Monday, February 28, 2011

What is a "Personal" View on a Matter of Public Policy?

By Mike Dorf


As recently as 2008, no Democratic Presidential candidate other than Dennis Kucinich publicly endorsed same-sex marriage.  I assumed then and continue to think that this was simple politics: Barack Obama, Hillary Clinton, John Edwards (remember him?!), Joe Biden, Chris Dodd, the Professor, and Maryann all probably would have supported same-sex marriage if they were not running for President but figured that it could be a deal-breaker with swing voters in the general election.   President Obama is a particularly poignant case.  As reported in Politico over two years ago, back in 1996, when Obama was merely a candidate for the Illinois State Senate, he favored "legalizing same-sex marriages."  When he became a national candidate, he backslid to favoring civil unions but said that he did not favor marriage--although he frequently fudged by referring to his position as his "personal" view.

More recently--and especially after the repeal of Don't-Ask-Don't-Tell led to a national yawn--the President has said that his views are "evolving."  Presumably, however, the views that are evolving are still his "personal" views, as White House Press Secretary Jay Carney indicated last week when the Administration's new position on DOMA was announced.  Carney distinguished Obama's "personal views" from "the legal decision" that the Administration had made about (not) defending DOMA, thus signaling that the President hasn't yet taken the leap back to his 1996 incarnation.

This notion of the President holding "personal views" about same-sex marriage is somewhat mysterious.  In what sense are a person's views about whether other people should have the legal right to marry "personal?"

We might try to distinguish "personal" views from role-based views.  Suppose I ask my accountant whether I am entitled to a deduction for a donation I made to an organization that lobbies Congress.  He might say something like this: "Personally, I think you ought to be able to take the deduction, but the Internal Revenue Code doesn't allow it."  Here, the personal view is normative, whereas the professional view is positive.  Might that be what President Obama and his spokespeople mean when they distinguish the President's "personal" views from the legal decision respecting DOMA?

We could well imagine the President saying that he personally thinks same-sex couples ought to have the right to marry, but that he can't say that they currently do have such a right under the constitutional case law.  In fact, I think this is probably a correct characterization of the views President Obama actually holds: 1) Based on his 1996 response and the fact that it's unlikely he has become less favorably inclined towards same-sex marriage in the ensuing 15 years, I would imagine that his real "personal" view is that same-sex couples ought to be able to marry; yet 2) based on the existing precedents, it is an open question whether there is a right to same-sex marriage.  We can be pretty confident that Justice Scalia will read those precedents (including the ones with which he disagrees) as providing no such right, and also pretty confident that Justice Ginsburg will read those precedents as granting such a right.  But we can't be confident about what the ultimate outcome in the SCOTUS will be.  In these circumstances, President Obama might truthfully say that he personally thinks  the existing case law is best read as recognizing a right to same-sex marriage, but that these are just his personal views, and that the Supreme Court could see it differently.

The problem, however, is that President Obama has used the notion of "personal" views to draw the distinction in the opposite direction.  He apparently wants people to believe that he "personally" thinks there should not be a right to same-sex marriage but that "legally" there is one.  This is a conceptual possibility, of course.  Presumably President G.W. Bush personally thought that there should not be a right to abortion but that legally there was one.  So we can make semantic sense of the claim that a President personally thinks there should not be a right even as he thinks there is one legally.  But the particular assemblage of views that President Obama would have us believe he holds makes very little sense.

Given that people in fact do differ on whether the existing precedents entail a right to same-sex marriage, it's just not plausible that someone would think that there ought not to be a right to same-sex marriage AND nonetheless that the only reasonable reading of the open-ended precedents is that they in fact do recognize a right to same-sex marriage.  Under the President's "legal" analysis, his own "personal" view is unreasonable!

Accordingly, I am left to conclude that the whole notion of President Obama holding anti-same-sex-marriage "personal" views was always political doublespeak.  As this fact becomes increasingly apparent, I suspect that his personal views will evolve back to where they were in 1996, and where--but for the perceived imperatives of politics--they belonged all along.

The Enforcement/Defense Calculus in DOMA and Beyond

By Mike Dorf 

The Justice Dept's decision last week to stop defending Section 3 of the Defense of Marriage Act (DOMA) predictably drew praise from gay rights groups and criticism from conservatives.  Many news stories--like this one in the Sunday NY Times--have raised the question of how much leeway the Executive Branch has to decide that a law is constitutionally indefensible even when those with different ideological views nevertheless stand ready to defend it and there is a fair chance that the courts could uphold it.  The Times story, for instance, notes that as a lawyer in the Justice Department in 1990, (now-Chief Justice) John Roberts told the Supreme Court that the government would not defend a FCC affirmative action program in broadcast licensing.  The Court upheld the policy in the Metro Broadcasting case, although that decision was effectively overruled five years later, following changes in personnel.)

One might think that the position taken by the Bush I Administration with respect to the FCC rule is not fully comparable to the Obama Administration's position on DOMA because the former was merely walking away from an agency rule rather than a statute adopted by Congress.  But this would be a mistake because, as both the majority opinion and a concurrence by Justice Stevens in Metro Broadcasting made clear, Congress, through conditions on an appropriations bill, had endorsed the FCC policy.  So whatever obligation the Executive Branch has to defend Congressional policies was as much in play with respect to the FCC program as it is in the case of Section 3 of DOMA.

Much has already been written about the Obama Administration's conclusion that it could not in good conscience advance arguments in support of DOMA, Section 3--at least not in those circuits that lack precedent making the highly deferential "rational basis" test the standard for judging laws that discriminate on the basis of sexual orientation.  Here I want to juxtapose the Administration's position on defense with its position on enforcement.  In Attorney General Holder's letter to House Speaker Boehner explaining the new position, Holder made clear that non-defense would not imply non-enforcement.  He wrote:
Section 3 will continue to be enforced by the Executive Branch. To that end, the President has instructed Executive agencies to continue to comply with Section 3 of DOMA, consistent with the Executive's obligation to take care that the laws be faithfully executed, unless and until Congress repeals Section 3 or the judicial branch renders a definitive verdict against the law's constitutionality. This course of action respects the actions of the prior Congress that enacted DOMA, and it recognizes the judiciary as the final arbiter of the constitutional claims raised.
This dichotomy should be familiar from the federal court same-sex-marriage litigation in California, in which the statewide elected officials declined to defend Prop 8, even as they continued (and continue) to enforce it.  Let's take a moment to step back and note how peculiar, indeed backwards, that arrangement is.

Suppose that one day your friend Socrates tells you that he is on his way to a cemetery to dig up some dead bodies and remove any valuable items of jewelry that might have been buried with them.  He asks you to join him.  You say that's immoral, that you would never do such a thing.  Socrates says that you haven't considered the matter fully and offers you a challenge: Come to the forum with him and debate the proposition "Graverobbing is immoral."  Socrates will take the affirmative of the proposition, while you will take the negative.  Now, you might have some aversion to arguing that graverobbing is a morally harmless act, but surely that aversion is less than your aversion to actually engaging in graverobbing.  If you think this example gilds the lily because graverobbing is not only immoral but also disgusting, imagine that the choice is between stealing a loaf of bread to give to a poor person and arguing in moral defense of stealing a loaf of bread to give to a poor person (assuming you think it immoral to steal a loaf of bread to give to a poor person).  So long as you think some act is immoral, wouldn't you generally think that it is worse to engage in the act than simply to argue to a neutral evaluator that the act is morally permissible?

We can quickly dispose of one objection.  You might worry that if you defend an immoral act, you will be so persuasive that it will come to be seen as moral simply because you are so much better at argument than those on the other side.  But that is certainly not going to be true in my example, in which no less than Socrates himself will argue the position that you actually favor.  And likewise in the actual court cases, there will undoubtedly be highly skilled lawyers challenging DOMA, so that the Justice Dep't will not overwhelm them if it defends DOMA.

One might also object to my hypothetical by noting that law is not exactly the same thing as morality, but which way does this cut?  Lawyers routinely make arguments that they do not personally find persuasive, whereas in the domain of morality we might think that one has a greater obligation to be true to one's actual beliefs.  At the very least, though, there is certainly no greater obligation only to make sincere arguments in matters of law than in matters of morality.

Consider one last example.  Thomas Jefferson thought that the Sedition Act violated the First Amendment (and history has validated him in this view).  Although it expired of its own force at the end of Adams' term, cases from the earlier period were still pending in the courts when Jefferson became President.  In accordance with his constitutional views of the Act, Jefferson dropped those prosecutions and issued pardons to those who had been convicted.  But suppose that Jefferson had reasoned as John Roberts and Eric Holder later would.  Jefferson would have persisted in the prosecutions of anyone already indicted under the Sedition Act, and presumably even would have initiated new prosecutions for pre-expiration Sedition Act violations, but if and when any of the defendants raised constitutional objections, Jefferson's lawyers simply would have declined to speak in defense of the Act's constitutionality, perhaps even acceding to the appointment of a Federalist lawyer to argue for constitutionality.  Would this not have been bizarre?

Fast forward to today, when two sorts of reasons are typically thought to justify the enforce-but-don't-defend approach.  First, it is sometimes said that this approach means that the President abides by his constitutional duty to faithfully execute the laws.  But this position is clearly question-begging, because, of course, the duty only extends to valid laws, and by hypothesis, we are dealing with what Holder himself calls a "rare case" in which the Administration determines that there are no reasonable grounds for defending the law at issue.

Second, enforce-but-don't-defend can perhaps be justified on the ground that this approach tees up the matter for judicial resolution, as the Holder letter states.  So long as the Executive is enforcing the law, its targets will have standing to challenge it, and so long as the courts permit other representatives (such as those selected by Congress or the courts themselves) to argue in defense of the law's constitutionality, there will be a concrete dispute for resolution in court.

I don't find this justification persuasive either.  To begin with, any force it has derives from standing rules that are themselves somewhat arbitrary.  The Supreme Court allows representatives of Congress to defend a statute that the Administration declines to defend but does not typically allow a private party or member of Congress to sue the Executive Branch to demand that it enforce a law the Executive refuses to enforce.  If one really values judicial resolution so highly, we could imagine a different regime in which whenever an Administration declines to defend a law's constitutionality, representatives of Congress could be given standing to sue the Administration for a declaratory judgment that the law is valid.

But in any event we shouldn't make judicial resolution the be-all and end-all.  Suppose that the Sedition Act had been challenged and upheld in court--as it almost certainly would have been by the Federalist-packed Supreme Court.  Would Jefferson then have been obligated to enforce it, notwithstanding his firm conviction that it was unconstitutional?  To my mind, an Administration should retain some freedom to choose not to enforce a law that the Supreme Court would uphold or even one it has upheld, if the President and her advisers, after due consideration of the stakes, make a judgment that the law is unconstitutional.  This power can be abused, of course, and some of the positions taken by President Bush 2 in signing statements went too far (though the most egregious examples involved a stated refusal to comply with laws rather than a refusal to enforce laws).   However, I think that risk is worth taking to get the basics right.  Doing so means that the judicial-resolution tail shouldn't wag the enforcement dog.

Friday, February 25, 2011

I Feel So Broke Up, I Wanna Go Home

-- Posted by Neil H. Buchanan

As I clicked the "Publish Post" button yesterday, committing my latest renting-is-better-than-owning post to the eternal blogosphere, I felt a deep sense of unease. At the time, I thought that the unease was caused by my suspicion that I had wimped out. After years of boldly saying that individual home ownership is a bad idea and should be discouraged, I had confronted the transitional issues and flinched. How to change things for the better, I asked? Slowly change people's attitudes, perhaps over the course of decades, I mumbled. Wimpy, wimpy, wimpy.

My discomfort intensified as the day wore on. It soon became clear, however, that the timidity of my position was the least of it. In this post, therefore, I will describe two fundamental errors that infected yesterday's post. Both of them end up further supporting my policy preference (and one might even reduce the wimp factor), but the errors are important for reasons that go far beyond housing policy.

My first error was in describing the housing market and related markets in the stylized terms that one finds in economics textbooks, assuming away real-life complications and acting as if the basic economic models accurately apply to the issues at hand. The most obvious example of this was my blithe assertion that the stock market would immediately and accurately respond to information about future policy changes, adjusting prices to offset those future changes. The closest I could come to a nod of recognition toward the real world was to allow that the market's response would be "adjusted for time value of money and risk," which is actually an even stronger assertion that prices respond perfectly. While many economists point to financial markets as being the closest of all real-world markets to the textbook models, however, it should by now go without saying that financial markets have proven capable of deviating rather severely from what we see in the textbooks.

There was a very good comment on the post, from a reader who goes by the name Doug. Doug gently noted similar errors in my claims about how the prices of houses fully reflect the mortgage interest deduction and other pro-ownership policies, suggesting that I was at least overstating the effect of those policies on home prices. The direct implication of his observations is that I might not need to be so wimpy after all. The more weakly resale prices respond to policy changes, after all, the less we have to worry about current homeowners being hammered by a policy change to discourage home ownership, and the more quickly we can make the changes.

These are merely a few useful examples of broader problems, however. At the very least, they are another illustration of the dangers of reasoning arguendo. Rather than saying, "Assuming (against all reality), that the various markets related to housing work as they do in the textbooks ... ," I said, "Because housing markets work as they do in the textbooks ... ." Even that reading, though, is far too generous. The import of my argument depended almost entirely on the validity of those assumptions. It was not a matter of being able to say that a logical outcome followed even if one stuck to the orthodox assumptions. The outcome was driven by those assumptions.

The first fundamental error in yesterday's post, therefore, was in allowing my traditional economics training to take over my brain entirely. Those who know me would find this at least ironic (and probably hilarious), given how much of my professional life is spent critiquing traditional economics. Still, given how often I have been baited with labels like Marxist, Communist, Socialist, anti-freedom, and so on, it is at least a change of pace to be accused (in this case, correctly) of being too much of a believer in textbook, market-oriented economics.

The second fundamental error in yesterday's post is even more troubling. At its core, my post framed the choice between the current pro-ownership legal structure and my preferred alternative proposal as a matter of removing unnatural policies and returning to an undistorted world where people's true preferences can play out in private, arms'-length transactions. (This is also an assumption in standard economics, but it is much less visible -- and much less widely understood -- than the more standard assumptions that allow the models to "prove" that markets are Pareto-efficient.)

For example, I wrote that "public policy should at least not artificially encourage people to own homes." "Artificially"?! Where did that come from? Obviously, my implicit strategy was to say that the current policy regime is not only bad in terms of its outcomes, but that it is unnatural, a deviation from something pure. This only makes sense, however, if there is a natural baseline against which all other arrangements can be measured. As is acknowledged in the economics literature (and, even more clearly, in the philosophy of science literature), there is no such natural baseline. (I should add, however, that being in the literature has not translated into this concept being widely taught -- or understood -- in economics departments.)

This lack of a neutral baseline means that my argument cannot plausibly be defended as advocating a return to the mythical state of nature, a world where we respect peoples' preferences and get policy out of the the way of happiness and progress. My bottom line, after all, was that we need to change people's attitudes. In that way, I am engaging in what liberals like me are always accused of engaging in: Telling people what is best for them, because I know better. Of course, that is what policy analysis is (liberal and conservative alike), and I do it all the time. I wish, for example, that the vast majority of people would understand that the estate tax will never apply to them, and that they (and the entire society) would be better off if they embraced rather than rejected it. Similarly, I wish that people would come to understand the foolishness (as well as the inherent bigotry) of anti-immigrant and anti-Muslim biases. I wish that gay civil rights were fully recognized and protected, and that women's reproductive rights were not under assault. In short, I wish that whatever is "the matter with Kansas" could be cured.

Preferences for home ownership are no different, in that people are acting in ways that I think are ultimately self-defeating and broadly dangerous. Still, one might argue, is there not something artificial about policies to reinforce those preferences? Given how strongly people believe in the moral importance of home ownership, it is unsurprising that public policy supports those beliefs. Yet we still might say that it is inappropriate for public policy to affirmatively support one view of the good life over others.

The problem with that assertion is that there is no "clean" baseline for public policy when it comes to housing (or anything else). We might look at the deduction for interest on home mortgages and say, "Well, that is clearly an add-on that supports the preference for home ownership. We can just repeal that provision of the tax code, and we will be closer to nature." But what about the failure to tax the consumption value of owner-occupied housing? Any "pure" definition of income or consumption would include this in the taxable base (because it substitutes for renting, which must be paid for out of after-tax funds), yet there is no code section to repeal.

One could still maintain that the tax code would be "purer" if we added a section to make it clear that owner-occupied housing should be taxed as consumption (and thus income). That, however, would undermine the idea that a simpler tax code (i.e., one with fewer sections) is a more natural tax code. More importantly, it assumes that the choice of tax base itself is somehow natural. If we did not have an income tax (or a consumption tax) and replaced it with a wage tax, owner-occupied housing would not be taxed at all. However, if we replaced the federal income tax with a federal property tax, housing would be taxed much more directly (and probably more heavily). And not having any tax at all is not a coherent baseline, because without government enforcement of property rights and contracts, there would be no market for either owning or renting homes.

In the tax area, this is now known as "the Murphy/Nagel point." The idea, however, extends well beyond the question of taxes. Government decisions about zoning, sewage districts, access roads, and so on, determine what kind of housing stock will even exist. And non-decisions are decisions. A city with no zoning laws, for example, is still dependent on the range of laws regarding real property, inheritance, nuisance, and so on that will be a necessary part of any gathering of humans living together.

Perhaps an even more obvious example of the baseline problem is in the area of immigration. What is the natural baseline for immigration, against which all other policies should be measured? Being against illegal immigration is no answer, because the issue is what the standard of legality should be. Is no immigration at all the baseline? Or is the non-artificial baseline a "no law/get the government off our backs" world that would amount to open immigration? That latter possibility, at least, would involve no government agents, no government spending, no licensing procedures, no prosecutions, and no apparent government involvement. Of course, the whole notion of being a nation means being able to say what is not part of that nation, so it would be rather odd to say that the natural path to maximum freedom in a country is to abolish the borders of the country.

In short, I framed my argument yesterday to appeal to the idea that we are currently doing something impure and distorted, whereas my supposedly more enlightened proposal would return us to a state of grace. I continue to believe that the current system is a worse choice than a system that would reduce or eliminate private home ownership. No set of policies, however, is the presumptive, non-artificial baseline involving no government intervention. As effective as it can be to frame policy debates as a choice of purity versus contamination, I should have known better.

Thursday, February 24, 2011

Home is Where You Wear Your Hat

-- Posted by Neil H. Buchanan

Last Friday, I revisited the owning-versus-renting question in housing. With the Obama Administration taking a surprising stance that home ownership might not be the be-all and end-all of housing policy -- that it might actually be better for some people to rent -- it is natural to ask who might be included among those who should not rent. My answer (based in large part on the idea that people's financial well-being should not be tied up in a single asset that can precipitously lose value): There is a rebuttable presumption that no individual should own his or her own home.

As a first step (one that is much more aggressive than anything the Administration is proposing), I suggested that public policy should at least not artificially encourage people to own homes. Even changing the current pro-ownership policy regime would only be the first step in this process, of course, because of the widely and deeply held belief that owning one's own home is evidence of having "made it." Changing such attitudes is not easy, but eliminating the current pro-ownership policies would rather quickly undermine many people's taste for risking everything on a house.

What are those policies? The list really is too long to discuss in any detail in a blog post, but it includes federal mortgage guarantees (the focus of the Administration's concern in promulgating its recent proposal), the deductibility of interest on mortgages, the deductibility of state and local property taxes, the exclusion from taxable income of the gain on the sale of a home (which would otherwise be taxed only at preferential capital gains rates, anyway), the homestead exemption in bankruptcy (which has been abused in states like Florida, where bankrupt litigants put all of their money into lavish homes), and so on.

As I mentioned this past Friday, however, there is a huge matter of fairness involved in changing the underlying rules that favor home ownership: People who bought their homes under the current regime would take potentially enormous losses if the legal incentives changed. This is true of any legal change, of course, but it is an especially large problem in housing, simply because so many people are involved. Moreover, while the losses from any legal change can possibly be justified by saying that there are no guarantees in life -- that, for example, people who buy Microsoft stock do so knowing that their investments would lose value if the government takes a more aggressive stance on antitrust law -- the home ownership situation presents a much stronger case for mercy. Having spent decades convincing everyone that owning a home is not only financially savvy but practically required for entry into Heaven, it would be especially unfair for policymakers now to channel Otter from "Animal House" and say, in essence: "You f#cked up. You trusted us!" [Movie fans will notice that the title of this post is from another favorite from my youth: "The Adventures of Buckaroo Banzai Across the 8th Dimension." I'm still waiting for the promised sequel.]

The problem, of course, is not that the housing stock should intrinsically be worth less in the hands of corporate owners who rent to individuals than in the hands of individual owners. If anything, the economies of scale involved in coordinating maintenance (repairs, snow removal, grass mowing, and so on) could lead to a combination of lower net costs to live in a house and higher property values. The potential losses come from the removal of public policies that directly and indirectly commit public funds to inflating the price of houses. Most obviously, if we believe that the mortgage interest deduction's value is included in the price of a house (making a person who would have been willing to pay $500,000 for a house willing to go to $600,000), then the removal of that subsidy will result in an immediate loss to current homeowners.

The textbook response to such a problem would be to compensate current owners for the policy change with a one-time lump-sum payment, making them whole and then letting the market go forward without policy-driven incentives to own. This would be enormously difficult, however, for the same reason that lending standards can be so easily manipulated: valuation is imprecise. Just ask any appraiser how easy it can be to make up a number. In the early 2000's, mortgage originators gleefully encouraged over-valuations, because they ultimately did not pay the price of those misjudgments. In a buy-out regime, with the federal government on the hook for the estimated losses, it would be especially tempting to game the system. (It would not be impossible to police this -- by, say, requiring look-back rules on subsequent sales under which federal payouts could be recaptured -- but I would not want to be the Inspector General for such a regime.)

The underlying goal here is to spread losses. (Arguably, however, some of the current rules should be changed in a way that concentrates losses, such as the homestead rules mentioned above. Taking this seriously would complicate matters even further.) The one-time buyouts would spread those losses by having the federal government initially cover the losses, which would thus be passed through to current and future taxpayers. If, however, we are not willing to concentrate the losses on homeowners, but we are too worried to nationalize the losses through the government, the next obvious place to look is shareholders. If there were a way to get the new corporate owners/managers of the housing stock to pay current prices for houses to make families whole, then to reduce the value of the housing stock by eliminating all of the subsidies later, the losses would show up in the form of reduced shareholder value. This would still cause pain to individuals (through, for example, reduced values of retirement and pension funds that have invested in real estate stocks), but the pain would presumably be more diffuse, with no one losing as large a chunk of their life savings because of the policy change.

Forward-looking investors, however, could unravel such a plan rather quickly. If the policy were announced in advance, the prices offered by corporate owner/managers would reflect the anticipated change in legal rules (adjusted for time value of money and risk), at least in the aggregate. The only alternative would be to pretend that no such plan was in the offing -- that the subsidies would continue for ever. That kind of clever plan would be nearly impossible to pull off, however, and it would also be subject to renegotiation under intense pressure from the new stakeholders.

If we are not willing to explicitly raise taxes to pay for the transition, and we are unwilling to make current homeowners pay, and we are not able to make future corporate owners pay, what is left? It is not enough to say that continuing the current regime is the cost-free alternative. We know from recent, bitter experience that the current system is not cost-free. The costs are hidden until it is too late (foreclosure crisis, financial bailouts), and they are sometimes worse than they need to be, because of market overreactions and the all-in character of too many families' financial investments in their homes.

The alternatives, therefore, are to adjust the rules to allow the current regime of subsidized home ownership to continue (with the adjustments designed to minimize the risks of concentrated losses and systemic crises), or to unravel the current regime slowly enough that the pain is tolerable. Nearly every politician favors the former, while I strongly prefer the latter. (The remaining political divide, of course, is driven by disagreements over how widely the subsidies should be made available, and how honest we should be about the implicit federal guarantees against systemic failure. Nearly all politicians, however, leave unchallenged the idea that home ownership is a high calling -- at least for most people.)

How boring is this? In the end, I am arguing for a radical re-ordering of society, to be carried out over decades in an orderly fashion. And I do so, knowing that it all could be reversed at any time. (In my defense, however, we are talking about undoing policies that have been in place for decades.) Surprisingly, the place to start might be where I began in one of my first DoL posts about the housing crisis: Point out to people that -- even with the pro-ownership subsidies in place -- owning one's home is not the financial boon that it is made out to be. Much of the current problem stems from people's belief that ownership is not only morally correct but financially wise. If we can disabuse people of that idea -- a process that will take time to unfold -- then the costs of future policy changes will almost surely go down.

Wednesday, February 23, 2011

Third-Party Standing in a Third-Party Standing Case

By Mike Dorf

Yesterday the Supreme Court heard oral argument in Bond v. United States, in which the petitioner was charged with violating a federal statute forbidding the possession or use of chemical weapons. The statute was enacted to implement a multilateral treaty--the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and their Destruction.  Yet Bond was charged with a garden-variety attempted poisoning: She left toxic chemicals on surfaces used by her former friend, who had been impregnated by Bond's husband.  On the merits, Bond argues that insofar as it reaches the sort of local conduct ordinarily regulated by state law, the statute goes beyond the bounds of the treaty power, and is thus invalid.

The Third Circuit Court of Appeals did not permit Bond to challenge the statute's constitutionality because she was making a 10th Amendment argument.  The 10th Amendment protects states, not individuals, the appeals court said, and therefore, Bond's argument was an impermissible effort to get the federal courts to adjudicate a third-party claim.  The Justice Department thought the third-party standing objection was indefensible, and so did not defend it in the Supreme Court.  As I explained at the time the Court granted cert, the third-party standing objection is, to my lights, just downright mistaken, and so the Justice Dep't made the right call.

Nonetheless, perhaps the Justices thought there was something to the third-party objection, because rather than summarily vacating the Third Circuit decision and remanding for consideration on the merits, as urged by the government, the Court enlisted attorney (and former law professor) Stephen McAllister to make the argument against third-party standing.  He did so in an able (but ultimately unpersuasive) brief.  The core of his argument--which comes through more clearly in the brief than in the oral argument transcript--is that while a criminal defendant is permitted to argue that Congress lacked the affirmative power to adopt the law under which she is charged, she lacks third-party standing to make a "Tenth Amendment" claim.

Now, to anyone who bothers to read the text of the Tenth Amendment, McAllister's argument will come across as baffling.  The Amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."  In other words, the actual content of the 10th Amendment is that Congress only has the powers enumerated in the Constitution.  In short, based on the language of the Constitution, a 10th Amendment claim simply is an enumerated powers claim.

As it happens, however, the Supreme Court has interpreted the 10th Amendment as going beyond the proposition that the federal government only has enumerated powers.  It has also held that the 10th Amendment sometimes restricts the means by which Congress may attempt to exercise one of its enumerated powers.  Most prominently, in Printz v. United States and New York v. United States, the Court held that the 10th Amendment forbids the federal government from "commandeering" state executive and legislative officials.

Much of the oral argument in Bond focused on whether there was a principled basis for saying that while a criminal defendant can object to a statute on the ground that it exceeds Congress's enumerated powers, she cannot object to a statute on the ground that it commandeers the state or otherwise violates the 10th Amendment.  Justice Kennedy and CJ Roberts were the strongest voices for the proposition that defendants should be permitted to raise both sorts of objections, and no Justice strongly supported the view--taken by the Solicitor General--that criminal defendants should be barred from raising anti-commandeering objections.

But here's the rub: Bond was not making an anti-commandeering or other exotic 10th Amendment claim.  She was making a straightforward argument that Congress had acted beyond its enumerated powers.  She says that neither the treaty power, the Commerce Power, nor any other power authorizes Congress to subject her to criminal prosecution for what was essentially a local act.  To be sure, part of the reason why she thinks the statute exceeds the scope of enumerated Congressional power is that it invades the province of the states, but that's still an enumerated powers claim.  In United States v. Lopez, for example, the fact that the federal statute concerned street crime and education--two areas of traditional state regulatory primacy--counted as reasons for finding that it exceeded the bounds of enumerated power under the Commerce Clause.  During the oral argument, the best that McAllister could do was to say that the treaty power is different from the commerce clause because it is found in Article II rather than in Section 8 of Article I.  But there is no reason why that should make any difference whatsoever.  So regardless of what, if anything, the Court says about anti-commandeering claims, Bond should have standing to raise the objections she is actually raising.

Finally, I'll point to an irony of the case that perhaps someone else has already noted.  Mr. McAllister was appointed to make an argument on behalf of the federal government even though the federal government does not want to make that argument.  He then argued that private parties should not have third-party standing to make arguments on behalf of states when those states do not want to make the argument.  One almost expects this argument to swallow itself or vanish in a puff of logic.  I expect the next-best thing: a unanimous decision that Bond has standing.

Monday, February 21, 2011

Pakistan Appears to be Right, and the U.S. Wrong, on the Vienna Convention

By Mike Dorf  (substantially amended in response to a comment)

The diplomatic impasse between the U.S. and Pakistan boiled over with the breaking of the story that Raymond Davis, the American being held by Pakistani authorities on murder charges, was in the employ of the CIA.  Davis has been classified by the U.S. as "administrative and technical staff" but he is part of a task force that monitors (and takes or facilitates covert action against) militant groups in Pakistan.  Several weeks ago, Davis shot and killed two Pakistanis who, he says, were attempting to rob him.  Accounts of the exact circumstances differ, but there is agreement that after the shooting, another U.S.-based vehicle killed a Pakistani pedestrian while its driver was attempting to come to Davis's aid, i.e., presumably trying to whisk Davis away before the authorities arrived.  The rescue effort failed and Davis was arrested.  The U.S. has strenuously insisted that Davis is entitled to diplomatic immunity.  Thus far, the Pakistani government has resisted calls for turning Davis over to the U.S.  The case has caused a further deterioration of the already-frayed relationship between the U.S. and Pakistan, and angered many people in Pakistan who were already upset about U.S. policies like drone attacks on suspected militants.

What's the right legal analysis?  That may depend on what treaty applies.  Article 41 of the Vienna Convention on Consular Relations provides that "[c]onsular officers shall not be liable to arrest or detention pending trial, except in the case of a grave crime and pursuant to a decision by the competent judicial authority."  There may be borderline cases that raise the question of what constitutes a "grave crime," but certainly murder counts as one.  Of course, Davis could well have acted in self-defense, but under the treaty, if that's so, Pakistan is entitled to make his self-defense argument subject to adjudication in its courts.

Notwithstanding Article 41, Davis could perhaps be immune to prosecution under Article 43.  It provides: "Consular officers and consular employees shall not be amenable to the jurisdiction of the judicial or administrative authorities of the receiving State in respect of acts performed in the exercise of consular functions."  The problem here is that Davis does not appear to have been engaged in any consular functions.  He was engaged in intelligence operations while acting under cover of a diplomatic passport.  Or so it appears anyway.  Perhaps the U.S. has an argument that in fact Davis had a genuine consular position of providing security services for U.S. diplomats.  But the U.S. has not said anything like that publicly.

Another possibility is that the U.S. takes the position that the receiving nation must accept the sending nation's assertion that one of its nationals was engaged in the exercise of consular functions when arrested, and thus immune.  But this is a hard sell also.  For one thing, I haven't seen that the U.S. has made this claim.  For another, there is nothing in the text of the treaty that supports it.  And finally, I am nearly certain that we would reject such a claim if the shoe were on the other foot.  Suppose that during the Cold War a suspected KGB agent killed two Americans.  Would we simply have accepted the Soviet assertion that he was really engaged in performing some consular function?  Even if we ultimately released him to the Russians, that surely would have been the result of a political negotiation, rather than out of a sense of legal obligation.

But perhaps instead of the Vienna Convention on Consular Relations, the case is governed by Article 31 of the Vienna Convention on Diplomatic Relations, which provides: "A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State."  Davis isn't a diplomatic agent, but Article 37(2) extends the immunity of Article 31 to "[m]embers of the administrative and technical staff of the mission."  Here too, though, the U.S. position looks shaky if Davis isn't really part of the administrative or technical staff but is simply using that as a cover.  Once again, the U.S. might avoid that result if its designation of its staff were given conclusive weight, but it is not obvious that things work that way under the treaty.  Consequently, the bottom line is that Pakistan's legal position may be stronger than it has been portrayed in the U.S. media.

Finally, I should be clear that Davis may well be guilty of nothing more than having had the bad fortune to be robbed and having defended himself.  It's also quite possible that a trial in Pakistan would be unfair to him.  Thus, I have nothing against diplomatic efforts to secure his return.  That, however, is something quite different from the position that the Administration has repeatedly taken--that Pakistan has an obligation under international law to release him.

Super-majority Quorum Requirements

By Mike Dorf

The walkout by Wisconsin Democratic Senators raises the question of whether it ever makes sense for a legislative body to set a rule that requires more than a simple majority to do business.  According to this useful CNN article on the history of walkouts to deprive the majority party of a quorum, Wisconsin is only one of a handful of states in which a simple majority does not suffice to do business.  The Wisconsin quorum rule requires the presence of 3/5 of the members.

Why set the quorum requirement at a super-majority?  In some legislative bodies and in some contexts, the answer might be because it has no impact.  Thus, in a body like the U.S. Senate, which now effectively requires a vote of 3/5 of the members to end debate (i.e., to break a modern filibuster), a minority party with more than 2/5 of the body's members can simply vote against cloture if it wishes to deny the majority an opportunity to enact legislation.  That's a less painful procedure than leaving the Senate chamber and hiding from the police, and so a state that already permits filibusters based on voting no for cloture could have a quorum rule with the same threshold without thereby empowering the minority to block any more legislation.

But why should a legislature ever have rules requiring a super-majority to do anything?  The standard answer is that such rules foster deliberation and moderation, while biasing policy towards the status quo.  Libertarians sometimes favor super-majority voting rules on the ground that they make it difficult for the majority to enact oppressive laws, but this assumption is not always correct: Where oppressive laws are already on the books, super-majority voting rules also make it more difficult to repeal them.  Still, painting with a very broad brush, it's probably fair to say that small-c (i.e., Burkean or "traditional") conservatives will be more likely to favor super-majority voting rules than progressives will be.  Or to put it differently, conservatives tend to worry more about the risks of too much government action, whereas progressives tend to worry more about the risks of too little government action.

Granting that there may sometimes be sound reasons to favor super-majority voting rules, is there any good reason for a super-majority quorum rule as opposed to other, more direct rules--like "it takes a 3/5 vote on the merits to raise taxes"--or a general super-majority rule--like what the U.S. Senate cloture rule has effectively become?

A superficially appealing justification for a super-majority quorum rule goes something this: The legislature is supposed to be representative of the People, but if only just over half of the People's representatives show up, that will mean that just over a quarter of their representatives will be voting to enact legislation.  When one considers that each representative can be elected with just over half of the voters from her district, and that voter turnout is often in the range of 50% of eligible voters, absent a super-majority quorum rule, legislation can be enacted by legislators representing just over a sixteenth of the electorate. This is undemocratic, and so, one might think, having a super-majority quorum requirement makes the legislative process at least a bit more representative.

But that reasoning strikes me as misguided.  To begin, there are political checks on absentee legislators.  One of the easiest attack ads to run shows the incumbent vacationing in some far-off locale juxtaposed with an empty seat in the legislature.  In addition, on truly contentious issues, we can count on party politics to maximize turnout.  The typical operating rules of legislatures require a majority for a quorum and a majority of those present to enact legislation.  Under such rules, members of each party have an incentive to show up--the majority members to increase the numerator that counts towards passage of legislation and the minority members to increase the denominator.  A super-majority quorum requirement is thus almost always unnecessary on important issues and will only become salient in cases like last week's Wisconsin's escapade, when it incentivizes legislators not to show up.  So long as a legislature has sensible rules about giving all members fair notice about the scheduling of votes, a super-majority quorum rule is either unnecessary or counter-productive.

A super-majority quorum requirement nonetheless may be thought to make sense for issues that do not divide along party lines, and involve asymmetrical concentration of costs and benefits.  Let's say that there is a proposal to adopt or repeal a subsidy for a particular industry.  Public choice theory says that lobbyists for that industry and representatives of the regions in which that industry are concentrated will care intensely about securing or preserving the subsidy, whereas the public at large, even if opposed to the subsidy, will not care enough about it (because the tax is diffused among a very large number of people) to fight it.  We can count on the industry's strongly-motivated proponents to show up for a vote on the subsidy, but not its weakly-motivated opponents.   Thus, a super-majority quorum rule is one sort of procedural measure to impede the enactment or continuation of "rents" for special interests.

The difficulty with the foregoing argument is that the logic of asymmetrical concentration of costs and benefits works pretty cleanly even when everyone shows up to vote.  Agricultural subsidies at the federal level are one example, but we can point to a great many others in which behind-the-scenes logrolling and the use of other procedural levers (e.g., threatened "holds" on unrelated nominations in the Senate) ensure that the legislators with the intense views get the body as a whole to do their bidding.  Thus, while a super-majority quorum rule isn't counter-productive on this front, it's not especially effective either.

Accordingly, I'm left to conclude that there is no very good justification for a super-majority quorum rule for a legislature.  However, I'd be happy to change my mind in response to other arguments I haven't considered.  And needless to say, this post is not in any way meant as a commentary on the merits of the current budgetary debate in Wisconsin.

Friday, February 18, 2011

A Shift in Washington's Attitude Toward Home Ownership?

-- Posted by Neil H. Buchanan

Early in the financial crisis, I wrote a series of FindLaw columns and Dorf on Law posts discussing and decrying the strong preference in the United States for people to own their own homes. (The most recent DoL post is here. That post includes links to my earlier writings on the subject.) The short version of my argument is that home ownership concentrates families' financial risk in entirely inappropriate (and often disastrous) ways, and that all of the supposed advantages of owning can be achieved in a world of renting.

Even as I argued that Americans' universal preference for home ownership was based on fundamental misunderstandings of the nature of owning versus renting, I acknowledged in nearly everything I wrote on the subject that changing people's attitudes about such a deeply-held ideal would be a nearly impossible task, best left to those (like tenured professors) whose job security should not be threatened by making unpopular proposals. I never imagined that any politicians -- and certainly not the hyper-cautious politicians in the Obama administration -- would push in this direction.

To my surprise, however, a report from Treasury and HUD was released earlier this week, in which the administration proposes to get the government out of the business of guaranteeing home mortgages (which it has long done, mostly through Fannie Mae and Freddie Mac). The response has been surprisingly muted, given that one news article described the report's broad message as: "Better to help some people rent." Pretty radical stuff in DC.

Unfortunately, my initial sense that this was a refreshing case of boldness on the part of the administration was undermined by the news that the proposal is most strongly opposed by some of President Obama's most reliable backers, and supported mostly by his opponents. (" 'Gutting Fannie and Freddie is the most irresponsible housing proposal yet from this administration,' said Representative Dennis Cardoza, a Democrat from the Central Valley in California. 'How is Joe Six-Pack ever going to be able to afford a home?' ") As a broad political matter, therefore, this is merely more triangulation from the neo-Clintonites.

While I understand why liberal groups have generally supported home ownership initiatives, however, I think that they are ultimately wrong. (Meanwhile, the reasons that most conservatives oppose Fanny and Freddie are even more wrong.)

The major impetus behind this proposal is, of course, the cost of the Fannie/Freddie bailouts to the public Treasury. An editorial in yesterday's New York Times, for example, assessed the report's three alternative proposals to reduce or remove federal mortgage guarantees, focusing its analysis entirely (and, in the context of the Great Recession, appropriately) on how likely each proposal would be to lead to future financial crises and public bailouts. Notably, however, the Times's editors expressed concern that "moderate-income communities could still be left behind," leaving unchallenged the idea that "getting ahead" must mean increasing access to home ownership.

The Treasury-HUD report also suggested that it might be time to reassess the tax preference for mortgage interest, which at least opens up the broader set of policies (far beyond the mortgage guarantee giants) that artificially push people to own homes. This raises the question of what an owner/renter neutral world would look like, and what kind of legal regime (aka regulation!) would be required to make it work. (Actually, I think that we should adopt policies to affirmatively discourage individual home ownership, because of the problem of risk concentration. I will, however, leave that aside for now. One enormous step at a time.)

The conservatives who clamor for the end of Fannie and Freddie do so, I suspect, in the belief that a new world of non-guaranteed loans would leave "the free market" to decide who lives in a house and who lives in an apartment. My assertion that rental markets can work reasonably well, however, is based on having lived in rental housing that is well-managed and well-maintained. I know, from having rented as an upper-middle class professional in Manhattan and DC/Maryland, that it is possible to have corporate-owned housing that is not a nightmare. By contrast, I vividly recall my days as a graduate student in the Boston area, left to the tender mercies of a low-end rental market that left my permanently low-income neighbors living in apartments with frequent (and sometimes disgusting) interruptions in power, water, sewage, and so on.

The preference among liberal advocates for increased home ownership among the poor and lower-middle-class, therefore, is based on the bitter reality that landlords have every incentive to take advantage of their tenants. Among many other problems, the costs of moving make it more difficult for renters to move away from bad landlords (even assuming that better ones exist), making the market adjustment process imperfect, at best. Even higher-income people need to rely on access to courts and regulators to enforce recalcitrant landlords to fulfill their obligations. After being scarred by uncounted horrible experiences with renting, it is understandable that people would view home ownership as an escape, finally liberating them from having to deal with rapacious and unresponsive property owners.

This means that the new world of more widespread renting -- including, as it must, the renting of single-family homes, not just apartments in multi-unit buildings -- would have to be accompanied by careful regulations to protect renters (and, to be fair, honest landlords) from abuses by the other side of the rental relationship. "Getting the government out of housing" must not mean simply allowing existing contract laws to govern the rental market. It would have to involve a very deliberately chosen set of policies that would correct the severe market failures that are fundamental to the housing market, especially for lower-income people.

Even if we could create those rules -- and, given my increasingly deep skepticism about "behavioral" remedies as opposed to "structural" remedies, I am not saying that the result would be ideal -- an even more difficult question is what would happen during a transition from the current regime to the neutral regime. What to do about all of those people who bought their piece of the American Dream? What will happen to them? I will address that question in a future Dorf on Law post.

Thursday, February 17, 2011

False Choices and Public Prosperity

-- Posted by Neil H. Buchanan

The dominant political story this week has been the sparring over the federal budget. The new Republican majority in the House of Representatives has been busily trying to see how much it can cut from this year's budget, decrying President Obama's less draconian cuts as irresponsible. The Obama team, meanwhile, continues to prove that it takes a back seat to no one in the art of triangulation, "pivoting" to prove that it finally gets it by proposing "tough" and "bold" -- read, harmful to the poor and middle-class -- cuts of its own. Within hours of announcing his budget plan, in fact, Obama was busily announcing that he really had not done enough cutting. Without doubt, Obama's approach to budgeting is the better of the two currently on offer in the United States, but no praise has ever been so faint.

The continuing narrative on budget questions is that there is no arguing with mathematics. The long-term budget forecasts all show historically large imbalances, and the only way to handle that is to cut, cut, cut. Moreover, as I explained when the reports of some deficit reduction commissions were released last Fall, the accepted route for anyone who wishes to be viewed as a Serious Person on budget matters is to somberly announce that some regrettably difficult choices must be made -- assuring everyone that the easy decisions are behind us, and that it is now time to pull together and set aside political sacred cows. This is followed by a selective list of proposed cuts to various programs that are usually viewed as politically protected. The message: If only the grown-ups could take over and show us that protecting these programs is no longer possible!!

That game is, naturally enough, easily rigged. A Serious Person proposes cuts to a given list of programs, taking the rest of the movable pieces in the budget game as immovable. A good recent example of this appears in last Friday's op-ed column in The New York Times by David Brooks. Shamelessly titled "The Freedom Alliance," Brooks lays out a blatant divide-and-conquer approach to budgeting.

Brooks first offers some crocodile tears for some "great people" he has recently met, all of whom are advocates for continued funding of wonderful programs that might well be cut: foreign aid, support for university-based research and innovation, early childhood education, and Teach for America. Assuring us that he is deeply sympathetic to their plight, Brooks announces that "these great people are suffering under a misimpression" that the merit of particular programs means something in the budget wars. Instead, "The coming budget cuts ... have to do with the inexorable logic of mathematics, [because] spending in nearly every section of the federal budget has exploded to unsustainable levels" over recent decades. He then cites John McCain's economic advisor in support of the claim that U.S. debt might be downgraded soon by Moody's.

All of this is perniciously wrong. "Nearly every section" of the budget is now at "unsustainable levels"? Not even the most hawkish analyses demonstrate any such thing. Our foreign aid levels are pathetically low (both by the standards of other wealthy countries, and compared to our own promises), and they could easily be doubled or tripled without causing any budget problems. Aid for low-cost housing, nutrition, and similar programs has exploded? Hardly. If one wants to believe that the U.S. budget has become unsustainable overall, that problem has nothing to do with growth in non-defense discretionary programs.

The most obvious problem with Brooks's claims, however, is that the "inexorable logic of mathematics" apparently does not apply to taxes. Brooks does allow that we need to "reform the tax code to foster growth and produce more revenue," but that is standard code for Laffer Curve logic: cutting rates for rich people and businesses to try to spur growth, with more revenue to follow. If the revenue does not follow, of course, then it's back to more spending cuts -- because it would "choke innovation" to raise taxes once they have been cut.

We thus have to make tough choices -- politically unpopular choices -- but none of those choices involves actually collecting more revenue from those who can most afford it. "We don't want to gut programs for home heating oil, but we have to." No, we don't. At most, one can argue that the choice to raise taxes to pay for such programs would be worse for the country in the long run than it would be to cut those programs now. That, however, is not a matter of being forced by mathematics to cut those programs. It is a matter of favoring one long-term outcome over another outcome with known short-term pain (and other long-term costs).

Having rigged a zero-sum outcome to the game, Brooks then proposes a "freedom alliance" of people who believe in Teach for America, who support research and innovation, and so on. This alliance should then do battle with their real enemies: people who defend Medicare and Social Security. Some "courageous senators" (including, shockingly, Democrats Dick Durbin and Kent Conrad) have been trying to make a "serious effort" to turn last December's laughable Deficit Commission report into legislation. Brooks asserts that we need a "popular movement" that understands that this is "about freedom." Cut Medicare and Social Security, or forget about other valuable government programs.

This, by the way, is hardly a new ploy for Brooks. As I pointed out last Fall, he used exactly this move to argue that public employees' unions have made it impossible for the government to spend money on any useful programs. Note that he continues to profess admiration for those who have good ideas for public spending programs -- thus appearing to be moderate, by refusing to repeat the more fundamentalist claim that all government spending is bad -- while always finding that the fault ultimately lies elsewhere inside the Democratic base.

Even if one believes that taxes are off the table, however, there is a more fundamental problem here. The basic claim is that some things must be cut to allow us to spend in other areas. It's simple math, because we cannot keep borrowing. But we can, especially for precisely the types of programs that Brooks highlights. Regular readers of Dorf on Law will surely recognize this as yet another example of my favorite subject: public investment. Public investments, like private investments, can be financed with borrowed funds. Not doing so -- choosing to forgo a program that would pay long-term net benefits -- would be irresponsible.

Not every public investment is worth it, of course, but many could be. As it stands, we have no formal process for determining which public investments are viable candidates for deficit spending. Pretending, as Brooks does, that potential public investments are subject to the same logic as current public spending, is self-defeating and dangerous.

Wednesday, February 16, 2011

New Conflict Rule for New York Courts

By Mike Dorf

Under a proposed new rule for the NY State courts, an elected judge would be ineligible to sit on cases in which a participating party or attorney has contributed $2500 or more to his or her election campaign in the prior two years.  The rule would also forbid participating in cases in which parties, attorneys, and firms have collectively contributed $3500 or more.  The comment period on the rule runs until the end of April.  I'll get the ball rolling here.

Although I think this proposed reform is laudable, the $2500 threshold for individuals strikes me as arguably too high.  Granted, it's way way way below the threshold for triggering due process concerns.  In the Caperton case, Massey Energy's Don Blankenship had donated $3 million to the campaign of the judge who failed to recuse himself.  That extraordinarily large contribution, Justice Kennedy said for the Court, made Caperton the rare case in which a campaign contribution created a due process violation.  I'm glad to see that New York proposes to go well beyond what federal due process requires.

Why do I think the threshold is still too high?  I'll also grant that it's hard to imagine that an otherwise honest judge would throw a case to reward a donor of a mere $2500, but things need not work exactly that way.  Consider an example.  Suppose that a hundred lawyers with similar caseloads--medical malpractice plaintiffs' lawyers, say, or white-collar criminal defense lawyers--each contribute $2499.99 to Judge Doe's election fund, hoping that Doe will be sympathetic to their cause in cases down the line.  The rule would not be triggered but one could still expect Judge Doe to have at least the appearance of a financial conflict and perhaps an actual conflict.

Now one might think that this is no worse than what happens routinely when judges are elected or, for that matter, appointed, in a process that involves politics.  The people who elect or appoint the judge do so in part because of what they know or suspect about the judge-candidate/nominee's views.  Other things being equal, we know that CJ Roberts is more likely to be sympathetic to the perspective of the Chamber of Commerce position on any given issue than Justice Ginsburg is--not because CJ Roberts has taken money from the Chamber but simply because he's ideologically sympathetic to their viewpoint.  And in fact, that's part of why President Bush nominated him (and conversely, why President Clinton nominated Justice Ginsburg) to the Court in the first place.

So why, one might ask, is it worse for judge candidates to take money from people who want to elect them?  One answer is that the line of causation from contribution to judgment is more direct when it runs through campaign contributions than through general ideological sympathy.  Another answer may be the lack of transparency.  Most of the time most voters know next to nothing about candidates in judicial elections, but at least in states in which judges run for office with party endorsements, voters can use party affiliation as a rough proxy for ideology.  (That's why, although I generally prefer an appointed judiciary to an elected one, if a state is going to have judicial elections, I think there is a good deal to be said for partisan rather than nonpartisan elections.)  By contrast, even if campaign contributions are nominally public information, they likely won't be known to most voters.

Finally, I'd note that the $2500 threshold may have been set with an eye towards surviving scrutiny under the federal campaign finance cases.  That's in the range of contribution limits that the Supreme Court has upheld.  By contrast, in 2006, the Court in Randall v. Sorrell invalidated campaign contribution limits on the order of $200-$400.  To the extent that the 2002 holding in Republican Party of Minnesota v. White subjects judicial elections to the same body of case law as executive and legislative elections, it's possible that the NY Administrative Board of the Courts thought it had to set a threshold well above the invalidated Randall v. Sorrell limits.  But if so, that strikes me as mistaken.  After all, the proposed new rule would not limit how much anyone can give to a candidate's campaign for judicial office.  It would only require recusal if the threshold is exceeded should the contributor have a case before a successful candidate.  The candidate would still get to keep the money.

Thus, my bottom line: I'm very happy to see this proposed new rule; I wish it were stricter.

Tuesday, February 15, 2011

A Belated Post on Justice Scalia's Participation in the Bachmannal

By Mike Dorf

Back in January, Justice Scalia took some criticism for his willingness to speak at an event on the Constitution organized by Minnesota Congresswoman Michele Bachmann.  Jonathan Turley's piece in the Washington Post is an example of such criticism, just as Noah Feldman's recent NY Times Op-Ed is something of a defense.  Turley says that when Scalia speaks to a largely partisan audience he undermines the perception (and perhaps the reality) of an impartial Court.  (Turley calls out other justices as well.)  Feldman says that justices have always been political, and so one shouldn't be surprised or worried.  Here I want to suggest something a bit different from either of those views.

Much of the controversy over Justice Scalia's appearance before the Bachmann group was defused when it became known that Democrats were invited to attend and some did.  Although the self-selecting group skewed to the political right, even a small bit of Democratic participation greatly eased the perception (and any reality) of partisanship.

Yet, so far as the Constitution is concerned, the bipartisan nature of Scalia's audience may have rendered his appearance more, not less problematic.  That's because Article III has long been understood to forbid members of the Supreme Court from giving legal advice to the political branches.  The earliest and most famous example involved a 1793 request by Thomas Jefferson, then George Washington's Secretary of State, for the justices' help in interpreting the government's treaty obligations to France.  The justices wrote a letter to Jefferson politely declining, citing the separation of powers.  Although the exact scope of the prohibition on advisory opinions has been much debated since 1793, its core remains: Article III judges and justices cannot moonlight as advice-givers to the political branches.

The very fact that the group to which Justice Scalia spoke included Democrats made the event more like a forbidden session of advice-giving to Congress qua Congress.  Had he spoken before a completely partisan group of tea party Republicans, it would have raised questions about partisanship but would have looked less like a breach of separation of powers.

I'm not saying that Justice Scalia crossed the line, and I very much doubt that he did.  One would  have to know exactly what he said, of course, to be certain.  But it strikes me as extraordinarily unlikely that he would have been asked a question like "Is this draft bill I'm handing you unconstitutional?"  And if he were asked such a question, I can't imagine he would have given any answer other than "I can't tell you."  But the prohibition on advisory opinions prohibits quite a great deal beyond talking about particular bills. Insofar as the core of the prohibition applies to "abstract" opining by the Article III judiciary, Justice Scalia's discussion of general principles of constitutional law might be considered no better than consideration of particulars.

To be clear, I wouldn't consider a general philosophical discussion of constitutional law and constitutional interpretation problematic under the prohibition on advisory opinions, but I have a fairly expansive view of what judges and justices ought to be able to do and say without violating that prohibition.  Justice Scalia, by contrast, has sometimes been a proponent of a robust understanding of that prohibition--especially in cases involving legal standing.  In other contexts, however, Justice Scalia has seemed less troubled than other conservative justices by the prospect of advice giving.  For example, he has often criticized CJ Roberts and other colleagues for deciding too little, thus tacitly rejecting their suggestion that speaking substantially beyond the facts of a case amounts to forbidden abstract advice giving.  To the extent that these positions are not perfectly consistent, I would like to see Justice Scalia and others on the Court narrowly construe the prohibition on advisory opinions, and thus expand permissible standing.  Interested readers can find out why here.

Monday, February 14, 2011

No Room for Cookie Monster at the Tea Party

By Mike Dorf

The effort now underway in the House to eliminate federal funding for the Corporation for Public Broadcasting (CPB) raises a number of very different sorts of issues that warrant untangling.  After doing so, I'll focus on the question I find most interesting because it has constitutional overtones.

First, the immediate impetus for seeking these cuts now is the bipartisan agreement that the federal budget overall needs to be cut, or at least reined in.  I think that consensus is wrongheaded in two ways: (1) for reasons that Neil Buchanan has repeatedly articulated on this blog and that Paul Krugman and even Ben Bernanke (testifying last week in Congress) have also outlined, the recovery is still sufficiently fragile that a substantial reduction in federal spending is likely to do more harm than good, even if one is worried about long-term deficits and debt; and (2) Congress isn't really serious about the stated goals of deficit and debt reduction, because if it were, defense spending would be on the table, and Congress wouldn't have extended the upper end of the Bush tax cuts.  But I don't want to focus much attention on these points here because it is clear that the current slash-the-budget mood simply provides cover for eliminating the CPB, a longstanding goal of many conservatives.

Second, some of the argument over whether the CPB is needed addresses an issue that is tangential to the contestants--namely, whether such funding is based on outdated assumptions about the media landscape.  The argument against funding is that with the proliferation of cable, satellite, and internet channels for educational, local, cultural, and news programming, the CPB is unnecessary.  Especially with respect to television, the original idea was that the major networks would use their limited broadcast slots for whatever was most likely to attract viewers and thus advertisers, and so in order to provide people with "better" programming, public subsidies were needed.  However, the argument goes, now it's much easier to distribute niche programming, so the mass market assumptions are outdated.  On the other side, one can see things as pointing in the exact opposite direction: Craigslist, etc., have greatly reduced revenue from newspapers, networks have gone to cheap-to-produce programming like "reality" shows, and overall it's harder than ever for quality programming to make enough money to cover costs.  Then again, local public tv and radio stations have diversified their revenue sources over the years too, and the internet makes it easier for them to raise money on a "shareware" model.  I don't have a strong view about any of this.  I suspect that the elimination of the CPB would hit public tv and radio hard initially but that they would ultimately survive, and perhaps even become better if less worried about Congress looking over their shoulders.  But I don't think that the opposition to the CPB is motivated by these considerations.

The real reason for the fight is ideological.  Conservatives generally favor markets over government-funded programs, but not across the board.  (Show me a farm-state Senator who seriously wants to slash agricultural subsidies and I'll show you a one-term Senator.)   The ideological component with respect to public broadcasting is based on the content of the broadcasting.  Many conservatives believe that educational programming on PBS skews towards "liberal" messages of multiculturalism and toleration (though it looks like the rumors about Bert and Ernie did not originate among conservatives).  Many conservatives also believe that news programming on the likes of NPR skews liberal.  Juan Williams is a useful poster boy in this cause, but he's only that.  Conservative complaints about public broadcasting long predate the fiasco of his firing.

Whether PBS and NPR have a "liberal bias" strikes me as an unhelpful question.  Is NPR to the left of Fox News?  Sure.  Is it way to the right of Al Jazeera English?  Absolutely.  Does it sit astride the exact median point of American public opinion on every issue?  That's not a meaningful question, assuming as it does that positions on all questions align along a one-dimensional left/right axis and that even if they do, the median point of American public opinion would be a sensible place to come to rest.

In recent years, some opponents of the CPB have accepted the proposition that any time government funds speech it will end up taking a position on controversial issues, and that therefore the government simply shouldn't fund any speech.  But I doubt that anyone really means this.  Government funds speech when it urges kids to say no to drugs, alcohol and tobacco, for example, or when it publishes a website identifying where former sex offenders live.  Certainly some people oppose these messages too.  But with the exception of the Establishment Clause, the Constitution generally does not forbid the government from funding one-sided speech.  (Campaigns urging children to exercise need not be balanced by equally well-funded campaigns urging them to sit on the couch.)

Conservative opponents of the CPB say that if the government is going to fund speech, it should do so neutrally, and that if it can't do so, it should simply get out of the business.  But of course, there is no such thing as neutral speech.  At a minimum, it requires editorial discretion to decide what subjects to cover and what range of viewpoints on that subject to include.  So the argument against the CPB is rigged: Because it is conceptually impossible for speech to be neutral, it follows inevitably from the premise that government can only fund speech neutrally, that government cannot fund speech at all.

In principle, there could be reasons to worry about government speech.  In a country in which dissent is suppressed, government-funded news media become a tool of oppression.  But the idea that PBS and NPR are crowding out private speech in the U.S. today is simply beyond laughable.

In the past, when conservatives have tried to zero out the CPB, its defenders have called on Big Bird and the other denizens of children's tv, knowing that an awful lot of voters across the ideological spectrum depend public television, regarding it as a substantially lesser evil than planting their youngsters in front of the commercially driven candy and toy ads children's programming.  The answer to the question of whether the strategy works again this time will say a great deal about the next two years of American politics.

Friday, February 11, 2011

Inequality, Technology, and Labor

-- Posted by Neil H. Buchanan

In my post on Monday, I extended my discussion of technological breakthroughs and their effects on society. My argument thus far boils down to these three points: (1) many of the great technological breakthroughs of the industrial era (airplanes and cars in particular) seem to have been fully exploited, with no apparent prospects of further game-changing advances, (2) whether or not (1) is true, the current era of information technologies seems not to be changing society in nearly as profound ways as the earlier technologies did, and (3) whether or not (1) or (2) is true, the current wave of technological breakthroughs is coincident with income stratification, whereas the early- to mid-20th Century's waves of technological change coincided with significantly egalitarian trends in income distribution. I thus suggested that deliberate policies to promote greater equality, especially reinvigorating labor unions, would improve matters.

My most recent post elicited two especially thought-provoking comments, both of which I have been pondering at some length. I offer the following thoughts not as a riposte to those comments, but in appreciation of the opportunity to think more deeply about these issues.

The question of most pressing global significance, I suppose, is whether I (channeling Frank Rich) am right in believing that modern information technology is not a driving force in the ongoing Egyptian popular uprising. Many people think it is, of course. In yesterday's New York Times alone, there was a front-page news article and an op-ed by Nicholas Kristof, both of which simply presumed as an obvious fact that events in Egypt are being led by "The Facebook Generation."

Confessing to having no expertise in Egyptian affairs, I take the point that some of what is happening there has apparently been carried on through new media. I maintain skeptical, however, of the cause-and-effect implication. As an analogy, consider the media story that quickly emerged after the tragedy at Columbine. There was a "trenchcoat mafia." The perpetrators were outcasts who had been bullied by football players. And so on. It apparently turns out that all of this was simply false. I heard the author of a book that was published recently (name and title currently escape me) talk about this. It was a convenient story, and everyone jumped on it. It became the accepted reality. Maybe "Facebook caused the Egyptian uprisings" is not a similar example of a hyped-up, simplistic story; but it fits the pattern. On this issue, however, I am certainly open to informed reporting that does not simply take the established storyline as its starting point.

In some ways, what is happening in Egypt is more important than anything that I wrote in my recent posts. Even so, within the context of my argument, the Egypt story is hardly central. The broader issue is whether I am underestimating the social effects of technology more broadly. On this, the two commenters on my Monday post are in disagreement. The commenter who disagrees with me suggests that I have made two specific errors (among others): (1) I am too impatient, and (2) I am confusing "technology" with "logistics." Both criticisms have some merit. In fact, I readily concede the second point, noting only that I do not see that as undermining my argument. I should comment on the first point, however.

It is possible, after all, that something big is brewing that is not currently known (or knowable), regarding technology and social progress. Again, however, I remain skeptical. In higher education, for example, claims have been made for over a half century that modern information technology will change everything. And it still might. So far, however, it is difficult to see the major transformations that technology has wrought. Yes, there is "distance education." But "Sunrise Semester" and "University of the Air" -- TV-based educational initiatives in the 1960's -- were the same basic thing. I receive promotional material all the time from publishers who want me to believe that their latest software platform will do everything I and my students could possibly wish; but the difference is in form, not substance. Email has all but replaced office hours, but the output is the same. As the second commenter on Monday's post argued persuasively, predicted changes from technology (his example: computers will make paper obsolete) are often wildly wrong.

My point is not that nothing ever changes. Rather, I am saying that the way society is being changed by technology seems to have changed. The automobile changed the world, and so did the personal computer. Whether or not one agrees with me that the former changes were more profound than the latter as a matter of transforming the way we live our lives, it is undeniable that the former occurred in an era of economic convergence, while the latter is occurring while society becomes much less economically egalitarian.

Which brings us to the final question raised in the second comment. Is the modern era one in which we simply cannot replicate the egalitarian trends of the post-WWII era? Would it be mere romanticism to try to reinvigorate unions, for example, in a world where they are obsolete? I once spoke with an airline executive who argued that unions were once important, in preventing atrocities along the lines of those described in Sinclair's The Jungle, but that unions were no longer necessary (and are, he argued, now harmful to society). Similarly, many analysts claim that globalization and other modern trends make unions superfluous at best.

This theory, however, does not fare well against the evidence. Most importantly, the United States is not the only country in the world with labor unions; so it is possible to test the hypothesis that unions are declining -- and, most importantly, wages for most workers are stagnant or falling -- because the economy has fundamentally changed. Under that theory, how do we explain Germany's success? The largest and most dynamic economy in Europe, which has extremely powerful labor unions that protected workers from layoffs, maintained relatively low levels of unemployment and high wages during the Great Recession. Some analysts point to Germany to argue that fiscal austerity works. Yes, in the context of the labor and industrial policies of Germany, fiscal austerity did not lead to the disaster that people like me predict would happen here. In the context of this post, hwoever, the central lesson from Germany is that a 21st Century economic powerhouse, with relative social equality, is able to maintain its success while maintaining strong unions and labor protections. I believe that the success is in large part because of those unions, but this example at a minimum makes the opposite case a more difficult sell.

A more thorough-going discussion of these issues is well beyond the scope of this already lengthy post. I will, however, point interested readers in the direction of a book that discusses these issues at length. Neil Brooks, of Osgoode Hall law school in Toronto, who is one of the best tax policy scholars in the world, has co-authored (with the prominent journalist Linda McQuaig) The Trouble With Billionaires. I have not yet had a chance to read the book, but Brooks's description of the book includes the following: "[The] increase in the concentration of income and wealth [since 1980] was not the inevitable result of technological change and increased globalization, but was the result of political decisions (and indecisions)." I have a feeling that McQuaig and Brooks explain this better than I can.

I am open to the possibility that a society could become irretrievably split between rich and poor. I do not, however, think that there is good reason to believe that we have reached that point. It would be wonderful if modern technology were to allow us to turn the tide, without further policy interventions. At present, however, that is not happening. Useful public policies are available to us, if we would only adopt them.

Thursday, February 10, 2011

Tort Reform Versus the 10th Amendment

By Mike Dorf


Yesterday brought news that 16 freshmen members of Congress had declined federal health insurance.  I find their principled stand admirable, even though I disagree with the principle that they are standing up for.  The issue was nicely encapsulated in an NPR interview of one of the 16, Congressman Rich Nugent of Florida.  Robert Siegel asked Nugent whether the high price he had to pay in the individual insurance market wasn't simply a product of the fact that individuals lack the bargaining power of large collectives, such as the federal government.  Nugent held his ground, arguing that most of the cost difference between the Congressional policy and the private policy he could buy on the open market was the result of a taxpayer subsidy for the Congressional policy.  The actual cost savings that result from large pools, Nugent said, was relatively small.


Nugent is surely right about a big chunk of this.  The main driver for health insurance inflation is health care cost inflation, and so bargaining power can only do so much to rein that in.  But when asked about health insurance inflation, Nugent repeated the old saw that it is driven by defensive medicine practiced, and unnecessary tests ordered, by doctors who fear medical malpractice liability.  Studies vary on that too, but most show it to be only a moderate contributor to health care cost inflation.


Nonetheless, we can expect the GOP alternative to "Obamacare" to focus heavily on med-mal reform, in substantial part because that is one area where there appear to be substantial differences between Democrats and Republicans, and the narrative, however exaggerated and distorted, favors Republicans: Dems can be portrayed as in the pockets of greedy ambulance-chasing lawyers.


The major affirmative effort on med-mal now pending in the House would impose a variety of limits: caps on compensation for non-economic injury and punitive damages; a federally-imposed statute of limitations (the shorter of 3 years from manifestation of the injury or 1 year from the discovery of the injury); caps on attorney contingent fees; etc.  Overall, the package is relatively modest and thus may have a chance of picking up some Democratic support but also is unlikely to make a serious dent in medical malpractice liability, much less in health care cost inflation.  In a fascinating study some years ago, Cathy Sharkey showed that state-law caps on non-economic damages did not much reduce total med-mal awards: Instead, plaintiffs' lawyers pursued, and juries awarded, more money for economic damages.  So even if the pending legislation prompts a big fight, it is ultimately small potatoes.


But there's also an interesting intra-conservative fight potentially brewing here.  Medical malpractice lawsuits, after all, seek damages in tort, an area of law over which states have traditionally exercised sovereignty.  Folks like me, who think that Congress has broad latitude to regulate under the Commerce Clause, have no difficulty seeing the package of federal limits as constitutional, even if we don't think it's desirable policy.  But what about all of those self-styled patriots in tri-corner hats who go on incessantly about how the federal government is a government of enumerated powers and worry about the modern Commerce Clause jurisprudence making the feds omnipotent?  Shouldn't they be worried about this federal government takeover of state tort law?  You betcha.


Yet here is the predicate for federal authority recited by H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011:
Congress finds that the health care and insurance industries are industries affecting interstate commerce and the health care liability litigation systems existing throughout the United States are activities that affect interstate commerce by contributing to the high costs of health care and premiums for health care liability insurance purchased by health care system providers.
That rationale for regulation works under existing post-New Deal Supreme Court precedent, but the tea partiers tend to follow Justice Thomas in decrying the modern definition of Commerce.  They prefer understanding congressional power as referring to something more like "exchange."  And thus, sure enough, two Texas Republican Congressmen have expressed federalism-based doubts about the Health Act. "If the people of a particular state don’t want liability caps, that’s their prerogative under the 10th Amendment," said Congressman Ted Poe. 


The Politico story from which I have taken that quote shows that House Judiciary Chair Lamar Smith doesn't get it.  He dismisses Poe's concern as misguided because the Act would not prevent states like Texas from enforcing stricter caps if they have them.  But as Poe's quotation clearly states, he is not simply worried about the ability of Texas to enforce its law; he doubts federal power to impose substantive tort rules on any state.


So, just as I admire Nugent and the other Congressmen turning down federal health insurance on principle, I admire Poe (and fellow Texan Louie Gohmert) for sticking with their federalism principles.  I suspect they'll lose this fight, though.  When push comes to shove, most elected officials are fair-weather federalists.  They tend to invoke states' rights when they dislike the substance of federal policy and to forget about states' rights when they like the substance of federal policy.  But at least in the short run, it will be interesting to watch the intra-conservative debate on these and other issues.