While the Debt Ceiling Slept (exclusive to Dorf on Law)

-- Posted by Neil H. Buchanan

Because of the kind of writing that we do on Dorf on Law, we occasionally imagine that we can place an op-ed piece in one of the big-time newspapers (the ones that still exist).  This is almost always a fool's errand, because the odds are ridiculously stacked against any over-the-transom submission to such places.  At least, that's what I tell myself.  In any event, DoL readers (and writers) are not the slaves of those dastardly editors.  Enjoy!

While the Debt Ceiling Slept

 

When Americans woke up on Sunday, May 19, the debt ceiling woke up, too.  Remember the debt ceiling?  Earlier this year, Republicans in Congress were again threatening to allow the federal government to default on its obligations, by refusing to increase the debt ceiling.  When the politics of that latest hostage-taking episode turned against them, they temporarily suspended the ceiling.

On February 4, therefore, the debt ceiling went into hibernation.  On May 19, it came back.  What happened in the meantime?  Nothing.  The country survived without a debt limit, and we could do so forevermore.

The deal that allowed the debt ceiling to go to sleep specified that, upon regaining consciousness, the debt ceiling would discover that it had grown to the exact level that federal debt had reached while it slept.  Supposedly, this maneuver allowed self-professed deficit hawks in Congress to say that they had never voted to increase the debt ceiling.  Even though that is not even technically true – the “ayes” voted for a bill that would reset the debt ceiling to a higher level fifteen weeks later – it was enough of a fig leaf to delay the crisis for a few months.

When the debt ceiling went to sleep, “total public debt outstanding” was just above $16.4 trillion.  We had technically hit the limit in December of 2012, but Treasury was in the midst of what have sadly become rather ordinary “extraordinary operations” (asset sales, rearranging payment dates on certain flexible obligations, and so on) to prevent a catastrophic default.  Although the numbers have not yet been finalized, the debt ceiling is now likely to be reset at roughly $16.7 trillion.

Immediately, however, this new hard limit puts the Treasury back into emergency mode, forced to waste time and effort moving things around while Republicans renew their threats.  We are, in other words, back to our very dysfunctional new normal.

But we can learn a few things from our fifteen-week hiatus.  We now know that the debt does not explode when there is no debt ceiling.  This might be a surprise, because when the White House suggested back in December that Congress effectively eliminate the debt ceiling, Senate Minority Leader Mitch McConnell mocked the idea, saying that the President wanted to spend money “without any limit.”  Well, there was no debt ceiling for more than three months.  What happened?

From February 1 (the last day before the debt ceiling dozed off) through last Friday (the last date before the debt ceiling woke up), gross federal debt rose from $16.434 to $16.737 trillion, an increase of 1.8%.  Here are some other time periods, for comparison:

-- During the fifteen weeks before we reached the debt ceiling on December 31, 2012, gross federal debt rose from $16.008 to $16.432 trillion, for an increase of 2.6%.

-- During the same period from early February to mid-May last year, the debt rose by 2.5%.

-- During the last fifteen weeks of George W. Bush’s presidency, the debt rose by 4.3%.

-- During the fifteen weeks after the 2003 U.S. invasion of Iraq, the debt rose by 3.3%.

There is not much of a pattern there, is there?  One thing we can say for sure, however, is that debt (and spending) did not go up without limit during the last fifteen weeks, even though there was no legal debt limit.  In fact, debt during the no-debt-limit era rose more slowly than at any of those other times.

The explanation is quite simple: The President never has the authority to spend without limit, because it is Congress that passes appropriations laws that the President is then required to execute.  Congress limits the debt at all times, when it passes spending and taxing bills that determine how much money must be borrowed.

Even without being bound by a debt ceiling law, therefore, President Obama could do no more than to spend exactly as much as Congress ordered him to spend, to collect exactly as much in taxes as Congress ordered him to collect, and to borrow the exact difference between the two, as Congress ordered him to do.

The new round of extraordinary measures is likely to take us into October, before a default might occur.  We thus face months of posturing over the reawakened debt ceiling, with Republicans set to warn that they will refuse to increase it, because that would supposedly open the floodgates of spending and debt.  That is simply wrong.  Without a debt ceiling, Congress and the President must still negotiate laws with specific (and obviously finite) spending and taxing authorizations, and thus that require finite borrowing.

Not having a debt ceiling, however, would at least eliminate the threat that the United States might default on obligations to which Congress has already committed us.  There is no downside to eliminating the debt ceiling, and as a bonus, it would give Republicans one less dangerous tool with which to threaten the President (and, by the way, the global economy).  But, of course, that seems to have been their whole point all along.

Bad Journalism: A Small Recent Example, With Larger Implications

-- Posted by Neil H. Buchanan

In a Dorf on Law post almost two weeks ago, I argued that the recent IRS non-scandal-scandal is another good moment to wish that our journalists had not been depleted and dumbed down to the point where we now actually receive better independent commentary from late-night comedians.  When relying on those comedians works, it works well.  There are times when it is truly amazing to see how well Jon Stewart and Stephen Colbert can cut to the heart of a matter, in a way that straight journalists never could.

As I pointed out in that post, however, the danger is that Stewart and Colbert (and SNL, and the networks' late night guys) are often ill-suited to the task of speaking truth to power.  They frequently take cheap shots and easy outs, sometimes making matters worse.  For example, shortly after I wrote that post, Stewart ran a segment about one of the IRS officials who is under fire, Lois Lerner, and her decision to invoke the 5th Amendment, in the face of possible criminal prosecution.  Stewart looked at the camera and said plaintively, "Nobody said anything about criminal prosecution.  We just want to know what happened."

The fact is, however, that people had been talking very loudly about criminal prosecutions -- so loudly that Stewart should not have failed to notice.  House Republicans, including Speaker of the House John Boehner, had been talking about putting people in jail from the very beginning of the trumped-up controversy.  And Lerner was a prime target.  She would have been crazy not to invoke the 5th.  Stewart's laziness managed not only to make people think that Lerner has a persecution complex, but he fed into the dangerous idea that people who take the 5th are "hiding something."  (To his great credit, Colbert did not make that mistake in his show that night.)

All of which is a reminder that we really, really need good and competent journalists on the beat.  Ahem.  One recent example of how far the Fourth Estate has fallen was provided in an article on Slate by David Weigel, who explains the press's dangerous distortion of a quote by Sen. Max Baucus.  Baucus, a principal author of the Affordable Care Act, supposedly said during a recent Senate hearing that the ACA will be "a train wreck."

Weigel showed that Baucus actually was complaining to the Secretary of HHS about her department's having done insufficient work to educate the public about the ACA.  Baucus pointed out that HHS had hired an outside contractor rather than doing the work itself, which worried him, because contractors are sometimes ... shall we say ... more interested in pocketing their fees than actually doing what they have agreed to do.

So, Baucus said, if we do not do what we should be doing -- educating the public about how the ACA will work, and their part in it -- there could be a train wreck.  The ACA is not the problem.  The failure to educate the public would be.

Unsurprisingly, Republicans immediately jumped on this quote and distorted it, claiming that Baucus had called the ACA an actual train wreck -- full stop.  (Notice that I say that it is unsurprising that Republicans have no ethical standards when it comes to distorting their opponents' views.  That was not always true, and it is sad that we no longer even raise an eyebrow about this craziness.)  What Weigel points out, however, is that it is not just the usual suspects like Mitch McConnell and Sean Hannity who are saying this nonsense.  A top NBC correspondent, Chuck Todd, asked during a press conference last month at the White House:

Max Baucus, Democratic Senator, referred to the implementation as your health care law as a potential train wreck. And other Democrats have been whispering nervousness about the implementation and the impact -- and it’s all self-centered a little bit -- the impact that it might have on their own political campaigns in 2014.  Why do you think -- just curious -- why does Senator Baucus, somebody who ostensibly helped write your bill, believe that this is going to be a train wreck?

Notice that Todd immediately gets off to a bad start, even though he tries to hedge by calling the ACA a "potential train wreck," because he describes the "implementation" of the law as the potential problem.  Although that could, one supposes, include poor implementation of the sort that Baucus was actually worried about (doing a poor job of educating the public), the more natural reading of that statement would be to suggest that there will be poor bureaucratic implementation of the structures and rules of the law itself.  Maybe Todd's phrasing is not an outright distortion, but it is certainly sloppy -- in a way that supports a specific political narrative.

Note also that Todd then manages to insert a rambling comment suggesting that this is really all about political calculations, not actual concern about educating the public about the law.  Now, no reasonable person would doubt that Democrats are nervous about this, because they know that the Republicans are doing everything possible to sabotage the ACA before it even begins -- and because they know that supposedly independent journalists have become lazy mouthpieces for Republican talking points.

When Todd finally ambles toward his actual question, note the lack of context.  Baucus's comment was entirely contingent on something that he hoped to change (HHS's strategy to educate the public) -- and his frustration was apparent, as he considered the possibility that the Administration itself will abet the Republicans who are determined to destroy the ACA.  Yet Todd manages to act as if it is simply obvious that Baucus was saying that implementing the ACA will definitely be a disaster.  And if Baucus really felt that way, then why shouldn't we want the House Republicans to take a few more votes to repeal the whole bill?  That would be big news: A principal architect of the ACA thinks it will be a dismal failure.  Great story.  Not true.

There are, I suppose, two ways to be charitable to Todd.  Before offering those partial defenses, however, it is worth noting that Todd is not some cub reporter, nor is he working for some fringe news organization.  He is the Chief White House Correspondent for NBC News, for heaven's sake!  He should not need his work to be viewed charitably.  Admittedly, the major networks have been slashing staffs and budgets for years, but there are still some prime jobs that supposedly attract the best of the best.  Sure, the networks no longer maintain news gathering operations abroad.  They have shut down entire field offices as well as subject area desks.  They stopped covering labor issues decades ago (unless it is to give a megaphone to yet another claim that teachers' unions are the root of all evil).  They give seconds of coverage to policy debates, but hours of coverage to horse-race politics.

But the White House Chief Correspondent?  If a major network cannot find someone who is actually intelligent, skeptical, and tireless for that job, then we are in bigger trouble than we thought.  Apparently, we are in bigger trouble than we thought.

As I noted a moment ago, there are two potential (but only partial) defenses here.  One is that Baucus himself actually has a reputation for saying things that infuriate his fellow Democrats.  Throughout his career, he has been willing to "go Lieberman," to coin a phrase.  People who follow such things might well have thought, "Yeesh, there goes Baucus again."  That, however, is a rather sad defense of Todd's failure actually to inform himself before asking his question.  "I assumed that Baucus was going rogue again, so I didn't bother to verify the story" is hardly a defense on which one should hang one's professional credentials.

The second charitable way to think about this -- but which, again, is not really a defense at all -- is to imagine that journalists like Todd have become so shell-shocked by the Republican attack machine that they no longer even dare to try to fact-check (or utter doubts about) the conservative narrative.  This is a variant on the he-said-he-said default in U.S. political reporting that many critics have scorned: "Republicans say that Obama was born in Kenya.  Democrats say that he wasn't.  Now, let's take you over to the Weather Bunny to find out about tomorrow's forecast."

Again, it is one thing to say that local news has become completely devoid of content.  If the network news coverage of the White House has now become hack central, however, then this is bad.  That is true even if -- or especially if -- otherwise intelligent reporters are trimming their sails to prevent saying anything "controversial."

As the title of today's post indicates, I view this error by Todd as a "small" example of bad journalism.  It is, moreover, a single example.  If this were an isolated instance, then Chuck Todd and the U.S.'s "serious" journalists would not deserve the criticism that so many people heap upon them.  Unfortunately, it is just another example of the drip-drip-drip of incompetence (and worse) that the free press of the world's only superpower inflicts upon its citizenry.

The Power of No

by Sherry F. Colb

In my Verdict column for this week, I discuss anti-lawyer sentiment as a reflection of a more general "rugged individualist" ethos that says people should handle bullies on their own rather than seeking third-party (e.g. court) intervention.  In the course of offering my analysis, I acknowledge that even as we support victims seeking redress through third-party assistance, it is simultaneously useful to educate people about the choices that they have for handling bullies.  In this post, I want to discuss one form of quasi-bullying that people encounter and that is often not amenable to litigation:  the "can you do me a favor?" request.

For many people, a request for a favor poses no special challenges.  If someone asks you to take care of something for them, and you are not inclined to do it, you simply say "no."  If you are such a person, then odds are good that you only occasionally encounter the sorts of unreasonable requests that plague people who have a much harder time saying "no."  If you are not sure into which category you fall, consider the following hypothetical scenario.  You receive an email in your inbox asking you to attend an event that you have no desire (and no straightforward obligation) to attend, because you either have no time for such an event or prefer to do something else, whether work-related or personal, during that time.

Do you simply write back, "Sorry.  I have to decline." or do you leave the email up on your screen, checking your calendar hopefully to see whether you can identify some excuse that the requesting party will consider legitimate for decliing?  And if you find no such "legitimate" excuse, do you agree to attend the event, because you feel reluctant and scared about failing to meet the other party's expectations?  Either way, do you feel stress and anxiety and wish that you had not received the request at all?

If you do the first, then you are probably comfortable with the word "no" and feel no need to worry, most of the time, about whether the other party finds your reason adequate.  If, on the other hand, you find yourself doing one of the other things (delaying a response, looking for excuses, saying yes while feeling resentful about being pressured into something you didn't want to do), then you are one of the many people who has a very difficult time saying "no."  As such, you are vulnerable to being pushed around and exploited.

Why do I say that?  Because the sorts of people who make unreasonable demands (cloaked as "requests") can smell a person who hates to say "no" from a mile away.  Reading the book The Power of a Positive No, by William Ury, could be as eye-opening for you as it was for me.

The book discusses the ways in which people make contributions to the lives of those around them for which they feel neither joy nor satisfaction, because they did not want to make the contributions but instead were pressured into it by requests they felt they could not refuse.  Sometimes the implicit threat when people feel unable to say "no" is economic -- if you don't get your boss coffee, you may lose your job.  Other times, though, the threat is more social in nature -- the person making the request has framed things in a way that suggests that, absent a good excuse, you really ought to do this thing they are asking of you, and if you don't, then they may think less of a you as a result.  This is why people who are vulnerable to this sort of pressure often feel the need to articulate elaborate explanations for why they are saying "no," on the rare occasion that they in fact do say "no."

It is far better to pick and choose when you contribute to others' lives rather than feeling forced into contributions that you resent and find distasteful.  Indeed, the very same activity can be either a joy or drudgery, depending on whether you feel a sense of agency in having chosen to engage in it.  The Power of a Positive No observes that when you say "no" to one thing (or one person), you are usually saying yes to another.  For example, if you say "no" to an acquaintance who wants you to attend a party he is throwing, you consequently have time you would not otherwise have had to spend with the people you would rather see -- close friends, family, or whoever strikes your fancy.  By saying "no" to the acquaintance, you are accordingly saying yes to yourself and your friends or family.

The Power of a Positive No suggests that if your saying "no" triggers anger rather than acceptance by the other party (a reaction that may account for your anxiety about saying "no" in the first place), then the "request" that the other person made of you was in fact not a request at all but a demand.  Anger signifies an attitude that says you really should do whatever it is the other person has asked of you.  Warmth and acceptance signify an attitude that says the request really was just a question, and either "yes" or "no" is a fine response.

After reading this book, I have made a point of stating explicitly, when I make requests of poeple (rather than, say, demands like "it's time to brush your teeth, kids"), that it is completely fine for the other person to decline.  Knowing that people sometimes say yes because they fear that a "no" will occasion anger, I bend over backwards to clarify the fact that I am interested in only the sort of help or favor that is freely given, not in pressuring someone to do what they do not want to do.

As I suggested above, the sort of bullying I am referencing here (where people take advantage of acquaintances, friends, and others who have a difficult time disappointing them) is not typically subject to litigation.  Sometimes, however, it can be.  At some point, for example, friendly overtures and requests for a date can turn into coercive stalking or harassment.  And other times, people may pressure co-workers, family members, or friends into shirking their ethical or legal obligations.  When that happens, it is useful to rememer that (a) "No" is a complete sentence.  No excuses are required for doing what you know to be the right thing or refraining from doing what you know is wrong; and (b) the refusal to take "no" for an answer can sometimes be remedied by a well-planned trip to court.

What's at Stake in the Town Board Prayer Case the SCOTUS Agreed to Hear?

By Mike Dorf

Last week, the SCOTUS granted cert in Town of Greece v. Galloway.  The case presents the question whether the Town of Greece (near Rochester, NY) violates the Establishment Clause by beginning its town board meetings with an official prayer.  The Second Circuit found a violation, although it did so on grounds that appear to be limited to the particular factual record.  In light of Marsh v. Chambers--which upheld a state practice of beginning each legislative day with a prayer by an official chaplain on the ground that such prayers were part of a tradition going back to the Founding--the appeals court acknowledged that in general, opening the sessions of a town board with a prayer would not amount to an Establishment Clause violation.

The Second Circuit thus cabined its holding with numerous caveats.  For example, the court said that sectarian prayers are not per se invalid.  But given a longstanding pattern by which the town invited only Christian clergy to deliver the prayers (at least until the practice was challenged), an objective reasonable observer would infer that the Town of Greece was affiliated with Christianity.  In short, under the "totality of the circumstances," the Second Circuit found a violation of what is sometimes called the "endorsement" test, which is itself a gloss on the "effects" prong of the Lemon test (announced in Lemon v. Kurtzman).

What will the Court do?  The cert petition does not expressly ask the Court to overrule Lemon, but that is a possibility.  It has been two decades since Justice Scalia likened the Lemon test to a "ghoul in a late-night horror movie that repeatedly sits up in its grave and shuffles abroad after being repeatedly killed and buried."  Lemon has long occupied a place in the Court's Establishment Clause jurisprudence similar to the place that Buckley v. Valeo occupies in its free speech jurisprudence: A majority of sitting Justices would like to overrule it but they can't agree on what would replace it, so it remains more or less the law.

Even if the Court in Town of Greece does not overrule Lemon itself, it could reject the "endorsement" test as an inappropriate gloss on the effects prong of Lemon.  Lemon establishes a three-part test for validity under the Establishment Clause: (1) there must be "a secular legislative purpose"; (2) the law's "principal or primary effect must be one that neither advances nor inhibits religion"; and (3) the law "must not foster an excessive government entanglement with religion".  Various Justices (but especially now-retired Justice O'Connor) have suggested that to apply the second prong, one should ask whether a reasonable observer would perceive the government as endorsing religion.

The endorsement test has been criticized by some liberals (like yours truly) as too permissive because, in positing an objective observer, it understates the extent to which the Establishment Clause should be interpreted to protect religious minorities (including nonbelievers) from feeling like second-class citizens on the basis of their religious affiliation (or non-affiliation).  This sort of criticism accepts the idea of an endorsement test as the right way to understand the effects prong of Lemon but proposes that instead of positing a reasonable observer, we should posit a reasonable religious dissenter or nonbeliever.

It is highly unlikely that five Justices would vote to tighten the endorsement test in the way I have just suggested--in Town of Greece or any other case, at least given the Court's current composition.  It is more likely that the Court would abandon the endorsement test entirely, because conservatives dislike the test on the ground that it is too restrictive.  The mere perception of endorsement, they say, does not offend the values underlying the Religion Clauses.  In this view, endorsements that fall short of coercing belief or affirmation by religious dissenters are permissible.

But I doubt that the Court would use Town of Greece as an opportunity to abandon the endorsement test on conservative grounds either.  That's because there is a much simpler way for the Court to reverse the Second Circuit: It could simply say (as the cert petition and various amici argue) that since Marsh, legislative prayer (including for local governments like a town) are virtually per se permissible, without regard to Lemon.  As the dissenters in Marsh complained, the Court there did not even pretend to apply its standard tests per Lemon.

Liberal critics of the Court's Establishment Clause jurisprudence (like me) should be hoping (praying?!) that the Court takes this last course.  The seemingly unprincipled tradition-based exception for legislative prayer has the salutary effect of preserving the general principle in other contexts.  An attempt to reconcile the permissibility of legislative prayer with the Establishment Clause precedents more broadly would probably end up weakening those precedents.  The Court almost certainly granted cert with the goal of reversing the Second Circuit.  Doing so in a way that strengthens the Marsh exception to Lemon would do the least damage to the principles of Lemon.  Those principles themselves are weaker than what liberals like me would like to see, but any change that this Court would likely make would go in the wrong direction.

Two Cheers for President Obama's Speech at the National Defense University

By Mike Dorf

In commemoration of Memorial Day Weekend, I'd like to (mostly) praise President Obama for his speech late last week at the National Defense University.  I'll begin with the praise.

Obama is already being criticized by the right for abandoning a policy of targeting al Qaeda leadership just when, by his own lights, it has succeeded in weakening the organization.  If we take our foot off the gas now, they say, won't al Qaeda use the opportunity to rebuild?  That is a legitimate question--or it would be if it were posed by people who don't simply oppose a policy on the ground that the President supports it.

In any event, although Obama did not directly address this anticipated criticism in his speech, the speech contains an implicit answer: The costs of going after "core" al Qaeda at full throttle now outweigh the benefits.  Those costs include gigantic sums of money that could be put to better use at home or abroad; civilian casualties; putting U.S. troops in harm's way; and counter-productive blowback from the people who are radicalized in response to U.S. attacks in their countries.  If we have evidence that core al Qaeda is growing again or that another group, like AQAP, is developing capacities akin to what core al Qaeda possessed on the eve of 9/11, then a more aggressive posture may be warranted.

Meanwhile, Obama's speech was remarkable for a modern politician in not just saying that there are no easy answers; politicians often say as much just before they attempt to rally support for what they regard as clearly the best answer; Obama went further in expressing ambivalence and uncertainty.  That was especially true with respect to what he hopes will be a shrinking number of captives who cannot be tried or repatriated.

Overall, this was a speech by a grownup for grownups.  Obama clarified and defended a narrowed drone strike policy in a way that presented it as simply the least bad option, and even then, he recognized the very real limits of what can be accomplished through military power alone.  For me, the speech called to mind Michael Walzer's notion of tragic choices and dirty hands: No matter what the President (and by implication the rest of us) do--including doing nothing--we will have blood on our hands.

Apart from particular quibbles and questions about a speech that covered an enormous range of complex subjects, I have two related reservations about the speech.  The first concerns our politics.  A good deal of what the President described involves decisions that he can make, and in some instances has already made, on his own in the exercise of his powers as Commander in Chief.  But on some very crucial questions--e.g., replacing the post-9/11 AUMF with a narrower authorization for the use of force better suited to our current circumstances; legislation establishing a framework for making targeting decisions; broadening the President's authority to repatriate Gitmo detainees who have been cleared for release--the President's position amounted to a call for Congress to act.  Yet Republicans in Congress and conservative opinion makers have given no indication whatsoever that they are interested in cooperating with the President on any subject.

To be sure, there is a wing of the Republican party that is skeptical of military force on grounds that roughly parallel some of the grounds one finds in the anti-military left: Senator Rand Paul's filibuster of John Brennan's nomination to be CIA director is characteristic of the position.  But I doubt that there is a sufficient constituency within the Republican blocking coalition in Congress to be peeled off to join Democrats in forging a majority (or in the Senate a filibuster-proof supermajority) in support of legislation of the sort that the President seeks.  The Paul wing of the Republican Party is isolationist (although Paul himself would resist that label, and it may be unfair as applied to him in particular).  Perhaps there are particular issues on which they will occasionally vote for policies that the President supports, but the isolationists and right-wing libertarian critics of the Administration are not likely partners in forging the sort of comprehensive new strategy the President has in mind.  The closest he even came to acknowleding their existence was, in his words, "to dismiss some of the more outlandish claims that have been made" -- a clear reference to Sen. Paul's questions regarding the Administration position on targeting Americans here at home.

The general tone of President's speech indicated that he expected cooperation from Congress in forging a new policy for a changed but still challenging national security environment.  I very much hope that was only for show, because, as anticipated, the Republican leadership and FoxNewsiverse pundits have already condemned Obama's speech as soft.  The President needs to figure out what he can accomplish without new legislation and do it.  Building popular support for his overall strategy might be a way to bring around some Republicans, but that will be very challenging given that his position is nuanced and the Republican position (for the most part) is not.  E.g., Mitt Romney paid no political price with Republican primary voters by vowing to "double Guantanamo."

My second reservation about the President's speech concerns what might be called its detachment, at least on some matters.  In various important respects, the speech was a defense of what the President has done.  But in others it almost sounded as though the President was an external observer of U.S. military/foreign policy.  This was particularly noticeable on the force-feeding question, where the Prsident said this:

Look at the current situation, where we are force-feeding detainees who are being held on a hunger strike.  . . . Is this who we are?  Is that something our Founders foresaw?  Is that the America we want to leave our children?  Our sense of justice is stronger than that.

Reading that passage, one has the sense that the President is criticizing someone else's policy, but in fact it was his decision to force feed detainees--over the objections of much of the international human rights and medical communities.  Now I get that the President only took that decision because he thought that the alternatives were worse--absent some fundamental change in our approach.  But, to return to my first reservation, we're not going to get that fundamental change from this Congress, and so the challenge for the President is to figure out how, in the short run and acting on his own, he can get us closer to the new strategy that he rightly seeks.

Schnitzel and Stuff

-- Posted by Neil H. Buchanan

In a post last week, I mentioned in passing that I am currently in Austria.  In fact, I am the PwC Visiting Professor of Law at Wirtschafts Universitat Wien (the University of Business and Economics in Vienna).  I am here for one month, teaching a course and delivering various lectures and seminars.  Yesterday evening was the big event, my featured lecture with a panel of discussants, in which I explained the U.S. debt ceiling and the dangers for the world economy and financial system that would result from putting the President in a trilemma.  (The gift that keeps on giving.)

My hosts at WU are fantastic, and the students (many Austrians, of course, as well as many from around Europe and the world) are top notch -- masters and doctoral students, some pursuing pure tax degrees, while others are involved in interdisciplinary programs.

Because this is the last post that I am scheduled to write during my stay here, and because I have been somewhat under the weather for the past two weeks, I thought I would stop writing about the difference between "targeting applicants because of the content of their politics" and "targeting applicants because of their political activities" (as much fun as that has been) and engage in a bit of personal travelogue, mixed with some Freshman-level social science observations.

This is actually my second visit to WU.  I was here for a week in Fall 2009 (see this DoL post written back then), which meant that I already had a basic sense of the place before I arrived last month.  Staying for a month has allowed me to get to know the city on a deeper basis than is possible in a week, but of course, I still know very little.  Why should that stop me from sharing a few observations?

Everyone should visit Vienna, if they ever have the chance.  It is stunningly beautiful, and the working government buildings are mixed in with the castles, cathedrals, and museums of its past.  Having once been the center of an empire, there is a lot of grandeur to see here, and the current Austrians know that this is an enormous asset.  Also, English has been taught in the schools since the early 1970's, which means that anyone under 50 is likely to be impressively fluent (as are many over 50).  Restaurants have menus in German and English (and sometimes French and Italian).  There are a lot of tourists, but it rarely invokes the feelings that overcome me when I am on the Mall in Washington, DC, or in Times Square.

Vienna is also an amazingly romantic city.  My fiancee was here with me for 8 days, and the city was even more magical than one could imagine.  Part of the romance (even when one is not with a loved one), of course, derives from Vienna's musical past (and present).  There are few people who are less cultured than I am, but seeing Mozart's "The Magic Flute" ("Die Zauberflöte") in a Vienna opera house (there are several) is a musical experience that cannot be matched.

That is about as much as I can write before turning on the economist/social scientist side of my brain.  Vienna's population is about 1.7 million people (2.4 million in the metro area), with Austria's total population currently estimated at 8.4 million.  GDP in 2011 was $417 billion, giving the country a per-capita GDP of about $42,400 (compared to the US's $49,900 that year, and about the same as Canada's and Australia's).   Austria's debt-to-GDP ratio was about 74% last year, almost exactly the same as the US, and lower than Germany's (82%), Canada's (84%), and the UK's (89%).

In short, Austria is a small, prosperous country.  Students here tell me that the recession that has ravaged Europe was pretty mild in Austria.  On the other hand, the country just this week provisionally agreed to finally stop helping foreigners avoid taxes, so its prosperity has been at least partially based on banking secrecy.  (The apparent bottom line: Austria will stop if Switzerland stops!)

Vienna covers 160 square miles.  For comparison, Washington DC's land area is about 68 square miles.  This means that Vienna's populations density is about 10,800 people per square mile, while DC's is about 9,300.  This comparison is interesting, because the contrast between the two cities's transportation systems is ... shall we say ... stark.

Indeed, as I wrote after my last visit to Vienna (here and here), the most outstanding feature of the city from an economist's standpoint is its excellent infrastructure, especially its public transportation.  There is a combined network of subways, commuter trains, and (most importantly) trolleys/trams that covers the city.  They are clean (even though people are allowed to bring food on board), and they run smoothly.  My column and DoL post from 2009 took special notice of the high-speed train that runs from the airport into the city, but even the (cheaper) standard subway line to the airport is fantastic.  Little of the system is new, but it is very well maintained.

For those readers who have never been to Washington, DC, let us just say that almost everything I wrote about Vienna's transportation system in the paragraph above is laughably absent in DC.  True, the 70's-era Metro is great (except during rush hours), and it runs from the city out to National Airport.  But the long-delayed project to connect Dulles Airport to the city with a (non-bullet) train is not scheduled to be completed until 2018.  We shall see.  Moreover, our extremely minimalist subway system has nothing like Vienna's tram network connected to it.  DC Metro buses are often like a Fellini movie, and they move slowly through the city's streets.

It is true that Vienna was severely damaged during WWII, which gave it an opportunity to rebuild itself in a more modern way.  Most of its transportation network, however, was built in the 1920's.  This is a smallish city, in a small country, with economic prosperity that is comfortable but hardly eye-popping, yet it manages to maintain an extensive, working transportation infrastructure.  DC?  Hmmm.  Which capital city is the center of government of the world's only superpower?

A few small observations about the Austrian welfare state.  When I became ill two weeks ago, my hosts at the university immediately told me that my temporary employment at the university qualifies me for zero-cost health care.  Fortunately, I have not become so ill that I have had to see a doctor, but I was given my social services ID number and told to contact any doctor, if needed.  Also, I asked my students how much they are paying in tuition.  (I was explaining loan-forgiveness programs in US law schools.)  They laughed and said, "17 euros per semester, total."  That is less than $45 per year.  The students confirmed my suspicion that no one takes out student loans here!  During my time here, I have seen some homeless people, but not many.  The poverty rate here is 6%, compared to 14% in the UK and 15% in the US.  Taxes are 42.8% of GDP, sixth-highest in the world.  All I can say is that they seem to get what they pay for.

Finally, the most important question: In the land of wiener schnitzel, how does a vegan eat in Vienna?  The answer is, quite well.  There are several purely vegan restaurants, at various price levels.  At least one (Bio Bar von Antun) serves what I call "vegan schnitzel," which is fantastic.  (Even before I became a vegan, I never liked wiener schnitzel.)  There are also many veg-friendly places, and most Asian restaurants (ubiquitous here, combining Chinese, Japanese, and Korean cuisines, often as take-out fast food) include the word "vegetarische" on their signs.  Not vegan, but very easy to eat well.  (Too easy.)

How animal friendly is Vienna?  People take dogs everywhere, including on the subways.  (Interestingly, there is a muzzle law on trains and trams that almost everyone obeys.)  But the best moment of the trip so far was when my fiancee and I were walking through a major shopping area (something like the Union Square area in SF, or Newbury Street in Boston), when a flatbed truck started blaring "Who Let the Dogs Out?"  When we drew nearer, we discovered that we had walked into an animal rights parade, with people carrying "Go vegan" signs and wearing animal costumes.  Vienna will never be home, but at that moment, it entered a different category of wonderful places.

Back to the U.S. next week.  But I am not sad, in part because our honeymoon will take us to London, Edinburgh, Dublin, Berlin, and Stockholm.  More social science field work.

Auf wiedersehen for now, y'all.

Subsituting Non-IRS for IRS Governance of Federal Activities

-- Posted by Neil H. Buchanan

My new Verdict column today takes a different angle on the non-scandal-scandal involving the IRS.  I address the ubiquity of "tax expenditures," which are the "tax cuts" that Congress (on a VERY bipartisan basis) loves to pass, but which are the equivalent of direct spending by the federal government (mortgage interest deductions, research and development tax credits, child tax credits, excludibility of employer-provided health insurance, and on and on and on and on).  Both methods of subsidizing favored activities have the same impact on deficits and debt, but Congress (especially, of course, Republicans in Congress) loves tax expenditures and hates government spending.

I have always been a bit of an outlier among tax scholars in my attitude about tax expenditures.  The standard view, which has a great deal to be said for it, is that Congress should stop mislabeling spending as tax reductions, essentially because it is better for Congress not to be dishonest.  A slightly more nuanced argument might be that forcing Republicans to run their favored versions of social engineering through direct expenditures would force them to admit that not all spending is bad, which could pry open some room in the debate for other, more progressive spending programs.

My mild apostasy on this topic is based essentially on the simple difference between substance and form.  I frankly do not care what we call these programs.  Even though in many cases calling them "spending programs" feels more accurate, I just don't care.  If the issue is truth-in-labeling, then what really matters is that everyone is able to understand the label.  And by this point, I hardly think it is a surprise to anyone who matters to learn that people opportunistically label things, and the buyer should definitely beware.

A more potent objection to using tax expenditures rather than direct spending is that Congress's procedures differ radically with regard to things that are labeled "spending" compare to things that are labeled "tax breaks."  Spending generally needs to be re-authorized and re-appropriated every year, whereas tax provisions continue to live (generally without being reviewed for cost-effectiveness) in perpetuity.  The latter claim need not be true, of course, as demonstrated by the many tax provisions that are enacted on a temporary basis (e.g., the payroll tax holiday).  Even so, it is true that some tax expenditures suck up money without any meaningful, continuing oversight.

Of course, we could change all of that.  We could sunset all tax provisions, annually or otherwise, if we thought that doing so was a good idea.  For that matter, we could admit that many non-entitlement spending provisions are all but permanent already (military hardware being the most obvious example).

Still, even though it is simple enough to describe a change in the legislative process, Congress is (to put it mildly) rather slow to changes its procedures.  (Filibuster reform, anyone?)  Maybe it would be easier to force Congress to relabel tax expenditures affirmatively as spending than it would be to force it to bring tax breaks up for regular review.  I remain skeptical, but I see the possibility.

In today's Verdict column, I link to a related column that I wrote for FindLaw's Writ (the defunct predecessor to Justia's Verdict) in March 2010.  There, I made the argument that there is another serious real-world cost involved in relabeling tax expenditures as direct spending.  As it stands, because Congress uses the Internal Revenue Code as its preferred legislative vehicle, the IRS ends up with enforcement responsibilities for a surprisingly large amount of the federal government's activities.

Moving enforcement responsibilities out of the IRS is, however, hardly a costless prospect.  As I noted in my 2010 column, other federal agencies can (and often do) simply end up requesting that IRS employees be "tasked" to the non-IRS agency, making such a change merely an exercise in re-labeling.  Moreover, there is a lot of expertise and institutional knowledge built into work environments.  (Indeed, part of what we are learning about the current non-scandal-scandal is that the Exempt Organizations group was, through budget cuts and low morale, essentially stripped of its institutional memory, as its best and most experienced people moved on.)

Today's Verdict column expands on the costs of moving from IRS governance of various activities to non-IRS governance.   I continue to believe that the best approach, taking account of all of the tradeoffs involved, would be simply to stop fighting about relabeling tax expenditures, but being careful to give the IRS the resources necessary to perform its outsized tasks.

As we now know, however, that is not going to happen.  Even though nothing damning is coming out of all the furor over the non-scandal-scandal, the Republicans are simply having too much fun with this.  Among other things, their insistent innumeracy is coming to the fore, as conspiracy theorists start to point to anecdotes as proof that the IRS is on the loose.  The funniest version of that so far was a column by former Bush I speechwriter Peggy Noonan, who wrote about four conservatives who say that they have recently been audited by the IRS.  Get it?  Conservatives were audited by the IRS.  That's the REAL scandal!  Statistics maven Nate Silver had fun with that one on his blog, actually running through the numbers to show what any adult should already know: Four examples do not prove Noonan's point.

No matter.  As my first post on this subject last week suggested (and as some examples in my Verdict column today demonstrate), the Republicans are getting too much political benefit from this to let it go.  A party that could never quite get itself to denounce birther-ism is certainly not going to go quietly on "political targeting of conservatives" (even though the targeting was not of the conservatism but rather the politicking).

Which raises a further question.  If, as I now believe, the politics have changed sufficiently to make it impossible to return to the status quo ante, with the IRS performing the governance duties that Congress dumped upon it -- and doing so rather well -- is there any prospect at all that the non-IRS agencies will be allowed to do their new jobs well?  After all, even though we know that Republicans hate the IRS, do they not generally hate all government workers?  And if so, is it not possible that we will soon see functions shifted out of the IRS, at great cost and dislocation, only to be dumped upon furloughed and salary-frozen employees in other federal agencies, with no gain to be had by pasting "not the IRS" on the agencies' appropriations requests?

This seems quite possible to me.  Other than people who turn out to be directly important to wealthy people and Republican Congressmen (air-traffic controllers being the obvious recent example), being a government employee means being hated by movement conservatives.  Moving functions around to non-IRS agencies might end up solving nothing, and costing money and causing serious mistakes in the process.  At this point, however, we are left hoping that there is some daylight between Republicans' hatred of IRS employees and their hatred of every other civil servant.

We have always had an impoverished public sector in the U.S.  (There is a reason that waiting rooms in government agencies are generally so dreary, after all.)  That is now likely to become even worse.  Nevertheless, there might be no choice now but to fight for the second best.  The IRS has been given a series of nearly impossible tasks, and it has outperformed expectations over and over again.  From here onward, however, it will probably not even be allowed to try.  We had better hope that there are other federal agencies that will be given a fair chance to succeed.

How Much More of a Fiction is Due Process Notice for a Person with a Mental Impairment Than For a Person Without One?

By Mike Dorf

My new Verdict column discusses Monday's SCOTUS decision in Metrish v. Lancaster.  Writing for a unanimous Court, Justice Ginsburg's opinion says that regardless of whether Lancaster's due process rights were violated when he was not permitted to offer a diminished capacity defense that was on the books at the time of the crime charged, the Michigan state court decision denying him that opportunity was not an "unreasonable" interpretation of Supreme Court case law; thus, under the Antiterrorism and Effective Death Penalty Act (AEDPA), the Court said that Lancaster was not entitled to habeas relief.  My column locates Lancaster and AEDPA in the decades-long retreat from expansive notions of habeas as a collateral remedy expounded during the Warren Court era.

Here I want to ask the question that the Court finds unnecessary to reach in light of AEDPA's deferential standard of review of state court applications of federal law: Were Lancaster's due process rights actually violated?  The Court's opinion suggests (correctly in my view) that this is an open question.  Here is how my column summarizes the key point:

According to the Supreme Court, Lancaster’s case fell somewhere in between two of the Court’s own prior precedents.  In the 1964 case of Bouie v. City of Columbia, the Court held that due process forbade a state from retroactively applying a construction of a criminal trespass statute forbidding entering private property to people who refused to leave such property.  In the 2001 case of Rogers v. Tennessee, the Court permitted the retroactive refusal of a state court to apply the common law rule requiring that the victim of an attack must die within a year and a day of the attack, in order for the perpetrator to be charged with murder.  According to the Court in Lancaster, taking away the diminished capacity defense after the fact is more like a due process violation than the non-violation found in Rogers, but less like a due process violation than the violation found in Bouie.

The Lancaster Court did not say which side of the line the case fell, because it found that the Michigan courts' decision was not unreasonable under AEDPA.  But considered de novo, where would it fall?

My initial inclination is to say that Lancaster is more like Rogers than like Bouie, and that therefore Lancaster's due process rights were not violated when the Michigan courts didn't permit him to make his diminished capacity defense.  That's because the central issue here is notice.  It violated the due process rights of the demonstrators in Bouie to be subject to a criminal trespass statute for staying on private property without permission when the statute only said in so many words that it forbade entering private property without permission.  Thus, they could plausibly claim that they didn't have notice that what they were doing was criminal.  By contrast, in Rogers, the defendant could not plausibly have claimed that he was relying on the year-and-a-day rule when he attacked his victim, because the timing of the victim's death was fortuitous.  (Perhaps a different case would be presented by a killer who used a poison known to take over a year to kill its victim, although it's hard to generate any sympathy for such a killer.)  Seen in this way, Lancaster also does not appear to have been prejudiced by lack of notice.  The whole point of the diminished capacity defense he wanted to make is that he lacked the capacity to form the intent to kill.  But if that's so, then notice wouldn't have done him any good.

I am nonetheless uncertain about whether Lancaster has a good claim because the Court in Rogers did not rely on the distinction I have just drawn.  Instead, it relied chiefly on the fact that the Tennessee Supreme Court in Rogers overturned a common-law doctrine that had never had a firm basis in the case law, so that Rogers could not have been unfairly surprised by the Court's rejection of it.  By that standard, the question whether Lancaster is more like Bouie or Rogers would involve parsing prior Michigan law to see how firmly established the diminished capacity defense was at the time of Lancaster's crime, and whether it was rooted in statutory interpretation or common law.

In addition, notice is always something of a fiction, but that does not typically bother the courts.  It's true that the notice question feels still more fictional in Lancaster and Rogers than in Bouie, but one could make an argument for relying on formal notions of notice across the board.

Bottom Line: I think it is an open question whether Lancaster had a good due process claim.  That means the Court's decision is probably right as an interpretation of AEDPA.  My column should thus be read not as a critique of the ruling in Lancaster itself but as a lament that Congress and the Court have so narrowed habeas.

The Slim Prospects for Executive or Judicial Action Interpreting "Exclusively" to Mean "Exclusively"

By Mike Dorf

Even as the IRS "scandal" continues to cause hyper-ventilation on the right, various progressives have been beating a different drum.  Tea Party and similar groups, they say, never should have been permitted tax exemptions in the first place because the relevant statutory language (Section 501(c)(4) of the Internal Revenue Code) says that an organization is entitled to such status only if it "exclusively" promotes the social welfare, but the IRS was merely requiring that such organizations "primarily" promote the social welfare, permitting them to engage in some political activity.  According to these critics from the left, the real problem is the longstanding regulation  and implementing tax opinions (described in an IRS tax manual) that have been too permissive in granting tax-exempt status.

Are these critics correct?  Well, no and yes.  On the face of it, it seems quite odd to interpret "exclusively" to mean "primarily," but in practice that strikes me as just about right.  Suppose that a group of kazoo players in Kalamazoo, MI want tax-exempt status for their new organization, the Kalamazoo Kazoos.  (That was the name of a now-defunct minor league baseball team, but I digress.)  The group gets together weekly to practice kazoo and gives occasional concerts.  Should this group qualify for 501(c)(4) status?  Sure.  Does the organization "exclusively" promote the social welfare?  Not literally.  Perhaps the Kazoos spend some portion of their meetings gossiping or networking or eating or engaging in other activities that are not exactly social welfare promoting.  But no organization engages exclusively in promotion of social welfare in the sense that every second of every event is directed at the social good.  And yet we can assume that Congress meant 501(c)(4) to apply to real organizations.  Accordingly, it makes sense for the IRS to interpret "exclusively" to mean "primarily."  Even textualists (like Justice Scalia) are not literalists, and so in the context of a statutory provision meant to have actual application, "exclusively" cannot be interpreted literally.

Nonetheless, one might think that the word "exclusively" in the statutory language should signal a  stricter attitude than the IRS has adopted.  Perhaps the provision should be construed to mean something like this: the organization must exist exclusively for purposes that promote the social welfare, with non-social-welfare-promoting activities and purposes being only incidental to the main aims of the organization.  The most thoughtful criticisms of the IRS from the left object that in practice the definition has been looser still.  I haven't followed the details of enough cases sufficiently closely to know whether that's broadly true, but on the face of things, that does strike me as at least a plausible criticism, especially with respect to the new politically active groups seeking 501(c)(4) status.

Suppose one were persuaded by this critique.  What could be done to change the law?  Well, the Obama Administration could, through executive action alone, tighten the operative definition.  It's true that Congress has effectively acquiesced in the longstanding IRS working definition of "exclusively," but the leading admin law cases permit an agency or administration to change its understanding of unclear statutory language so long as that language is in fact unclear and the new understanding is reasonable.  Here, a tightened interpretation would likely satisfy those criteria.

Does that mean the Obama Administration would do it?  Fat chance.  Had the Administration come out swinging--arguing that although the Cincinnati office of the IRS used improper criteria, the real problem was a too-permissive approach to 501(c)(4), not a too-restrictive approach--it would now be well positioned to make the case to the public that what we need is to protect hard-working Americans from the giveaways that the IRS has for too long been allowing.  But, having accepted the Republican narrative that low-level officials acted "scandalously", and having fired the acting head of the IRS, the President would likely take too much political heat for such a seeming about-face.  Accordingly, in the short term executive action appears quite unlikely as a means of changing the IRS approach.

What about lawsuits?  As a general matter, SCOTUS case law disallows taxpayer standing.  Thus, no individual taxpayer would be permitted to go into court to complain that, by allowing 501(c)(4) status for, say, American Crossroads, the IRS reduces its take from such entities, thereby requiring it to obtain more money from the likes of individual taxpayers.  Except for a very narrow exception for a narrow category of Establishment Clause challenges, there is no such taxpayer standing.

To be sure, not every individual lawsuit must rely on taxpayer standing.  Consider the case of Dr. David Gill, who is one of the plaintiffs in a lawsuit filed in February against the IRS alleging that by employing an overly lax standard for 501(c)(4) status, the government effectively subsidized attacks on his (ultimately unsuccessful) campaign for Congress by an organization that received substantial anonymous donations from an insurance company and the pharmaceutical industry.  Gill is not asserting standing as a taxpayer.  Rather, he is alleging a conventional injury: He was at a competitive disadvantage in the race because, he says, the IRS under-enforced the law.

The IRS has nonetheless moved to dismiss the case for lack of standing, invoking various longstanding precedents that limit the ability of private parties to insist that the government enforce the law against some third party.  Allen v. Wright is a typical and seemingly highly relevant case.  There, plaintiffs--parents of minority schoolchildren--argued that by failing to police tax-exempt status for segregated private schools, the IRS effectively subsidized such private schools, and thereby undermined the ability of the plaintiffs to send their children to desegregated public schools.  The SCOTUS rejected standing on the ground that the causal connection between the government under-enforcement of the law and the plaintiffs' injury was too tenuous.

In their response to the IRS motion to dismiss, Gill and his fellow plaintiffs gamely attempt to distinguish Allen and similar cases by saying that the new case is simply a straightforward admin law challenge to a reg that violates a statute.  I hope they succeed, because I don't like the Allen rule and I share the sense that the IRS has indeed been too lax in its implementation of 501(c)(4).  But I wouldn't bet on it.  Post-Allen cases emphasize the point that private parties (whether suing as taxpayers or to vindicate some more particularized interest) generally should not be heard to complain that the government is under-enforcing the law against some other private party--even when there is a pretty obvious connection between the interests of the plaintiff and the conduct of that other private party.  These cases are related to conservatives' dislike of lawsuits generally and their fondness for the "unitary executive" in particular.  (When courts, acting at the direction of private parties, tell agencies to enforce the law, they undermine the President's ability to direct the executive branch.)

Hence, if this were just a straight-out admin case, I would expect the conservative DC Circuit or, on cert, the conservative majority on the SCOTUS, to be skeptical of the claim for standing.  Throw in the now-ideological stakes derived from the current "scandal" and the odds against the courts ultimately upholding standing by a party challenging IRS under-enforcement of 501(c)(4)'s limits look quite long.

Two Broader Lessons of the IRS/Tea Party "Scandal"

By Mike Dorf

Today I'll discuss two ways in which the IRS "scandal" reflects broader features of contemporary American politics.  I'll follow up tomorrow with a post that asks the question whether there is any realistic prospect of changing the policy by which the IRS interprets the exemption from taxation for 501(c)(4) organizations that are "operated exclusively for the promotion of social welfare" to mean organizations that are operated "primarily" for the promotion of the social welfare.  (Hint: The answer will be no.)

(1) Separate Factoverses and False Equivalence

Even judged only by the comments on one of Professor Buchanan's posts on the IRS/Tea Party "scandal" last week, I am reminded that Americans believe they are entitled not only to their own opinions but to their own facts.  Those informed by right-wing media insist that where there's smoke there's fire, that Tea Party activists were harassed by the IRS and its jack-booted thugs, that the motives of the harassers were nakedly partisan, and that responsibility in the sense of knowledge and perhaps even direction must have come from the top levels of the Obama Administration, probably the President himself.  Those informed by progressive media doubt that there was necessarily even any low-level wrongdoing, with the focus on names like "Tea Party" and "Patriots" simply reflecting the flood of applications, that left-of-center groups faced similar scrutiny, that there is no evidence whatsoever of Presidential complicity, and that the real scandal was the failure of the IRS to subject the truly powerful groups that abused 501(c)(4) status, like Karl Rove's American Crossroads, to scrutiny.

None of us is without priors, of course, and long-time readers of this blog will realize that I come closer to the second view, but I'd at least like to think that the reason has something to do with actual facts.  I'm perfectly happy to say that I've seen nothing sufficiently definitive to rule out high-level Administration involvement or to rule out the possibility that one or more of the Cincinnati-based IRS staff did act out of an improper partisan motive.  Sometimes where there's smoke there's fire, but sometimes where there's smoke there are only mirrors.  Thus, I will continue to use the term "scandal" in quotation marks, not to mock the notion that the IRS scrutiny of Tea Party groups is scandalous, but simply to withhold judgment about what, to this point, looks mostly like a case of ineffective management of overworked staff who were in over their heads.

Even that stance probably concedes too much to the right-wing view, however.  Of course people of all political stripes can and sometimes do exaggerate or outright fabricate in order to support a position they hold for ideological reasons.  But we live in an era in which the propensities towards making stuff up are not evenly divided across the political spectrum.  In 2004, Karl Rove was talking specifically about foreign policy when he told Ron Suskind that Suskind was part of the "reality-based community" as though that were a problem, but the statement has broader resonance.  Whether it's the belief that the Affordable Care Act would create death panels, that man-made global warming is a hoax, that Barack Obama is a devout Muslim (and an atheist!), or that permitting same-sex couples to marry will contribute in any way to the deterioration of opposite-sex marriage, Americans who are active on the political right have demonstrated less interest in conforming their views to evidence about the world than do other Americans.  Again, that is not to deny that all people exhibit confirmation bias to a substantial degree.  It's simply to deny that we all do it to the same degree.

Nonetheless, when one combines the pre-existing tendency of the news media in America to conflate "even-handedness" with objectivity, with the last decade's decimation of budgets for actual investigative journalism, it is inevitable that reports on the IRS/Tea Party "scandal" will feature roughly equal doses of conservatives claiming that they are the victims of a witch hunt and liberals saying that if so, their team wasn't holding the pitchforks.

(2)  Preemptive Counterproductive Appeasement

Meanwhile, the President's response and the inevitable counter-response also fit a familiar pattern. From the moment that the IRS/Tea Party story broke, the President has expressed outrage and has already fired the acting head of the IRS.  He thus aims to show the American people that he shares the basic world-view of the people on the right who are outraged, but wants to chart a somewhat more moderate course.  Hmm, where have we seen this before?

Oh, I don't know.  How about in every single budget negotiation with Republicans in Congress?  For reminders, I'd refer readers to Tom Tomorrow's brilliant "Middleman" cartoons, like this one on the 2011 debt ceiling negotiations, or this one on the sequester that arose out of them.  Like Charlie Brown thinking that surely this time Lucy won't pull away the football, President Obama believes that if only he shows himself to be a reasonable compromiser willing to meet his opponents substantially more than halfway, then they will respond in good faith.

The Downside of Outsourcing Political Oversight to Comedians

-- Posted by Neil H. Buchanan

At apparently the same time that I was writing my Dorf on Law post yesterday, the editorial board of The New York Times was reaching essentially the same conclusions.  Although they did not focus as much attention on the IRS non-scandal-scandal, they made the important point that this "week of scandals" that supposedly has changed everything is, in fact, a bunch of small-bore matters that have somehow been turned into a whole that is much bigger than its parts.  Even taking seriously the notion of "totality of the circumstances," there is still nothing but a disconnected handful of matters that Republicans are now screaming about.

As if to show that content does not matter, the show trials are already set to begin.  Today, the House Ways & Means oversight subcommittee will hold the first of what promises to be many, MANY hearings on the IRS's "targeting" of Tea Party groups.  (As I said yesterday, the notion that they were targeted because they are Tea Party groups is not the same thing as being politically targeted in the sense of being the victims of a political hit job.  But nuance left the building long ago, and it's not coming back.)  The chair of the subcommittee set the perfectly absurdist tone, saying: "I just refuse to believe that lower-level I.R.S. personnel were making these kinds of decisions."  That pretty much sums up the modern Republican Party: Decide in advance what is true, and refuse to believe anything else.  Why hold hearings, then?  It is certainly not about fact-finding.

As I pointed out yesterday, however, the hyperventilating about the IRS's mistakes is hardly limited to the right wing.  Democrats are "in no mood to defend the nation’s tax collector," as a news article in the Times put it this morning.  Even The Progressive, the monthly magazine published in Madison, Wisconsin that gamely carries the torch of LaFollette-style progressivism, jumped on the bandwagon.  In a podcast earlier this week, almost comically titled "Obama's Bad Nixon Impersonation," the magazine's editor declaimed against the "odious political witch hunt that was under way" at the IRS.  I understand that The Progressive has good complaints about Obama's policies (many of which echo my own critiques), but this is just insane.

Part of the larger problem, I think, is that we have reached the point in our country's history where there are no longer reliable sources of informed independent oversight of our political system.  Last year, I commented on the ridiculousness of the media's coverage of the Affordable Care Act case, which led to CNN's almost inevitable mistaken announcement that the Act had been struck down.  In that post and elsewhere, I have noted that (with rare exceptions) current news reporters simply lack the ability and knowledge to understand news stories, which leads them to default to meaningless he-said-she-said reporting.  (I am not, of course, claiming to be the only person to have noticed this problem.)

Comedians have always been an important part of the public's check on political power.  Even before there were court jesters, surely humor was an important source of power for those in the political opposition (formal or otherwise).  Now, however, we have reached the point where the only real sources of political commentary from a left-of-center perspective with any widespread impact at all are Comedy Central's two late-night "fake news" shows, hosted by Jon Stewart and Stephen Colbert.  This, we are beginning to see more and more clearly, is a bad state of affairs.

As I pointed out in my post yesterday, Stewart has responded to this week's meta-narrative about a scandal-plagued Obama Administration by completely buying into the premise.  Again on Wednesday night's show (which, because I am currently in Austria, I did not see until about six hours ago online), Stewart talked about how the right wingers whom he has mocked now have some "legitimacy" in their complaints.

Only a week ago, Stewart himself was mocking the "Groundhog Day"-like Benghazi hearings that the Republicans were pushing, pointing out the Republicans' complicity in the actual underlying problems that led to the deadly attack last September.  Nothing has changed this week at all regarding the Benghazi situation, except that the release of government emails makes it even more clear that there was no coverup or anything "bigger than Watergate" that the Republicans had been trumpeting.  It would have been very much in character for Stewart to mock the Republicans' renewed outrage, as well as their attempts to paint a distorted broader picture of scandal.  Instead, he simply bought into the false narrative.

Why?  In one way, Stewart and his staff are extremely hard-working.  They do a great job of finding clips of politicians who opportunistically adapt their outrage in chameleon-like fashion.  Exposing hypocrisy is valuable, and "The Daily Show" does it better than anyone.  In another way, however, Stewart is extremely lazy.  When a story is in any way complicated, he tends to default to simplistic tropes that miss the real story.  Any time he talks about budgets, for example, he cannot stop himself from emphasizing the word trillion, as if the shear size of that number is independently significant.  Clearly, he and his staff bought into the same "political witch hunt" notion that The Progressive stumbled into.  It is completely unsupported by facts, but what an easy story to tell!

This, moreover, is hardly the first time that we have seen this mistake play out at 11pm on Monday through Thursday nights.  Several months ago, in a very public-spirited effort to improve the lives of disabled veterans, Stewart and his staff deplored the long delays that veterans have faced in their attempts to receive benefits to deal with their war-related injuries.  This is, again, a very admirable effort on Stewart's part.  However, he then claimed that the explanation could not possibly be that the relevant government offices are underfunded, because the budgets for those offices have recently gone up, not down.  Of course, the caseloads have also been rising, and those offices have never been given the resources to modernize and deal with the problem in a systematic way.  But that did not matter to Stewart.  "They have more money" became "They have all the money they need."

And it is not as if Stewart is holding back from making bigger-picture pronouncements.  His commentary on the backlog of veterans' claims included the broad statement that this failure threatened to support the conservative narrative that government can never do anything right.  Of course, if the self-proclaimed defender of government's role in society is constantly willing to skip the facts and go for the simplistic nonsense, then maybe the problem is not that government -- when given a fair chance -- cannot do anything right.  It could be that the supposed defenders of government punt away their chances to make pointed arguments.  (Stewart has, by the way, returned to this narrative more than once since he first rolled it out in the story about veterans.)

Sometimes, the easy laugh is the point.  For example, back in January, when Paul Krugman was making the case for the "big coin gambit," he engaged in a genuinely nasty back and forth with Stewart, who was mocking the idea of the one trillion dollar coins.  My take on this was that public confidence in the monetary system was too fragile to risk making everyone wonder how we can simply mint cartoonish coins to solve the problem.  In that context, Stewart's simplistic mocking served precisely the role that one would expect of a comedian: The first thing that makes people laugh is often the most powerful.

How is this week different?  As I noted above, there was nothing about what happened this week that should have been catnip to a comedian.  Especially given Stewart's recent track record on Benghazi, it would have been natural to continue to mock Republicans' inflated claims about a scandal.  In the IRS non-scandal-scandal, it would have been just as easy to mock the outrage at the supposed witch hunt -- "Wait a minute!  You're telling me that Tea Party groups claimed to be 'social welfare organizations,' and the IRS suspected that maybe they were really fronts for lobbying operations?  What an overreach!" -- as to adopt the crazy "targeting political opponents" meme that Stewart grabbed from Day One.

Returning to the title of today's post, the downside of our having people like Jon Stewart and Stephen Colbert provide political oversight is not merely that they are ill-equipped to fill that role consistently well.  It is that they are really our only line of defense, at this point.  Because they often do what they do so very well, we can often think: "Well, sure, the Fourth Estate is almost completely dead.  But we really don't need them anymore."  Until we do.

The IRS Mess Is Already Badly Misunderstood -- And the Distorted Narrative Will Only Get Worse

-- Posted by Neil H. Buchanan

Last Friday, a news story broke that quickly came to be known as "the IRS scandal."  Even the just-the-facts-ma'am TaxProf Blog has taken to posting daily collections of news stories under that title, accompanied by the number of days since the story broke, e.g., "The IRS Scandal, Day 7" today.  Move over, Iranian Hostage Crisis!  (Who will be the new Ted Koppel, to emerge from this media frenzy?)

This is not to criticize TaxProf, or anyone else who is calling this a scandal.  It is certainly being treated as one, by almost everyone, and it is difficult to resist a powerful narrative.  Something did go wrong at the IRS, and it should be investigated and put right.  There really are good reasons why everyone should worry about what happened.  Based on what we know, however, this is either a medium-sized story that is being blown up into a huge story for partisan (and media-driven) reasons, or it is a big story that is big for a completely different set of reasons that are only mildly connected to the hyped-up story that is already being taken for granted.

What do we know?  Not long after President Obama took office, the IRS was hit with a wave of applications by newly-formed political organizations, asking for the legal status known as 501(c)(4) organizations.  Such organizations are not eligible to receive tax-deductible donations, but the organizations can run their operations exempt from taxation.  (That is, they do not have to determine their revenues minus their deductible expenses, and then pay income tax on the difference.)  That is, they are presumptively nonprofit, in the sense that they use their net proceeds to engage in "charitable, educational, or recreational purposes."  501(c)(4)'s can engage in political campaign activity, so long as that is not the organization’s "primary activity."  What is such an organization's primary purpose supposed to be?  Why, "the promotion of social welfare," of course.

The IRS is the government agency that Congress has designated to police this extremely vague set of rules.  The IRS field office in Cincinnati is where 501(c)(4) applications are processed.  The job of the IRS employees in that office is to try to figure out which of these organizations are really just political lobbying operations that do not meet the requirements for operating tax free.  When hit with a wave of applications, all of which claim to be "social welfare organizations," the staff decided that they needed to set up a triage operation, figuring out short-cuts to find the groups that were likely to be pure political lobbying operations masquerading as something else.

When the wave of applications became overwhelming in 2010, some of the career staff (not political appointees, and as far as we know not even legal staff) looked out at the world and concluded that the sudden increase in applications was likely to be driven by the major new political movement that had emerged in 2009 and 2010.  The staff then used keywords like "tea party" and "patriot" to sift through the applications.  This led to a higher percentage of administrative inquiries -- not even close to half of the total, but still more than would otherwise have been the case -- being directed toward tea party-like groups.

Even though that strategy had its own internal logic, it was clearly wrong for IRS staff to adopt such a sorting rule.  It was a big mistake, and it should not have happened.  When higher-level career IRS people found out about it, they immediately declared that it was a mistake and must stop.  Those higher-level people then made another big mistake, by not checking to make sure that it had really stopped.  It apparently took about 18 months before they finally shut it down.

There are plenty of accusations and insinuations now flying around, along with newly emerging facts.  The White House has forced out the acting commissioner of the IRS, and the Justice Department is investigating whether any crimes were committed.  Even so, the facts at this point show that the IRS as an organization made two mistakes: (1) Using a decision rule that disadvantaged political groups with a common (in this case arch-conservative) political ideology, and (2) Failing to correct the error quickly and completely.

And now we are off to the races.  Some politicians are likening this to Nixon's enemies list, in which the White House directly ordered the IRS to conduct audits of the personal taxes of Americans who were critical of the President.  That is obviously not what happened here.  Indeed, if there were a political cabal that wanted to use the IRS to harm the President's opponents, they could hardly have chosen a less effective method.  Most Tea Party groups, by their very nature, are shoe-string organizations that would have virtually no money to tax, even if they were denied nonprofit status.  And if the cabal really thought that this was a great idea, it is hardly clear why they would have shut it down over a year ago.  Watergate, this is not.  (And why would the imaginary cabal let big 501(c)(4)'s like Karl Rove's -- which clearly are not social welfare organizations -- continue untouched?)

No matter.  The White House (and Democrats in general) are running scared.  Even before dumping the IRS commissioner, the President contrasted the anger from Republicans over Benghazi with their reaction to the revelations about the IRS's stupidity, saying that the former is nonsense but the latter is a legitimate cause of public outrage.

This is understandable.  Even though the net result of being tagged for extra scrutiny does not actually mean that the merits of your application are viewed unfairly -- your organization can still show that it is truly a social welfare organization, using the same facts and law that should legitimately be applied to your case -- being tagged itself is time-consuming and stressful, and it seems unfair.  Although the analogy is hardly perfect, one can liken this to being in a group of people who are much more likely to be pulled over on the highway to have their cars searched.  Even if a member of such a group is actually doing things that raise probable cause, and even if they are then given a fair chance to prove their innocence, it is still hardly a minor matter that being in the disfavored group increased the likelihood of having to deal with law enforcement officers.

Everyone, no matter their political ideologies, can understand why we would not want the IRS -- or any other law enforcement organization -- to use political criteria to determine enforcement patterns.  No one, in fact, is defending this bone-headed plan.

What we have here, however, is an agency that is chronically underfunded by Congress (the IRS hardly being a historical favorite among the public or their representatives, especially the very Republicans who are now screaming the loudest), an agency that was faced with a wave of applications from politically-oriented groups, and an agency that had to decide how to apply a very vague law passed by Congress (and to do so without undue delay).

What these IRS employees did not only falls far short of Nixon's enemies list, it does not even come close to "targeting political enemies."  As far as we can tell, the stupid plan was based not on any hostility to the ideological goals of the groups.  It was based on the guess that such groups (which were being formed in response to a nationwide political movement) were more likely to be pure lobbying operations than "social welfare organizations."

This, of course, has not stopped the inevitable media and political firestorm from quickly distorting this into a scandal that is political with a capital "P."  On "The Daily Show With Jon Stewart," for example, Stewart is freely describing this as "targeting political enemies."  In fact, his nightly tirades on this topic have taken on their own narrative arc, to the point where he is now saying that this situation gives paranoid right-wing groups legitimate reason to believe that their worst fears are true.

Stewart has even complained that "the government" is terribly incompetent when it is supposed to do good things, but it is suddenly a well-oiled machine when it comes to doing things that we do not want it to do.  That is clearly wrong.  Whatever else might be going on, what started all this at the IRS was incompetence, not sinister proficiency.

Stewart, of course, is hardly alone.  We now have the spectacle of a story that is completely misunderstood, a bad mistake that took too long to fix being recast as a political spy thriller.  And with Democrats giving ground, saying (correctly) that what happened here is indefensible, they are being misinterpreted as agreeing that this was all motivated by partisanship.  The facts say otherwise.

Even so, this will now spin into its own version of political reality.  Certain events simply become emblems and political rallying points, completely disconnected from actual events.  We can count on this story becoming less and less recognizable, and more and more politicized, for years to come.  Look for "The IRS Scandal, Day 5349."  Yippee.