On February 8th, Public Citizen, the National Resources Defense Council, and the Communications Workers of America sued the federal government, alleging that the President exceeded his constitutional authority and violated the Administrative Procedure Act in issuing Executive Order 13771 on Reducing Regulation. The Order directs “executive” agencies to identify for repeal two existing regulations for every new regulation proposed or issued and to ensure that the net costs of any new regulations in combination with repealed regulations not exceed zero. The suit argues that the Executive Order distorts the administrative process by requiring administrative agencies to focus exclusively on costs as opposed to the benefits of regulations, and that only Congress has the authority to direct agencies to prioritize reducing costs.
The legal issues involving President Trump’s travel ban executive order are fascinating and complex. But equally significant have been the President’s attacks on the judiciary. It is one thing for a President to say that he disagrees with a ruling, that he has confidence in the constitutionality and legality of his actions, and that he is instructing his attorneys to appeal—but that is not what Trump has done. Instead, he has attacked the district court judge who issued the nationwide temporary restraining order as a “so-called judge,” he has called the Ninth Circuit opinion denying a stay “disgraceful,” and he has urged people to blame the judiciary if “something happens.” These kinds of statements reflect a dangerous attack on the very legitimacy of an independent judiciary.
By Alexander Dill
Clearing Corporation Charitable Foundation Practitioner in Residence
Last Friday, February 3, nearly two weeks into his term, President Trump issued a directive to revamp financial market regulation, aimed squarely at the Dodd-Frank Act of 2010 without naming it but also encompassing the financial regulatory framework as a whole. The directive presents a vague framework in the form of several “core principles” that dovetail with Congressional Republicans’ complaints that regulatory burdens have crimped banks’ ability to lend, thus reducing business expansion and job growth. Among the core principles are the prevention of taxpayer-funded bailouts and the fostering of “economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures.”
However, Republicans’ claim flies in the face of the all-time high level of commercial and industrial lending since 2010, as pointed out by Jordan Weissman of Slate Magazine. It is possible that the true source of concern is the reduced return on equity resulting from the higher capital requirements, with historically low interest rates a contributing factor. These factors have hit banks where it hurts most – lowering profitability and depressing stock prices. If banks can return more capital to shareholders, with one estimate at $100 billion by the six largest banks due to potentially looser regulation, through buybacks and dividends, stock prices will increase. In fact, the market expected as much in its reaction to the President’s February 3 directive as bank stocks moved upward.
It has been over a week since President Trump nominated Neil Gorsuch to a seat on the U.S. Supreme Court. The widely respected and impressively credentialed Judge Gorsuch, currently sits on the United States Court of Appeals for the Tenth Circuit.
The nomination was met with the predictable outpouring of support from Republicans, while the response from Democrats has been more mixed. Democrat Senator Dianne Feinstein praised Gorsuch calling him “caring” and “obviously legally very smart.” CBS News reports that Senator Feinstein, the top Democrat on the Senate Judiciary Committee, did not promise a vote for Gorsuch but describes him as “impressive.”
America is a democracy, and a lot of my fellow Democrats seem to have forgotten that. Donald Trump got elected president of the United States, and he has been doing pretty much what he said he was going to do during the campaign. That’s the way democracies are supposed to work.
To be sure, they are also supposed to work through checks and balances. Democratic pressure on the President’s cabinet nominees is part of that. So also is the scrutiny given to the President’s immigration order by a panel of the United States Court of Appeals for the Ninth Circuit on Tuesday.
I’ve been involved in politics all my life. I’ve helped run mayoral campaigns in Boston and Atlanta, state representative campaigns in Boston and Atlanta, aldermanic campaigns in Chicago, and a national campaign in Kosovo. I’ve worked on the White House staff and on two transitions, the one from Ford to Carter and the one from Bush to Clinton.
Having run unsuccessfully for office myself (as the Democratic nominee against Mark Kirk for the U. S. House of Representatives in 2002), I know that all you have a right to ask for is an opportunity to be able to deliver your message. If it resonates with enough people you get elected. If it doesn’t, you don’t. I often said to my friends in Kosovo, Bosnia, and Iraqi Kurdistan, as I worked on various nation-building exercises there and wrote two books on Kosovo, the test of a democracy is not how well you win, but what do you do when you lose.
First, kudos to the Ninth Circuit Court of Appeals for livestreaming the oral argument. The technology was not perfect, but opening the hearing to all citizens represents a needed step toward transparency in light of the controversy engendered by the Executive Order.
Second, the panel was prepared and peppered both sides with tough questions. The judges, despite their different ideological leanings (Judges Canby and Friedland were appointed by Democratic presidents, and Judge Clifton by a Republican), bolstered the image of an independent judiciary committed to the rule of law.
Third, despite the risks of predicting votes based on questions in oral arguments, the panel in my view is leaning towards recognizing that the State of Washington enjoyed standing to bring the lawsuit. At least two of the judges seemed convinced that the State could sue in its proprietary capacity because of its allegations that state universities would suffer if students and professors could not get into the country. In any event, the DOJ attorney conceded that individuals and their families who were directly affected by the Executive Order had standing, so that even if the State of Washington could not bring suit, other plaintiffs could.
Fourth, on the merits, there was little discussion of the question of the Order’s inconsistency with the 1965 statute, other than apparent agreement that the statute only prohibits country of origin categorization with respect to granting immigrant visas, and the President’s Order reaches far more broadly.
It sometimes feels like no one has anything good to say about the Supreme Court confirmation process. Some lament its lack of substance. (Back when she was a law professor, Justice Kagan described it as “a vapid and hollow charade.”) Some worry it has become too partisan. (Just last spring, Chief Justice Roberts said that a “sharply political, divisive hearing process … increases the danger that whoever comes out of it will be viewed in those terms.”)
Despite these criticisms, something the confirmation process does quite well is to focus the nation’s attention on the idea of the rule of law and the values of an independent judiciary. Usually the discussion of these topics are little more than obligatory checkboxes for senators and the nominee prior to rolling up their sleeves and discussing the more contentious issue of constitutional interpretation and hot-button topics such as abortion and gay rights. But today, when people from across the ideological spectrum see the most basic principles of legal process and judicial independence under threat from the executive branch, what before might have felt like platitudes take on new importance.
An independent federal judiciary is an indispensable part of our system of checks and balances. One of the important purposes of checks and balances, as contemplated by the Framers, is to prevent the seizure by factions of Congress and the Executive Branch. Another is to prevent over-reaching by both branches of government.
At this point the Trump administration is not likely, for political reasons, to be checked by either House of Congress, so it is the federal judiciary that will have to do much of the heavy lifting. For that reason, we all should vehemently protest the President’s recent ad hominem attacks on two federal judges: the federal judge presiding over the Trump University case and the federal judge in Seattle who recently issued a temporary restraining order against much of the President’s executive immigration order. Though the Supreme Court is our last resort, the entire federal judiciary is our first line of defense and must be protected at all costs.
Early last Friday morning, using an unusual legislative procedure, the Senate voted to repeal a law that was part of Dodd-Frank. Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Act directed the Securities and Exchange Commission to issue rules requiring public companies (issuers) to include in their annual reports information regarding payments by that issuer to a foreign government, or the federal government, for the purpose of the commercial development of oil, natural gas, or minerals. This provision was only tangentially related to the heart of Dodd-Frank reforms. The purpose of this Dodd-Frank provision was to increase transparency, prevent corruption, and allow governments, across the globe, to be held publically accountable. In August, 2012 the SEC, as required, adopted Rule 13q-1, which immediately ran into hurdles.
During the 2016 presidential campaign, candidate Donald Trump promised both to curb and to eliminate the EPA. A Florida congressman is planning to introduce legislation to abolish the agency by 2018. Going nuclear against the EPA will not be easy and the counterattacks will be fierce.
The EPA was created in 1970 by President Richard Nixon by Executive Order. It gathered into a new agency the scattered, weak environmental laws delegated to the Departments of Agriculture, then Health, Education and Welfare and Interior. Most foundational environmental laws enacted between 1970-1980 were assigned to the EPA for implementation and enforcement.
The President’s power to abolish agencies falls under government reorganization acts that trace back to the New Deal. The last one was enacted in 1977, before the Supreme Court invalidated legislative vetoes, so the current thinking is that the President must ask Congress for authority to abolish an agency. Even assuming that the current Congress grants the authority, then the fun starts. The air, hazardous waste and water pollution laws that EPA implements and enforces cannot be abolished by the Executive; the Constitution clearly grants that authority exclusively to Congress.
Does the Republican controlled Congress really want to create that level of chaos? Stay tuned.