The latest wrecking ball flailing around in the rubble of America’s election and campaign finance laws, McCutcheon v. Federal Election Commission, will be argued in the Supreme Court on October 8. Once again we can expect counsel and some members of the Court to be on the lookout for deviant, “forbidden” thinking about money and democracy.
At issue is whether the federal aggregate contribution limits (currently $48,000 to candidates and $74,000 to party committees) violate freedom of speech under the First Amendment. One plaintiff is Shaun McCutcheon, CEO of a company that services the coal and mining industry. Although he was among a handful of people who contributed hundreds of thousands of dollars to candidates and SuperPACs in the last election cycle, he claims that his freedom of speech is violated by the federal aggregate limit of $123,000. The other plaintiff is the Republican National Committee, whose members naturally wish to receive as much money as they can, and claim that the aggregate limits violate their freedom of speech.
Today marks the 20th anniversary of a little-known but remarkably important document: Executive Order 12866, issued by President Bill Clinton in 1993. Executive Order 12866 replaced an order issued by President Ronald Reagan in 1981. Both of these documents set out a process whereby the White House – acting through the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) – would review major agency rules before they were issued.
Executive Order 12866, and the Reagan order before it, ushered in a new era in administrative law, one in which the White House would become the dominant force in administrative rulemaking and in which cost-benefit analysis would become the overarching framework for evaluating the wisdom of rules. Professional career staff in the agencies, steeped in the technical fields relevant to the agencies’ work, would see their work product changed, sometimes dramatically, by professional career staff in OIRA. Political management at the agencies would find their actions scrutinized, revised, and sometimes stopped altogether by political operatives at the White House.
Even where statutes (as most do) charged a particular agency with making a particular technical finding and set forth a decision-making framework other than cost-benefit analysis, the White House process of regulatory review displaced those agency decision makers and supplanted the statutory standard with a cost-benefit test. The executive orders under both Reagan and Clinton qualified their reach by stating that they were to be applied “to the extent permitted by law,” but administrative law developments in the Supreme Court subsequent to the Reagan executive order – in particular, the famous Chevron decision – give tremendous leeway to agencies in interpreting the statutes they administer, and OIRA has taken upon itself to instruct agencies how to interpret these laws. Thus the constraint of following existing law is more illusory than real.
Erin Ryan’s analysis of potential constitutional challenges to environmental laws in the wake of the NFIB v. Sebelius decision makes a strong case that even under the Supreme Court’s new Spending Clause jurisprudence, these laws are constitutionally sound. (I came to a similar conclusion last year when I asked whether Sebelius casts constitutional doubt on Title IX.) Ryan’s analysis also makes clear, however, that the fundamental incoherence of the Supreme Court’s coercion analysis in Sebelius means that it is difficult to predict how it will be applied going forward. While the Court claimed to reason from contract law in finding the terms of the Medicaid expansion so coercive as to render a state’s implementation of the expansion involuntary, it is difficult to imagine the Court finding such a bargain coercive in other contexts. Consider, for example, another Medicaid case, Harris v. McRae.
In 1976, Cora McRae needed to terminate her pregnancy for medical reasons, but she had very little money. She had health insurance through Medicaid, but under a provision of federal law known as the Hyde Amendment initially passed in 1976, federal Medicaid funds cannot pay for abortions, including medically necessary abortions, though Medicaid covers other medically necessary expenses, including the costs of childbirth. McRae joined with other plaintiffs to challenge this law, arguing that by paying for childbirth expenses, but not for medically necessary abortion expenses, the government was unconstitutionally coercing her reproductive decisions and denying her constitutionally-protected right to end her pregnancy. In 1980, the Supreme Court rejected McRae’s challenge to Medicaid’s failure to fund medically necessary abortions. “Although Congress has opted to subsidize medically necessary services generally, but not certain medically necessary abortions,” the Court wrote, “the fact remains that the Hyde Amendment leaves an indigent woman with at least the same range of choice in deciding whether to obtain a medically necessary abortion as she would have had if Congress had chosen to subsidize no health care costs at all.”
In other words, refusing to provide Medicaid coverage for abortions did not represent unconstitutional coercion of a poor woman’s reproductive choices, according to the Court, because in the end it was her poverty that constrained her choices, rather than any barriers the federal government had placed in her way. That she was poor and might be forced to make certain choices because of her poverty—like going through with a potentially dangerous pregnancy because she could not afford an abortion--wasn’t the government’s fault, the Court held.
Environmental law is safe from legal challenge under the Spending Clause’s new coercion doctrine. That’s the bottom line of Erin Ryan’s new ACS Issue Brief. Professor Ryan, an associate professor at Lewis & Clark Law School, is an expert on environmental and natural resources law and federalism. Her issue brief makes a compelling case that the federal environmental grant programs are not likely vulnerable under the new coercion doctrine that emerged two Terms ago in NFIB v. Sebelius, in which the Supreme Court largely upheld the Affordable Care Act but, significantly, struck down the Act’s expansion of Medicaid as unconstitutionally coercive under the Spending Clause.
I agree with Professor Ryan’s analysis and want to make the case that the same is true about federal education law. In fact, as the second highest source of federal support to the states after Medicaid, federal education law makes a good case study under the new coercion doctrine. If the federal education laws are likely to succumb to the doctrine’s constraints, then maybe the Court’s Medicaid decision is just the tip of the iceberg, and a lot of federal spending programs are going down. If, on the other hand, the federal education laws are not likely to be problematic under the new coercion doctrine, then conditional spending in the federal regulatory state is likely to survive relatively unscathed. My work suggests that this second story is more persuasive.
As Professor Ryan notes, the NFIB Court’s fractured opinions failed to set forth the terms of the new coercion doctrine with anything like precision, but consensus is emerging that the doctrine has essentially three parts. (For the plurality, that is; the joint dissent -- in agreement with the plurality that the Medicaid expansion was coercive -- would focus only on the last part.) First, does the condition in question threaten to take away funds for a separate and independent program, or does the condition merely govern the use of the funds? If it just governs the use of funds, then the program is not coercive.
The second question arises if the condition does threaten funds for an independent program. This question asks whether the states had sufficient notice at the time they accepted funds for the first program that they would also have to comply with the second program. If they did, then the inquiry ends once more with the conclusion that the program is not coercive.
The third question arises only if there was no such notice. This question asks whether the amount of funding at stake is so significant that the threat to withdraw it constitutes what the plurality calls “economic dragooning.” Only if this last question is reached and the answer is yes would a program be coercive.
by Patrick Kibbe. Mr. Kibbe is a joint degree candidate in law and public policy at Harvard Law School and the Harvard Kennedy School. He is a member of Harvard’s ACS Student Chapter. This piece is cross-posted at Daily Kos, where it originally appeared.
Headed to the Supreme Court for oral arguments on October 8 is a case that could be worse for the American public than Citizens United v. FEC, and unleash countless millions of special interest dollars into political campaigns. In this case, McCutcheon and the Republican National Committee v. FEC, Shaun McCutcheon, an Alabama businessman, and the Republican National Committee have teamed up to try and eliminate the aggregate spending limits for federal elections that are in place.
Currently under federal law, there are base limits on spending (the amounts that you can give to a particular candidate or committee) and aggregate limits on spending (the amounts that you can contribute across all political candidates and committees). In a carefully orchestrated legal strategy, building off cases like Citizens United and Speechnow.org v. FEC, McCutcheon and the RNC are challenging the aggregate limits, but not the base limits for campaign contributions. In this way, McCutcheon and the RNC are seeking to chip away at federal protections designed to reduce corruption in politics.
But don't be fooled, McCutcheon and the RNC are trying to chip off a pretty huge chunk.
McCutcheon's view would blow the lid off the amount of money the super rich could contribute to campaigns and influence politics compared to the average American. According to the U.S. Census Bureau, the median American family makes $52,762 a year. What would be a reasonable limit that any individual, in accordance with a constitution that begins "We the people", could contribute to campaigns to ensure that elected officials represent all people and not only a select few? $10,000? $20,000? $52,762?
The current aggregate limits are set at $123,200, more than twice what an average American family makes in a year. And these are the limits that McCutcheon and the RNC are challenging. Under their view, any individual could contribute more than fifty times what an average American family makes in a year at $3.63 million.