The Law — as It Was and Is
Michael S. Swisher
Ladies and gentlemen — honored guests — welcome to the annual St. Croix Review Panel Discussion.
Our topic this year is the Law. No matter what subject we choose to address, it inevitably comes back to the law. Law affects our social, economic, and political lives. It both reflects and shapes the consensus of the society it governs.
Ancient peoples revered their lawgivers. Not only Moses, who brought the Ten Commandments down from the mountain, but also figures like Lycurgus and Solon, are still familiar to us. We do not, however, view our contemporary legislators with such regard. Perhaps some of the present attitude can be attributed to the observation made by Otto von Bismarck, who said that anyone who wishes to retain his respect for laws or sausages should never witness either being made. We can now turn on C-SPAN and watch the process of lawmaking any time we wish. Bismarck’s quip applies à fortiori in the present electronic era.
There is another good set of reasons for the dubious sentiments of American citizens about the law and its uneven application. Both the process and the character of legislation have changed markedly — and not for the better — in our lifetimes.
Those who remember their high school civics will recall the description of the legislative process. A bill is introduced into one of the houses of the legislature (be it federal or state), made up of the voters’ elected representatives. It is referred to the appropriate committee, where it may be revised, and may be voted up or down. If voted in the affirmative, it proceeds to the floor, where it is again debated, possibly amended, and put to a vote. If it passes, it proceeds to the other house, where it undergoes a similar process. If passed without amendment, it goes to the executive for his signature or veto. Should there be any amendments, resulting in a difference between the bill passed by either house, a conference committee reconciles the two versions and the final revision goes to the executive for signature or veto.
These formal procedures reflect the way the Framers of the Constitution expected the legislative process to function. They still exist, and legislation is proposed, passes, or fails to pass, and is signed or vetoed, but the procedure outlined does not accurately describe the situation as it prevails in most cases today.
The most obvious illustration of this at the federal level is the repeated failure of Congress to pass its appropriations bills on time. Since the system provided by the 1974 Congressional Budget Act for appropriating federal revenues has been in place, Congress has passed all the required measures in time only on four instances: fiscal years 1977, 1989, 1995, and 1997. The ongoing spectacle of continuing resolutions and cliff-hanger votes under the threat of government shutdown is an illustration of the system’s chronic dysfunction.
Putting this to one side, we must acknowledge that many of the substantive rules that govern how Americans live and go about their many daily tasks do not follow the civics-book legislative path at all. Instead of being made by elected representatives, proposed rules are devised by unelected bureaucrats working in agencies described by a scramble of initials: FTC, SEC, FAA, IRS, ATF, NLRB, CPSC, CFPB, and many others too numerous to list. When a proposed rule is completed, it is published in a compendium of such rules, the Federal Register. The page count of this collection of documents hit an all-time high in 2016, amounting to 95,894 pages. The current year’s running total is over 70,000.
Once a proposed rule is published in the Federal Register, a period for public comment, typically 90 days, is allowed before it is promulgated. Unless responses have been voluminous, and objections dominant among these, the regulation is adopted as written. It then has the force of law and is law in all but name. The distinction between law and regulation is all too often one that makes no difference.
Moreover, the alphabet agencies that effectively exercise the legislative function in this manner all too often act as executives — enforcing their own regulations — and even as judges, in special administrative tribunals. While these tribunals — so far — do not have the authority to send violators to prison or condemn them to death, they can and do levy fines, which can be very substantial. This makes a travesty of the separation of powers.
What I have just described is called the administrative state. This is not the same thing as the so-called “deep state” often spoken of by conspiracy theorists. It is an effective fourth branch of government not provided under the Constitution. How did it come into existence? Largely by virtue of the refusal of our elected legislature to do its job. Rather than engage in legislation in detail, according to Constitutional procedure, Congress has delegated its legislative authority to unelected officials in one after another sphere of activity. This authority is used in ways the Framers of the Constitution could scarcely have imagined. Where, in the powers delegated to Congress under Article I, section 8 of the Constitution, could Congress itself (let alone some agency created by it) find the authority to dictate the types of lightbulbs or flush toilets that citizens might buy? Yet, this is the reality in 21st century America.
The agencies comprising the administrative state are nominally parts of the executive branch, but in practice the elected executive has little, if any, ability to direct their activities. To provide independence from the executive, some agencies (e.g., the FTC and SEC) are structured as commissions, the members of which must be even, or near-even, numbers of Democrats and Republicans so that, in theory, they are non-partisan. Terms may be staggered to avoid allowing a president to fill too many vacant positions. In practice, partisan battles go on within the commissions routinely. Sometimes when a commission member reaches the end of his term, the position is allowed to remain vacant; in some cases, a commission loses enough members that it cannot form a quorum and is prevented from acting.
Most of these agencies, whether they follow the bipartisan commission model, or are headed by one presidential appointee, obtain their operating funds through Congressional appropriation. One interesting example of an effort to circumvent any Congressional attempt to constrain the actions of an agency via the appropriations process is Elizabeth Warren’s brainchild, the Consumer Financial Protection Bureau. Rather than receiving an appropriation from Congress, the CFPB receives its funding from the Federal Reserve System. Since the Federal Reserve System has its own revenues that are not subject to the Congressional appropriations process, this insulates the CFPB from any change in the composition of Congress, which might result in a majority hostile to the bureau.
As an illustration of the hostility of the technocratic class to genuine democracy, the CFPB is an especially egregious example. Those who remember the real estate collapse of 2008 and its effects on financial institutions will recall the many bank failures and the controversial “bail-outs” that followed. The history of these events is complicated, but the principal problem at hand was that many banks had made bad loans or bought unsound securities.
The failures or near-failures of those institutions resulted from conditions that should have been discovered during traditional safety-and-soundness bank examinations of a type that has been familiar for many decades. All of the affected institutions were already regulated by at least three of the following agencies: The Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTC), and the state banking commission in whatever state may have issued a bank’s charter. Since none of these entities prevented the failures, what was government’s decision? It could not be something so simple and rational as reviewing the functions of the existing regulatory bodies, eliminating duplications and inefficiencies — no, it was to create yet another regulatory agency — and one which, by its charter, was to have nothing to do with safety and soundness. Rather, the CFPB concerns itself with various social engineering goals, the elimination of alleged discriminatory activity in the financial industry, and in general the advancement of Elizabeth Warren’s economic and political agenda. None of these would have done anything to keep depositors’ money safe or to prevent future failures. It was a simple opportunistic use of the moment — “never let a crisis go to waste” — to embed ideological goals in a bureaucracy immunized against the oversight of elected officials.
Federal courts have been as much a contributor to the growth of the administrative state as have Congress and the Executive Branch. Two examples will have to suffice for the present brief summary.
The first is the Supreme Court’s decision in a case titled Wickard v. Filburn, 317 U.S. 111 (1942). This decision markedly increased the Federal government’s regulatory power by its expansive reading of the Constitution’s Commerce Clause, to the present day. The U.S. Department of Agriculture had, under a New Deal enactment, set limits on wheat production based on the acreage owned by a farmer, with the intention of stabilizing wheat prices and supplies. Roscoe Wickard, a farmer in Ohio, grew wheat on his land in order to feed his livestock. He grew more than he was permitted to do under this rule and was fined. He argued that because the wheat he grew for this purpose was not sold, it was therefore not in commerce of any kind, whether inter- or intra-state. The Court ruled that Wickard’s use of wheat he grew to feed his animals reduced the amount of wheat he would buy on the open market. Therefore, since wheat is traded on national commodities markets, his reduction in wheat purchases affected interstate commerce and was subject to the regulation — even though none of the wheat he grew ever left his property. Wickard v. Filburn gave the federal government essentially unrestricted power to regulate economic activity, which it exercises vigorously to this day.
The second is a concept enunciated by the Supreme Court in Chevron U.S.A., Inc. v. National Resources Defense Council, 467 U.S. 837 (1984). It established a legal test by which a court might determine whether to defer to a regulatory agency’s interpretation of a statute that it administers. The Court’s decision outlined a doctrine that has come to be known as “Chevron deference.” Chevron deference involves a two-part test — first, has Congress addressed the precise question at issue, and second, “whether the agency’s answer is based on a permissible construction of the statute.” This effectively requires lower courts to defer to the interpretation of the agencies, which under Chevron deference enjoy the benefit of any doubt.
While two cases now before the Supreme Court now challenge Chevron deference, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Dept. of Commerce, it remains to be seen what the court will do. Abandonment of Chevron deference would be a small step toward restraining the administrative state.
I will not comment much more on the role of federal courts other than to point out that we’ve seen an odd new development in the assertion of power by the lower Federal courts, wherein a federal district judge issues what amounts to a nationwide injunction of a broad category of actions, rather than one confined to the litigants in a particular case before the district court, or even to the circuit in which the district court is situated. This encourages judge-shopping, and has featured in several prominent cases in recent years.
In essence, both the development of the administrative state and the rise in the political consequences of court decisions arise from the abdication by Congress of its proper legislative role. On the one hand, it is happy to delegate much of its legislative authority to regulatory agencies, letting them deal with the details it can’t be bothered to address. On the other hand, it is relieved to be able to kick “hot button” issues, such as abortion, immigration, or gun control, up to the federal courts, where judges serve for life and never have to face voters who may object to their decisions. Having disposed of these troublesome responsibilities, Congress still holds tenaciously onto its power of the purse, but even in this it does not exercise wisely or even on time.
The student of medieval history will recall France’s rois fainéants — the do-nothing Merovingians — who were trotted out for ceremonial functions until the last one, Childeric III, was deposed by Pepin the Short, the mayor of the palace, who was the real ruler and who decided he might as well be king in name as well as in fact. Congress ought to reflect on Childeric’s fate.
At the state level, the legislatures have not ceded so much of their authority as has Congress, but perhaps the reason is that they haven’t had as much to begin with. There are certainly state regulatory agencies, but they have not burgeoned to the extent federal ones have. Despite this, similar signs of legislative sloth and regulatory or executive ambition can be found at the state level.
An example of the former is in the writing of certain types of routine legislation. Many states and localities have fire codes. Did their legislatures write the fire codes? They did not. Instead, they have adopted a pre-packaged fire code written by a private organization, the National Fire Protection Association, headquartered in Quincy, Massachusetts. The NFPA has written thousands of pages of fire codes covering every imaginable issue related to fire prevention. The organization was founded in 1895 by representatives of several fire insurance companies and a manufacturer of pipes used in fire sprinkler systems. If any jurisdiction incorporates NFPA Code by reference into its statutes, it not only accepts it as now standing, but automatically accepts any revisions the NFPA may subsequently make.
Is this a good or a bad idea? It’s pretty hard to find fault with the desire to prevent fires, but “the devil is in the details” as always. Whatever might be said about the NFPA and its codes, what state and local legislative bodies do when they incorporate them by reference in their statutes and ordinances cannot be called democracy.
The propensity of the federal government to attempt to constrain state governments to do its will is another familiar practice. As an example, we may recall the Carter Administration’s effort to force states to adopt a 55 mph maximum speed limit, ostensibly in the interests of energy conservation, by threatening to withhold federal highway funds from states that refused to do so.
Recently, we have seen efforts by some states to compel other states to act in certain ways. California is a leading practitioner of such compulsion. While it has apparently abandoned this particular effort, at a time of great public controversy over so-called gay and transgender rights, California banned state-funded travel to a number of other states that did not follow its dictates.
More prosaically, in 2018 California approved a referendum, Proposition 12, providing that pork producers had to provide their pigs with pens having square footage equal to or greater than a prescribed minimum. No one disputes the right of a state to regulate animal welfare, but the novel part of California’s law prohibits pork from animals raised outside the state under conditions not conforming with Proposition 12 from being sold in California. California’s supermarkets and restaurants use approximately 255 million pounds of pork a month, but its farms produce only 45 million pounds. Therefore, producers in other states — Iowa, for example, the nation’s principal pork-producing state — would thereby be required either to conform with the California regulation or forgo doing business in that state. Obviously, this imposes significant costs on pork producers. One study found that bacon prices would rise 60 percent were this measure to be enforced. Thus, a $6 package of bacon would cost $9.60. Does this pass muster Constitutionally under the Commerce clause? The Supreme Court of the United States, in a fragmented ruling in which five of the Justices wrote their own opinions, rejected an appeal, although implementation of the Proposition has been stayed pending separate litigation in a state court.
My final point will touch very close to home. Governor Tim Walz acted under Minnesota law to assume emergency powers during a so-called peacetime emergency arising from the COVID-19 pandemic. He held these powers for approximately 16 months, protracting the term by repeated 30-day extensions.
The idea of emergency powers is not a new one. Minnesota’s provision for emergency powers was enacted at a time when travel was more difficult than it is today, and to assemble a special session of the legislature might have taken weeks. The idea of granting an official such powers has ancient precedents. The laws of ancient Rome provided for a magistrate who in grave emergencies might be elected for a period of six months, on the recommendation of the consuls. The title of this official was dictator.
The famous Cincinnatus was dictator twice, saving his country, then laying down the office and returning to his plough after only a few days during periods of acute military crisis. Romans let the office lapse until the early first century B.C., when Lucius Sulla revived it, and was appointed dictator rei publica constituendae, i.e., for an indefinite period. He laid down the office and retired to private life in 79 B.C., dying the next year. Julius Caesar was made dictator four times, the last for life. The office was abolished after his death.
Walz assumed emergency powers for a longer time than the six months originally permitted to a dictator of Rome, and followed the practice of Caesar in contriving extension after extension. He was backed in this by his party.
The next time you hear someone on television prating about “our democracy,” reflect on that. Are we truly a republic of laws, or do substantial numbers of people in positions of authority regard our Constitution and the rule of law as window dressing? *