Friday, March 27, 2015

Judges, regulators often political, not neutral

Should presidents and governors select judges and regulators based on their political views?  Should they be able to direct their appointees in making decisions?

The answer to the first question seems obvious.  Because the elected chief executive is given the constitutional right to pick those who judge, a president or governor must be expected to select people sharing their political views.  That should make it unnecessary as well as unlawful to give them orders.

These days, decisions of a multi-judge federal court are usually accompanied by reports about the justices and the president who appointed them.  It is newsworthy when one party’s appointee votes with justices named by appointees of the other party.

Only one president appointed all the federal judges – George Washington.  He favored a strong central government, and it is likely all his appointees did as well.

Though he named political friends to the bench, he undoubtedly assumed that, because they formed the third branch of a government with checks and balances, they would be independent of his control.

And it did not take his appointees long to overturn decisions made by John Adams, the second president and Washington’s fellow Federalist, and assert the Supreme Court’s right to declare laws unconstitutional.  In one stroke, the Court asserted its independence from the executive and legislative branches.

While presidents and governors occasionally select judges and regulators based on their nonpartisan and independent wisdom or expertise, we have grown accustomed to courts and regulatory bodies looking increasingly like small and highly partisan legislatures.

Because most major federal cases pass through one of the regional courts of appeals and the Supreme Court, the political origins of their justices can matter.  Right now, a majority of these judges, though not on the Supreme Court, are Democratic appointees.

Most cases don’t involve ideological or political issues.  The public hears nothing about them.
Sometimes, even at the district court level, the lowest level in the federal setup, partisanship can crop up.  A political decision by a district court judge, who sits alone and not on a panel, can set the stage for partisan appeals.

Take the recent district court decision in south Texas, which overruled President Obama’s measures allowing some illegal immigrants to stay in the United States.

The case had been brought by Texas and many other states, including Maine.  They picked a district where the judge was known to oppose efforts to relax immigration constraints.

That’s called “forum shopping,” and, not surprisingly, the states won the first round of their case.  There’s no doubt the case will end up at the U.S. Supreme Court, where Republican appointees outnumber Democratic picks by five to four.

Sometimes, the political lineup indicates the outcome.  But not always.  Take Obamacare, where the Republican-appointed chief justice voted with the Democratic appointees to save the law.

Partisanship also crops up in regulatory matters.  The recent decision by the Federal Communications Commission to ensure equal access to the Internet and block preferential use for those who pay for it was only possible because a straight party-line vote.  The three Democrats outvoted the two Republicans.

In Maine, a recent decision by the Public Utilities Commission has raised the same kind of issues.  Electric customers are taxed to support energy efficiency efforts.  Was the tax supposed to be levied based on the full cost of electricity or only on the cost of the wires, the part of the cost regulated by the state?

The full cost approach would raise more money, probably the legislative intent.  But the words themselves clearly based the tax on wires alone.  This is a classic case, where language and intent may differ, and courts or regulators must decide.

Two PUC members, appointees of Republican Gov. Paul LePage, opted for the exact language and the third member, named by former Democratic Gov. John Baldacci, favored legislative intent.

Some critics saw the majority doing LePage’s bidding.  That’s undoubtedly unfair, but was probably raised because LePage has intervened inappropriately with other independent state bodies.  In this case, the majority decision was independent and defensible.

Incidentally, the exact same issue – language versus intent – has been before the U.S. Supreme Court in its consideration of whether Obamacare premium subsidies for the insured can be paid in states not having their own insurance exchanges. 

In the end, there’s only one way the political orientation of most judges and regulators can be influenced by the people – at the ballot box, by considering key appointments in voting for the president, the governor or legislators.  That’s seldom done by voters.

Friday, March 20, 2015

Policies suffer from leaders’ style -- weak or strong

Style matters in politics.  Political style is a matter of how politicians lead.

It is possible to suffer as a leader by showing too little personality or projecting too much.

President Barack Obama is a clear case of keeping his light under a bushel.  Because of projecting little or nothing of himself as a strong leader, he makes himself and his policies vulnerable.

Take Obamacare.  After several presidents failed to achieve a program to provide health care coverage to millions, Obama took advantage of a momentary, overwhelming Democratic majority in Congress to gain the passage of a national health insurance plan.

The program was passed without a single Republican vote and immediately came under attack.  The GOP realized that it could make an issue of Obamacare, because its complexity would allow Republican candidates to pull out touchy issues and attack them.

In the 2010 congressional elections, the GOP campaigned against Obamacare, but Obama was nowhere to be seen in defending it.  Since then, he and his party have done little to campaign in its support.

A couple of weeks ago, the nonpartisan Congressional Budget Office announced that Obamacare would cost 11 percent less than originally forecast.  That’s because health insurance premiums are rising more slowly than foreseen.

Have you seen the Democratic television ads touting the millions of increased signups and the decreased cost?  Of course not, because they have never been produced or aired.  The result is that Democrats, lacking Obama’s support, sometimes run away from the program.

The Republicans have been successful in turning majority opinion against Obamacare, because it lacks the president’s vigorous and persistent defense.  He did not mention it once in this year’s State of the Union address.

In foreign policy, Obama has provided massive aerial support in the conflict against the Islamic State.  The American contribution has been critical in turning back the tide of the terrorist advance.

But he has done little to wave the flag demonstrating to Americans and allies that the United States is committed to defeating the Islamic State and that it leads a coalition making real progress on the ground.

Oddly enough, he walks the walk but doesn’t talk the talk, just the reverse of many public figures.  That opens the door for unfounded claims he doesn’t love America.

Obama has also fallen short in the easiest of leadership responsibilities – directing his own troops in Congress.  He has difficulty in building support among Democrats, because he takes what seems to be a hands-off approach to dealing with them on key bills.

The president comes across as a cool intellectual in a country yearning for a leader to provide a national rallying point.  Many people believe that a strong country demonstrates its power through the governing style of its leader.  Obama’s style undermines that sense of leadership.

If Obama’s style is too restrained, Maine Gov. Paul LePage is just the opposite.

Unlike Obama, he does not want the Legislature to operate independently, but treats it as if it is meant to be subordinate to the governor.  He more often bullies it rather than cajoling it into supporting his proposals.

Increasingly, observers wonder if he recognizes the difference between being the chief executive officer of a private corporation, which he was, and only the head of one branch of state government.

Take his recent tax reform proposal.  It is a bold, new look and includes at least some changes worth considering.  Like virtually any other government proposal ever made, it won’t gain enough support to be adopted exactly as presented, but, through compromise, some key elements could be enacted.

Instead of working with legislators to fashion compromises that could advance his ideas, LePage, obviously believing his electoral victory last year gives him extraordinary powers, threatens to campaign against legislators, including those of his own party, who do not go along with him.

That stance could poison the political atmosphere, undermining both his proposals and public confidence in state government.

Because of a relatively minor difference of emphasis with the immensely successful head of the state community college system, LePage threatened to withhold necessary funds for the colleges unless their leader was ousted.  The governor won.

And he forced the Legislature to break an approved deal with Statoil, one of the world’s largest corporations.  He was willing to use unusual and short-sighted political clout to sacrifice the state’s drive for new business investment.

Somewhere between Obama and LePage, there’s a political style needed both to build public confidence in government and promote respect for its leaders.

Friday, March 13, 2015

Opposition motto "just say no"; nothing gets done

“Just say no.”  That anti-drug campaign response coined by First Lady Nancy Reagan has become the motto of opponents of government policy.

Critics can reject a policy without proposing an alternative.  Their aim is to stop government action, not to solve problems.

To avoid the label of being nothing more than naysayers, opponents may claim they are offering an alternative, though they know it is either impractical, impossible or both.

The obvious recent example was the speech by Israeli Prime Minister Benjamin Netanyahu before a joint session of Congress.  His purpose was to use an American national platform to reject the unfinished nuclear negotiations between the United States plus five other world powers with Iran.

The goal shared by the so-called “five plus one” countries and Israel is to block Iran from gaining nuclear weapons.  The Iranians claim that they only seek peacetime uses of nuclear energy but almost nobody believes them.

Netanyahu argued there should be no deal with Iran, even if it froze its nuclear development for at least 10 years.  His alternative, without providing any assurance that it could possibly work, is to break off talks immediately and keep pressing Iran so that it gives up any chance for nuclear energy.

His optimism about the effects of squeezing Iran is shared by no world power.  Breaking off the talks could leave only the option of a military attack on Iran to destroy its facilities.  That amounts to the Israeli Prime Minister saying to the U.S.: “Let’s you and them fight.”

That alternative is obviously unacceptable.  In the absence of a realistic alternative, Netanyahu’s position amounts to “just say no.”

Why did the Republicans invite him to speak?  They knew he would attack President Obama’s negotiating policy, giving them yet another way of undermining the president.

How about U.S. immigration policy?  Opponents of allowing most of the illegal immigrants to remain in the country offer no alternative about what to do with them.  Instead, they insist the government must first seal the borders.

That’s not an alternative when it comes to those already in the U.S., and it is impossible.  So the opponents’ response amounts to saying that matters should be left in their currently confused state without even trying to resolve the problem.

One answer might be to throw out as many of them as possible.  That’s just what the Obama administration has done by deporting two million immigrants.

The Affordable Care Act – Obamacare?  House Republicans have voted more than 50 times to repeal it without providing an alternative for the millions of people unable to find reasonably priced health insurance.

The only alternative half-heartedly advanced is to retain coverage that people have gained under Obamacare temporarily and then leave it to the states to come with health care insurance plans.   Opponents must know that many states will do nothing.

Not all the “just say no” fault lies with the GOP.  Take the Keystone XL pipeline.

Though the now-completed government review has taken many years instead of the usual several months, Obama is still hiding behind the regulatory process and refusing to make a decision.  It seems clear he is against it.  Congress has tried unsuccessfully to force the hand of man seemingly determined to leave no fingerprints.

The threats worrying Obama already exist; other pipelines transporting Canadian fuel into the U.S. carry the same kind of oil.  And there is an alternative to Keystone: far more dangerous rail transportation of oil.  A fuel train derailed just last week.

The ‘just say no” policy may be producing a worse result than allowing Keystone XL, which has developed into an environmental rallying point more than constituting a major new threat.

None of this “just say no” discussion is meant to take sides on the substance of the issues.  Maybe there are better outcomes than are now foreseen for Iran, immigration, health care and oil pipelines.

But Americans will never get to work out the best solutions to the problems to the issues they raise so long as opponents insist on playing “gotcha.”  These issues are not merely matters of political debate.  The political system needs to produce results.

Policy makers should understand that no solution is perfect and that people want workable compromises, not endless and sometime dangerous political battles.

Perhaps it is time to show some courage and repeat what House Speaker John Boehner did on immigration: put together coalitions to produce results regardless of party.  He was willing to pass a bill depending on votes of both parties, not only the majority Republicans.

Friday, March 6, 2015

Risky gamble in setting taxes, spending

Chances are good that most people missed a major change in national economic policy last month that could effect everything from taxes to spending.  In other words, your wallet.

The issue is how the government calculates the future effect on both the economy and the government budget of bills proposed in Congress.  Obviously, bills with either a projected positive effect or no effect would have a better chance of becoming law than those imposing added costs.

It boils down to something called “scoring.”  In other words, what’s the economic score, winning or losing, from a piece of legislation?

Scoring is based on the rules of the game.  Just as those running any sport can alter its rules, Congress, too, can change the scoring rules.  In this case, changing the rules of the game can change the game itself

Until January, the Congressional Budget Office, the outfit doing the forecasts, used what is called “static scoring.”  It assumed no change in the economy – it would remain static – when the government raises or lowers federal taxes or government spending.

A simple way of calculating the impact, it simply eliminated the need to study what the effect of a measure would be on the economy.  It would look only at the resulting impact on government revenues and expenses.

If, for example, a tax cut was proposed, static scoring would project how much revenue would be lost.  If spending was boosted, it would forecast how much more revenue was needed.

Static scoring does not provide an accurate picture of future effects.  A tax cut might stimulate the economy, which in turn can increase tax revenues.  While it is unlikely that tax cuts can completely pay for themselves, it is likely that the cost of a tax cut can be reduced by the revenues resulting from increased economic activity.

Different measures would have different effects.  A corporate tax cut would produce a different effect than reducing government outlays used to stimulate the economy.  But static scoring could make them seem equivalent by counting only the amount of dollars in each change and not their long-term economic effect.

Now in control of both houses of Congress, the Republicans have ordered a change in the scoring method.  The new approach is called “dynamic scoring.”

Dynamic scoring will look at the effect on the economy of a proposed change in federal revenues and expenses and try to take into account resulting federal tax gains or losses.  To do this, the proposed change will be run through an economic model of the American economy.

For example, corporations say their federal tax rate is too high, making them less competitive in the world.  What would happen to economic growth, possibly bringing in more federal revenues, if that tax were cut?

The answer obviously depends on the model.  That’s the problem.  Just as static scoring with no complete model did not study economic effects, dynamic scoring can be influenced by the design of the model itself.

The other problem created by using dynamic scoring is that effects must be measured over a span of years.  But much can happen in the future that the CBO cannot possibly know.

Congress itself could tinker with the proposed change, almost inevitable in a tax system under which there are more holes than cheese.  And new ones are added every year.

And what about changes in the economy itself unrelated to the change in government policy?  These now-unknown changes could greatly influence how the policy plays out.

Republicans may justify tax cuts by finding their future impact on the federal budget is less than it might appear.  Democrats won’t agree, because they distrust the model.

The new scoring method is a gamble on the future.  It can allow more tax cuts or more spending, but nobody can be sure of really understanding future effects.

Neither the now abandoned static scoring nor the new dynamic scoring can provide more than a guess about the effect of proposed changes in federal taxes and spending.  But the new approach is somewhat riskier than the old one.

Does the same situation apply in states?  No, because all states except Vermont have some kind of balanced budget requirement.

That means, at the state level, every tax cut or spending increase must be immediately balanced by other measures that keep the budget from falling into a deficit.

While the possible future impacts may influence legislators’ decisions, this is the ultimate in static scoring.  The budget offset is not based on future developments; it exists right from the start.