[JURIST] The US House of Representatives on Monday rejected a financial rescue bill [PDF text; summary] that would have allowed courts to review purchases of troubled assets made by the US Treasury Department [official website]. The Emergency Economic Stabilization Act of 2008, defeated by a vote of 228-205, would have permitted courts to set aside Treasury actions that were "arbitrary, capricious, an abuse of discretion, or not in accordance with law." The bill further shielded the Treasury secretary from injunctive relief except for constitutional violations and provided that any requests for restraining orders or injunctions be considered on an expedited basis. CNN has more.

Last week, Senate Democrats questioned the legality [JURIST report] of the Bush administration's proposed version of the legislation, which would have precluded judicial oversight of the asset purchases. Led by US Sen. Christopher Dodd (D-CT), chairman of the Senate Banking Committee [official websites], the Democrats put forth their own proposal that included the judicial review language. Some observers had expressed concern that the Bush proposal would represent an unconstitutional delegation of the spending powers granted to Congress by Article I of the US Constitution [text].