15 Jul It’s Congress’s Fault*

It’s Congress’s Fault

America’s Constitutional system provides for a sharing of power among the three branches of Federal government: the executive (the President); the legislative (Congress); and the judicial (the courts and, ultimately, the Supreme Court). Each branch has the primary responsibility for a different set of specified tasks … and each is intended to coordinate with the others to ensure that the actions taken by one branch do not overstep the boundaries set in the Constitution. There is nothing in the Constitution or elsewhere, however, that prevents a branch from failing to fulfill its responsibilities. The consequences of failure are supposed to be faced at the voting booth at re-election time. However, with gerrymandered voting districts, most Congressmen/women are now insulated from defending their performance at the voting booth.

Article 1 of the Constitution enumerates the powers delegated exclusively to Congress. Those powers include the power to tax, to spend, to borrow, and to declare war.

Congress has exercised its power to tax by enacting and interminably amending the Internal Revenue Code. The taxes imposed by the IRC provide the money that allows Congress to budget and spend on those programs it determines are in the best interest of Congress America. That’s because Congress has the exclusive authority to tax and to spend (although the President must agree with both in order for Congressional enactments to become law … unless, that is, the President is overruled by a Congressional super-majority). Unfortunately, Congress hasn’t enacted tax laws that bring in enough revenue to fund the programs it has chosen to spend money on. The result for the past number of years has been enormous Federal budget deficits.

Why has Congress decided to tax too little and spend too much?

Because doing so buys votes.

The goal of those elected to Congress has not been to tax appropriately and spend prudently, but rather to get re-elected … and that’s been an unfortunate truth for members of both parties … a terribly unfortunate situation that has thrived persisted under several Presidents.

The budget deficit for the current fiscal year is expected to exceed $1 trillion.

That’s $1,000,000,000,000!

That means that Congress has decided (together with the President), intentionally to spend $1 trillion more than the Federal government takes in. Congress instead could have chosen to fund its spending by taxing more … or it could have chosen to spend less by cutting back on earmarks and/or voter-sensitive wasteful unnecessary certain programs. However, had Congress chosen to do so, that would have been too horrible to seriously consider cost re-election votes. Members of Congress may be assuming that there’s unlikely to be a budget crisis until they retire, so what the heck … or else be relying on the hope that Modern Monetary Theory is more than merely a harebrained theory. In any event, what they’ve decided is not to deal with either the tax or the spend problems … contrary to what responsible members of America’s Constitutional government ought to be doing.

Are there any easy fixes to increase tax collections? It appears that at least one exists: The Internal Revenue Service estimates that more than $450 billion in taxes is evaded underpaid every year. It would appear easy for Congress to halve the budget deficit by ensuring an appropriate tax-collection mechanism … or at least take steps that lead dishonest taxpayers to so fear being caught that they report and pay the correct amount of taxes. Unfortunately, Congress decided some time ago that it is smart politics to underfund the IRS and its tax collection machinery … because the IRS is extremely unpopular with voters … and especially unpopular with those voters who provide members of Congress with their largest re-election contributions. Underfunding the IRS has not reduced Americans’ disdain and distrust of the tax system … although it has led to an increase in the number of taxpayers blatantly creatively ignoring paying their proper taxes. No surprise there.

All Americans were shocked and disappointed when they learned that Bernie Madoff had been able to pull off a brazen Ponzi scheme under the very noses of the Federal agency that was charged to protect Americans from precisely such frauds. They shouldn’t have been the least bit surprised. Congress has gutted the budget of the watchdog – the SEC – that was supposed to monitor Madoff. In part, the SEC is handicapped by the complex web of laws enacted by Congress (and signed by various Presidents) that have created an almost impossible tangle of legal, regulatory and accounting requirements that few even at the SEC can comprehensivelyfathom and tarmies of lawyers and accountants are required to decipher … at great cost to the American economy. And, yet, Congress has underfunded the SEC … and continues to do so, hobbling efforts to enforce those very laws. After the Madoff scandal, Congress pressured the SEC with great fanfare to require all investment advisers, including prospective Madoffs, to register with the SEC and be subjected to a variety of obligations. This required both the many good … and the relatively few bad … investment advisers to undertake truly enormous legal and accounting burdens. All investment advisers, both the good and the crooked bad, thereafter were to be audited by the SEC within 12 months of their registration and every 3 years thereafter. That was how the bad guys were to be caught. Why bother to require America’s private investment management industry – the world’s leader – to incur burdens in the first place if not to catch the bad guys … right? Unfortunately, because the SEC is so underfunded, SEC investment adviser audits lag years and years and years behind. Shouldn’t Congress understand that enacting laws that look good on paper and yet are hobbled by the failure of Congress to fund their enforcement only encourages the bad guys?

Congress has the responsibility to tax and to spend. In addition to under-taxing, it’s been underspending on those things it has prioritized and burdened American industry with. Conversely, it has overspent on the wrong many other things. This has led not only to enormous budget deficits, but also to a disdain for America’s laws and for the Federal agencies entrusted to enforce them … and, worse, a recognition by the “bad guys” that the laws that are intended to catch them … don’t.

The system is broken and it’s Congress’s fault. Only a bipartisan committed Congress can fix the problems it’s created (of course, with the President’s help).

During America’s 243-year history, Presidents from time to time have tried to usurp Congress’s Article 1 powers. Perhaps the two most notable examples of misappropriation usurpation of Constitutional power are those involving war powers: the Korean War “police action” undertaken by President Truman; and the Vietnam War “police action” authorized so to speak by President Johnson, both without the required Congressional declarations of war. Although President Trump hasn’t yet taken any similar unilateral war-like decisions, he has engaged in a broad range of unilateral actions that challenge the delegation of Article 1 powers to Congress … with the apparent goal of establishing a stronger, Imperial Presidency. Thus far, Congress has been tacitly acquiescing in the usurpation whittling down of its Article 1 powers – that is, it has been derelict both in its responsibilities to tax and to spend … and, by October 1^st, to borrow … and in protecting its exclusive Article 1 powers from Presidential encroachment. To the extent a President’s attempts to arrogate power to the executive branch create adverse consequences for America or Americans, it falls on both Congress and the courts to exercise their Constitutional authority to restore the balance of power. The courts have been doing precisely that in an unprecedented number of cases involving actions taken by the Trump Administration. These include but are not limited to attempted rollbacks of Environmental Protection Agency regulations that were issued in defiance of existing legislation (in which the Trump Administration’s efforts have been overturned by the courts in ~95{29ea29b64b10057f61377b2c087cd5b7537a0cd24da4295a308b0bf589469f35} of the cases litigated to-date), President Trump’s attempted ban on transgender soldiers serving in the military, President Trump’s attempts to withhold Federal grants to sanctuary cities, President Trump’s attempted cancelation of DACA, President Trump’s initial attempts to ban travel to the U.S. from certain Muslim-majority countries, the Trump Administration’s efforts to undercut funding for Obamacare, President Trump’s attempt to de-credential a reporter, the Trump Administration’s efforts to trim the rights of Federal employees, its attempts to change the rules on predatory lending to students, and the President’s efforts to selectively block access to his Twitter account. The most recent judicial headline involved the Administration’s attempt to include a question about citizenship status on the 2020 census form. That question reached the Supreme Court, which held that there was no legitimate rationale for the Administration’s proposed question. President Trump’s initial reaction was to state that he would defy the Supreme Court’s ruling, and he publicly speculated about how he might do so, threatening to (1) issue an unConstitutional executive order mandating inclusion of the question on the census form or (2) ordering the Administration’s legal team to concoct a new excuse pretext explanation that would then wind through the courts a second time in the hope that the Court might change its mind … even though Wilbur Ross, the Secretary of Commerce, previously had told the Court that the concocted reason was the Administration’s sole rationale. President Trump ultimately capitulated (although the President will require federal agencies to create a database outlining the number of U.S. citizens and non-citizens).

The Federal courts have been fulfilling their Constitutional obligation of ensuring that the executive branch doesn’t overstep the bounds of American democracy. Congress, however, has not.

To the very significant extent that America’s government is malfunctioning, it’s not the fault of the courts. It’s Congress’s fault. Congress is consistently stepping back from its Constitutional obligations. The powers allocated to each branch of American government are a cornerstone of America’s democracy. Their proper exercise is essential to ensuring its durability. Whether you’re a “strict constructionist” or favor a “judicially active Constitutional constructionism” (however various Constitutional scholars define either concept), America’s democratic system requires that there be a balance of power among the three branches of government. In 1788 in the Federalist Papers, James Madison warned: “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”

In order to exercise executive authority, a President must rely on laws enacted by Congress. Except in times of war, the Constitution gives Presidents little power to do anything other than enforce those laws. A president cannot enact laws himself or take actions that are inconsistent with or in defiance of those laws. Prior TLRs have addressed the authority of a President, any President, to issue executive orders that defy a Congressional or Constitutional mandate, such as the one attempted with respect to the census. President Trump also has denied the authority of Congress to secure testimony and documents to investigate whether his actions violate the law and/or the Constitution. Congress’s failure to confront these issues on a collective, bipartisan basis, as well as the terribly difficult tax and budget problems facing America, undermines the Constitutional balance. Any such failure will be used by future Presidents, whether Republican or Democratic, to enhance executive power and sideline Congress. Republicans in Congress were correct in challenging President Obama’s abuse of executive orders in his various attempts to stifle Congressional authority. They were correct in criticizing the Obama Administration’s selective enforcement of laws. And Democrats are correct in challenging President Trump’s broader attempts to do the same.

The partisan politicization of everything Congressional – together with the corrosive Congressional re-election game – weakens lawmaking and the balance of power in America … and of democracy itself. Budgets – the sole purview of Congress – are out-of-control, bedeviled by partisanship, lobbying, and the self-interest of members of Congress. Laws enacted without adequate funding cannot be enforced by the executive branch … whether the President then in office is a Republican or a Democrat. Prior TLRs have addressed America’s overly-complicated tax system … and the purposeful underfunding of the IRS. Similar problems exist with respect to America’s complex securities laws … and with Congressional underfunding of the SEC and other Federal agencies. The list is long, and the consequences pernicious.

It is America’s democracy that’s at risk … and it will be Congress’s fault if the system fails … as it is may well be in the process of doing today.

Finally (from a good friend)

Wife – “Where the heck have you been? You said you’d be home by noon!”

Husband – “I’m so sorry Honey … but you probably don’t want to hear the reason.”

Wife – I want the TRUTH, and I want it now!’

Husband (sighing) – “OK. Fine. We finished the round in just over 4 hours and I had a quick beer in the clubhouse, hopped in the car, and would have been here at 12 on the button. On the way home, I spotted a girl half our age struggling with a flat tire and I naturally stopped to help her. I changed the tire in a jiffy. She was very thankful and offered me money. Of course I refused it! Then she tells me she was headed to the bar at the Sheraton – and begs me to stop so she can buy me a beer. She’s such a sweetie that I said yes. Before you know it, one beer turned to three or four, and I guess we were looking pretty good to each other. Then she tells me she has a room at the Sheraton less than 50 steps from our table. She took me by the hand and suggested we get some privacy. I tried saying no, but she was insistent. Now I’m in her room … clothes are flying in all directions …. the talking stopped … and we proceeded to have sex in every way imaginable. It must have gone on for hours, because before I know it the clock says it’s 5:30. That’s when I jumped up, threw my clothes on, ran to the car, and here I am.”

The Husband paused for breath, then added – “There. You wanted the truth … you got it.”

Wife (screaming) – “LIAR!!! You played 36 holes, didn’t you!”

*┬® Copyright 2019 by William Natbony. All rights reserved.