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Updated: 27 min 13 sec ago

FBI Sets Eyes on Black Freedom of Speech

Thu, 10/19/2017 - 09:57

Matthew Feeney

The FBI has identified a new threat: the “Black Identity Extremist” (BIE), whose perceptions of police brutality are very likely to serve as justification for violence toward police officers, according to a counterterrorism document recently obtained by Foreign Policymagazine

The murder of police officers is clearly wrong and tragic, but in creating this new category of extremist, the FBI risks stifling innocent Americans’ First Amendment-protected activity.

To its credit, the FBI narrowly defines BIEs as those who seek to use force or violence to create “a separate black homeland or autonomous black social institutions, communities, or governing organizations within the United States.” The FBI further notes that activism and the use of strong and even violent rhetoric, “may not constitute extremism, and may be constitutionally protected.”

The murder of police officers is clearly wrong and tragic, but in creating a new category of extremist, the FBI risks stifling innocent Americans’ First Amendment-protected activity.

At first glance, this should offer some reassurance to Black Lives Matter activists and protesters from similar organizations. After all, Black Lives Matter isn’t advocating a black ethno-state, let alone urging members to harm police officers. Yet, given the FBI’s history with black activists, it’s understandable that some people might be wary of engaging in protests knowing that the FBI has a designation for black identity extremists.

The FBI’s COINTELPRO surveillance program, begun in 1956, targeted black civil rights leaders, among many others. The FBI went so far as to send Martin Luther King Jr. a letter urging him to commit suicide. The Senate’s Church Committee, which in 1976 published a report on intelligence activities and the rights of Americans, found that the FBI’s “Black Nationalist” program included organizations that weren’t advocating independence at all; they were just primarily black.

The FBI eventually acknowledged some of its mistakes, but mistakes can be made more than once. While the FBI’s counterterrorism document on BIE focuses on violent nationalists, we should be prepared for the FBI to put black organizations under increased surveillance. We should also be prepared for the FBI to establish tenuous links between BIE violence and unrelated crimes. As Foreign Policy noted, former FBI special agent Michael German found that the agency connected radical “black separatists” from the 1970s with attacks in 2010, despite their being no clear connection.

And it’s not just black activists and civil rights leaders who need to be wary of increased FBI scrutiny; the bureau’s long history includes all kinds of specialized snooping based on race and political views. Shortly after a string of letter bombings inspired by an Italian anarchist in 1919, J. Edgar Hoover, then the head of the “Anti-Radical” division, organized a massive index card database that eventually contributed to hundreds of deportations and thousands of arrests. In 1920, Assistant Secretary of Labor Louis Freeland Post canceled more than 1,000 of 1,600 remaining deportation orders after finding little solid evidence that those rounded up in raids posed any threat.

Innocent people having their rights violated is a risk when the government casts a wide net, but even if the FBI’s activities related to BIEs remain narrow, news of the designation and the FBI’s interest in BIE could prompt a stifling effect on speech.

Research on Internet activity unsurprisingly suggests that innocent Americans chilled their own online curiosity in the wake of Edward Snowden’s revelations. If you know that the FBI is keeping an eye out for BIEs, how likely will you be to attend a Black Lives Matter protest, even if you have no intention to commit a crime? And although the FBI’s counterintelligence document notes that “mere advocacy” of a particular view “may not constitute extremism, and may be constitutionally protected,” the use of the word “may” leaves the FBI with plenty of leeway.

Some protesters may take comfort in the fact that the historian and King biographer David Garrow views the FBI as too incompetent to be a threat, telling Foreign Policy that the FBI, “are often so clueless.” Nonetheless, when it comes to federal government law enforcement and surveillance, it’s safe to err on the side of concern.

The murders of police officers in Dallas, Baton Rouge and New York City were awful and unforgivable. Whatever one thinks about the police-involved killings of black men such as Walter Scott, Samuel Dubose, Eric Garner, Philando Castile, and many others, violence against police officers won’t help implement reforms that will increase police accountability and transparency.

Yet in responding to this violence the law enforcement community should resist designations that could be abused, leading to the surveillance of innocent Americans participating in activities protected by the First Amendment. It has happened before, and it can happen again.

Matthew Feeney is a policy analyst at the Cato Institute.

The GOP’s Tax Dilemma

Thu, 10/19/2017 - 09:52

Ryan Bourne

Opponents of the Republican tax-reform framework are adept at intellectual contortion.

On the one hand, they bemoan that the proposed changes will widen the budget deficit. On the other, they denounce that eliminating some deductions will make certain households worse off.

Since net tax cuts, and hence higher initial deficits, are the only way to make everyone financially better off, one might think that some progressives would oppose any tax-reform agenda.

Yet behind the slippery critiques lies an important consideration for lawmakers: How much increased borrowing should be tolerated as part of a tax-reform plan?

Tax reform without tax cuts is political suicide; tax cuts without tax reform is a huge missed opportunity.

Several commentators, and even some Republican tax-cut proponents, distinguish “tax cuts” from “tax reform,” defining the latter as revenue-neutral changes to the tax code. Freedom Caucus leader Mark Meadows (R., N.C.), for example, has reportedly said that “revenue neutral” reform “doesn’t do anything to the economy” because it is “just moving money around.”

This is not a view economists would share. Lowering marginal rates, even if fully financed by eliminating deductions and exemptions, can raise the efficiency of the economy. Lowering marginal rates improves work incentives, while base-broadening efforts remove distortions to economic decision-making. For a given level of revenue, this package acts as a supply-side boost to the economy. The expected result is faster growth until the economy reaches a permanently higher level of GDP.

Yet as we have already seen with the furor over limiting the mortgage-interest and state-and-local-income-tax deductions, revenue-neutral tax reform could fall victim to political opposition. Financial losers (those who lose generous deductions and exemptions) tend to be more vocal and motivated than winners (those who obtain the higher standard deduction and lower rates). With revenue-neutral reform, there would be a lot of losers if rates were lowered substantially. In order to avoid or mute some opposition, accepting higher borrowing would allow greater rate cuts, easing the financial impact for those losing out from eliminating deductions.

Allowing higher borrowing can therefore be useful in helping grease the wheels of economically beneficial tax reform. In fact, the positive effects of rate cuts on incentives can be so powerful in some circumstances that they reducedeficits over the long term thanks to higher growth. This could well be the case with a significant corporate rate cut. Canada and Britain have cut their rates substantially without revenues falling as a share of GDP.

The Republican tax framework may not be a complete overhaul of the tax code, but it does attempt to make the code more economically coherent. The message Republicans should be selling is that their tax changes will improve the growth prospects of the economy, in turn raising productivity and living standards.

Yet the debate thus far has focused on who will be most affected financially by the immediate changes. Republicans are getting increasingly defensive about the “pay-fors,” with some members questioning the wisdom of fully eliminating certain exemptions and others insisting that everyone must get a net tax cut, which would require huge borrowing increases.

This is dangerous territory. Republicans in the Senate have purportedly already agreed to a budget that would allow additional borrowing of up to $1.5 trillion over ten years for tax cuts. If they back away from the base-broadening proposals, though, such as the abolishing of the state-and-local-income-tax deduction, less of this allotted revenue can be used to lower marginal rates, muffling the economic benefits of the reform.

But let’s suppose there were no constraints in the Senate. Would huge tax cuts without any base-broadening measures be wise?

Some Republicans seem to believe that tax cuts are good for the economy because they will boost demand by leaving more money in people’s pockets. Yet with the economy approaching full employment and the Federal Reserve unlikely to accommodate further boosts to demand, there is little evidence that deficit-financed tax cuts will provide any short-term demand boost at all.

Cutting marginal rates would of course still boost the supply side of the economy by sharpening incentives, and we would expect this to improve the economy’s growth prospects. But without reductions in government spending (the true burden of government on the market sector), taxes would then need to be higher in future, negating this pro-growth effect. Sadly, there is little evidence that cutting taxes to “starve the beast” has been a particularly effective strategy.

Tax cuts resulting in initial higher deficits are therefore worth it only if they grease the wheels for growth-boosting tax reform or come with guarantees for future spending cuts. Tax reform without a degree of tax cuts would be politically suicidal. Cutting tax rates without reforming the code or cutting spending would be a huge missed opportunity.

Ryan Bourne holds the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute.

It's Time for GOP Leadership to Stop Letting Democrats Stall Judicial Nominations

Thu, 10/19/2017 - 07:52

Ilya Shapiro

“The judge story is an untold story,” President Donald Trump said Monday, with Senate Majority Leader Mitch McConnell standing beside him. “When you think about it, Mitch and I were saying, that has consequences 40 years out, depending on the age of the judge, but 40 years out.”

Indeed, this “untold story” also got lost in a rambling White House press conference, and McConnell’s awkward presence underscored the tension between the two men although the majority leader is largely responsible both for Trump’s election and the greatest achievement of his presidency.

That’s because a president has few constitutional powers more important—certainly on the domestic front—than making judicial appointments. Legislative victories are typically short-lived, budget reforms sunset, regulations can be rescinded, and policy guidance is often not worth the paper it’s written on. But federal judicial appointments are for life; those black-robed arbiters continue shaping our world long after the president who appointed them has left the White House.

The Consequences Will Astound You

Justice Antonin Scalia served nearly 30 years on the Supreme Court as President Reagan’s bridge to the twenty-first century. To take a lower-profile example, last year an important ruling on nonprofit-donor disclosures was made by a district judge in California who was appointed by Lyndon Johnson.

The abuse of senatorial tradition and privilege by individual senators is a bridge too far.

Every four years, legal pundits make the case that judicial nominations should be among voters’ primary considerations when choosing a president. In the 2016 election, they truly were, as the vacant Supreme Court seat crystallized the issue for a big chunk of Republican voters. These were not necessarily the working-class “Reagan Democrats” who were so important in the Rust Belt, but the traditional conservatives, legal elites, and evangelicals many thought would abandon the GOP when Trump secured the nomination.

These voters knew they were voting not just for a president whom they may have found distasteful, but also weighing the balance of the Supreme Court for a long, long time. McConnell made sure of that, announcing his controversial decision not to take up any pre-election nomination without consulting his caucus or allowing President Obama to nominate Merrick Garland or anyone else.

Besides the Scalia seat—now filled by Neil Gorsuch, who is already making a name for himself—three other justices were older than 78 last November. Given that Ruth Bader Ginsburg is now 85, Anthony Kennedy is 81, and Stephen Breyer is 79, Trump wasn’t crazy in predicting over the weekend that he’d end up with four SCOTUS picks in his first term alone.

That goes just as much or more for the lower courts, which decide 35,000 cases annually even as the Supreme Court set a new low with only 62 rulings after argument last term, less than half the number from just a generation ago. Every four-year term, a president appoints around a fifth of the judiciary, meaning that a two-term presidency is worth about 40 percent of the currently authorized 894 Article III judgeships. (Bill Clinton got 373 judges confirmed, George W. Bush 327, Barack Obama 329.) Put another way, when Obama took office, one of the 13 federal circuit courts of appeals had Democratic majorities—the west-coast Ninth Circuit that’s now the heart of the judicial #resistance—but eight years later, and to this day, nine do.

A Refreshing New Class of Able Justices

Trump is now doing his best to reverse all that, with the able help of McConnell and Judiciary Committee Chairman Chuck Grassley, who won reelection by 25 points in supposedly swing-state Iowa despite millions of dollars spent against him on the Garland blockade. On Inauguration Day, there were 105 judicial vacancies, and that has increased to nearly 150, including 21 circuit judges. By the end of September, Trump had made 58 nominations—more than any president going back at least to Reagan—and confirmed seven (where Obama had three and George W. Bush six).

To his credit, Trump has allowed White House Counsel Don McGahn’s team to run this show, with the advice of Federalist Society Executive Vice-President Leonard Leo and that organization’s network of ideologically committed—not party-driven—members. (Full disclosure: I’m an active member.) Occasionally a senator will insist on a crony, but the ratio of solid, “movement” nominees to establishmentarian hacks is exceedingly high. It’s refreshing to debate whether a judicial candidate would be too judicially “restrained”—overly deferential to government—rather than whether he or she is actually a squish with no underlying originalist or textualist principles.

Realizing the danger in all this to their general jurisprudential non-theory of willy-nilly social-justice-seeking, Democratic senators have used every parliamentary trick in their power to slow this particular Trump train. Of course, they no longer have the biggest brake, the filibuster, because Harry Reid got rid of it in 2013 (after having begun to use it for partisan purposes a decade earlier, for the first time in our nation’s history).

Accordingly, Democrats are forcing more cloture votes than any early presidency and demanding the full 30 hours of floor time per nominee that Senate rules allow. They’re also refusing to return “blue slips,” meaning the home-state senator’s traditional prerogative to decide whether and when to allow a nomination to be considered.

We Don’t Like the Consequences of Losing Elections

Minnesota’s Sen. Al Franken, for example, has kept his blue slip for Eighth Circuit nominee David Stras, a Minnesota Supreme Court justice who was elected to his seat by a greater margin than Franken was to his. The first-ever Jewish justice on the state high court and a well-regarded academic, Stras was also on Trump’s Supreme Court list.

Similarly, Oregon’s Ron Wyden and Jeff Merkley are blocking the nomination of Ryan Bounds to the Ninth Circuit, citing the evasion of an in-state “judicial selection committee” that has never been used to pick circuit nominees. That non-tradition makes sense, because circuit judges preside over the law of their entire circuit, not just the state (or part of it) like district judges.

Then there’s the demagoguery. Last month there was the bigotry thrown at Seventh Circuit nominee Amy Comey Barrett—recall Sen. Dianne Feinstein’s “dogma lives loudly within you” line. Franken’s attack on Stras is wholly guilt-by-association—with Justice Clarence Thomas, for whom Stras clerked, and Justice Scalia, whom he’s cited as an influence.

All of these people, along with Third Circuit nominee Stephanos Bibas, Sixth Circuit nominee Joan Larsen, Tenth Circuit nominee Allison Eid, and D.C. Circuit nominee Greg Katsas, among others, are real intellectual heavyweights. Recent Fifth Circuit nominees Don Willett and Jim Ho—which announcement showed that Sen. Ted Cruz won the Texas battle royale over the preferences of fellow Republicans Sen. John Cornyn and Gov. Greg Abbott—are also stellar (and personal friends of mine). But all of these fine folks, with whom I certainly don’t always agree, will face stiff obstruction (and have already).

Look, I have no problem with senators voting against nominees. Then the voters can evaluate each senator’s judgment in that regard. I also have no problem with a Senate checking a president—I encourage it!—subject again to electoral review. But the abuse of senatorial tradition and privilege by individual senators is a bridge too far. I hope Grassley reaches the end of his patience sooner rather than later, taking McConnell’s recent advice of getting rid of blue slips that are taking too long for no good reason.

At the end of the day, all of these stalling tactics are just that: stalling tactics. As economist Herbert Stein would say, they can’t go on forever, so they won’t. And we’ll be left with the best judges. Let me tell ya, you’ll love ’em.

Ilya Shapiro is a senior contributor to The Federalist. He is a senior fellow in Constitutional Studies at the Cato Institute and Editor-in-Chief of the Cato Supreme Court Review.

President Trump Shouldn't Give in to the Solar Industry’s Drama

Wed, 10/18/2017 - 13:37

David Boaz

President Trump is about to decide whether to raise the price of solar energy, based on an economic theory refuted in 1845.

In response to a formal complaint, the U.S. International Trade Commission ruled this month that imported solar cells are putting too much competitive pressure on domestic cell producers. The commission will now examine what remedy would be appropriate, and then it will be up to the Trump administration to decide whether to take action. The likely remedy would be to impose tariffs on imported solar cells, thus protecting U.S. cell manufacturers and raising prices for consumers.

The solar industry is already receiving this sort of protection. In 2014, in response to a complaint by U.S. manufacturers, the Commerce Department imposed tariffs of up to 78.42 percent on imports of solar panels made in China, increasing the price for any U.S. consumer purchasing the panels. But that wasn’t enough for the U.S. companies filing this year’s complaint relating to the cells that make up the panels.

This attempt to raise the price of using sunlight for energy reminds me of one of the most famous documents in the history of free trade. In 1845, the French economist Frederic Bastiat wrote “The Candlemakers’ Petition,” in which he imagined the makers of candles and street lamps petitioning the French parliament for protection from a most dastardly foreign competitor:

Let’s hope that this time President Trump stands up for American consumers and workers and tells the uncompetitive solar panel manufacturers to go build a better mousetrap.

“We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price [ …] This rival … is none other than the sun.”

After all, Bastiat’s imaginary petitioners noted, how can the makers of candles and lanterns compete with a light source that is totally free?

Thank goodness we wouldn’t fall for such nonsense today—or would we? Solar manufacturers are asking for pretty much the same thing: protection from a cheaper competitor.

Perhaps the comparison is unfair. After all, the solar manufacturers haven’t been asking for protection from the sun, only from foreign companies.

What’s the difference, though? Any source that supplies solar panels to American consumers and businesses is a competitor of the American industry. And any source that can deliver any product cheaper than American companies is a tough competitor. Domestic producers will no doubt gain by imposing a tariff on their Chinese competitors, but American companies that install solar power will lose, by having to pay higher prices for panels.

Indeed, as is often in the case in trade matters, not all the companies in the industry are in agreement. This case was brought by two companies, but the largest solar trade group in the nation, the Solar Energy Industries Association, opposes tariffs. The association says that if the two companies get what they are asking for, prices for solar power will rise, consumer demand will fall, and the industry will lose some 88,000 jobs, about one-third of the current American solar workforce.

Interestingly, the two companies that brought the complaint, Suniva and SolarWorldAmericasTwo, are based in the United States but are respectively owned by German and Chinese firms. It’s ironic that companies made possible by cross-border investment are now seeking protection from cross-border trade.

Businesses would always prefer a world without competitors. If they can’t outcompete their rivals in the marketplace, they may be tempted to ask the government for protection. And our trade laws actually invite such complaints. But economists agree that consumers, and the businesses that use imported products, lose more on net than producers gain. Protectionism is a bad deal for the American economy. And in this case, a bad deal for anyone who wants to see more solar energy in the United States.

Let’s hope that this time President Trump stands up for American consumers and workers and tells the uncompetitive solar panel manufacturers to go build a better mousetrap.

David Boaz is executive vice president of the Cato Institute.

We Need More Than Half-Measures to Right-Size Regulation

Wed, 10/18/2017 - 10:38

Thaya Brook Knight

A decade after the start of the 2007-2008 financial crisis, and seven years after the passage of the Dodd-Frank Act, it seems both the legislative and executive branches may be making small steps toward financial regulatory reform. Earlier this month, the Treasury Department released the second in a series of reports on the U.S. financial sector, this one focused on the capital markets. And last week, the House Financial Services Committee passed a suite of bills aimed at reforming many areas of financial regulation. 

While passing legislation out of committee is only the first of many steps toward enactment, it is encouraging that several of the House bills passed with either unanimous or bi-partisan support. Although the House notably passed the Financial Choice Act earlier this year, a bill that would serve effectively as a repeal-and-replace template for Dodd-Frank, that bill passed on a strict party-line vote, with only Republicans voting in favor. Therefore, the fact that many of the most recent bills had some support from Democrats may bode well. Of course, any action will require Senate approval as well. There has not yet been a Senate answer to the House version of the Choice Act, although there is still time in the year.

 

But even though this recent regulatory reform activity is a step in the right direction, much more needs to be done. And in terms of the reforms envisioned in the Treasury report and the recent suite of House bills, they’re a mixed bag. To be sure, some proposed reform follow recommendations that many of us have been pushing for a while now. For example, the Treasury report recommends that all companies considering an initial public offering (IPO) be permitted to file confidentially and “test the waters,” that is, sound out potential investment interest before pulling the trigger on a costly IPO. Right now, only companies below a certain size are permitted to do this. There has been widespread concern about how few IPOs have taken place in recent years, and how few public companies now exist. Given the fact that investment in privately-held companies is tightly restricted, if companies eschew the public capital markets, average investors lose out. This change is one that may entice more companies to go public, with little risk to either investors or the markets.

But other changes would be half-measures, better than the status quo but still short of the mark. For example, both the Treasury report and one of the House bills address the restrictions on investment in private companies. Under current securities laws, investment in private offerings is effectively limited to institutions and wealthy individuals, defined as those who either earn at least $200,000 per year or have at least $1 million in assets excluding their primary residences. Both the Treasury report and the House bill would expand the definition, including individuals who can show financial sophistication through licensure or other means.

Expanding the definition is certainly a start. As it stands, existing regulation has absurd results. For example, an investment advisor who advises wealthy clients can recommend investments she herself cannot make since current law deems her insufficiently sophisticated if she is not also wealthy. Expanding the definition to remedy this would at least make the results less ridiculous. But this change doesn’t go far enough. Why should there be any restriction on how a person can spend money he has actually in hand? After all, anyone can spend money on all kinds of silly purchases, thankfully, without government interference. But if a person would prefer to make an investment with that money, current regulation is patently paternalistic: If the person is not wealthy, he, for the most part, cannot use that money to invest in private companies.

 

Another half-measure concerns a bill that would repeal the controversial Department of Labor rule governing broker advice for the sale of retirement investments. This rule, which would require those providing advice while selling certain investments to adhere to the very stringent “fiduciary duty” standard, has been criticized on two grounds. First, that the Department exceeded its authority, shoe-horning the rule into its limited jurisdiction over employer-sponsored retirement accounts. Second, that the rule itself would result not in better advice for moderate-income Americans, but no advice as brokers are likely to abandon low-value accounts due to the increase in compliance costs the rule would impose.

Repealing the rule is a good place to start. However, the bill passed by the House committee would only remove the rule from the Department of Labor’s (DOL) jurisdiction. While the legislation does not expressly impose a fiduciary standard, as the DOL’s rule does, it still uses language suggesting a heightened duty of care. Brokers are, in reality, salespeople who give recommendations incidental to that role. There may be some argument for requiring that such brokers disclose the fact that they may be paid based on a commission structure, to ensure that investors are not confused about their role. But any rule must ensure that the compliance costs of a higher duty of care do not outweigh the benefits, or place inappropriate requirements on those in a sales role. Otherwise the result is likely to be reduced access to information for the people who need it most. In fact, some initial reports show that this has already begun to happen in some firms under the current DOL rule. 

The efforts by Treasury and the House Financial Services Committee are welcome. It is encouraging that some of the House bills passed with considerable support from both political parties. Given the breathtaking scope of Dodd-Frank’s changes, and the harmful effects it has had on the economy, any change is welcome. But there is still much, much more that can and should be done.

Thaya Brook Knight is associate director of financial regulation studies at the Cato Institute.

Short of Nuke Strike, Removal of Prez a Long Shot

Wed, 10/18/2017 - 08:21

Gene Healy

Former Trump consiglieri Steve Bannon believes that the president has less than a one in three chance of making it through his full term, according to a report last week in Vanity Fair. The story is that Bannon told Trump that “the risk to his presidency wasn’t impeachment, but the 25th Amendment” — to which Trump allegedly replied, “What’s that?”

They say there’s no such thing as a stupid question, so: the 25th Amendment, drafted in the wake of the Kennedy assassination and ratified in 1967, allows the vice president to take over when the president is deemed “unable to discharge the powers and duties of his office.” Section 3 allows the president to make the call himself, and several presidents have used it to stand aside temporarily while undergoing surgical procedures. Section 4 provides for the president’s involuntary removal when vice president and a majority of Cabinet heads or “such other body as Congress may by law provide” declare him incapacitated.

The 25th Amendment wasn’t designed for ejecting “merely” erratic or untrustworthy presidents. It aimed at situations of total, or near-total disability.

In the five decades since the amendment’s ratification, section 4 has featured in multiple TV thriller plots, but never been used in real life. Lately, though, growing numbers of public intellectuals and elected officials have decided it’s the best way to repeal and replace the Trump presidency. Sorry: It’s not going to happen.

Leave aside Steve Bannon, it’s mystifying that smart people — like The New York Times’ Ross Douthat, the University of Chicago’s Eric Posner, and former law professor U.S. Rep. Jamie Raskin (D-Md.) — have convinced themselves that the “25th Amendment Solution” is viable. In a Washington Post column this week, The American Prospect’s Paul Waldman argues that while Trump’s impeachment is “only a remote possibility,” his removal is “far more likely to happen via the 25th Amendment.”

It’s hard to see how. For one thing, unless Vice President Mike Pence is much less servile and more Machiavellian than he seems, the “25th Amendment Solution” never gets off the ground. Perhaps Pence is trying to lull “45” into a false sense of security before pulling the section 4 trigger, but right now he sure doesn’t look like a guy plotting to overthrow his boss.

Even if Pence proves a willing co-conspirator, for the switch to last, you’d need two-thirds of both houses of Congress to ratify it. If you have that, you already have more than enough votes for Trump’s impeachment and removal. The 25th Amendment’s framers deliberately set the bar higher for removal via section 4 because, as one of its principal architects, U.S. Sen. Birch Bayh (D.-Ind.) explained: “We were concerned about the politics of the palace coup.”

If you don’t have a supermajority in both Houses, then within three weeks, Trump would return to the Oval Office hell-bent for vengeance. And, short of the president actually standing in the middle of Fifth Avenue and shooting someone, it’s hard to imagine nearly 100 GOP congressmen crossing the aisle to declare him mentally unfit for office.

The 25th Amendment wasn’t designed for ejecting “merely” erratic or untrustworthy presidents. It aimed at situations of total, or near-total disability. Fordham University law professor John Feerick, who helped draft the amendment, summarizes the congressional debates on section 4: “It was made clear that unpopularity, incompetence, impeachable conduct, poor judgment, and laziness do not constitute an inability within the meaning of the Amendment.”

The only real advantage the disability amendment has over the old-fashioned method is speed: the president can be displaced — temporarily, at least — as soon as the vice president and a majority of the Cabinet send notification to Congress. There’s one scenario where that speed would be absolutely necessary and the “25th Amendment Solution” might work: If the president were to order an unprovoked nuclear first strike, it’s possible that the secretary of defense could, instead of transmitting the launch order, get on the phone with the veep instead. They could then decide to trigger section 4, putting the president into a “time-out” until Congress votes. And Congress, presumably, would go into that vote knowing that, unless they ratify the switch, they’re voting for nuclear war.

That scenario is, I hope, unlikely. But if it happens, you won’t hear me complain about the constitutional impropriety of invoking section 4. It’s crazy that it’s not entirely crazy to think about this kind of thing.

Gene Healy is a vice president at the Cato Institute and author of “The Cult of the Presidency.”

The Perilous Path to Tax Reform

Wed, 10/18/2017 - 05:04

Michael D. Tanner

Raul Ryan has threatened to keep Congress in session until Christmas if that’s what it takes to get a tax-reform bill passed. But it’s still an open question whether Republicans will be getting presents or coal in their stockings.

There is an assumption that Republicans will ultimately pass some type of tax-reform or tax-cut bill, if for no other reason than that they’re desperate. This Congress has few if any legislative accomplishments to its name, and after the Obamacare repeal-and-replace debacle, the party can’t afford another failure.

Yet the divisions on display in the Obamacare debate have not gone away, and the failure of repeal and replace cost Republicans hundreds of billions in savings that they had been counting on to offset tax cuts. With that money off the table, the arithmetic of tax reform got a lot more complicated, which is why the GOP tax plan still remains little more than a vague outline.

The divisions on display in the Obamacare debate have not gone away, and the failure of repeal and replace cost Republicans hundreds of billions in savings that they had been counting on to offset tax cuts.

Republicans continue to disagree sharply over just what tax reform should accomplish — or even whether the priority should be cutting taxes or reforming the tax system. The usual formula for tax reform is to trade fewer deductions and loopholes, which often distort economic activity and benefit special interests, for lower rates. But that can create losers as well as winners. And therein lies the rub.

Senator Rand Paul, for instance, questions whether doing away with some tax breaks means that too many middle-class taxpayers will lose out. “This is a GOP tax plan? Possibly 30% of the middle class gets a tax hike? I hope the final details are better than this,” Paul tweeted a few weeks ago, citing a study from the Urban-Brookings Tax Policy Center. That study has been widely and justifiably criticized for the assumptions it made. But it does highlight the troublesome trade-offs that a reform package could entail.

Meanwhile, Senator Bob Corker, fresh off his latest Twitter fight with President Trump, expressed his concern that a tax cut would explode the national debt. Some estimates suggest that, even after accounting for economic growth, the tax bill could add $1.5 trillion to the national debt over the next ten years. Corker said that he is unlikely to support any bill that does that.

Some Republicans want to focus on cutting tax rates for business, which are an increasing burden on American competitiveness. Others from the pro-family wing of the party want a tax plan that benefits the middle class with a rate cut and/or an increase in the child tax credit, which would likely have less impact on economic growth. And President Trump continues to hint that he might support a rate increase for top earners, which might please Republican populists and win a couple of Democratic converts but would almost certainly cost the support of conservatives.

Republicans still have just a two-vote margin in the Senate, meaning that they will have to find some way to keep all these competing factions — along with such habitual iconoclasts as McCain, Collins, Murkowski, Lee, and Cruz — happy.

And even if they can settle on a package that satisfies everyone, it won’t be ideal. Because their majority is so slim, they are planning to resort to the budget-reconciliation process to pass a tax bill, and reconciliation legislation cannot, by rule, increase deficits beyond ten years. That almost certainly means that at least some tax cuts in any bill will have to be crafted to expire in a decade, which is troublesome for businesses that need to plan for the future.

None of this means that we don’t need tax reform. Our current tax system is uncompetitive and a burden to both business and individuals, slowing economic growth. But as we saw with efforts to repeal and replace Obamacare, needing to do something and doing it are two entirely different things.

Michael Tanner is a senior fellow at the Cato Institute.

Digital Realty Trust v. Somers: Hasn't Chevron Deference Gone Too Far?

Tue, 10/17/2017 - 15:07

Ilya Shapiro

In the high-flying corporate world, employees from time to time suspect that a colleague or boss may be violating federal securities laws. But they may shy away from reporting these violations — from “blowing the whistle” — either to the employer or relevant authorities, because of a risk of retaliation. When Congress passed the Dodd-Frank Act in the wake of the Great Recession, it included an “anti-retaliation” provision to protect those employees who report securities violations to the government. The statutory text defines a “whistleblower” as an “individual who provides … information relating to a violation of the securities laws to the [Securities and Exchange] Commission.” The statute is unambiguous: If someone reports a violation of the relevant laws to the SEC, Dodd-Frank gives them a remedy against employer retaliation.

In 2014, Paul Somers sued his former employer, Digital Realty Trust Company, claiming that he was fired for complaining to senior management that his supervisor had violated the Sarbanes-Oxley Act of 2002 (one of the laws covered by Dodd-Frank’s securities-whistleblower provision). But Somers failed to report anything to the SEC, so Digital Realty moved to dismiss because the text of Dodd-Frank specifies protection for reporting to the SEC, not for reporting to company management.

The District Court for the Northern District of California disagreed, however, holding that the definition of “whistleblower” was ambiguous and that Chevron deference was owed to a 2011 SEC rulethat had redefined the term to include those who internally report violations to their employer. Digital Realty appealed to the U.S. Court of Appeals for the Ninth Circuit, but lost there as well. The Ninth Circuit not only agreed with the district court that the statute was ambiguous — and that Chevrondeference should apply to the SEC’s rulemaking — but also found that a better reading of the statute’s text protected internal reporting!

Digital Realty asked the Supreme Court to hear the case and the Court granted cert. Petitioner’s argument that the statutory text of the Dodd-Frank Act is unambiguous and thus forecloses respondent’s claim is rather straightforward: The law could not be clearer in specifying that if a person reports a violation of the covered laws to the SEC, Dodd-Frank provides him or her a remedy against retaliating employers. It’s a pretty basic point, so I’ll refer you to Digital Realty’s brief on the merits for more technical details.

More interesting, and potentially of broader impact, is the administrative-law angle, which was the focus of the amicus brief that I filed for the Cato Institute in support of Digital Realty. The last few years have of course seen renewed attention-academic, judicial, and journalistic-to the question of whether courts have become altogether too deferential to executive agencies. While Chevron deference (and its cousins, Auer and Seminole Rock deference) was originally justified as a necessary tool for preventing courts from unduly meddling in administrative decisionmaking, hasn’t the pendulum swung too far?

Regardless of one’s views on the debates over various deference doctrines, Digital Realty should be low-hanging fruit for the reassertion of Article III review of Article I overreach. Here, even if five Justices somehow find the statutory text to be ambiguous, the Supreme Court shouldn’t simply defer to the SEC’s interpretation of Dodd-Frank, because the agency ignored a basic tenet of administrative due process. Indeed, the SEC violated the Administrative Procedure Act (APA) when it failed to provide fair notice to the public that it would redefine — and thus expand — the definition of “whistleblower” in its final rule.

After all, in 2010 the SEC had agreed with Digital Realty’s position. In its Notice of Proposed Rulemaking (NPRM), the commission defined “whistleblower” in line with the statutory definition: “You are a whistleblower if, alone or jointly with others, you provide the Commission with information relating to a potential violation of the securities laws (emphasis added).” So far, so good. The SEC’s NPRM didn’t try to change the statute’s definition or otherwise indicate that it was contemplating doing so. Nor did it ask for comments on whether it should. Indeed, there was no mention at all that it would expand the statute’s meaning as to who qualifies as a “whistleblower.”

When the SEC promulgated its final rule the following year, however, something was different: The definition of “whistleblower” (for anti-retaliation purposes) was expanded to cover people who don’t report securities violations to the SEC, so long as they had undertaken the protected activity listed in the statute. The SEC didn’t even try to explain why it was changing the definition in its final rule. Nor did it cite to any public comment that led it to do so. It merely announced that it was expanding the definition of “whistleblower” to reach those who do not report covered securities violations to the SEC.

The APA’s notice-and-comment procedures simply don’t allow the SEC to do this. The APA requires that final rules be the “logical outgrowth” of proposed rules. In other words, the SEC can’t include things in its final rule that weren’t in the proposed rule, because that doesn’t give the public “fair notice” and an opportunity to comment on the legal interpretation. As the Supreme Court explained in Long Island Care at Home, Ltd. v. Coke in 2007, the APA requires an agency conducting notice-and-comment rulemaking to provide the public with “fair notice” of what will be, or might be, included in its final regulation. Yet there was nothing in the SEC’s NPRM that would have given any notice to the public that it was going to change whom Dodd-Frank would protect from retaliation.

Just last year, the Court reaffirmed in Encino Motorcars, LLC v. Navarro that procedurally deficient rules that violate the APA do not receive Chevron deference because they lack the “force of law.” The SEC regulation here was procedurally deficient because of the final rule’s fair-notice problem, so it shouldn’t qualify for Chevron.

The APA serves as a vital procedural check on an ever-growing administrative state. When agencies like the SEC flout these important administrative due-process provisions, the Court should not reward them by erasing the procedural protections Congress has enacted.

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review. He filed an amicus brief supporting the petitioner in this case.

Restricting Trade after Factory Explosion Would Hurt Bangladeshi Women

Tue, 10/17/2017 - 10:48

Chelsea Follett

A tragic boiler explosion killed 10 Bangladeshi garment workers over the summer, an incident reminiscent of the catastrophic 2013 Rana Plaza building collapse, which focused public attention on working conditions in that developing country. In the wake of such disasters, many people in rich countries assume the compassionate response is to impose trade restrictions and stop buying clothes made in Bangladesh.

Ironically, such a response would actually harm Bangladeshi garment workers, most of whom are women, by forcing them into far worse situations than factory work.

What many people do not know is that the rise of factory work in the country has helped bring about significant positive change in many Bangladeshi lives-particularly for women. The country is home to 18.4 million of the world’s poorest people and has strict gender norms. Yet Bangladesh was recently called “the happiest economic story in the world right now,” as extreme poverty has plummeted.

Despite its dangers, factory work has slashed extreme poverty and increasedwomen’s educational attainment while lowering rates of child marriage in Bangladesh. It has also sparked cultural change towards more freedom for women, not only by enabling them to earn money but by granting them freedom of movement.

The country’s women-dominated garment industry transformed the norm of purdah, or seclusion (literally, “veil”), that traditionally prevented women from working beyond the home, walking outside unaccompanied by a male guardian, or even speaking in the presence of unrelated men.

Many Bangladeshi women now interpret purdah to simply mean modesty instead of social and economic segregation. In the words of social economist Naila Kabeer of the London School of Economics, factory work let women “renegotiate the boundaries of acceptable behavior.” Today, in Dhaka and other industrial cities, women walk outside and interact with unrelated men.

The country industrialized rapidly, growing its number of export-oriented factories from a handful in the mid-1970s to around 700 by 1985. Women now hold more than 80% of manufacturing jobs.

The expansion of manufacturing in the country met with challenges early on. In 1985, Britain, France, and the United States imposed quota limitations on imports from Bangladesh in response to anti-sweatshop campaigns financed by labor unions in the rich countries. Within three months, two thirds of Bangladeshi factories shuttered their gates and over 100,000 women were thrown out of work, many to face destitution.

The quotas were, in short, a disaster for Bangladeshi women. Britain and France removed their quotas in 1986, and Bangladesh’s garment industry has since expanded to thousands of factories employing millions. Unfortunately, protectionist sentiment is growing in rich countries, aided by sensationalized accounts of working conditions. The Bangladeshi General Secretary of National Garment Workers has warned that these could restrict Bangladesh’s growth.

Britain and France removed their quotas in 1986, and Bangladesh’s garment industry has since expanded to thousands of factories employing millions.

Despite their frequent depiction as passive victims, Bangladeshi factory women are making their own choices. Kabeer’s research found that “the decision to take up factory work was largely initiated by the women themselves, often in the face of considerable resistance from other family members.”

Yet societal change is definitely underway. “Garments have been very good for women,” a factory woman named Hanufa, whose earnings allowed her to escape her physically abusive husband, told Kabeer. “Now I feel I have rights, I can survive.”

In fact, the earning power of women is eroding the custom of bridal dowries, and earning power typically increases the weight a woman’s priorities carry within the household.

Tragedies like the Rana Plaza building collapse garner a lot of press. The garment industry’s wider-reaching effects on the material well being and social equality of women in Bangladesh receive less attention. Rich countries should not rush to impose trade restrictions on poor countries after disasters. As one factory worker put it: “The garments have saved so many lives.”

When Kabeer interviewed 60 factory women in her native Bangladesh, she found that the factories had expanded women’s options and were viewed positively overall. More and more experts share that assessment. The World Bank has acknowledged that factories play “a significant role” in reducing poverty and combating child marriage. The Financial Express’ Monira Munni stated earlier this year that factories have “socially empowered women workers in Bangladesh to have better control over their own lives.”

According to Kabeer, “it took market forces, and the advent of an export-oriented garment industry, to achieve what a decade of government and non-government efforts had failed to do: to create a female labor force.”

Chelsea Follett is managing editor of HumanProgress.org, a project of the Cato Institute.

The Progressives Are Cheating in the Argument against Donald Trump's Tax Cuts

Tue, 10/17/2017 - 07:50

Ryan Bourne

Has anyone noticed how “tax cuts for the rich” has become a moniker for all and every income tax cut?

When the Conservatives dropped the top rate of income tax from 50p to 45p, that was predictably lambasted as a tax cut for the rich. George Osborne’s promise to raise the starting threshold for the 40p rate? Tax cut for the rich.

Even proposing to raise the personal allowance further was described by progressive economists in the 2015 election as a tax cut for the better off.

So I’ve been getting deja vu here in the US listening to the debate about Donald Trump’s self-proclaimed “giant, beautiful, massive… tax cut”. The President wants to double the “standard deduction” for the income tax (the equivalent to personal allowance), and compress the number of income tax rates from seven to three, while lowering them.

Has anyone noticed how “tax cuts for the rich” has become a moniker for all and every income tax cut?

This will be financed in part by eliminating a whole bunch of other income tax exemptions and allowances. And his opponents are already presenting this package as “a giveaway to the wealthy”.

As with all misleading statements, there is a grain of truth here. In pure cash terms, richer households look as if they would benefit from the income tax package more than poorer ones.

But that is a fig leaf for a whole bunch of chicanery which misleads on the broader arguments for tax cuts like this - and which you should be aware of next time the debate arises in Britain.

First, economists believe that efforts to lower marginal income tax rates and eliminate deductions can raise the level of GDP. Tax reform can improve incentives to work and produce, simplify filing returns, and lead to less tax-induced distortion of the economy.

But this improved efficiency won’t show up on any assessment that looks solely at the static impact of tax changes on an individual’s finances. As such, it is misleading to look at who is left “better” or “worse” off through the prism of individual circumstances, because doing so ignores these growth effects.

In the US, analysis like this also ignores the effect of Trump’s corporate income tax cut, which more and more academic analyses suggest will raise productivity and wages in time.

Second, analysis from the US Treasury Department shows that the bottom 50 per cent of households, on average, do not pay net income taxes. Meanwhile, the top 20 per cent of households pay 95 per cent of federal income tax receipts, with the top 0.1 per cent of taxpayers alone paying 24 per cent.

It is highly unsurprising that, if marginal tax rates are cut, the people who will benefit directly are those who actually pay the tax.

Opponents to rate cuts on these grounds are criticising tax changes on the basis that they do not help people who are already completely exempt from them. This is bizarre. It effectively implies that they are against all tax cuts, of any sort.

Third, left-leaning policy analysts often get slippery when describing whether a proposed tax change is “progressive” or “regressive”.

Usually, a policy is described as progressive if it increases the relative disposable income of poorer households by a larger proportion than richer ones. But when things like the personal allowance are raised, analysts move the goalposts by looking at the absolute cash changes instead.

This, of course, makes it look as though people on upper incomes benefit more, rather

than the tax cuts being proportionately more beneficial to those on middle incomes.

There are two lessons here for Republicans and Conservatives.

Most obviously, tax reform is hard. Unless it is complemented by other tax changes elsewhere that make everyone financially better off in cash terms, it leads to strident opposition from the losers. But cutting taxes for all will raise deficits, merely delaying subsequent future tax rises, unless government spending can be sustainably cut.

Perhaps more importantly, Republicans and Conservatives should leave the class struggle to the other parties when they make the case for tax cuts.

Progressive analysts have effectively shown that they do not believe income taxes should ever be cut. Given that poorer households tend to pay no to little income tax, the focus on messaging for income tax changes should be about how they would support durable economic growth for the nation as a whole.

In Trump’s case, selling income tax cuts as middle class relief when the middle class pay so little in income tax in the first place is a fool’s errand. Instead, his government should focus on why eliminating deductions and lowering rates will improve incentives and grow the economy.

Ryan Bourne occupies the R Evan Scharf Chair in the Public Understanding of Economics at the Cato Institute in Washington DC.

War with North Korea Is Neither the Best Not the Only Solution

Tue, 10/17/2017 - 07:10

Doug Bandow

The Cold War was marked by hysteria over the potential for nuclear conflict. School kids practiced getting under their desks, and families built bomb shelters in case the missiles fell. Although there were moments of acute danger, most notably the Cuban Missile Crisis, the world seemed to enter a new age when the Soviet Union collapsed. Small wars continued, but the famed nuclear doomsday clock finally moved backward.

Yet the possibility of nuclear war again is dominating international headlines. A foreign government is building nuclear weapons and ICBMs to target the U.S. And the president of the United States in turn is threatening to destroy that nation. People have begun to share their parents’ fear of nuclear warheads raining down upon American cities.

Fear-mongering is hardly new in American politics. But President Donald Trump’s decision to match North Korean Supreme Leader Kim Jong Un insult for insult and threat for threat creates a serious risk of misjudgment and mistake. Neither the U.S. nor Democratic People’s Republic of Korea desires war, but the spectacle of the two nations’ leaders behaving like participants in a cockfight demonstrates that these are unusual times.

Most analysts who know the Korean peninsula realize that war is not an option, at least absent a well-grounded belief that conflict truly is inevitable and the only question is how it starts and is conducted. There are some—Sen. Lindsey Graham (R-S.C.) comes to mind—who suggest that a Second Korean War wouldn’t be such a big deal because it would not be “over here.” Of course, the U.S. military would be involved in any fight, and the North probably has the capability to hit American bases in the region.

Policymakers should reconsider Washington’s current strategy, which needlessly risks the lives, wealth and security of Americans for the interests of other nations.

Even if Pyongyang currently lacks the ability to hit the U.S. mainland, it could loose murder and mayhem on South Korean and Japanese territory. Too bad the senator doesn’t believe those lives count for much. Most war games discount claims of North Korean forbearance or an otherwise easy victory. Casualties surely would be at least in the tens of thousands and perhaps many, many more. And if the conflict’s impact flowed over the North’s borders into China and Russia, Washington would face additional significant geopolitical dangers.

Yet some analysts as well as politicians, like Graham, appear to believe that the only choice is war or living with a dire and growing North Korean nuclear threat against the American homeland. In which case war, especially if it could be kept “over there,” would be preferred.

Those might appear to be the only choices because the U.S. insists on remaining militarily entangled in Northeast Asia. However, it is Washington’s commitment to South Korea which has brought America into potential conflict with the Democratic People’s Republic of Korea. So long as the U.S. intervenes militarily to protect the South from the North, the latter must prepare to offset Washington’s overwhelming military might. Which makes nuclear-tipped ICBMs the obvious weapon of choice.

However, nothing requires Americans to remain forever on station in the Republic of Korea. The ROK was a wreck in July 1953 when the armistice was signed. South Korea trailed its northern adversary in economic strength and political stability until the 1960s. But over time Seoul lived up to the Biblical promise that the last would be first. Today the South vastly outranges the DPRK, enjoying a 45-to-1 economic edge and 2-to-1 population advantage. Long ago South Korea gained the ability to field a military capable of deterring the North and defeating the latter’s forces if deterrence fails.

Maintaining the unnecessary “mutual” defense treaty with the ROK is what makes America a potential North Korean nuclear target. Without the Cold War context, South Korea no longer matters significantly to U.S. security. A renewed Korean conflict would be a humanitarian tragedy and highly disruptive to Asia, but neither of those problems warrant either triggering a conflagration on the peninsula or making America’s homeland a nuclear target.

Of course, the problem of South Korea defending itself against a North armed with nuclear weapons would remain. Yet that represents a more general problem of Washington’s tendency to promiscuously hand out nuclear umbrellas as well as conventional guarantees. It isn’t in America’s interest to risk Los Angeles, Honolulu, Seattle, Phoenix and perhaps a host of other cities to defend Seoul—or, frankly, Tokyo, Taipei and Canberra.

Which suggests that Pyongyang’s acquisition of a nuclear arsenal is an appropriate time to consider encouraging nations threatened by the North, most obviously meaning the ROK and Japan, to develop countervailing deterrents. Seoul started down the nuclear path a half century ago before being forced to halt by U.S. pressure. Although President Moon Jae In opposes the idea, a range of officials, politicians, and commentators back a South Korean bomb.

That would force Japanese policymakers and people to consider doing the same to confront growing challenges from the North and People’s Republic of China. The opposition to nuclearization would be stronger in Japan than in the ROK, but Tokyo could no longer rely on Americans performing the most important function of government everywhere, providing for the nation’s security.

More important, if Washington allowed China to share the nightmare created by North Korea’s nuclear developments, Beijing might feel forced to do more to constrain the North’s nuclear ambitions. The possibility of America’s friends going nuclear might energize the Xi government.

In any case, the U.S. would escape the either war or nuclear threat conundrum. There is no reason to believe Kim Jong Un, however brutal, is suicidal. The North seeks to avoid American involvement, not trigger it. Stepping back militarily and allowing prosperous and populous states to take over their own defense surely would be better than starting the very war Washington has spent 64 years attempting to prevent. And it would seem to be a lot better than risking nuclear strikes on the American homeland if that war nevertheless erupted.

North Korea is the land of second best solutions, it has been said. But war is far worse than second best. And turning the U.S. into a nuclear target is scarcely better. Policymakers should reconsider Washington’s current strategy, which needlessly risks the lives, wealth and security of Americans for the interests of other nations.

Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan. He is the author of Foreign Follies: America’s New Global Empire.

Surveillance "Reform": the Fourth Amendment's Long, Slow, Goodbye

Mon, 10/16/2017 - 08:56

Patrick G. Eddington

Over 16 years after the 9/11 attacks and the subsequent repeated passage or renewal of draconian “temporary” but “emergency” domestic surveillance laws in response, it’s fair to ask: Have we officially abandoned the Fourth Amendment in the Bill of Rights?

With the expiration of Section 702 of the FISA Amendments Act (FAA) less than three months away, now is a good time to review the effects of these surveillance laws in the seemingly endless “War on Terror.” But first, a quick recap of America’s embrace of mass surveillance in the post-9/11 era.

Within six weeks of the terrorist attacks in 2001, and with virtually no serious debate, Congress passed the behemoth PATRIOT Act. The law created vast new government surveillance powers that abandoned the Fourth Amendment’s across-the-board probable cause warrant requirement. In an October 11, 2001 speech discussing the Senate version of the legislation, Sen. Diane Feinstein (D-Calif.) assured terrified civil libertarians that the PATRIOT Act’s five-year “sunset” clause governing 15 of the bill’s provisions would serve “as a valuable check on the potential abuse of the new powers granted in the bill.”

Unless the privacy and civil liberties community revamps its entire approach and structure for advocacy on these issues, the long, slow goodbye to the Fourth Amendment will come to an end just before Christmas in 2019.

Unbeknownst to the public and most members of Congress, the Bush administration allowed key authorities of the PATRIOT Act to be abused, a fact only brought to light in 2013 by Edward Snowden’s revelations of mass telephone surveillance conducted under Section 215 of the PATRIOT Act.

Section 215 is one of the 15 “temporary” provisions that has been renewed repeatedly since 2001, making a mockery of Feinstein’s assurance that the “sunset” provision would act as a “check” on any abuse of the law. Today, 12 of those 15 “temporary” and “emergency” surveillance measures are permanent law.

Thanks to another document made public by Snowden, we know that three days after the 9/11 attacks, then-NSA Director Michael Hayden initiated a secret warrantless surveillance program encompassing Americans in contact with anyone in Afghanistan. Over the ensuing weeks, it would become a multi-pronged warrantless spying effort code-named STELLAR WIND. After the New York Times revealed this unconstitutional surveillance in December 2005, thanks to the help of a whistleblower at the Justice Department, the Congress and the Bush administration spent the next two years trying to make the illegal surveillance legal. Their final product, passed in 2008, was the FAA—renewed with little debate in 2012 and now, because of a “sunset” provision, is set to expire on December 31.

The key provision of the FAA that is the primary focus of debate is Section 702, which allows the government to target the communications of foreign entities even if the government knows it will likely sweep up the emails, text messages, and phone calls of innocent Americans in the process.

Have FAA’s authorities been used to subvert the Fourth Amendment and the constitutional rights of Americans, just as the PATRIOT Act has? Yes. Repeatedly.

In September, the politically progressive group Demand Progress issued a scathing reporton documented abuses of the FAA, drawing directly from partially declassified Foreign Intelligence Surveillance Court (FISC) records. The findings showed that aspects of the government’s Section 702 information collection, revealed in 2011, acquired “non-targeted, entirely domestic communications,” violating the Fourth Amendment. Indeed, the FISC found that the NSA engaged for 12 years in types of surveillance that FISC would eventually deem unlawful, with NSA only ceasing the violations under repeated—but ultimately empty—threats of criminal sanctions.

This report was preceded earlier this year by the publication of Stanford law professor (and Just Security editor) Jennifer Granick’s excellent book American Spies, which chronicles in detail the rights violations and false claims of effectiveness of the PATRIOT Act and the FAA by NSA and FBI officials.

Sixteen years after creating the biggest unconstitutional mass surveillance dragnet in American history, we have documentary evidence—from the federal government’s own records—of repeated, systemic abuses of these authorities. We also know they’re costing taxpayers, whose digital communications are swept up by these programs, tens of millions of dollars annually. What we don’t have is any public evidence that these surveillance practices have made us safer.

What’s the response of Congress? It’s proposing to reauthorize the same Section 702 program, which has led to these abuses.

On Oct. 6, on a bipartisan basis, the House Judiciary Committee introduced the ill-named USA Liberty Act (HR 3989). In my initial analysis of the bill, I noted that the proposed legislation ignored every major problem highlighted in the Demand Progress report. The bill’s authors also ignored an even longer list of Section 702 reform proposals put forward by nearly 60 civil society groups.

Meanwhile, the Director of National Intelligence Dan Coats, NSA Director Adm. Mike Rogers, and FBI Director Christopher Wray have mounted a public campaign to renew Section 702 unchanged. At a meeting with reporters on Sept. 25, Coats and his colleagues argued that 702 is a vital surveillance authority that has helped thwart numerous terrorist plots. On background, I asked one of the reporters who attended that meeting whether Coats, Rogers, or Wray offered a single example of 702 stopping an attack on the United States. They did not—which tracks with Granick’s findings in American Spies.

Despite the lack of public, independently confirmed evidence that 702 has prevented terrorist attacks on America, Coats, Rogers, and Wray are winning the argument that 702 should remain the law of the land.

If you think about it, the indifference of the House Judiciary Committee leadership to these proposals is not terribly surprising. The overwhelming majority of the groups calling for changes to a surveillance law that should never have existed have no political power.

Unlike the National Rifle Association, they operate no political action committee or similar electoral vehicle that could be used to strike fear into House or Senate members who dare to put forward such proposals. Thus, House and Senate members know that they can safely ignore these groups, no matter how many press releases, Facebook posts, or completely fact-based reports about surveillance abuses they churn out-just as they have ignored these same groups for nearly 20 years as Congress has passed or reauthorized laws that, bit by bit, have eviscerated the Fourth Amendment.

My prediction: Absent another Snowden-like revelation, Section 702 of the FAA will be reauthorized largely without change, and any changes will be cosmetic, and almost certainly abused. Whether it has a “sunset” provision or not is now politically and practically meaningless.

After this latest assault on the Bill of Rights has been signed into law by President Donald Trump later this year or early next, opponents will have one more—and probably final—chance to roll back the damage already done when the three remaining PATRIOT Act provisions subject to “sunset” come due at the end of 2019. Unless the privacy and civil liberties community revamps its entire approach and structure for advocacy on these issues, the long, slow goodbye to the Fourth Amendment will come to an end just before Christmas in 2019.

Patrick Eddington is a Policy Analyst in Homeland Security and Civil Liberties at the Cato Institute.

Jeff Sessions Restores the Rule of Law

Mon, 10/16/2017 - 05:09

Josh Blackman

As a senator, Jeff Sessions waged a principled battle against President Obama’s efforts to rewrite the law using his pen and phone. Now, as attorney general, Sessions has led the charge in unraveling these abuses of the Constitution. On two occasions, one involving immigration and the other Obamacare, Sessions has concluded that the prior administration’s policies were illegal. And on both occasions, President Trump agreed and halted those unlawful programs.

Executive power is often described as a one-way ratchet: Each president Democrat or Republican augments the authority his predecessor aggrandized. To his remarkable credit, Sessions has done the unthinkable: He willingly surrendered the lawmaking power back to Congress, where it belongs. In mastering the art of the executive-action repeal, the attorney general has taken monumental steps to restore the rule of law in our republic.

President Obama unilaterally implemented two foundational changes to our immigration laws. First, in 2012, after the Senate declined to enact the DREAM Act, the Obama administration announced an executive workaround known as DACA. This policy deferred the deportation of the so-called Dreamers aliens who had entered the United States as minors but were not lawfully present and granted them work authorization and other federal benefits. Two years later, after the House rejected comprehensive immigration reform, once again the president turned to the pen and phone. DAPA, as the program became known, would have granted similar federal benefits to the parents of children who were citizens.

In mastering the art of the executive-action repeal, the attorney general has taken monumental steps to restore the rule of law in our republic.

Following a challenge by Texas and 25 other states, the Fifth Circuit Court of Appeals ruled that DAPA was illegal. That decision was appealed to the Supreme Court, where the justices split 4-4 following Justice Scalia’s passing, but the case did not directly affect DACA. Following the inauguration, the Trump administration rescinded DAPA a policy that had never gone into effect but, to the surprise of many, retained DACA. Texas, along with some but not all of the 25 others, threatened to sue the Trump administration if it continued to grant new licenses under DACA.

In response to this ultimatum, Sessions made an unpopular but principled decision, advising the Department of Homeland Security to wind down DACA. The attorney general determined that the policy was implemented “without proper statutory authority” and that this “open-ended circumvention of immigration laws” was “an unconstitutional exercise of authority by the Executive Branch.” He reaffirmed his “duty to defend the Constitution and to faithfully execute the laws passed by Congress.” Sessions added that the “proper enforcement of our immigration laws is, as President Trump consistently said, critical to the national interest and the restoration of the rule of law in our country.”

After eight years of a president who seldom found the outer bounds of his own power often resorting to contorted readings of statutes to advance his progressive agenda President Trump’s willing surrender of such authority, without any equivocation, is a breath of fresh air in an otherwise chaotic time. Indeed, while Democrats tend to over-enforce the law, the power to under-enforce laws is one that generally inures to the benefit of a deregulatory conservative agenda. This Cincinnatian act of self-restraint makes the administration’s concession a big-league victory for the separation of powers.

Last week, the attorney general began to drain another unconstitutional swamp: Obamacare. Under the Affordable Care Act, Congress created two different types of subsidies that were designed to lower insurance costs. One type, used to offset the premiums customers paid, was fixed through a permanent appropriation, meaning Congress would not need to add a new line item to the budget each year. The other type, known as cost-sharing-reduction subsidies (CSRs), would reimburse insurers for certain expenditures. The CSRs, however, were not fixed through a permanent appropriation. As a result, the Obama administration had to ask Congress for funding. In 2013, the White House made such a request, but apparently in an effort to avoid cuts under sequestration the request was later withdrawn. Instead, the executive branch simply raided the Treasury, pilfering funds from the permanent source to pay for the unappropriated CSRs.

The Republican-led House of Representatives sued the Obama administration and prevailed. A federal district-court judge in the District of Columbia ruled that Congress had never appropriated the funds for the CSRs. The Obama Justice Department appealed, but the case was held in abeyance leading up to the inauguration. Much to my surprise, the Trump administration continued to make these payments for nearly eight months. But thanks to the leadership of the Sessions Justice Department, that illegal practice too has drawn to a close.

In a letter to the Departments of Health and Human Services and Treasury, the attorney general determined that the ACA “does not appropriate funds for the CSR program.” He acknowledged that his predecessor had defended the payments, but “concluded that the best interpretation of the law is that the permanent appropriation” cannot be used to fund the CSRs. The Holder Justice Department had twisted the statutory language to argue that the payments to customers and insurers “are essentially two parts of a single program.” Sessions, however, stated the obvious: “The two programs are distinct.”

This situation is worlds away from President Nixon’s practice of impoundment, whereby he declined to spend money that had been appropriated, because he disagreed with Congress’s priorities — a practice that Congress subsequently prohibited. Here, President Trump declined to spend money that was never appropriated in the first place. Due to this relinquishment of power, the Trump administration has returned this important question to where it belongs: Congress. The Republican-controlled Congress should appropriate the funds for the CSRs, where the Democrat-controlled Congress did not.

Unsurprisingly, not everyone appreciates this leadership. In a series of lawsuits, Democratic attorneys general have sued the executive branch, alleging that President Trump is required to continue enforcing DACA and making the CSR payments whether or not Congress acts. Historically, clashes between the executive branch and the courts have followed a familiar pattern: The president takes an action he deems lawful; a court rules that the action is unlawful; the court orders the executive branch to halt the action. These recent lawsuits try to turn the tables in a bizarre way: The president deems an action unlawful, and halts it; a court rules that the action is lawful; the court orders the executive branch to continue taking the action.

One of the Supreme Court’s earliest and most significant decisions provides the rule of decision. The holding of Marbury v. Madison (1803) that federal courts have the power to invalidate acts of Congress is far more familiar than the facts of the case. In the waning hours of the Adams administration, William Marbury was nominated as a judge, but he did not receive his commission before the inauguration. Marbury then asked the Jefferson administration to finalize his appointment. James Madison, the newly confirmed secretary of state, refused to do so. Marbury filed suit in the Supreme Court, arguing that the law required Madison to deliver his commission. Ultimately, Chief Justice Marshall ruled that the Supreme Court did not have jurisdiction to hear the case. In reaching that conclusion, Marshall distinguished between certain acts that the executive branch could and could not be forced to take.

Where the Constitution or an act of Congress provides a “precise course as accurately marked out by law,” Marshall observed, such actions must be “strictly pursued.” Here, Madison’s duty to deliver Marbury’s commission was a “ministerial act which the law enjoins on a particular officer for a particular purpose,” Marshall concluded. Not so for “certain important political powers, in the exercise of which [the president] is to use his own discretion, and is accountable only to his country in his political character, and to his own conscience.” For such political questions, the president is guided by his obligation to take care that the laws that is, the laws enacted by Congress are faithfully executed.

Marbury had a right to his commission. The same cannot be said for the issuance of discretionary immigration relief or for the payment of unappropriated funds. Congress did not chart a “precise course as accurately marked out by law” for either program, and there is none for the president to follow. Indeed, the Obama administration’s policies are illegal. With such “political” acts that are “entrusted to the executive,” Chief Marshall concluded two centuries ago, the courts have “no power to control that discretion.” And they do not.

The arguments from the Democratic attorneys general are indeed grotesque, for they seek to force the president to violate the oath of office he took on January 20, 2017: “I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.” To better understand that oath, the Constitution allows the president to “require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices.” With respect to DACA and the CSR payments, Attorney General Sessions has done just that. And President Trump has accepted that advice.

In any event, the Trump administration does not need to be correct about the legality of these policies beyond a reasonable doubt. So long as the suspension of DACA and the CSR payments are not “arbitrary and capricious,” the courts may not block it. Moreover, even if a judge does find the decisions capricious, he cannot order the executive branch to approve new DACA applicants or make these payments absent an appropriation. As reflected in Marbury, the judiciary lacks the power to compel the executive branch to take discretionary acts that are not required by law. At most, a judge could order the government to seek public comment or reconsider its decision. Thus the current litigation, even if successful, may not help a single immigrant or insurer. Indeed, both groups have other avenues for relief. Aliens who are not lawfully present remain free to request that their deportations be deferred on a case-by-case basis. Likewise, insurers remain free to sue the federal government in the Court of Federal Claims to recoup any money they are due. But courts cannot order the executive branch to do that which the law does not require.

At bottom, whether to protect the Dreamers and assist insurers were always decisions for the legislative branch. Congress, and not the president, has the power to change the immigration laws. Congress, and not the president, has the power to provide payments to insurance companies. If the Dreamers and insurers are to be protected and they should be Congress must take the first step. The judiciary should resist the urge to intervene and should allow the legislative process to do its work.

Josh Blackman is a constitutional-law professor at the South Texas College of Law in Houston, an adjunct scholar at the Cato Institute, and the author of Unraveled: Obamacare, Religious Liberty, and Executive Power.

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