Can The Executive State Be Tamed?


This program is brought to you by the James Wilson Institute on Natural Rights in the American founding. If you'd like to learn more about the James Wilson Institute these visit James Wilson Institute Dot Org. We hope you enjoy the program title. This morning is in the executive state detained. I try to give you my answer but I'll I'll say that if it is to be tamed. There's only one agency that could possibly do it. And that is the other political branch of the federal government the Congress and so into the spirit of the election season when everyone is speculating. What will the Republicans do if they capture the Senate and hold onto the house? I want to do an elaborate. A thought experiment. The talk in Washington is that the Republicans in a time if they do prevail in In now November we'll pursue a positive problem solving agenda and I think what this means is that they will pass some bills that President Obama could sign and therefore demonstrate that Republicans can get things done and pass some other legislation that he would bound to veto and therefore give a harbinger of better days to come if they should win in two thousand sixteen. The White House. I think that that would have serious. Potential Times of fully divided government can be both highly partisan and highly productive witnessed. The last couldn't years which saw an impeachment trial and The first and only balanced budgets that we had in many decades or since and also created to a Republican sweep For that party in two thousand but I have something different in mind if the Republicans wanted to in addition They could do something of transcendent importance. And that would be to reverse Congress's institutional decline and begin to replace restore the position of the elected legislature. It's vital position in our constitutional scheme. The decline of Congress Requires some words get his been masked in recent years by the Obama? Administration's aggressive acts. A unilateral autonomous while making revising. I by the press release or email important provisions of the Obamacare Act Several Welfare Labor Immigration Education Environmental Statutes of the Constitution Clear appointment requirements. Many of these acts have been unconstitutional. The courts of blocked some of them. They have exceeded to a few others with obvious. Great Reluctance But in most cases the actor immune from legal challenge because nobody has the Standing that demonstrate tangible personal Harms to bring a suit and so the. House has now approved a lawsuit of its own at constitutional suit throwing itself on the Bercy of the Courts Casting Congress. A pitiful helpless giant an innocent bystander to presidential use of patients. Well Congress is not innocent Congress has been and continues to be an active partner in transferring legislative power to the executive branch since the early Nineteen Seventies. It has a debt established dozens of agencies such as the Environmental Protection Agency That have unilateral authority to enact sweeping costly contentious national laws under very vague statutory standards in recent years Obamacare and Dodd Frank of established new standards of Congressional Delegation of lawmaking power providing a fleet of new agencies and committees and councils with sweeping legislative most dramatic abdications of involve taxing spending and borrowing These powers you can read them right there. In Article One section eight and section nine. They are specific. Planetary exclusive the linchpins of Congress's position in the balance of powers Congress now appropriates only thirty percent of federal spending. The rest seventy percent is interest on the debt in Small Park but mostly on entitlement spending the proceeds without any congressional authorization for appropriation from year to year and in almost all year. Congress doesn't appropriate the thirty percent either because of the utter collapse of its budgeting procedures. It has not passed Full the full twelve appropriations bills in many years. A new fiscal year begins next week. Needless to say Congress is not SPEC passed a single propagation out for fiscal year. Two Thousand Fifteen things get rolled up into these enormous blunderbuss continuing resolutions controlled by the party. Hierarchies Congress Has a strong propensity to spend much more than taxes and the result is continuous annual deficits deficits. And that's a separate kind of delegation delegation to future citizens and Congress's who are going to have to figure out somehow some way to pay the costs of today's mounting debt. An issue I talk about an article. That heavily has distributed. But in the meantime this propensity of continuous deficit spending has also led. Congress to transfer tax spending and borrowing powers with the Constitution gives to it alone downtown to the executive agencies. It has recently handed several in the past ten twenty years several agencies to set the power to set and collect their own broad based taxes the FCC runs eight nine billion dollars a year quote Universal Access Fund which provides subsidies for a grab bag of worthy causes rural health clinics for example and now subsidies to people who attest online that their income is below a certain level can get iphones and the rising accounts at super bowl cost. This is funded by a tax that it sets and collects by itself it just sit on a quarterly basis to keep track with its Spending designs. The ways and Means Committee would love to be able to do that. The Public Company Accounting Oversight Board called peekaboo sometimes which was set up by the two thousand and two Sarbanes Oxley Act. It supports itself with a corporation tax to cover its annual budget. It takes its budget for the year has a spreadsheet with all of the public companies in the country weighted by their current asset values and it just punches it in and it divides the bill and it sends them all. And if you don't hey what they call a contribution. You can't have your books audited. So it's pretty powerful incentive to Contribution much has been said about the dodd. Frank Act Newest Regulatory Agency the consumer financial protection. Bureau it is not financed by its own taxes rather it gets a automatic share a draw from the profits of the Federal Reserve Banks these prophets which are collected from Banks in the course of conducting monetary Operations AREN'T IMPLICIT TAX. After cracking its own operating costs at turns them all over to the Treasury Department is General revenues. But now before that happens it also gives an automatic cut to this new bureau a cut that with otherwise supporting other ongoing Government programs so the way to think of this new departure financial independence for the executive branch is. It's an entitlement. It isn't entitlement not for Social Security. But an entitlement for a regulatory agency and it's a debt financed entitlement As well we set up a new agency we took money from other agencies and gave it automatically to this new agency The feds annual profits. This year will be well over one hundred billion dollars. It's operating costs are six billion and this year's cut for the consumer financial protection bureau is a half billion so that means there's lots of room for this idea of regulatory entitlements to grow the last surrender of its borrowing power has gone largely unnoticed and filled with irony. The borrowing power has been exercised since World War. Two by a debt limit. It used to be if the treasury needed to borrow money. They go up to the hill. They'd have a little bourbon branch water. Talk it over. We have a war on our hands down in the Caribbean. We need to borrow money. How much what are the markets? Look like they'd sit down. They designed the debt instruments The congressman of has some ideas of some good people to contact for brokerage for the new issues and so forth that we had to raise a lot of money. Fast in the middle of rebel when we got into World War One. We had this limit where Congress can't borrow more than a certain amount and if it gets up to that limit you need more Come back to us. It's right there in the constitution. It's number two enumerated power. It's legitimate congressional prerogative but in a time of constance deficits growing debt. It's an impotent feeble. Prerogative because by the time we hit the lemon and need to borrow more. Congress has already authorized and appropriated the dollars authorized the taxing the creates the gap that creates the need to borrow more may not be this congress. The Tea Party people would say well. I never approved the stuff. I just got here. But Congress has appropriated these things it shows the vertical concatenation and when they try to use the debt ceiling as leverage. They always fail In recent years as the The house was unwisely tried to use the need to raise the debt ceiling as a lever to extract policy and spending concessions out of the Obama Administration. President Obama wisely rejected the Council of several legal pundits that he simply ignored the borrowing power ignore Congress borrow beyond the ceiling. We had an emergency on our hands. The Abbot President is to solve emergency. So go in there and ignore that riffraff over in the House and borrow it will. He turned that down but then when the dust settled last October November after the failure after the government shutdown. He'd been restored the house. First of all Chagrin at discovering yet again That the debt ceiling is not a good lever in days continuous but then faced with the prospect of voting for a debt ceiling which would have had to be over eighteen trillion to get through the elections in the fall that we don't want to vote for that. So what they did was they suspended the debt ceiling so the Treasury may borrow atwill to meet what believes to be. It's through a certain time and that time is now next March fifteenth. I think that if Congress is going to take back presidential encroachments such as we've seen and they're not just Obama. I could give a litany of George Bush's brazen encroachments on legislative power. If Congress is going to take these back it first has to recover the arsenal of powers that it's given up itself. These Republicans that will be controlling the congress if they if they win in November would seem to be just the people for the task especially with the new tea party. Inspiration of adamant. Constitutionalism is their new guide. Word they are devoted to the constitution but if they actually try the task of reasserting their powers that try is going to put their devotion to the test because Congress did not give up its constitutional powers by inadvertent gave them up by calculation. And if it's going to get them back we're going to have to have a new political calculus and a new political culture in the United States. Congress let me explain what I being my that the Constitution's powers are also responsibilities. The first responsibility of the legislature is what I will call collective choice that is making choices on matters of public importance and dispute in league with many others that have differing and often sharply conflicting interests and viewpoints. The politician tends to be gregarious and assertive at but has to Has To reserve those natural instincts to be legislature legislator. You have to suffer fools gladly. You have to settle for half lobes you have to make wretched compromises. You have to endure that treachery of your opponents. And also the disappointment of your eyes when you make your compromises in compensation you are a member of a famous and powerful elite you possess many a perogatives and perquisites and you are referred to and addressed as honorable and all that deference I would say a lot of it simply has to do with your shear power but There's clearly more than that to be an elected. Legislator is a big deal. You are part of a tradition of democratic self government we actually make two representatives to laws that we obey a radical idea it extends back for centuries and is one of the great glorious of Western civilization. Now I believe that delegating lawmaking to the executive has been continues to be not entirely but to a considerable degree. A means of shirking the legislative responsibility while retaining and even augmenting increasing the power and parameters of the individual member in exchange for these burdens and risks of legislating of collective choice. The member becomes a solo practitioner with a public license and the license is to influence at the margin the operations of this vast executive apparatus through grant headed and a letter writing and regulatory tweaks putting your staff and your allies in key positions in regulatory agencies administrative agencies in the Executive Branch. Washington lobbying firms adding adding entrepreneur per neural writers and earmarks in line. Items to these blunderbuss Spending bills promising to either preserve or undo the latest executive action of before aroused constituency groups pell mell personal fundraising. Now a lot of these things are longtime legislative congressional perogatives but they have called last into all new Capitol Hill Culture. In recent decades that has acquired a logic and a momentum of its own is executive government grows so do the opportunities for influencing its choices at the margin and soak correspondingly value the value to outsiders to having access to the individual member a instantaneous communications continuous surveillance twenty four seven by interest groups and national constituency groups drives out all time in negotiated space for collective choice and puts a premium on snappy personal political message. So that is the Congress today if we're going to have a constitutional revival. I maintain we're going to have to have a cultural reliable. Congress is going to have to To regain its lost powers. It has to relearn legislative arts skills. Legislators energies have to be redirected and the Majority in Congress going to have to risk too I R- of Party constituencies who have grown unfamiliar with the obligations of legislating and the centrality of that task to our constitutional order but President. Obama just might cooperate at least up to a point. At least he should. Presidents have gotten too powerful for their own good and late-term presses have learned this the range and sheer high-velocity volume of executive branch lawmaking his grown far beyond the span of control or even understanding of its sole elected official and his immediate political staff. It brings surprises and dilemmas every day when the agencies act or when our president acts on his own initiative and volition he is seen today as exercising personal power unmediated by any sort of legislative engagement. He's different from parliamentary Prime Minister. He stands before the nation before the citizenry alone and apartment. Congressional participation is usually he stays in the form of a Greek chorus a discordant recourse to be sure to party leadership's with instantaneous. Party partisan messaging for the media. One hailing the other condemning the president's action and the most unqualified terms. Five minutes after the action became public. Which only reinforces this notion that we have today of crown government surrounded by a group of courtiers we've now had three consecutive presidents who've been subject to continuous highly organized well-financed personal defamation. For most of their terms we've had presidents that have been defamed in the past but three in a rows unusual and I spotted trend. And I think that it's plausibly. The result of this extreme and undemocratic concentration of power in a single person at the center of our democracy which is increased the value to the opposition of undermining his personal reputation and authority a little bit of power sharing with make the president stronger not weaker than it is today. I- maintaining the separation of powers is supposed to provide not just checks also balanced shared responsibility all presidents seek constitutional approval for particularly risky and difficult decisions especially in military affairs. I believe that it would be a good thing for the precedent for our presidents if they had to do so I'll routinely as a matter of obligation rather than discretion. Even if they often sometimes I did not get approval sought the president would have some gripes to bring to the table of his own They would pertain to Congressional micromanagement of Executive Branch Organization Chairman Administration. If you read obamacare and Dodd Frank. I've said that they're very vague. And don't settle anything but as we all know there hundreds of pages long. What's in those pages? If they're not actually making legislative choices they read like a Organizing Manual for the executive branch they have Organization charts and they say who reports to home and they set up special constituent. There's now a every. Financial Regulatory Agency has a women's financial empowerment and the GS level of the person that heads it and that she has to be in the loop on certain decisions. It's all a great process oriented these interferences and they go to procurement and permitting many other things. They often interfere obnoxiously with the pursuit of statutory objectives or a substitute for the lack of any substance of any such objectives. They also permit committees of the Congress members. Even staff to participate on a regular basis in executive branch decision making they therefore are a reflection of this evolution from legislative choice to individual member entrepreneurial niggling with executive. Joyce I think a better balance of power Would be better for both branches. That's all very abstract to bring it down to Earth. I'll let me offer a five part plan. Everybody has to have you have to have a five part. You know Diet plan how to write a resume or how to do a job interview. Here's my five part plan for the Republican led Hundred Fourteenth Congress. And let's see where it takes us step one retrieve the taxing spending and borrowing powers that you recently gave away For the retrieval of the taxing and spending authorities revoke those authorizations to the SEC and Peekaboo and similar agency taxes and the Consumer Financial Protection Bureau's entitlement to fed profits and replace them all with Special Appropriations for two thousand fifteen and we want to raise the constitutional issue issues starkly so we are simply going to match whatever their budget for the year. We're going to be in the second quarter of the year anyway by the third quarter by the time Congress gets around so leave the question of what the appropriate appropriation should be to the big budget battles coming Next year over fifteen sixteen seventeen most importantly is this power borrowing power because this was a very sly decision that the congress made a year and a half ago. And it's going to be very tempting to simply renew it. If you suspend the ceiling for a set period of time rather than raise the ceiling to a set dollar SOM- you avoid having to approve a scary upsetting unpopular deck number but the Treasury is still lied to trundle up to Capitol Hill on a regular basis to kiss your and beg for in this case an extension rather than Debt debt increases. But calling on the Treasury to come see you gives you know power in a time of continuous deficits and growing death. That if we really thought we could get rid of the deficits for the time in the immediate future. That could be a great lever. You can take everything in Paul Ryan you can take everything proposed by every congressional. Republican in the last four years added to budget numbers going forward for the next ten years. We're still going to need hundreds of billions in debt every single year. You take everything we WANNA do. The Republicans WanNa do We're still going to have to increase that debt level so it's not a powerful weapon of exercising as a time limit rather than a dollar limit is going to jeopardize congressional prerogatives for the future because the day's going to come when the debt ceiling becomes a powerful weapon Once again it could be. We have gotten the debt down to a sustainable constant level o level maybe even zero of of national spending and suddenly something comes up and the executive needs to borrow money maybe bailout Illinois well at that point they got that they can't slow the debt to bail out the Illinois debt without going up to the congress. That's a very powerful tool that point or when we get around too long term entitlement reform which is involved lots and lots of trade offs between taxing and spending borrowing and the debt ceiling will be an important one or when we hit a severe external debt crisis precipitous rise in interest rates. A MAJOR WAR. The failure of entitlement reform until the day of reckoning arise forcing excruciating choices between severe cuts and benefit levels defaulting. On the installed debt. Drastic new borrowing. The debt ceiling will be powerful. Then it will be very unfortunate for Congress. If that day arrives were in the middle of one of its debt. Ceiling suspensions And the Treasury is operating on its own. Congress can take the can suspend these suspension but that would require legislation with the president's signature. Means in the meantime these Trespasses tend to become easement if we go on for years The Treasury is going to accommodate itself to borrowing with no dollar limit People actually do know a thing or two about operation of credit markets. They'RE GONNA forget they're not going to know how these things go and they are going to really The debt is going to continue to grow. And they're going to lose track of the Solemnity of voting for Gargantuan numbers The new number next March will be at least two trillion higher than the last number. Get it voted for so I think the thing to do is get that power back as a ceiling limit when there are no exigent crises When the press would clearly sign such thing they're not gonNA kick the new debt ceiling just to begin to get through a period when the Republican deficit reducers in spending cutters. Really make a difference Even just to get through the Obama Administration. It's going to be about twenty trillion and that's not going to be Pity Fun Second Re Institute. The spending power this year will spend two point Smith three point seven trillion dollars. Two Point Seven is entitlements in debt. Service one point. Trillion is quote discretionary spending that Congress can control of its ability to control that has been Compromised by the collapse of its capacity for collective choice that I have just That I mentioned and the first order of business is to reestablish Congress's structure and what People Congress call regular order actually abiding by the rules that they say they're going to abide by to get ready for the upcoming battles over spending priorities today The budget process in Congress has governed by the Congressional Budget and Impoundment Control. Act of one thousand. Nine hundred seventy four. It's got a whole array of procedures and timelines for adopting an annual budget. In the spring there's a concurrent resolution a concurrent resolution unlike a joint resolution. It's just an act of Congress it's not a lawful act it's not presented to the president just Congress speaking and they're supposed to adopt a concurrent resolution saying this is going to be spending for the kids and then they divvied up among the appropriations committees and the procreation committees working within that limit appropriate money for categories such as defense interior and the environment commerce justice in science and that meets the budget. And they do this well of advance of the October first beginning of the new fiscal year. It's been a complete record complete failure. Congress not followed in full for decades. It's procedures are open to criticism. There's big reformist literature but important thing is that they are not the main problem. The act was passed just as the congressional seniority system was coming unraveled In in the early nineteen seventies partially because most of the seniors. The the strong committee chairman were dixiecrats from the south. They were reviled by northern liberals both parties that was a time still of Liberal and conservative wings of both parties and they were They were in a clips. They had been refuted and undermined by the success of the civil rights revolution of the Nineteen Sixties. But we lost track of something. Powerful seasoned committee chairman had provided the structure and hierarchy that are necessary for a legislation which is a committee hundreds of people to operate effectively. An exercise collective choice and that are particularly important in our separated powers that is non parliamentary system. Where the Congress has to step up to has to contend with an inherently hierarchical executive branch overspending and lots of other things the nineteen seventy four budget act was attempted to substitute abstract process for incarnate power. It failed it failed. Because in the absence of an internal authority structure spending became a tragedy of the Commons. Every legislator became free. Brace and a fool not to. Nobody was responsible for the result. The mayhem overwhelmed. The axe procedures and deadlines and produced improvised continuing resolutions. Which I've mentioned Run BY PARTY LEADERS. Rather than Committee substantive leaders recurring brinksmanship over debt ceilings government shutdowns of profusion of parochial earmarks added by individual legislators as their price for going along with the huge piece of legislation. That they don't have a clue what's in it and merchants of routine very large deficits resuscitating. Spending told does not require legislation. It doesn't require budget process reform. It requires something much more profound. A new congressional structure of strong authorizing committees that policy and strong appropriating spending committees with powerful chairman. The chairman would be a selected by some combination of tenure and recognized leadership and political skills. Each chambers rules would give the chairman a huge amount of personal power subject however to automatic pre sanctions like losing your stripes. If you do not meet the spending levels or the deadlines that are assigned to you. There are actually some stirrings in these directions The dixie crap legacy. Nobody even really remembers. It doesn't cast a pall on the idea of seniority and hierarchy anymore The Need to return to regular order is widely acknowledged in recent years the emergence of substantive committee chairman of Great Great highly. Impressive people come Paul Ryan In House and I would put Ron Wyden head of finance in the Senate. The same category. They'd begun to assert themselves. Members are noticing it The party leadership is noticing. A time of fully divided government When the House and Senate had real prospects of achieving a concurrence on spending matters would be the grip just the right time for a new dispensation immediate goal house and Senate Precede a crisply to adopt a budget by April fifteenth. All twelve appropriations bills supporting education for the president's approval or disapproval by the end of July for the next fiscal year. This would give constantly repeated congress. A genuine constitutionally grounded I'll leverage over spending levels immediate goal of build capacity for extending Budget Authority over entitlement spending when that day inevitably comes When those programs have to be a fundamentally realigned I'm part of a budget reform group That has Senior Policy Gurus from both party. We all agree that title are going to have to be abolished in favour of regular appropriations. Were toying with ideas of multi year appropriations. Because we're dealing with expenditures that a lot of people rely on and need to have some certainty about the congress's not remotely ready for that and if the day comes For entitlement reform I'll before Congress has its act together. It's GonNa be a summit meeting how to Andrews Air Force Base the executive branch is going to dominate and it is going to sideline Congress from authorities over entitlements for years probably for decades the biggest goal the most profound of this we constitution of the Congress would go beyond spending all aspects of lawmaking to stop establish a strong merit based TIREC in both changes as a means of organizing the the difficult tasks of collective choice of discouraging member activism which is the guiding rule in Congress today and investing the legislative calling with political prestige young men and women who run for Congress pursue election. Today often I would say mostly do it for reasons that have very little to do with actual legislative. They see a stepping stone to higher office always meaning executive office or steppingstone stone to careers in the Let's call it the government space after Congress or are they wanted to assert their conservative or they're progressive credentials and worldviews details to follow. After I'm elected I think that's all fine. It's inevitable but let's imagine just imagine that it was also possible for a member of congress through a diligent work. Legislative mastery earned esteem to ascend to a position of authority over reforming the social safety or rebuilding the National Electric Grid where the air traffic control system or designing a better system for supporting basic science. Or a hint or improving intelligence methods or security doctrines one hundred other concrete matters of national importance that are currently entirely the domain of executive choice in off often handled very netflix. If persons with a specific talents practical interest saw congressional careers as a path to achievement the pool of office seekers would be enlarged and diversified and the prospects of redefine Congress's Intrinsic Congressional. Powers would be greatly enhanced third part of my plan on delegate to the regulators regulate the regulators throughout most of my career concerned with regulatory matters of the debates were about the merits or demerits of the Clean Air Act and the Communications Act and other statutes reform proposals to substitute economic incentives for command and control regulation to subject rules to a cost-benefit test or heightened standards of judicial review. They're great debates. I can go on about them for a long time. But they have been displaced by the surge of unilateral executive power in all domains in Congress in the academy debates are now all about the problems of congressional delegation to the Executive Branch the growth of outright executive perogatives and what might be done about them the latest entry by Philip Hamburger of Columbia Law. School is a massive. Tome and a wonderful wonderful study titled Is Administrative Law Lawful. His answer is no not even a little the whole thing. It's not law. It's an end run around the most important of all the land The constitution he is as good scholar. Should he's great at analysis and history and modest unlike me in this talk and modest about reform proposals but if you press him. Give the immensity of the task. At how much has been given up he would say let's start with a small obscure unknown agency and take all of its rules in the code of Federal Regulation and let's adopt them in statutory law and modified as we go along and take some you know pitiful little agency nobody cares and just start with them and see what happens and March through the code of regulations and turn it into status and change it as you as you go. I like that But I think that if we had a Republican Congress what we should do instead is take a couple of areas of regulatory controversies and answer them with statutory law. And see what happens now. The Republicans will want to do this with the using the clean air act to regulate greenhouse gas emissions which it clearly was not intended to do and these many revisions of obamacare standards for eligibility mandatory provisions enrollment terms coverage in many other things. But there are problems here. First of all take obamacare if they're going to object to what the executive has done They would reenact. What was all what's already in the statute which the Republican strongly disagreed with in the first place or else they replace not just the original act and the executive refinement with something completely different? Which is GONNA take us off into political territory? Far from this constitutional basis is wonderful about Focus on and anyway. The president's GonNa veto whatever they do so it may be. They want to do this For Policy for political reasons but pressing the pure constitutional issue in these cases calls for something else. Which is my step which I'll get to in a minute but I what I think that they should do. And regulation is take a couple areas of ray-ban snarl well well for one thing. Here's an example. Many Republicans led by Governor. Bobby Jindal of Louisiana. I have this idea that the FDA should permit birth control pills in devices to be sold over the counter rather than by prescription. Only now. They're not just trying to liberalize drug control it's also takes it out of obamacare. Obamacare does not cover aspirin. Thanks for over the counter. So so there's a method to their madness if they really want to do this. They don't need to plead with the FDA. Why don't just take matters into their own hands? Pass a one page statute listening devices and say that these are over the counter. That's the end of it and see what President Obama would do with it really really interesting now. Now let me. I want to give you two examples by got a few more minutes. No I want to give two examples of cases of high visibility regulatory snarls right now. Where a statutory remedy would be easy to explain and communicate his demands of Congress. They'd be very popular and they'd be highly beneficial I I hope there's nobody here from Commercial Bank. My first is to legislate simple strong capital requirements for American banks. A central cause of the two thousand and eight collapse was the banks with the active collaboration of regulators were maintaining absurdly inadequate equity capital. So that a small decline in value of their assets You know four percent decline in the value of this enormous acid base caused by the bursting of the housing bubble left. Him bankrupt or insolvent. If they'd been soundly capitalized the way banks were in the good old days. The shareholders would have absorbed those losses to creditors wouldn't of panicked and there have been no need for a taxpayer bailout. The need for higher equity is now widely understood but the banks powerful closed and their regulators are going along with them or with only timid proposals banks like very thin equity because that yields greater profits when times are good So these are very timid. Proposals With standards only marginal high marginally higher than they were senators Shared Brown a lefty liberal from Ohio and David veteran solid conservative from Louisiana have introduced a wonderful little bill and held hearings on. It was written essentially by my former colleague and good friend Allen Meltzer a bill that would require large banks to maintain true equity capital of at least fifteen percent of the value of their assets. Three times what the regulators are thinking. I'd go higher. Fifty percents fines perfectly acceptable. Smaller banks would have to maintain a somewhat less room for debate but the The the basis in research and experience for this is clear. The bill wouldn't have to be twenty pages long and the best thing is over time we would learn and even legislators that if a world of well capitalized banks. The too big to fail. Dilemma IS GONE. Governance doesn't have to worry about because if a bank is too big it fails the shareholder. We're going to take care of the problem. And almost all of the really crazily regulatory intrusive procedures of dodd-frank would become obsolete. But that's for another I just want to ask. Secondly excused the food and Drug Administration from controlling innovation in personal healthcare information. Fancy new iphone six but some of you may have noticed in the introduction a little bit of side excitement about the new health app for monitoring your personal circumstances a smartphone apps and software and plug INS and a lot of standalone devices are opening up a lot of possibilities for personal monitoring. You can monitor your body functions. You can monitor it. Conditions frequently even continuously this. I'm like we got some fitness bus around here. So you're used to Footsteps and calories had weight and even biomass all of it on your own on your smartphone but now you can have a cardiac and respiratory functions. In abundance glucose many other blood levels urine level skin conditions sleeping patterns even genetic profiles. You can combine the information from various sources tracking. You can transmit it back and forth in real time to your doctor or your doctor's nurse by the medical portals. A lot of medical practices have now set up. You can use it instantly. Continuously to adjust personal behavior diagnose treat illnesses evaluate and modify a therapeutic regimens and manage chronic health conditions the F. B. The FDA believes that most all of these things have to secure its approval before they could be marketed. And you know how often iphone apps are modified and then area of changing technology and where the changing technology is interacting with human with personal behavior. We're changing these things all the time every time you gotta go to Washington and go through an industrial age of review procedure. Now it says it's going to exercise this power fairy a liberally. I doubt it last year. For example it ordered this silicon valley firm. Either. One of the guy's wives who's a doctor setup Called twenty-three or me. They sent you a DNA test kit. It's a little small test tube and you spit in and you seal it in the mail back to them and they can do a very very low capital cost and their business model. They're actually doing this for you. Below their cost. They can do a good extraction of important elements of your genetic profile and they send it back to you It's in back the results and information on what these profiles me good bad predisposition to certain diseases but that and that's where the FDA is unhappy because people might make mistakes with your information that they have the information not. We may not be true but just pay attention to this. The information that they're sending back to you. It's widely available knowledge. There's nothing proprietary about what they're telling you about you. And they're combining with general scientific information even from the intimate but they're also interpreting it in a very sober and responsible way it's highly qualified. It's telling you to report to your doctor before you do anything with this information. And the FDA has his real. I had just briefly. Shut it down. their business models FDA supposed to regulate the safety and efficacy of new drugs and medical devices? Not Interfere with the communication of information if we all have better information about health conditions and health status. Guess what some of US ARE. GonNa make mistakes with that information but that is not a reason why all of us should not get better informed to deny that information to the rest of US anyway. It's beyond their. It's none of their damn business anyway. A great number of Americans have become engaged in monitoring my bodies our selves managing their health and discouraging improvements in the information and advice that they get can't be stuck for a senator deb Fischer from Nebraska Republican and Angus King for Maine Independent Independent means I caucus with Democrats They've reduced a short pithy. Five-page Bill to take out the FDA in regulating clinical and health software. That covers a lot of it. Not all of it. I broaden it there's again there's room for debate that it would be a great step. If bills like the two that I've mentioned actually moved seriously through the House and Senate and were on their way to before he bank regulators the Fed the FDIC the controller the currency and the FDA and their business allies and their media champions would mobilize against these provisions. It'd be amazing to see with a fuselage of week and self-serving arguments. I say so much the better. Bring Them Up. If Congress passed the bills against that it would be a great victory for smart populism against the against the elite forces of crony capitalism and fo- expertise and it would produce a lot of stuff would produce enormous benefits. And that would do the key thing which is to build congressional confidence in more Irredentist adventures to recapture lost territory substitute legislative choice for executive choice. I'm going to be very brief on my last two steps in my Five step plan. The fourth about five is censure unconstitutional executive acts censure. It's not in the constitution Has Been Done. It is done by a concurrent resolution which I mentioned nine joint resolution. It's been talked of throughout American history during the impeachment proceedings in the House against Clinton several people some Republicans mainly Democrats. Who saw where things were going on. Nancy Pelosi lead them proposed that they censored the president rather than Impeach him there are a lot of ideas floating around the blogosphere today for a century. President Obama and Eric Holder. Well he got got that one And and other people for this that and the other thing But they almost never past there have been one or two cases when when they've passed both houses of Congress there are a few cases where they've passed a single house and there are a lot of sensors. Judges and members of your own chamber talking about a member of the executive Republican majority in both houses would open the possibility of doing this with the full prestige of a co. Equal branch of government would be very grave but it would be in my judgment commensurate too many flagrant intrusions into congressional legislative power That the Obama Administration has undertaken and to get back to this business of Legislation instead or the president or his subordinates. Have ignored a ignored. Specific important statutory requirements not on constitutional grounds but for reasons of administrative convenience or policy tech political tactics. Congress should not be obliged to reenact the provision again. This already on the books order. Replace it with something else. And then let the president's veto filing lawsuits which is the current house strategy is constitutionally supine in my view and worse it risks involving the courts continuously in supervising the political relations of the political branches. So I believe that of the available responses that concurrent resolution is the most commensurate And the most reciprocal I would call it. A constitutional censure to distinguish it from centers for personal misconduct and that it should be a clear a precisely grounded statement of exactly why the act in question violated the constitution. Without reference to motivations political circumstances. It would not correct it. It's not illegal act. It would not correct the Dirk to act directly but it could alter the courses events it would be an authoritative statement for the guidance of course if there had been such a concurrent resolution. I could have changed the decision. The Supreme Court case over the Clean Air Act in In early July it would edify public opinion and it would also be a guide for Congress's further actions of a fully legislative Nature concerning the statute enacting question finally as Congress on the limbering its constitutional powers and responding to presidential executive trespasses. I think it should make a strategic retreat from its own trespasses into executive territory. The micromanagement problem I mentioned earlier requiring Executive Branch Organization management terms that are unnecessary or a positive nuisance presence frequently signed bills with signing statement. And the signing statement. Says I'm signing. This thing's a great piece of legislation or accepted anyway up there these four or five cases where it's interfering with internal executive branch matters. I'm instructing my subordinates. To ignore the treated is advisory only and not to follow it. They've been doing it for a long time. Increasing Leagues Under Clinton and Bush and then and then Obama And especially military of Foreign Affairs. Prerogatives are concerned but the executive agencies just accumulated they profusion of infuriating debilitating mandates that often make it impossible to to make decisions. If you've read some of the recent books Frank Francis Fukuyama Institutional Decay and Philip Howard's the rule by nobody. They're talking about these problems. In such areas. As permiting procurement executive branch needs more discretion. Not less so I would invite the agencies through the president to submit wishlist. I would take them seriously. I consider a mechanism similar to what we've used for base closing and military base closing and trade liberalization For get a structure for consideration. Certain things to improve executive management fast track to the full House and Senate upper down no amendment of votes these mechanisms give Congress political cover to do no knows needs to be done but it can't do on its own. It recognizes that in certain areas. The president can do a better job of balancing broad national goals against local and parochial interests. And finally and my favor in the in the concessionary apart of this plant is Far Republican Congress to repeal and replace the impoundment provisions of the one thousand nine hundred ninety four budget act for the signature of Democratic president. These effectively prevent the president from impounding appropriated funds. They were naked over the veto of Richard Nixon. Three or four weeks before he resigned when he was completely Completely in there is a legitimate but I will admit contestable congressional argument for direct presidential impoundment in certain cases. The constitution says the executive may not spend money but in consequence of appropriations made by law section nine but it doesn't say that appropriate funds have to be spent in their entirety. Never says that and if you ask the founders have said no no of course not very early on. Jefferson refused to build a whole fleet of military bases and ships. They appropriated all the money. Said we don't need it. I've got something going with France. They were going to do something they'd appropriate some money for some basis down Louisiana territory to fight the Spanish. I just bought the police. We don't need these space so he just didn't spend money. Nobody conscious always a little bit addicted but they often go on and they've got a lot of these battles. Here's been during the Kennedy. During the Kennedy Administration everybody acknowledges any an executive has gotta have SOM- discretionary some leeway in managing to a budget pursuing economies and efficiencies rooting out waste. The only question is is how much Before seventy four presidents did it Lbj A lot of it was military but in the twentieth century with the growth of domestic spending old there were several big instances especially FDR and LBJ of impounding a lot of very large expenditures and Richard. Nixon was relying on those precedents but he was more aggressive than they work and he did it in very politically charged. Circumstances are there was a case where he'd recommended six billion dollars a six hundred. He'd recommended five billion dollars for municipal wastewater treat sewage treatment plants and they appropriate eleven billion dollars. He thought that was a lot of pork so he he impounded the six. The six billion That he had not recommended very very controversial but most of all compared to Lbj and FDR he had many many fewer friends in Congress and in the end he had none so they took it away from him and his caused enormous amounts of problems. There's a complicated decision procedure. Recession is almost never granted. That's the seventy four act process overpower if you read all the literature on this that I've had to learn on budget process. These two parts of that seventy four actor looked at congressional budgeting comments as separate and apart. They're actually a matched set. Congress was dismantling its own authority structure for control and spending and for good measure dismantled the executives as well it came to see its mistake and that was the story behind the line item Veto Act Ronald Reagan Champ. People after him it was passed and signed in one thousand nine hundred ninety six. It gave the president and more authority more authority than he'd ever had before to control spending but the Supreme Court in my view regrettably held it unconstitutional and ninety eight. Congress has since been almost continuously modeling what they call constitutional line item vetos. I would be for a fairly ample bill. I would recognize the president's Traditionally exercised constitutional impoundment authority. I would permit some broader recissions when approved by Congress under very fast track right to the top upper down sorts of procedures and considered providing impoundment power to meet debt reduction and deficit targets again. We'd be Congress would be saying we have solarge goals the executive Can Get there better than we can't given the nature of the institutions about finally and I believe you with this part of this whole plan acknowledging and encouraging the president's exercise of his authority to control spending levels within appropriated amounts while at the same time simultaneous reprimanding and resisting the incumbent president's unauthorized rewriting of stacks tort law would be a splendid object lesson in The call it the living constitution as lived by its actual members. Sworn Officers in Congress assembled this program has been brought to you by the James Wilson Institute on Natural Rights in the American founding. If you'd like to learn more about the James Wilson Institute please visit James Wilson Institute Dot Org. Thanks for listening.

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