The Volokh Conspiracy

That’s the title of an article that I have co-authored with the Cato Institute’s Trevor Burrus, in a symposium issue of the Harvard Journal of Law & Public Policy. The symposium is “Law in an Age of Austerity,” and includes contributions from Charles Cooper (Treasury Dept.’s authority to index capital gains for inflation), John Eastman (state authority to enforce immigration laws), and others.

The major part of the Article details some recently-enacted criminal law and sentencing reforms in Colorado, which mitigate the fiscal damage of the drug war. The second part of the Article summarizes the fiscal benefits of ending prohibition. Finally, the Article looks at some of the legal history of alcohol prohibition, and suggests that current federal drug prohibition policies are inconsistent with the spirit of the Tenth Amendment, including  state tax powers.

Amidst all of my many posts about what federal courts should do if DOMA is struck down, I thought I should say a little bit about Congress.

First — and this may be obvious to some readers but perhaps not to all — Congress could of course fix the choice of law problem by providing a statutory rule. Indeed, one of the few virtues of DOMA is that it is just such a rule. And in one of the most recent proposed bills that would repeal DOMA, Congress has also proposed replacing it with a choice of law rule.

I think this is a great idea. If DOMA goes away, Congress should exercise its power to replace it with some legitimate choice of law rule (obviously, if DOMA is unconstitutional, the replacement rule couldn’t be identical to DOMA, but there are a lot of other possibilities).

A congressional choice of law solution would have more legitimacy than a common-law solution, and could be more far-reaching, considering a broader range of policy considerations. (It could even extend federal marital benefits to civil unions, as discussed in my exchange with JHW.) Indeed, the opportunity to provide a replacement rule is one reason that Congress ought to repeal DOMA rather than just waiting around for the courts to have their way with it.

As for what rule Congress should adopt, I think the rule proposed in S.598 is a pretty good one. That rule is:

For the purposes of any Federal law in which marital status is a factor, an individual shall be considered married if that individual’s marriage is valid in the State where the marriage was entered into or, in the case of a marriage entered into outside any State, if the marriage is valid in the place where entered into and the marriage could have been entered into in a State.

For domestic marriages, the bill makes the marriage valid if it was valid where the couple got married. (Note, by the way, that with very rare exception, a marriage is almost always valid where the couple got married, because the couple usually chooses to get married someplace where their marriage will be valid.) For international marriages, there is the extra requirement that it must be a marriage that is valid in at least one state — no polygamy, no brother-sister marriages, no marrying nine-year-olds.

This is something of a “maximalist” approach to the choice of law problem, because in practice it will make almost all same-sex marriages valid. (Or at least it is “maximalist” within the realm of the traditional choice of law options.) So I think it would be problematic for courts to impose a solution like this without Congressional authorization. But it would also maximize stability and predictability for same-sex couples, at least with respect to federal law. As with the common-law solution, there’s plenty of room for argument about what rule Congress should adopt, but it would be nice if it stepped in with a rule.

However, I am pessimistic about this actually happening. Scholars have been calling for Congress to fix various choice of law problems for decades, and it rarely happens. While the DOMA repeal bill is a sign that at least somebody in Congress has thought about this issue, I don’t think anybody should be holding their breath for that bill, or any other statutory solution. That’s why I spent so much time blogging about the courts.

Monday’s NYT reported the Securities Industry and Financial Markets Association is investigating potential constitutional challenges to the President’s proposed $90-billion bank tax.  It’s apparently not enough to argue that the President’s various economic and regulatory initiatives are bad policy — as this proposal is — it must also be unconstitutional.

Based on the article, SIFMA hopes to argue the tax is an unconstitutional bill of attainder or ex post facto law.  I suppose another challenge, if the tax legislation is poorly drafted, could be that it is a direct tax and must be apportioned to be constitutional.  None of this is likely to matter, however.  Barring exceedingly poor draftsmanship, I doubt any court would strike down the tax, should it be enacted.  If the AIG bonus tax would pass muster in the courts (as discussed in this thread), I don’t see any likelihood a more broad-based tax on banks would face any difficulty at all.

In case you didn’t get a chance to read the Manager’s Amendment to the Senate bill yourself, all the way to the end, the way that your senators surely will, here’s one item of possible interest:

(b) EXCISE TAX ON INDOOR TANNING SERVICES.—

Subtitle D of the Internal Revenue Code of 1986, as

amended by this Act, is amended by adding at the end

the following new chapter:

CHAPTER 49—COSMETIC SERVICES

‘‘Sec. 5000B. Imposition of tax on indoor tanning services.

‘‘SEC. 5000B. IMPOSITION OF TAX ON INDOOR TANNING

SERVICES.“

(a) IN GENERAL.—There is hereby imposed on any

indoor tanning service a tax equal to 10 percent of the

amount paid for such service (determined without regard

to this section), whether paid by insurance or otherwise.

(b) INDOOR TANNING SERVICE.—For purposes of

this section—

(1) IN GENERAL.—The term ‘indoor tanning

service’ means a service employing any electronic

product designed to incorporate 1 or more ultraviolet

vidual by ultraviolet radiation, with wavelengths in

air between 200 and 400 nanometers, to induce skin

tanning. Continue reading ‘The Tanning Salon Excise Tax’ »

The New York Times reports that Congress and the administration might soon reach some kind of view on legislation for addressing “too big to fail” institutions.  Off the table is Paul Volker’s proposal to re-establish some line between commercial banking and proprietary trading – some updated Glass-Steagall demarcation.  On the table is the Treasury’s proposal to designate various institutions as “too big to fail” in various degrees and subject them to greater capital requirements, limits on risk-taking, and in addition require a so-called “living will” that would make clear how to disentangle these institutions from others in a crisis.  I think the “living will” idea is not a bad one on its own, as long as we all understand the limits of what it gets you.

Much, much more puzzling to me is this description in the Times, quoting Michael S. Barr, assistant Treasury secretary for financial institutions (italics added to show the quote):

The White House plan as outlined so far would already make it much more costly to be a large financial company whose failure would put the financial system and the economy at risk. It would force such institutions to hold more money in reserve and make it harder for them to borrow too heavily against their assets.

Setting up the equivalent of living wills for corporations, that plan would require that they come up with their own procedure to be disentangled in the event of a crisis, a plan that administration officials say ought to be made public in advance.

“These changes will impose market discipline on the largest and most interconnected companies,” said Michael S. Barr, assistant Treasury secretary for financial institutions. One of the biggest changes the plan would make, he said, is that instead of being controlled by creditors, the process is controlled by the government.

Some regulators and economists in recent weeks have suggested that the administration’s plan does not go far enough. They say that the government should consider breaking up the biggest banks and investment firms long before they fail, or at least impose strict limits on their trading activities — steps that the administration continues to reject.

The changes will “impose market discipline”?  How?  They all seem designed to make for better prudential regulation by government regulators – not a bad idea necessarily, in fact not a bad idea at all – but hardly market discipline.  As the Times says Barr says, if there is a big problem, instead of “being controlled by creditors,” the process will be “controlled by the government.” Continue reading ‘Market Discipline? What Market Discipline?’ »

The papers are filled with stories (like this one) about the Congressional Budget Office’s conclusion that the Baucus health care reform bill will cost some $829 billion but not increase the federal deficit over the next ten years due to a combination of taxes, fees, and medicare cuts. Only there’s a catch. As the CBO analysis notes on the first page: “CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language.” And again, on pages 8-9 for those who missed it the first time, the analysis notes:

The Chairman’s mark, as amended, has not yet been converted into legislative language. The review of such language could lead to significant changes in the estimates of the proposal’s effects on the federal budget and insurance coverage.

The CBO further notes that some provisions are not included in the analysis costs to be funded by future appropriations, including some implementation costs, are not included, and these could cost several billion dollars. There is also little discussion of the bill’s likely effect on state budgets, which could be quite significant.

The key point here is not the particulars of CBO’s scoring or the merits of the proposed reforms, but the fact that the Senate Finance Committee is poised to consider — and likely vote on — a bill that does not exist.  William Jacobson screams this point from the rooftops: “There is no Baucus Bill!”   I repeat, there is no bill, and yet the Washington Post reports there could be a committee vote on it as early as tomorrow.

Set aside my naive belief that legislators should actually read legislation before they vote on it and that reading is necessary (if not always sufficient) for understanding. Here Senators are preparing to vote on a bill that does not even exist. I am sure someone will say this is okay, because the Senators have been briefed by their expert staff, read summaries, and thus understand the legislation they have not read.  But the expert staff won’t have read the bill, and the summaries are based on some ideas, not actual legislative language.In this case, no one has read the bill.  Not the sponsor, not his staff, not the CBO — no one.  Their votes on whether to advance legislation to overhaul a substantial portion of the American economy will be based upon nothing more than expert assurances that as-yet-unwritten legislative language will achieve everything as planned.

A bill that has not been written cannot be understood. Until the conceptual outline of the Baucus bill is actually reduced to legislative language, it is impossible to determine what the bill will actually do, let alone what it will cost.  Even if legislators don’t need to read legislation in order to understand it, someone does.  But no one has read this bill as it is not written, so no one can say, with any assurances, they understand all that it is likely to do or what it will actually cost.  And yet we pretend.  This is how representative democracy ends — not with a bang, but a whimper.

[An aside: For my academic colleagues who believe reading a bill is unnecessary to understand it, do you feel this way about legal documents? Can your students really understand the cases and other materials assigned for class if they haven't read them, but instead relied upon the expert analyses found in outlines, headnotes, and the like? And, if not, are we really at the point where we expect less of our elected representatives than our students?]

UPDATE: Is the above a bit overheated?  Perhaps.  And my concerns about this particular legislation may be a bit premature.  As one of the commentators notes, one could view what the Senate Finance Committee is doing as nothing more than delegating to committee staff the drafting of legislation and a committee report along certain lines.  That’s a fair point.  There is nothing sacrosanct about a particular committee structure, and no reason to insist upon specific committees handling their responsibilities in particular ways, so long as the actual legislative language is published and available before the Senate as a whole considers the bill.  My concerns are twofold.  First, many people are treating this CBO analysis as if it anything more than a preliminary assessment of what the bill would actually cost (a highly questionable assumption for these reasons, among others).  Second, and more importantly, I believe the bill will be fast-tracked (much as Waxman-Markey was in the House) such that neither legislators nor the public will have a clear understanding of what it will do when it comes up for a vote.  If this is not what occurs, and the bill text is published and available before the final vote, I will be satisfied this aspect of the process worked as it should, and I will post something accordingly.

Some folks say that Congress will do anything that resonates with the public, and that Congress doesn’t care about the Constitution — especially if the Constitution gets in the way of “protecting the children.” If you think that, you should read this report about Wednesday’s House Judiciary subcommittee hearing on the proposed Megan Meier Cyberbullying Prevention Act that Eugene blogged about a few months ago. A taste:

  Proposed legislation demanding up to two years in prison for electronic speech meant to “coerce, intimidate, harass or cause substantial emotional distress to a person” was met with little enthusiasm by a House subcommittee on Wednesday.
  Rep. Linda Sanchez (D-California) lobbied fellow lawmakers of a House Judiciary subcommittee to back her proposed legislation dubbed the “Megan Meier Cyberbullying Prevention Act.” In its first congressional hearing, Sanchez said the proposal was designed to target the cyberbullying that led to the 2006 suicide of the 13-year-old Meier of Missouri.
  “Bullying has gone electronic,” Sanchez testified before the Subcommitttee on Crime, Terrorism and Homeland Security. “This literally means kids can be bullies at any hour of the day or the night, or even in the victims’ own home.”
  From the outset of the 90-minute hearing, however, committee members from the left and the right said they thought the measure was an unconstitutional breach of free speech. “We need to be extremely careful before heading down this path,” Bobby Scott, a Democrat from Virginia and the committee’s chairman, said during the hearing’s opening moment.
  Rep. Louie Gohmert (R-Texas) said the legislation “appears to be another chapter of over-criminalization.” He quipped, however, that the law could target the “mean-spirited liberals” in the blogosphere that are attacking himself and his family regularly.
  About 30 minutes later, Gohmert said that not all prosecutors would exercise good judgment, that they might “harass the harasser.”

Good for them.