It must have seemed like a way the President should show he was in command: "inform" BP that they would be setting up an escrow account to fund payments for damages in the Gulf oil spill. BP has now agreed. The amount is $20 billion and the fund is to be administered by federal officials.
It may turn out to be a bad idea for the President. He has now assumed direct responsibility for distributing money to aggrieved Gulf Coast businesses and individuals. If payments are slow, he will be blamed, and rightly so. It is unlikely that the government can set up a new bureaucracy that will work efficiently and quickly. There is also the danger that the fund will be politicized, and seen to be so.
It is a bad idea for the Gulf, where the recourse for claims has now been turned into a government program. People often find it painful to deal with a big corporations, but it's even worse dealing with government. Some will be tempted to use political pull to to get ahead in line.
It may be a bad idea for BP. Unless there is a part of the deal that has not yet made public, they have just agreed to a $20 billion floor, not a ceiling.
And its is a very bad precedent for the constitutional law in America. Who or what exactly gives Presidents power to direct private companies to set up accounts of this kind? If he can order one company around, why can't the President order any other around? BP is an unsympathetic target, of course, but law and sympathies are supposed to be separate.
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