Supreme Court Shows Active Restraint in Not Taking Up Marriage Cases

Confounding the expectations of most commentators, the Supreme Court this morning denied petitions for review in all seven same-sex marriage cases pending before it. I wasn’t so bullish on the petitions’ chances – the justices are increasingly reluctant to entertain controversial subjects except when they absolutely must – but see a sort of practical wisdom in this noteworthy inaction. Although it’s unusual for the Court to deny review in those rare cases where all parties urge it, there’s no current “circuit split” – all appellate courts have struck down the challenges to various states’ marriage laws – so the justices’ demurral signals a desire to let public opinion shift even further in favor of allowing same-sex marriage before the Court wades in with a definitive constitutional ruling. By doing so, and thereby postponing any eventual ruling (perhaps until a circuit court goes the other way, if one does), the Court is lessening the chance that its involvement will warp American legal and political discourse the way Roe v. Wade did.

In the meantime, once today’s “decision not to decide” works its way through the lower courts, same-sex couples will be able to marry in 30 states and the District of Columbia. That’s a good thing.

Brazil’s Presidential Election: More Surprises to Come?

The first chapter of Brazil’s presidential election was a roller-coaster: It kicked off with the country’s demoralizing exit from the World Cup, then its economy entered into a recession and widespread corruption charges engulfed the ruling Workers Party (PT). In August, Eduardo Campos, the candidate of the Socialist Party and a rising star in Brazilian politics, suddenly died in a plane crash.  His VP candidate, Marina Silva, also a charismatic figure, ran in his stead and experienced a meteoric rise in the polls to the point that two weeks ago she looked certain to defeat President Dilma Rousseff in a runoff. But Silva’s support steadily eroded in the last week, and yesterday it was Aécio Neves, from the Social Democratic Party (PSDB), who finished a strong second and will challenge the president in a runoff three weeks from now.

With so many things going on, it’s difficult to pinpoint the precise factors behind the electoral result or predict what will happen next. But here are some of my impressions:

El-Sisi the Reformer?

Is Egypt’s economy taking a turn for the better? The government is hosting an economic summit in February next year, aiming to attract foreign investment, with the participation of not just private investors but also of the International Monetary Fund.

[Christine] Lagarde said Egyptian authorities’ “recent reform efforts” were “encouraging” and expressed her hope that participants in the upcoming summit will see how these reforms can “help restore durable economic stability and sustainable growth to Egypt.”

On the surface, it appears that Egypt’s government is making tangible progress addressing the country’s fiscal problem. The planned energy subsidies cuts are under way, although these are also accompanied by tax increases, mainly through a planned introduction of a value-added tax, hikes to tobacco and alcohol taxes and a new tax on capital earnings.

Experience from other countries, most notably from Europe in the aftermath of the global financial crisis, shows that fiscal consolidations that rely on revenue increases lead to worse outcomes than consolidations that consist of permanent reductions to government spending.

But, whatever one thinks about this particular question, there are two additional reasons to be skeptical. First, putting aside the fuel price hikes that have already occurred, much of the praise directed at the Egyptian government presupposes that it will deliver on its promise to slash subsidies by one third in the fiscal year 2014/2015. That would be welcome news but it is worth remembering that similar reform targets were set in the past and were systematically missed:

According to the budget for the past fiscal year, 2013–2014, the subsidies to oil materials were already supposed to be close to EGP100bn ($14bn). Yet, the actual spending was drastically higher, perhaps by as much as an additional EGP70bn ($10bn)

Second, it is deceptive to look at the fiscal question in isolation, as a technocratic problem that can be solved by clever tweaks to existing policies. Egypt’s economic problem is political in nature, and will continue to plague the country as long it is governed by a kleptocratic, unaccountable elite.

The government – more specifically its military forces – own and run a large part of the economy, shielded from competition, and generating rents. The military coup last year led to the strengthening of the opaque network of cronyism that has long characterized military-run enterprises. Some estimates suggest that as much as half of last year’s stimulus, worth around $4bn and funded predominantly by funds from the United Arab Emirates, has been directed at military-controlled enterprises that became involved in road construction and other forms of infrastructure works, displacing the traditional construction companies.

Just as it was a mistake to see Vladimir Putin as a market reformer in the early 2000s, notwithstanding some of the real policy shifts (such as the introduction of a flat tax), it would be a mistake to see President Abdel Fattah el-Sisi as somebody aiming to open Egypt’s economy to competition and raise the living standards of Egyptians through increased economic freedom. If economic reforms occur, they will occur with the narrow goal of strengthening his hold on power and satisfying the material needs of the generals backing him.

In Egypt, as in other countries of the region, economic and political oppression go hand in hand and are mutually reinforcing. Nothing is a bigger threat to a military dictatorship than an economically empowered citizenry. For this reason, we should not expect genuine reforms to be very high on Mr. el-Sisi’s list of priorities.

Police Misconduct: The Worst Case in September

Over at Cato’s Police Misconduct website we have identified the worst case for the month of September.

The worst case goes to the still-unnamed police officer who shot John Geer in a Northern Virginia incident last year, and the police and federal investigators who have refused to release any information on the case a year after the shooting.

Fairfax County police officers responded to a call from Geer’s longtime girlfriend who called 911 because Geer had been drinking and throwing her possessions out onto the lawn after she told him she was moving out. When officers arrived, they trained their weapons at Geer as they spoke with him in the doorway of his home for almost 50 minutes. Friends and family gathered to watch the situation. One of Geer’s daughters shouted from a neighbor’s home “Don’t you hurt my daddy!”

Geer had been speaking calmly and holding his arms above his head, resting them on the doorframe from within, but when he moved his hands down the doorframe to about face-level, one of the officers abruptly fired a shot directly into Geer’s chest, as his best friend, father, and neighbors watched. Geer spun and closed the door before collapsing. The officers then waited an hour while Geer bled to death before sending in assistance. Over four hours later, Geer’s body was still left lying on the floor of his home.

Police handling of the incident and its aftermath haven’t improved in the year since the shooting. Geer’s family and friends still don’t know the name of the shooting officer—who has been on paid desk duty ever since—whether the shooting was declared justified or not, or why trained negotiators were not called. State and federal investigators have taken no substantial public action on the case, and the family, which exhibited incredible patience for the better part of a year, has finally had to resort to a lawsuit.

The refusal of the police to disclose even the name of the officer who shot and killed an unarmed man is just another example of the same troubling lack of transparency that we saw in the shooting of Michael Brown in Ferguson. Police officers are human, and yes they make mistakes, but what possible excuse is there for circling the wagons and denying the public—and worse, the victims’ family and friends—the right to know what their public servants have done and which of them needs to be to held accountable? The resulting feeling among those affected, as Geer’s father described it, is “Frustrating to say the least—not knowing anything and having a feeling of helplessness, sadness, anger. Just wondering what’s going on and why nobody would tell us anything.”

This is a case of one man shooting another unarmed man in the chest in front of dozens of witnesses. No complication can justify forcing that feeling of helplessness and anger on John Geer’s friends and family for over a year.

Ten Reasons Portland Transit Is Not a Model for Other Cities

Secretary of Transportation Anthony Foxx came to Portland, Oregon last week to tell TriMet, the region’s transit agency, not to apologize for spending $204 million per mile on its latest light-rail line. Although that is eight times as much (after adjusting for inflation) as the region’s first light-rail line, Foxx noted that regions “need to have bold visions” and that, as a model for the rest of the country, Portland was “building for today and for the future.”

Residents of Austin, Durham, St. Petersburg, and many other cities are being told they need to emulate Portland by building their own expensive light-rail lines. Here are ten reasons why they should reject Portland as a model for their own transit and transportation systems.

Court Is Back in Session: No Huge Cases Yet, but Blockbusters Loom

While it seems like just yesterday that the Supreme Court went on vacation after its controversial (but correct) ruling in the Hobby Lobby contraceptive-mandate case, summer is over even for The Nine. Today is First Monday, the traditional start of the new Supreme Court term.

As of this writing, the Court has 50 cases on its docket, which is about on par with recent practice, such that we can expect 70-75 opinions at term’s end once the Court sets more cases for argument later in the term. Here are some of the issues: whether a policeman’s mistaken belief that someone had committed a traffic violation can form the basis for a lawful search (Heien v. North Carolina – Cato’s brief); whether a prison can prohibit a Muslim inmate from growing a beard (Holt v. Hobbs); whether a fisherman can be prosecuted under Sarbanes-Oxley’s recordkeeping provision for throwing undersized fish overboard (Yates v. United States - Cato’s brief); whether Congress can force the State Department to recognize Jerusalem as part of Israel on U.S. passports (Zivotovsky v. Kerry); the circumstances under which criminal charges can attach to Facebook posts (Elonis v. United States Cato’s brief); and whether an occupational-licensing board gets immunity from liability for anticompetitive behavior (North Carolina Board of Dental Examiners v. FTC Cato’s brief). These cases don’t yet reach the high profile of recent terms, but if the Court takes up one of the same-sex marriage or Obamacare-subsidies lawsuits now at its doorstep, all bets are off.

For more detail on these and other cases, see the “Looking Ahead” essay in this year’s Cato Supreme Court Review, as well as these two previews.

Cato Maintains Opposition to IRS Lawlessness in Obamacare-Subsidies Case

To encourage the purchase of health insurance, the Affordable Care Act added a number of deductions, exemptions, and penalties to the federal tax code. As might be expected from a 2,700-page law, these new tax laws have the potential to interact in unforeseen and counterintuitive ways.

As first discovered by Michael Cannon and Jonathan Adler, one of these new tax provisions, when combined with state decision-making and IRS rule-making, has given Obamacare yet another legal problem. The legislation’s Section 1311 provides a generous tax credit for anyone who buys insurance from an insurance exchange “established by the State”—as an incentive for states to create the exchanges—but only 16 states have opted to do so. In the other states, the federal government established its own exchanges, as another section of the ACA specifies. But where § 1311 only explicitly authorized a tax credit for people who buy insurance from a state exchange, the IRS issued a rule interpreting § 1311 as also applying to purchases from federal exchanges.

This creative interpretation most obviously hurts employers, who are fined for every employee who receives such a tax credit/subsidy to buy an exchange plan when their employer fails to comply with the mandate to provide health insurance. But it also hurts some individuals, such as David Klemencic, a lead plaintiff in one of the lawsuits challenging the IRS’s tax-credit rule. Klemencic lives in a state, West Virginia, that never established an exchange, and for various reasons he doesn’t want to buy any of the insurance options available to him. Because buying insurance would cost him more than 8% of his income, he should be immune from Obamacare’s tax on the decision not to buy insurance.  After the IRS expanded § 1311 to subsidize people in states with federal exchanges, however, Klemencic could’ve bought health insurance for an amount low enough to again subject him to the tax for not buying insurance. Klemencic and his fellow plaintiffs argue that they face these costs only because the IRS exceeded the scope of its powers by extending a tax credit not authorized by Congress.

The district court rejected that argument, ruling that, under the highly deferential test courts apply to actions by administrative agencies, the IRS only had to show that its interpretation of § 1311 was reasonable—which the court was satisfied it had. On appeal, a panel of the U.S. Court of Appeals for the D.C. Circuit held that the plain language of the ACA precluded the federal government from subsidizing the premiums of insurance policies obtained through federally established exchanges. Later that same day, the Fourth Circuit in King v. Burwell took the opposite position on the same question—from which ruling there is now a cert petition pending in the Supreme Court.

This circuit split did not last long, however, as the D.C. Circuit decided to vacate the panel opinion and rehear Halbig en banc (meaning all the court’s judges, not just a three-judge panel). Federal appellate rules say that such review “is not favored” and the D.C. Circuit has a particularly high bar, on average taking only one case per year en banc. Judge Harry Edwards, who dissented in the Halbig panel ruling, has taken great pains to reduce the number of en banc hearings. Even before he served as the D.C. Circuit’s chief judge, Edwards wrote in Bartlett v. Bowen (1987) that “the institutional cost of rehearing cases en banc is extraordinary” and that it “substantially delays the case being reheard, often with no clear principle emanating from the en banc court.” Nevertheless, the court took this step, vindicating President Obama’s strategy of packing the underworked D.C. Circuit after the Senate eliminated the filibuster for judicial nominees.

Cato and the Pacific Research Institute have filed a brief continuing our support for the plaintiffs on their appeal. While it is manifestly the province of the judiciary to say “what the law is,” where the law’s text leaves no question as to its meaning—as is the case here with the phrase “established by the State”—it’s neither right nor proper for a court to replace the laws passed by Congress with those of its own invention, or the invention of civil servants.

If Congress wants to extend the tax credit beyond the terms of the ACA, it can do so by passing new legislation. The only reason for executive-branch officials not to go back to Congress for clarification, and instead legislate by fiat, is to bypass the democratic process, thereby undermining constitutional separation of powers.

This case ultimately isn’t about money, the wisdom of individual health care decision-making, or even political opposition to Obamacare. It’s about who gets to create the laws we live by: the democratically elected members of Congress, or the bureaucrats charged with no more than executing the laws that Congress passes and the president signs.

The en banc D.C. Circuit will hear argument in Halbig v. Burwell on December 17.