Wednesday, March 25, 2015

How Biased Towards Libertarianism is the US Constitution?

by Michael Dorf

My latest Verdict column discusses  a recent Harvard Law Review essay by Suzanna Sherry, in which she reviews Richard Epstein’s book, The Classical Liberal Constitution. Sherry says (correctly) that Epstein defends a view of economic rights as no less fundamental than “personal” rights such as contraception, abortion, and marriage. She also says that liberal progressives have failed to respond adequately to the argument by offering a full-throated defense of personal liberty that excludes Lochnerian economic liberty. I argue that this charge is unfair. I point to constitutional theories by the likes of John Hart Ely and Jim Fleming that draw just this distinction. I might have pointed to any number of others. Indeed, it is practically a cliche that liberal constitutional theory of the last four-plus decades has been obsessed with distinguishing Roe from Lochner.

The main point of my column is not, however, to defend liberal constitutional scholars against Professor Sherry. My chief aim is to examine an unspoken premise that she and Epstein share: namely, that implementing economic libertarianism in the name of the Constitution would require a substantial change to our existing constitutional regime. I challenge this assumption in two ways. I note that: (1) while the SCOTUS has not accepted the invitation of the economic libertarians to revive Lochner as a matter of substantive due process, the Court has in fact been very friendly to the deregulatory agenda of economic conservatives while using other doctrines; and (2) the main contribution of the American Constitution to economic libertarianism comes not from judicial enforcement of the Constitution or courts more generally, but from the hard-wired features of the U.S. Constitution—its multiple “veto players”—that tend to stymie efforts to adopt progressive policies.

I suggest at the end of the column that all is not lost for liberals, however, because multiple veto gates make it difficult to change the status quo, so that when progressives do manage to secure legislation that advances their agenda, conservatives will have a difficult time repealing it. And indeed, as I note in the column, that is how things have worked out over the last 35 years or so. With the exception of AFDC—which was “reformed” by a Democrat—the key elements of the social safety net adopted by the Democratic coalition during the New Deal and Great Society periods—Social Security, Medicare, and Medicaid—remain.

But I do not want to appear Panglossian. The fact of multiple veto players in the U.S. constitutional system does not merely exert a status quo bias. It exerts an anti-regulatory bias. The reason is that much of what progressives want requires annual appropriations and executive energy. It is notable that each of the programs mentioned in the last paragraph is an “entitlement” in the sense that Congress need not vote for new funding each year in order to sustain it. And while there is some bureaucracy associated with these programs (e.g., to determine eligibility for Social Security disability or to oversee reimbursements), the basic role of the federal executive for each is cutting checks.

However, much progressive legislation does not take the form of entitlement spending and is thus vulnerable to the anti-regulatory bias of multiple veto players. For example, a determined conservative Congress--or just a conservative blocking coalition in Congress--can severely undercut statutes aiming at environmental protection or preventing and remedying housing discrimination without repealing those statutes simply by failing to fund the relevant enforcement mechanisms annually. Likewise, a determined conservative president can exercise prosecutorial discretion and otherwise enforce regulations less than fully vigorously.

In recent years, non-defense discretionary spending has been about 17% of all federal spending, whereas entitlements have accounted for about half of federal spending. Or in crude terms, that means that about three out of every four "progressive" dollars the government spends is largely protected against the libertarian bias of our multi-veto-player system. Actually, the fraction is substantially larger even than that, because much of the non-defense discretionary spending is on things like transportation, international relations, and other matters that are not regulatory at all, much less progressively regulatory. We need not get bogged down in accounting conventions, however, to say with confidence that a very large majority of progressive federal dollar spending is in entitlement programs that are largely immune from the multi-veto-player libertarian bias.

That would be generally good news for progressives if the only point of government were to provide a social safety net. But of course the goods produced by different kinds of government programs are often not substitutable in any meaningful sense. Yes, (somewhat) progressive tax rates and Social Security get locked in by the multi-veto-player nature of the U.S. government, but so does protection against needed regulation for politically well-connected multi-billion-dollar industries.

Indeed, focusing on the veto-player-protected entitlements misses the fact that the smaller dollar figures at stake for non-defense discretionary spending are themselves partly the product of the veto-player phenomenon. In our system, it is extremely difficult to generate and sustain the political will necessary to regulate, rather than simply to tax and transfer. Of course, I'm not saying that it's easy to enact tax-and-transfer programs. But given that such programs have staying power, it is easy to see why progressives have tended to focus what political power they have on enacting such programs.

Finally, this analysis suggests that criticism of President Obama for "wasting" so much of the first half of his first term on the ACA is short-sighted. A Democratic president who wants to do lasting good sensibly focuses his domestic policy agenda on enacting or expanding entitlements. Whether Obama ends up having succeeded will depend ultimately on a factor beyond his control: Whether the SCOTUS--which, in truth, is yet another veto player in our system, guts the ACA in King v. Burwell. (I discount the possibilty that a future Republican president would be able to undo the ACA by purely executive action, although that would be a live issue were the Court to uphold federal subsidies in King via Chevron deference, as I've noted before.)