Category Archives: Politics: The Party of Sleaze

Is There a Poison Pill in the Debt Ceiling Bill?

The House GOP leadership introduced its 3-month debt limit increase yesterday and plans to vote on it tomorrow. As a sweetener to paper over their turnaround on the debt limit, the GOP attached a “no budget no pay” provision to H.R. 325 that could change the payment of Congressional salaries. While this looks like unconstitutional grandstanding, there is a chance that — intentionally or not — the “no budget no pay” part of the statute could function as a poison pill clause. If so, I am concerned that any challenge to the unconstitutional part could have the effect of restoring the debt ceiling while seeming to put the blame on the courts rather than Congress.

Explaining what I’m worried about is slightly convoluted, involving first the validity of a Constitutional Amendment with a strange ratification history and second the arcane rules about “severability” — what courts should do when they find part of a statue unconstitutional — so bear with me.

As you may know, the House GOP’s fig leaf for its temporary parole of the hostage it had taken (the international economy) was to say that unless the Congress passes a budget this year — instead of the various continuing resolutions and such under which we’ve operated for some time — federal legislators would not get their salaries.

This provision is (almost certainly) blatantly unconstitutional. The US Constitution provides, in the 27th Amendment (proposed 1789, ratified 1992(!)),

No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.

The reason for the “(almost certainly)” is that the 27th Amendment has an unusual history. The provision was one of the two amendments in the original bill of rights that did not get approved by a sufficient number of states. It laid largely dormant for almost two centuries until being revived due to a campaign started by U. Texas undergraduate. (He got a C on the paper proposing the campaign, by the way.)

No court has ruled on the validity of the 27th Amendment, but in light of Coleman v. Miller, 307 U.S. 433 (1939) and the subsequent acceptance of the 27th Amendment by Congress, I think it’s a very good bet that just about every judge in the land would say it was valid.

If so, we turn to figuring out whether H.R.325 violates the 27th Amendment. The structure of the bill “To ensure the complete and timely payment of the obligations of the United States Government until May 19, 2013, and for other purposes” is simple: Two sections. Section One is short, and says the debt ceiling “shall not apply for the period beginning on the date of the enactment of this Act and ending on May 18, 2013.” Section Two is much longer and purports to put congressional salaries in escrow until the end of the session if no budget is passed. I’ve put the full text of it at the end of this post. The key parts that relate to salaries are these:

[2(a)](1) IN GENERAL- If by April 15, 2013, a House of Congress has not agreed to a concurrent resolution on the budget for fiscal year 2014 pursuant to section 301 of the Congressional Budget Act of 1974, during the period described in paragraph (2) the payroll administrator of that House of Congress shall deposit in an escrow account all payments otherwise required to be made during such period for the compensation of Members of Congress who serve in that House of Congress, and shall release such payments to such Members only upon the expiration of such period.

(4) RELEASE OF AMOUNTS AT END OF THE CONGRESS- In order to ensure that this section is carried out in a manner that shall not vary the compensation of Senators or Representatives in violation of the twenty-seventh article of amendment to the Constitution of the United States, the payroll administrator of a House of Congress shall release for payments to Members of that House of Congress any amounts remaining in any escrow account under this section on the last day of the One Hundred Thirteenth Congress.

Does this comply with the 27th Amendment? I don’t think this is even a close question: in my view the escrow provision clearly does not. The prohibition on “varying the compensation” seems pretty clear to me: it means no changes in amount, and no changes in time of payment because there is a time value to money. Anyone who gets a salary would think it a very material change in the terms if the money were escrowed for more than a year and a half instead of being made available to pay the mortgage.

You might, therefore, be forgiven for dismissing the House GOP insistence on this provision as mere grandstanding — one quick lawsuit by a member of Congress wanting his pay, and the pay limit is toast.

But here, finally, is where I have a somewhat scary thought: Is it possible that the pay provision is non-severable from the debt ceiling increase? Could it be the case that if a court strikes down the pay provision — as I think it must do if asked — will the court also be forced to nullify the debt ceiling increase provision of the bill? Is this pay provision not just grandstanding but in fact, and perhaps even intent, a piece of Machiavellian scheming?

Answering those questions requires some background in the law relating to “severability”.

We are long past the point where one unconstitutional clause necessarily infects an entire statute. There is now a substantial body of doctrine about when a court should “sever” the unconstitutional piece and leave the rest. Much of that doctrine concerns statutes with a “severability clause”, an instruction from Congress about what to do if a dubious clause is struck down. As H.R. 325 does not have a severability clause, we can ignore all that and turn straight to the rules for statutes without severability clauses.

The Supreme Court recently addressed this very issue in Free Enterprise Fund v. Public Co. Accounting Oversight Board, 130 S.Ct. 3138, 3161-62 (2010), which involved the fate of the Sarbanes-Oxley Act. I’ve excised the citations in the quote that follows:

“Generally speaking, when confronting a constitutional flaw in a statute, we try to limit the solution to the problem,” severing any “problematic portions while leaving the remainder intact.” Because “[t]he unconstitutionality of a part of an Act does not necessarily defeat or affect the validity of its remaining provisions,” the “normal rule” is “that partial, rather than facial, invalidation is the required course[.]” Putting to one side petitioners’ Appointments Clause challenges (addressed below), the existence of the Board does not violate the separation of powers, but the substantive removal restrictions imposed by §§ 7211(e)(6) and 7217(d)(3) do. Under the traditional default rule, removal is incident to the power of appointment. Concluding that the removal restrictions are invalid leaves the Board removable by the Commission at will, and leaves the President separated from Board members by only a single level of good-cause tenure. The Commission is then fully responsible for the Board’s actions, which are no less subject than the Commission’s own functions to Presidential oversight.

The Sarbanes–Oxley Act remains “ ‘fully operative as a law’ ” with these tenure restrictions excised. We therefore must sustain its remaining provisions “[u]nless it is evident that the Legislature would not have enacted those provisions … independently of that which is [invalid].” Though this inquiry can sometimes be “elusive,” the answer here seems clear: The remaining provisions are not “incapable of functioning independently,” and nothing in the statute’s text or historical context makes it “evident” that Congress, faced with the limitations imposed by the Constitution, would have preferred no Board at all to a Board whose members are removable at will.

So the issue is whether (1) HR 325 remains fully operative as a law, and (2) whether in light of the statutory and historical context “it is evident that the Legislature would not have enacted those provisions … independently of that which is [invalid].”

Even assuming HR 325 passes the first test, does it pass the second? Will it be clear at passage that the bill would have passed without the Republican face-saving section on Congressional pay?

There are powerful reasons to say no, that the two parts of the statute are tightly linked. Just consider what the GOP leadership has been saying. For example, Eric Cantor and John Boehner:

“We will authorize a three-month temporary debt limit increase to give the Senate and House time to pass a budget,” House Majority Leader Eric Cantor, R-Va., said. “Furthermore, if the Senate or House fails to pass a budget in that time, members of Congress will not be paid by the American people for failing to do their job.”

In selling the idea, House Speaker John Boehner called the Senate’s failure to pass a budget over the last four years “shameful.”

Or Darrell Issa, who originally said the no pay idea was unconstitutional, but then backpeddled, said,

“I strongly support the House Republican leadership’s proposal to link the debt ceiling increase to passage of a budget by the Senate, which has gone 1360 days without passing a blueprint for federal spending.

So Congressional leaders are selling the provisions as linked. Does this mean that the two sections of H.R. 325 are too closely linked to be severable? I think the best answer is that we don’t know yet, since the vote hasn’t happened, but it is a real possibility. The answer may turn on the final vote and the debate around it. The more that Members of Congress say the only reason they are going along is the “no budget no pay” clause, the worse it will look. If the vote is close, will a judge be able to say in good conscience that H.R. 325 would have passed without the pay provisions? I’m not sure I could say that if I were a judge. On the other hand, if the vote is very lop-sided, it could be easier to argue, and to persuade oneself, that the provisions were not key to passage, and that even some Republicans voting for it might have swallowed the debt ceiling increase without the pay sop attached.

One could of course argue that all the talk about the value of the “no budget no pay” rule is just legislative camouflage, and should not be taken too seriously. That might well be true politically. But in the face of statements by both key House leaders and perhaps many of the rank and file saying “no budget no pay” matters to their vote, asking a court to in effect hold that members of a co-ordinate branch of government were dissembling might be asking lot.

Continue reading

Posted in Econ & Money, Law: Constitutional Law, Politics: The Party of Sleaze | 9 Comments

Disgusting Antics in Virginia

Holding session on MLK Day is a distasteful thing for any Southern legislature to do — it’s about not treating the day as a holiday in order to disrespect Dr. King’s memory not to mention what he stood for. Adjourning at the end of the day to celebrate General Thomas J. ‘Stonewall’ Jackson is just putting the boot in.

But what the Virginia legislature did today is truly toxic.

The VA Senate is split 50-50. Today, one Democrat was absent. Sen. Henry Marsh, a 79-year-old civil rights veteran, was in Washington DC for the Obama inaugural. That’s when the Republicans pounced: they introduced and rammed through without notice a redistricting bill that would take the 20-20 Senate and make it, by some calculations 27-13 by packing as many Democrats as possible into a minority of the districts.

Fortunately, if some of the online commentators at Blue Virginia are to be believed, there’s a good chance the move violates the Virginia Constitution, Art. II, sec. 6, which reads in relevant part (as recently amended):

Members of the House of Representatives of the United States and members of the Senate and of the House of Delegates of the General Assembly shall be elected from electoral districts established by the General Assembly. Every electoral district shall be composed of contiguous and compact territory and shall be so constituted as to give, as nearly as is practicable, representation in proportion to the population of the district. The General Assembly shall reapportion the Commonwealth into electoral districts in accordance with this section in the year 2011 and every ten years thereafter.

Any such decennial reapportionment law shall take effect immediately and not be subject to the limitations contained in Article IV, Section 13, of this Constitution.

I am not in any way informed about the Virginia Constitution, but this seems consistent with the view that reapportionment must be decennial, and that mid-decade reapportionment is unconstitutional. I’d be interested in hearing other views.

(Additional context here.)

UPDATE: JST points me to this eye-witness account of the Virginia Senate in action.

Posted in Politics: The Party of Sleaze | Leave a comment

Citizens Insurance Won’t Be Making Sweetheart Loans to Dodgy Insurance Companies After All

Some time ago, I got upset that Citizens Insurance planned to use our premiums to make GIFTS to private insurance companies. Well, it seems the bright boyos at Citizens paid Goldman Sachs a great deal of money to explain how it would work, and they explained that it wouldn’t work as none of the potential participants were solvent enough to be trusted with any money, so the plan is off the table at least for this year. See The Buzz for the details, Citizens to abandon loan program for private companies, floats new ‘clearinghouse’ idea. (How do I know Goldman Sachs was paid a lot of money when the article doesn’t say? Simple: it’s Goldman Sachs.)

This of course has nothing to do with the increasing ethical quicksand gradually engulfing the management at Citizens in which we’ve learned that Citizens fired all four members of its “integrity team” while they were investigating allegations of sexual harassment, indecent drunken behavior in public, questionable payments and falsified documents. Things got so bad that Gov. Rick Scott said he wants Citizens Insurance to have an inspector general — think about it: there’s a state body so corrupt that Rick Scott thinks it needs investigating and cleaning up! That’s a scary concept. But do not fear, the earth still revolves around the sun: the Governor is in no hurry to do anything. So that’s alright then.

Posted in Econ & Money, Florida, Politics: The Party of Sleaze | Leave a comment

Lies and the Lying Liars Who Profit From Them

Rick Perlstein’s The Long Con: Mail-order conservatism suggests that lying in part of the DNA of the right-wing political movement.

I have a knee-jerk distrust of arguments (especially around election time) that seem so nakedly calculated to reinforce liberal biases, but the source commands some respect, and it is based on some research. Perlstein is the author of Nixonland, one of the rare truly great books about Nixon and his times. (Two other great Nixon books I’ve read are William Safire’s Before the Fall and Garry Wills’s Nixon Agonisties.) His piece is worth a read, and I say that as someone who pretty much stopped reading Crooks & Liars a couple of weeks ago because the constant theme about how absolutely everything the GOP does is dishonest started feeling tiresome and shrill. (I wouldn’t go over 50%, see how moderate I am!) Perlstein, though, is plausible and palatable:

It’s time, in other words, to consider whether Romney’s fluidity with the truth is, in fact, a feature and not a bug: a constituent part of his appeal to conservatives. The point here is not just that he lies when he says conservative things, even if he believes something different in his heart of hearts—but that lying is what makes you sound the way a conservative is supposed to sound, in pretty much the same way that curlicuing all around the note makes you sound like a contestant on American Idol is supposed to sound.

In part the New York Times had it right, for as much as it’s worth: Romney’s prevarications are evidence of simple political hucksterism—“short, utterly false sound bites,” repeated “so often that millions of Americans believe them to be the truth.” But the Times misses the bigger picture. Each constituent lie is an instance pointing to a larger, elaborately constructed “truth,” the one central to the right-wing appeal for generations: that liberalism is a species of madness—an esoteric cult of out-of-touch, Europe-besotted ivory tower elites—and conservatism is the creed of regular Americans and vouchsafes the eternal prosperity, security, and moral excellence of God’s chosen nation, which was doing just fine before Bolsheviks started gumming up the works.

Perlstein makes a convincing case that lying is a core part of how the permanent campaign class of the GOP, from Richard Viguerie to NewsMax to Anne Coulter, milks its base. Where we may part company, though, is when he also argues that this is how the elite in the GOP rolls, pointing to what he calls a “curious fact”:

—for all the objections that conservatives have aired over Romney’s suspect purity in these last months, not one prominent conservative has made Romney’s dishonesty part of the brief against him.

Is that right? It seems to me that the Eleventh Commandment broke down quite badly in the primaries. Consider this video:

Some of the right-wing spin machine are probably in it just for the money; but that’s probably the case with most long-running political movements. Some others are true believers, whether well-informed or prisoners of the self-referential epistemology that Perlstein points us to. Some of the billionaire funders may be operating on self-interest rightly understood. And some of the above are Straussians, actualizing the philosophy that the way to talk to — to lead — the masses is to lie to them. Romney doesn’t come off sounding like like a true believer, which is odd as his policies surely serve his self interest. That invites us to place him in another one of the categories. Perlstein says Romney is lying because that is what his backers expect. I suppose it could be, as Perlstein’s account would lead us to believe, that Romney’s lie parade is some dog-whistle style pitch to fellow Straussian would-be overlords, but if so it’s certainly not being done with much finesse, nor despite a generally stenographic mainstream press does it seem to have wowed the voters.

I hope.

[Instant Update: fixed the title of Safire’s book!]

Posted in Politics: The Party of Sleaze | 7 Comments

Romney at 917 Campaign Falsehoods…and Counting

Steve Benen, Chronicling Mitt’s Mendacity, Vol. XLI:

In a way, I blame my friend Greg Sargent. In the first week in January, he noted, almost in passing, that Mitt Romney seemed to be making a lot of false claims, and someone “really should document them all.” That struck me as a good idea, so I decided to tackle this on my own.

After all, I thought at the time, how hard could this be? Once a week, I’d let readers know about Romney’s whoppers, which I assumed would total about a half-dozen a week, and maybe after the election, I’d do a top 20 list of my favorites. The project would be a nice little Friday-afternoon feature.

Little did I know at the time that Romney would become an ambitious prevaricator, whose rhetoric would come to define post-truth politics. Nearly 11 months after Greg Sargent’s harmless suggestion, I’ve published 40 installments in this series, which, before today, featured 884 falsehoods. (If you include today’s edition, the new total is 917 falsehoods for the year.)

I wish that were a typo. It’s not.

On track for an even 1000 by election day?

Posted in 2012 Election, Politics: The Party of Sleaze | 5 Comments

Florida Files 11 Ethics Charges Against Rep. David Rivera

The state of Florida “has filed 11 separate ethics counts against U.S. Rep. David Rivera, R-Miami — all stemming from actions he took while he was a member of the state Legislature.”

Given that Rivera left the state legislature about two years ago, and many of the facts were reported in newspapers a long time ago, you might wonder what exactly took Florida so long to file the charges.

Meanwhile, you now have eleven more reasons to vote for Joe Garcia to replace David Rivera in Congress.

(Wow – Wikipedia has a whole section on Rivera’s peccadillos. Lots there besides the subject of this ethics complaint.)

Posted in Politics: The Party of Sleaze | Leave a comment

Citizens Insurance to Use Our Premiums to Make GIFTS to Private Insurance Companies

The biggest local scandal of the week isn’t that a key witness in the latest David Rivera corruption case has vanished — shortly after being seen speaking with Congressman Rivera himself. That’s a doozy, but, no, the biggest scandal is a ballsy ripoff of insurance premiums paid in by Florida homeowners to state-sponsored home-insurer-of-last-resort Citizens Insurance Co. that is to be repurposed for the benefit of Republican crony capitalists.

Yes, while the Miami Herald front page was trumpeting the putative end of a relatively trivial abuse — top officials at Citizens Insurance were treating the travel budget as an unlimited personal extravagance fund — the real ripoff, one more than a thousand orders of magnitude larger, was being reported inside the paper.

A little background before the, ahem, money quote. Private insurance companies with actual capital, the ones that advertise on TV (Allstate, GEICO), won’t write homeowners insurance in much of Florida because they are too afraid they might have to pay out if a hurricane struck. To fill this void, the state of Florida created a back-up insurance company called Citizens. Citizens is far from perfect: it started out vastly undercaptialized, its customer service is lousy, and its rates are have always been high. But despite all these, it represents a deadly threat to the Republican world view because it is an example of government stepping in and solving a problem.

In the past few years the Citizens management, appointed by Republican Governors, has followed the following strategies:

It so happens, however, that the weather has been kind. And thanks to its ferocious rate increases, Citizens faced the terrible prospect of solvency this year. Having said for many years that it would need at least $6 billion in reserves to deal with an Andrew-sized disaster, Citizens reached that goal. Only someone who did not understand the Florida GOP would think that Citizens would react by cutting prices, or at least halt price increases. No, rather than congratulate themselves on their fiscal prudence, the Citizens board decided it would raid the piggy bank — or rather, hand over parts of it in gifts to its well-connected friends.

Here’s the money quote I promised you:

Citizens would take capital from its record $6.2 billion reserves and lend it — under favorable terms — to private insurers who agree to take over policies and keep them for 10 years.

The 20-year loans require interest-only payments during the first three years and are forgivable, in part, if hurricanes hit the state. Citizens acknowledges that the interest rate of about 1.6 percent “does not approximate the true market rate” for similar loans and that Citizens could be left unpaid if an insurer goes belly up after receiving a loan.

Critics, including several state lawmakers, called it a “sweetheart deal” for insurance companies and “corporate welfare” funded by the premiums collected from Citizens’ customers over the past several years. With no hurricanes hitting the state since 2005, Citizens has saved up a massive treasure chest of $6.2 billion, money that private insurers find attractive.

“I sat here and listened to the board today give out one of the biggest bailouts. Corporate welfare, I call it,” fumed Sen. Mike Fasano (R-New Port Richey), blasting Citizens for quickly approving the controversial plan without legislative input.

The plan, which was unveiled to the public on Thursday, was approved by the board on Friday in a unanimous vote.

Got that? Loan the money at below-market rates to unercapitalized private insurers on the grounds that by taking over some Citizens policies they reduce Citizens’s risk. But if in fact the private companies have to pay out — the risk that Citizen is supposedly reducing — then they can keep the money! So Citizens’s risk isn’t reduced at all…or at least not very much (depending on the details). This is not only immoral, but a vast dereliction of the fiduciary duty to the state and to the insured. But that’s business in Tallahassee. I bet we’ll see some of these new insurance company moguls on TV explaining how they built their own businesses, and complaining about how hard taxes make it for them to be entrepreneurial.

And let’s not forget this bit from the other day:

The proposal mirrors one presented in July by a lobbyist for Tower Hill Insurance, which currently insures more than 300,000 policies in Florida. Tower Hill and another insurer that lobbied for the program have already indicated that they would take over more than 180,000 policies if Citizens provides a multimillion-dollar incentive.

Tower Hill and other insurers interested in receiving a low-interest loan funded by Citizens’ surplus have committed to raising rates no more than 10 percent per year during the loan’s interest-only first three years. After that, rates could go up further.

“The insurance companies have hit the lottery,” said Rep. Frank Artiles, R-Miami. “They get no competition, they circumvent the Legislature and they get exactly what they want. “This is a classic Tallahassee get-rich-scheme that has bitten us in the butt before.”

Artiles contended that the program’s eligibility rules were written in ways that exclude all but a few privileged insurers, which are represented by Florida lobbyists.

But of course. No wonder the public got one day’s notice of the plan before it was rushed through.

Posted in Econ & Money, Florida, Politics: The Party of Sleaze | 3 Comments