who originally wrote the constitution consider it unconstitutional for federal government to do it? Almost surely, yes: they wrote an explicit list of things the federal government can do, and if something was not on the list, it was understood that the federal government cannot do it.
Of course, in early 20th century this has all been thrown through the window by the Progressive era Supreme Court, and contrary to intent of the framers of the constitution, it became clear that nothing restrains federal government other than what a group of nine says, and even that is not always true.
You missed the point. Of course the Contracts Clause applies to the states and not to the federal government. The point here is that there is no need for Contracts Clause applying to federal government to exist, because the federal government cannot do what the Contracts Clauses forbids the states anyway.
Of course, that's the theory. In practice, the federal government can do literally anything it wants as long as it uses magic incantations of "General Welfare" and "Commerce Clause", and as long as the nine guys in SCOTUS
accept that, regardless of what the authors of constitution meant for federal government to be able to do.
To put it more bluntly, it literally starts with the words "No State shall...."
If you want to go all originalist, the point was to prohibit private bills benefiting a specific person, which is almost the opposite of what's proposed here.
Well, we know the founders were all like, this is final word, we have foreseen all contingencies, if you ever do anything we wouldn’t like we will haunt you from the grave.
