The Supreme Court should have made members of the SEC subject to presidential removal, and this failure is the central mistake of Free Enterprise Fund.
Yesterday, the Hoover Institution hosted a conference on “A Better Way,” the House Republicans’ agenda to make America perhaps not great again but at least work again. That proved a useful focus for a panel discussion featuring yours truly (video link to come). As for ABW itself, I’m with the Boss:
Well my soul checked out missing as I sat listening
To the hours and minutes tickin’ away
Yeah just sittin’ around waitin’ for my life to begin
While it was all just slippin’ away
The fact is that ABW is dead for the foreseeable future. Mr. Trump has severely compromised, if not single-handedly destroyed, the political force that produced this document. And while there may well be worthwhile items in the other parts of ABW, the part on the Constitution suggests that maybe we shouldn’t mourn over the corpse. The document embraces the Constitution in the same way in which the party has embraced its standard-bearer: diffidently; desperately; and opportunistically (examples to follow).
The Constitution deserves a more earnest engagement. (It’s hardly perfect but in nearly 230 years, it has never groped anyone.) I understand that a party platform is not a ConLaw seminar. I understand the need to be pragmatic and constituency-oriented. And I’m not opposed to some of the modest proposals here—improved data collection and the like. Still: if you’re seriously proposing to re-establish constitutional government—as opposed to larding up a partisan agenda with constitutional platitudes—you have to be more serious and hard-nosed. First, you have to take the Constitution seriously. Second, you have to think long-term. Third, you have to think about incentives. And fourth, you have to think structurally and institutionally, not just situationally.
The Founders thought that way. ABW doesn’t come close, in any of the four dimension: that’s this post. The next post will noodle over what a serious agenda might look like—or at least, how one might think about it.
The Constitution. Here is one ABW proposal:
Enact a judicial procedure permitting the House, the Senate, or both chambers together to receive expedited review [by the Supreme Court] of a lawsuit against the executive branch for failure to execute the law.
The legislation should instruct that “courts set aside their own court-created standing rules in cases brought by Congress, thereby preventing courts from using procedural excuses to avoid making decisions in these important separation of powers cases.”
This proposal is most charitably interpreted as an attempt to make the late Antonin Scalia rise from his grave. And even that won’t work because he knew Scripture: they didn’t listen to the prophets so they’re not going to listen to one who rises from the dead. Justice Scalia raised precisely this prospect of legislative “failure to execute” claims in his Windsor opinion and denounced it as blazingly unconstitutional. Standing is not a “procedural excuse”; it’s a constitutional Article III requirement, which even Congress cannot abrogate. And congressional standing to compel executive enforcement is a blatant violation of Article II and the “Take Care” Clause, and legislative aggrandizement of a sort that’s been held unconstitutional in every separation of powers case I can think of.
The Constitution presumes that every branch will make its own constitutional judgments and preserve its own prerogatives with its own means. Clamoring for a judicial bailout is the counsel of despair—unless, that is, you’re willing to adjust the Constitution in some pretty major ways. I’ll come back to that.
Long-Term. It is often said that constitutional rules should be made behind a veil of ignorance, for all “posterity” (to quote the Preamble). That’s a lot to ask. But even party platforms should ask: would we still favor this if the political fronts were reversed? ABW abounds with proposals that flunk that minimal test. “Congressional lawsuits to compel enforcement” is one of them. In my view half the U.S. Code should go unenforced, and a sober Republican President should see to that. Compel full enforcement of every last piece of Dodd-Frank? The ACA? Indeed.
Here is another, equally short-sighted idea:
End judicial deference to agencies under the Chevron and Auer doctrines that makes it easier for agencies to overreach the bounds of their statutory powers.
This, we are told, will “clamp down on judicial deference—without authorizing judicial activism—thus reinforcing the courts’ role as the final interpreter of regulatory statutes and regulations issued under them. This will not only strengthen the courts’ power to strike down overreaching regulations, it will strengthen Congress’s incentives to write clearer statutes and rein in federal agencies.”
At how many different levels is this wrong? It assumes that you can “clamp down on deference”—in other words, make judges look hard when they don’t want to. Wrong. It assumes (actually, it says) that courts are the “final interpreter” of statutes. Wrong: if Congress doesn’t like a judicial interpretation it can always override it by statute. It says that less deference will make Congress legislate more conscientiously. Highly doubtful: the premise of Chevron is that deference will make Congress legislate more precisely. Admittedly that’s also doubtful. (I’m no great Chevron fan.) In truth, most legislation is just an opening bid for an ongoing game, and the question is whether you want the agency or the courts to hold the trumps. This says, the courts.
Really? Going forward we will have an Obama-Clinton judiciary for decades to come. And a Republican administration, should that ever happen again, will need all the judicial deference in the world. So this proposal is either pointless or affirmatively counterproductive.
Incentives. The Framers thought in terms on institutional incentives (checks and balances, and all that). That’s what makes Madison so modern, for all his obvious errors. ABW shows no awareness of the thought. Proposal after proposal, it urges lawmakers to do what existing rules often already require—as if mere exhortation could trump legislators’ manifest incentives to do the opposite, or nothing at all.
Deep down, ABW recognizes the problem—only to walk away from it. Thus, it flags that the overwhelming portion of the federal budget (for entitlement programs and the federal debt) isn’t appropriated, as the Constitution demands. Should we then make those items subject to appropriations? Well, no: who wants to vote on Medicare or Social Security? Another $300 billion or so is appropriated annually for programs that are no longer authorized. Should we then just vote “no” on unauthorized appropriations? Well, no: we should compile a better inventory and raise points of order. Those exhortations will go unheeded for the same reason that the budget and the debt are out of control: no legislator has any incentive to do anything about it.
The same lack of realism pervades ABW’s administrative law reforms—proposals to further formalize agency rulemaking; to impose additional procedural constraints; to improve reporting requirements; and to enhance congressional oversight and judicial review. John Dingell or Henry Waxman did not need any of these devices to ride herd on agencies; they just wielded institutional power. In contrast, ABW proposes legal controls over matters that by their nature and by virtue of the incentive structure cannot be controlled by law.
Financial settlements between agencies and regulated industries illustrate the point. ABW wants a rule that prohibits third-party payments in such settlements, and it wants the payments to actually go to the Treasury rather than third parties or the agencies themselves, as already provided by law. I’m on board with that. But the fact is, the proceedings themselves are the problem. The agencies have incentives to bring garbage allegations, and the targets have incentives to settle them. And because the settlement value is the product of the amount and the likelihood of conviction, the phoniest allegations will come with the highest payment demands. (Witness the $14 billion demand against Deutsche Bank, which did not bother to explain just what the bank was supposed to have done wrong). At the end, both the agency and its enforcement targets have powerful incentives to settle on terms that are favorable to them. Congress may be able to change or prohibit this or that contract term, and that may be worth doing. But it can’t prevent the bargains. They’ll just be re-priced on some other margin.
The same logic applies to proposal to further formalize the rulemaking process and to subject it to congressional oversight or approval. You’d simply drive the actual decisionmaking further underground; and the agencies will always be one, two, three steps ahead of a lumbering Congress and the courts. For example, the proposed REINS Act would require congressional approval of major rules. Ignore that this idea runs directly counter to the demand for de novo judicial review: as Professor Hegel once remarked, it would be astounding to see two constitutional thoughts held together where not one thought can be found. Note instead that many agencies no longer govern by rulemaking; they govern by enforcement or by proposal, as with the EPA. Regulated industries have to plan and invest in the shadow of any proposed rule. As a result the agency gets most of what it wants without a final rule or even adjudication, especially if it makes a very aggressive opening bid. The EPA no longer cares whether that bid survives judicial review. Why should it care about congressional review?
Once you arm agencies to the teeth, they’ll misbehave. An improved weapons inspection system won’t help; you have to disarm them.
Structure and Institutions. With commendable candor ABW acknowledges that Congress has abdicated its powers; for the most part the rise of executive government wasn’t a unilateral power grab. It never asks why ambition has failed to counteract ambition—why the branch most likely to draw all powers into its impetuous vortex has proven the most feckless.
That’s a long story but here’s a piece of it: to quote a famous law review article we no longer have a separation of powers but a separation of parties. The president’s party in Congress will protect the executive no matter what. In that scenario power flows to the executive. Fixing that problem requires one of two things. Either you figure out a way to re-connect legislators’ incentives to the interests of the institution. Or else, you adjust the institutional arrangements, especially including the arrangements to check the executive, to the realities of party government.
What might that look like? More in the next post.