Sunday, February 28, 2010

Inefficiency - Not a Bug, but a Feature of the Constitution

A filibuster is a means of slowing down or preventing a vote on legislation in the U.S. Senate by refusing to end debate. The rules of the Senate allow a filibuster to be stopped by cloture, which is a procedure to end debate on a bill, but cloture requires a vote of 60 percent of the Senate. Some of the same people in Congress who argued in support of filibustering judicial nominees of President Bush in 2005 are now arguing that filibustering health insurance reform legislation in the Senate is unconstitutional and are arguing for the reconciliation process to avoid the need to have 60 votes to stop a filibuster from preventing its passage in the Senate. A filibuster, they say, in anti-democratic because it blocks the will of the majority. A filibuster certainly does frustrate the will of a majority in the Senate and, even if the filibuster ultimately fails to stop legislation, it creates inefficiency by slowing the process down. However, neither frustrating the will of the majority nor slowing down the process makes a filibuster unconstitutional. In fact, the Constitution is all about making it difficult for a majority to prevail and about slowing down the process of making new laws. If the people who created the Constitution had wanted to create a quick and efficient process of turning the will of the majority into legislation, there would not even be a United States Senate, which is not very democratic, since states with widely different populations are each represented by two Senators. Instead, there would just be a House of Representatives and a bill would become law by a simple majority vote. The President would not have the power to veto legislation, because that would frustrate the will of the majority. Instead, the Constitution requires that in order to become law, the same version of a bill must be passed by both the House of Representatives by majority vote and it must signed by the President (or it becomes law without his signature if he does not sign or veto it within ten days and Congress is still in session at the end of the ten-day period. If the President vetoes the bill (by returning it to Congress or by doing nothing while Congress adjourns within ten days after the bill is presented to him), then the bill must again be passed by both houses of Congress, but this time by a two-thirds vote in each house. Even then, the Supreme Court can frustrate the will of the majority of Congress by declaring legislation unconstitutional. The Constitution is all about slowing down the process and making it difficult for the will of the majority to prevail. If the goal of the Constitution was to efficiently implement the will of the majority, it could have just created the House of Representatives and had given it the power to create the rest of the government and to change the rules whenever it pleased, with no separation of powers, checks and balances, requirements of supermajorities, or any of the other “inefficient” and “undemocratic” features. The founders of the United States were not opposed to majority will, but they were aware that majorities can be very temporary and can base decisions on emotion rather than careful thought and planning. In other words, they preferred that legislation be passed by a slow process that makes it unlikely that legislation gets passed without broad support. The process of passing laws was intended to be inefficient. The process of amending the Constitution even more strongly indicates the purpose of slowing down the process and making more difficult for the will of a simple majority to prevail. An amendment to the Constitution needs a vote of two-thirds of both houses of Congress to be proposed and needs to be ratified by the legislatures of three-fourths of the states to be ratified – hardly an efficient process. Actually an amendment can be proposed by a convention call by Congress on the application by the legislatures of two-thirds of the states and an amendment can be ratified by conventions in three-fourths of the States, but these methods are not commonly used. The inefficiencies in creating laws and Constitutional amendments were features of the system, and not bugs.

The filibuster itself has an interesting history, which is stated briefly on the website of the United States Senate at Originally, a bill could be debated endlessly in both houses of Congress. Unlimited debate became impractical in the House of Representatives because of it had more members than the Senate, so the rules of the House of Representatives no longer allow for unlimited debate. The first limitation on unlimited debate in the Senate came with a change in the Senate rules in 1917, when debate could be ended by a cloture vote of two-thirds of the Senate. The number of votes needed for cloture was changed from two-thirds to 60 percent in 1975. If endless debate in the Senate was consistent with the Constitution even without the possibility of a cloture vote to stop it before 1917, it must still be consistent with the Constitution when it can now be stopped with a cloture vote.

In short, the inefficiency of lawmaking in the United States is not such a bad thing. However, while we can tolerate inefficiency, why do we need to tolerate the enormous expense?

Sunday, February 07, 2010

State of the Union Address: ... and the Ugly

The last two posts were about the “good” (parts I agree with) and the “bad” (parts I disagree with) in the State of the Union address. This is about the “ugly”, the parts that just don't work at all.

When President Obama, announced his spending freeze of about 17 percent of the Federal Budget, he said that the freeze would not start for a year and said that is how budgeting works. At that point there was laughter from the audience. No, Mr. President, that is not how budgeting works – that is how my ex-wife thought that budgeting works. The way budgets work (outside the Beltway, anyway) is that you control your spending so that it does not outstrip your income. Most businesses and families can tell that you can borrow for emergencies, or borrow in order to take advantage of an opportunity to increase income, but you avoid it otherwise. After you have increased discretionary spending to unsustainable levels, you do not freeze the spending at those levels, you lower the spending. That is how budgeting works. When voters divorce the politicians that are supposed to represent them in Washington in 2010 and 2012, the out of control spending will be one of the reasons. He did advocate that Congress establish a bipartisan commission to come up with ideas to cut the deficit, but his motivation appeared to be to get political cover by getting Republicans on a commission that advocates raising taxes as a way of decreasing the deficit. If I thought revenue from increasing taxes would actually be applied to reducing the deficit, raising taxes wouldn't bother me that much, but it never works that way. In fact I think that paying for expenditures with taxes is better than paying for them with borrowing, which just kicks the can down the road, but taxes are a relatively minor issue compared to spending. When the proposal to create a bipartisan deficit reduction commission died in the Senate, the President said that he was establishing such a commission by executive order, which I think shows at least a mild disrespect for the separation of powers. My main objection, however, it is that a commission is just a distraction, a way to appear to be doing something about reducing the deficit without really doing it.

The ugliest part of the speech was near then end when after saying that with “all due respect for separation of powers,” the recent decision of the Supreme Court that a law limiting expenditure of corporations and other organizations (including non-profit organizations and labor unions) overturned a century of law and would open the floodgates for influence by special interests including foreign corporations. He went on to emphasize that foreign organizations should not be able to influence elections in the United States. This was ugly on many levels. The President has as much right as anyone to criticize the Supreme Court and its decisions, but doing it in a State of the Union address with the members of the Supreme Court seated just a few feet in front of him and unable to respond was totally inappropriate and lacking in class. Justice Alito could not contain himself and shook his head and muttered under his breath what appeared to be “not true”. What was not true was that the decision had any effect at all on foreign corporations. Foreign corporations and foreign governments continue to be forbidden to influence elections in the United States. One would expect the President and his speech writers to do some fact-checking before such a major speech, especially about a court decision, since President Obama is a graduate of Harvard Law School and a former instructor of constitutional law at the University of Chicago. I downloaded the decision, Citizens United vs. Federal Election Commission and began to read it, but it is very long (giving the impression that Supreme Court justices think that they get paid by the word), so I skimmed over it to get the gist. I didn't see anything that remotely suggested that it lifted any restrictions on foreign corporations. To paraphrase the late Senator Daniel Patrick Moynihan, the President is entitled to his own opinion, but he is not entitled to his own facts. If he keeps making up facts to support his rhetoric, some day he may face a whole chorus of people chanting, “You lie, you lie.” He is lucky that the people in his audience had enough respect for decorum not to shout out what many of them were thinking. I know I find myself shouting a lot at the television lately.

Saturday, February 06, 2010

State of the Union Address: ... the Bad ...

In my most recent post I talked about the “good”, or the parts of the State of the Union address in which I like what President Obama said, even though I doubt that what he says and what he means are always the same. This time, my focus is on the “bad,” what he said that I don't like. Next will come the “ugly.” Early in his speech, President Obama proposed a “fee” (euphemism for tax) on the largest banks in order to recover the money that was lent to some large banks in the TARP program, otherwise known as the bank bailout. What is bad about his proposed fee is that it isn't aimed at the banks that still owe the government money, but it is a tax on large banks in general. Extracting repayment from banks who haven't paid their debts is one thing and is good; punishing banks just for being big is wrong. It is just taking political advantage of the fact that large banks are unpopular. Not that the large banks are going to get hurt much; they will pass the extra cost on to their customers.

The President claimed that two million workers who would otherwise be unemployed have jobs because of the American Recovery and Reinvestment Act. His allegation is based on what the recipients of the stimulus money told him about jobs that were “saved or created” by the money paid out so far. There is a strong conflict of interest here – the recipients are motivated to claim that they created or saved jobs in order to continue to receive funds. I don't believe that there is any serious verification of the numbers of jobs actually saved or created, again because of a conflict of interest; the administration wants to claim great success for the Recovery Act and verifying the numbers might make them lower and less supportive of claims of success. While it is clear that the Recovery Act has been expensive, it is far less clear that it has saved or created any jobs when you consider the jobs lost because businesses hesitate to hire when government policies make the future of business so uncertain. The President proposed in his speech more of the same, except this time he calls it a “jobs bill,” in part because, the American Recovery and Reinvestment Act came to be called the “stimulus bill” and acquired a reputation for being expensive and ineffective. Doing the same thing again, but changing the name will not improve the results.

The President wants an energy and climate bill to “make clean energy profitable”. He was apparently referring to the cap and trade bill that had already passed the House of Representatives. What cap and trade will do is make most kinds of energy that people actually use much more expensive and decrease supply by making energy production less profitable or unprofitable, which will be devastating for the economy and would make hardly a dent in whatever global warming may be occurring. If clean energy requires subsidies from taxpayers for the companies that supply it to make a profit, then the clean energy isn't really profitable; what is profitable is getting favors from the government. If getting favors from the government is profitable, then that increases the influence of lobbyists, which is something that the President claimed he opposes. Despite the President's assertion that there is overwhelming evidence of climate change caused by greenhouse gas emissions, much of the “overwhelming evidence” is overwhelming only because data that didn't support the notion of global warming has been suppressed. Then he said that the nation that leads with a clean energy economy will lead the global economy. Not if Spain is any example. Spain spent much money subsidizing a “clean energy” economy only to see its debt and unemployment rates climb as a result.

The President said that he plans to end subsidies to banks for student loans. I like that idea because I am generally opposed to subsidies, but what he really meant is that he plans for the government to completely take over the business of making student loans. That does not represent an improvement. Taxpayer money is still spent to subsidize student loans but the people administering them will be government employees instead of bank employees. The improvement is – what? The President proposed that no student would be required to pay more than ten percent of his or her income to repay a student loan and the balance would be forgiven after 20 years, or after 10 years if the former student enters “public service.” Pardon me, but even though I have spent a career in the federal government and am presently employed part-time by the State of Connecticut, I reject the idea that people who are working in the private sector are serving the public any less than those who have government jobs; nearly all provide a valuable service and some in the private sector are serving the public more than those in the public sector because their compensation and even the existence of their jobs is more closely tied to performance.

The worst part of the speech was President Obama's continued support for “his” health reform plan. It changed from a health care plan to a health insurance plan when it occurred to him that health insurance companies were unpopular and could be demonized. Also, he has never really laid out what “his” health insurance reform bill is. The versions that passed the House and the Senate have several major differences between them. Is one of them his and the other not? Is his plan something that differs in some way from both? What exactly is his plan? His claim that Americans opposed the health insurance reform bills because he didn't explain them well enough is arrogant and untrue. He has made televised speeches, many containing health reform in the subject matter, on a regular basis. It hardly seems likely that he hasn't made enough speeches! Also, the more time the public has had to learn the contents of the proposed legislation (in either the House or Senate version), the less popular it becomes. It isn't because the public does not understand the proposed health insurance reform legislation that it is unpopular, it is because the public does understand it. President Obama then repeated his mantra that if anyone has ideas to bring down the cost of health care without reducing quality and without increasing the deficit, he would like to hear them. No, he wouldn't! The ideas are out there, but he is deaf to any proposal that does not increase the government's role in health care. I can't go into to much detail about better ideas for reforming health care without making this post unreasonably long, but I will mention some briefly. Tort reform would reduce the cost of health care by reducing what doctors have to pay for malpractice insurance. Insurance plans with coverage for only catastrophic medical conditions combined with health savings accounts for more routine care would reduce the cost of insurance by making patients more aware of costs and reducing administrative expenses. Shifting the tax advantages of buying insurance from employers to insured persons would make give consumers more control of the costs of health insurance and health care. Allowing insurance companies to sell each insurance policy in all states instead of individual states would give consumers more choices and reduce the cost of insurance premiums by promoting competition between insurance companies. Instead the health insurance reform bills passed by each house of congress give consumers less choice and less control and drive up costs of providing insurance while doing little or nothing to decrease the cost of providing health care. I intend to write more about health reform later. For now, it is enough to say that the proposals that the President supports are almost entirely backwards from what would provide the best health care to the most people at the least cost.