June 2020

June 30, 2020 5:25PM

The Costs and Consequences of the Hong Kong National Security Law

The Hong Kong national security law deals a serious blow to the territory’s unique political freedoms and autonomy. The law is the culmination of Beijing’s efforts to assert greater control over Hong Kong, which has seen both a steady erosion of civil liberties and growing protests against Beijing’s control in recent years.

The national security law achieves the objective of further cementing China’s control over Hong Kong, but this move will have multiple negative consequences for Beijing’s relationships with Hong Kong, the United States, and other countries in Asia. China’s willingness to pay these costs should inform how the United States structures its policies toward China if Washington wants to create effective policies for changing Beijing’s behavior.

The Hong Kong national security law is the latest in a long list of Beijing’s foreign and domestic policies that are souring China’s relationship with other countries. In June 2020 alone, China has likely launched large‐​scale cyberattacks against Australia and killed Indian soldiers along a contested border. Domestically, the Associated Press reported this week that China’s abusive policies toward the Uyghur people include a massive campaign to reduce Uyghur birth rates through practices like forced sterilization.

Economic relations have not fared any better. The coronavirus pandemic derailed a potential U.S.-China détente on trade issues and the Trump administration announced that it would start rolling back Hong Kong’s favorable trade status due to China’s attempts to reduce Hong Kong’s autonomy.

For all its raw power, Beijing has done a terrible job of managing its domestic and foreign relationships. The Hong Kong national security law will only deepen the perception that China is an increasingly hostile and uncompromising power. In the United States, this will accelerate the development of an emerging consensus for a tougher China policy even if the details of such a policy are up for debate. Furthermore, the steamrolling of the “one country, two systems” model will make it harder for countries to cooperate with Beijing today if it could reverse course and break agreements or mutual understandings tomorrow.

Yet Beijing’s repeated willingness to implement policies that it knows will result in reputational, political, and economic costs should be a wakeup call for U.S. policymakers, especially when it comes to issues that Beijing sees as essential for national sovereignty. If China is willing to hurt itself in the process of asserting greater political control over Hong Kong, then what costs will it be willing to absorb in order achieve similar goals such as establishing control over Taiwan? If Beijing has a fundamentally different assessment of the stakes of its policies, then is it possible for the United States to coerce China into changing course?

These are important questions to consider because much of the discussion about a more competitive U.S. approach to China focuses on imposing costs that can force a change in Beijing’s policies. Competing with China through punishment scratches the “do something” itch, but given China’s recent behavior a U.S. cost imposition strategy is unlikely to produce the changes that Washington seeks.

Noting China’s acceptance for cost absorption doesn’t provide an answer to the question of what U.S. policies can successfully change Chinese behavior. However, as Washington grapples with big questions about how to deal with a rising China it will be important to soberly assess how Beijing reacts to various policies.

The Hong Kong national security law is another data point showing that Beijing is willing to take actions that cause pain for itself in order to achieve a core national interest. A U.S. strategy that is too heavily dependent on raising costs for China may be easy to sell in Washington, but it will probably not change Beijing’s behavior.

June 30, 2020 4:15PM

Supreme Court Strikes Down Montana Blaine Amendment Barring State Aid to Religious Schools

This morning, the Supreme Court issued its decision in Espinoza v. Montana Department of Revenue, striking down Montana’s state constitutional Blaine Amendment, which forbids state aid to “any church, school, academy, seminary, college, university, or other literary or scientific institution, controlled in whole or in part by any church, sect, or denomination.” The decision overrules a Montana Supreme Court decision striking down a state school choice program that had provided tax credits on an equal basis to students attending both religious and secular private schools. The ruling is an important victory for religious freedom, specifically the principle that government policy should not discriminate between private organizations and citizens on the basis of religion.

The decision is a close 5–4 ruling, split along ideological lines with the five conservative justices in the majority, and the four liberals all dissenting. To my mind, that is unfortunate. Striking down blatant government discrimination on the basis of religion should not be so controversial and divisive.

While there are a number of complexities in the case, Chief Justice John Roberts’ majority opinion effectively captures the main issue:

The Free Exercise Clause, which applies to the States un­der the Fourteenth Amendment, “protects religious observ­ers against unequal treatment” and against “laws that im­pose special disabilities on the basis of religious status.” Trinity Lutheran….Those “basic principle[s]” have long guided this Court….

Most recently, Trinity Lutheran distilled these and other decisions to the same effect into the “unremarkable” conclusion that disqualifying otherwise eligible recipients from a public benefit “solely because of their religious character” imposes “a penalty on the free exercise of religion that triggers the most exacting scrutiny….”

Montana’s no‐​aid provision bars religious schools from public benefits solely because of the religious character of the schools. The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school. This is apparent from the plain text. The provision bars aid to any school “controlled in whole or in part by any church, sect, or denomination.” Mont. Const., Art. X, §6(1). The provision’s title—“Aid pro­hibited to sectarian schools”—confirms that the provision singles out schools based on their religious character….

When otherwise eligible recipients are disqualified from a public benefit “solely because of their religious character,” we must apply strict scrutiny. Trinity Lutheran

The Blaine Amendment doesn’t exclude only those religious schools which fail to meet neutral educational standards, or have some other kind of flaw. They are barred from receiving state assistance for which similar secular institutions are eligible. That is clearly discrimination on the basis of religion, if anything is. The opinion goes on to explain that the Blaine Amendment cannot possibly survive strict scrutiny, as there is no narrowly tailored state interest that can justify a categorical ban on aid to religious schools, while simultaneously permitting aid to otherwise similar secular ones.

The dissenting justices argue that state governments must be free to discriminate against religious institutions in at least some instances, in order to avoid Establishment Clause programs. Here, for example, is a relevant passage from Justice Sotomayor’s dissent:

Contra the Court’s current approach, our free exercise precedents had long granted the government “some room to recognize the unique status of religious entities and to single them out on that basis for exclusion from otherwise generally applicable laws…..”

Here, a State may refuse to extend certain aid programs to religious entities when doing so avoids “historic and substantial” antiestablishment concerns. Locke [v. Davey], 540 U. S., at 725…. Indeed, one of the concurrences lauds petitioners’ spiritual pursuit, acknowledging that they seek state funds for manifestly religious purposes like “teach[ing] religion” so that petitioners may “outwardly and publicly” live out their religious tenets. Ante, at 3 (opinion of GORSUCH, J.). But those deeply religious goals confirm why Montana may properly decline to subsidize religious education. Involvement in such spiritual matters implicates both the Establishment Clause, see Cutter, 544 U. S., at 714, and the free exercise rights of taxpayers, “denying them the chance to decide for themselves whether and how to fund religion…”

This is a longstanding argument offered by defenders of discriminatory exclusion of religious institutions from government education programs. But it is dangerously flawed. If there is a violation of the Establishment Clause or the Free Exercise Clause any time the state provides assistance that helps religious people engage in “spiritual pursuits,” then the same argument can be used to justify excluding religious institutions from virtually any government service or tax credit. If the government provides police and fire department protection to religious institutions on the same basis as secular ones, that facilitates worshippers’ “spiritual pursuits” and denies taxpayers ” the chance to decide for themselves whether and how to fund religion.” The same point applies if the government gives tax exemptions to religious charities on the same basis as secular ones (as both the federal and state governments routinely do).

You don’t have to adopt many conservatives’ unduly narrow interpretation of the Establishment Clause (which they interpret as barring only the establishment of an official church or as directly coercing people to take part in its services) to recognize that nondiscrimination is not establishment. Even if government endorsement of religion also qualifies as an “establishment,” merely treating religious institutions the same as secular ones does not count as such an endorsement. For example, no one claims that the government endorses religion when it gives legal effect to religious wedding ceremonies on the same basis as purely secular ones.

There is an in‐​depth debate between the majority and the dissenters over whether Espinoza can be distinguished from the Court’s 2004 decision in Locke v. Davey, which upheld a state law denying scholarships to students pursuing degrees in “devotional theology” for the purpose of studying for the ministry. I think Roberts has the better of this debate, but I will not try to cover it in detail here. I would note, however, that there is an obvious difference between refusing to fund studies for a degree devoted to a specific subject matter, and categorically denying funding to all students attending religious institutions, even if they meet the curricular standards required for secular schools to be eligible for assistance.

Funding of education necessarily requires some criteria for determining which subjects have to be taught in order to qualify. Otherwise, the state would end up subsidizing attendance at institutions that only teach material that is completely irrelevant to the state’s educational objectives—for example a school whose curriculum consists solely of training to repair obsolete typewriters. Imposing neutral curricular requirements in a scholarship program is different from categorically barring participation by religious schools, even if they cover the subjects required by the state just as well as secular ones do.

Two of the dissenters—and many of Montana’s supporters in the legal academy—argue that there is no actual discrimination on the basis of religion here, because the net effect of the Montana Supreme Court’s ruling enforcing the Blaine Amendment was to invalidate the entire school choice program, thereby denying aid to both religious and secular private schools. For example, Justice Ruth Bader Ginsburg argues that Montana simply “put all private school parents in the same boat.“Roberts has a good response to that point:

The Montana Legislature created the scholarship program; the Legislature never chose to end it, for policy or other reasons. The program was eliminated by a court, and not based on some innocuous principle of state law. Rather, the Montana Supreme Court invalidated the program pursuant to a state law provision that expressly discriminates on the basis of religious status. The Court applied that provision to hold that religious schools were barred from participating in the program. Then, seeing no other “mechanism” to make absolutely sure that religious schools received no aid, the court chose to invalidate the entire program….

The final step in this line of reasoning eliminated the program, to the detriment of religious and non‐​religious schools alike. But the Court’s error of federal law occurred at the beginning. When the Court was called upon to apply a state law no‐​aid provision to exclude religious schools from the program, it was obligated by the Federal Constitution to reject the invitation…. Because the elimination of the program flowed directly from the Montana Supreme Court’s failure to follow the dictates of federal law, it cannot be defended as a neutral policy decision..

Imagine that a state legislature enacted a school choice program similar to Montana’s, and that the state supreme court then struck it down because it violated a provision in the state constitution barring state aid to racially integrated schools. The state could then argue there was no racial discrimination here, because the end result of the ruling was that students attending both segregated and integrated private schools are denied tax credits. Few would deny that the state government would be acting unconstitutionally in such a case, because the denial of tax credits was the result of a provision in state law that explicitly discriminates on the basis of race. The Montana Supreme Court ruling enforcing the Blaine Amendment in Espinoza qualifies as discrimination on the basis of religion, for exactly the same reason.

Montana remains free to deny state assistance to all private schools alike. But it cannot do so on the basis of a state law that requires discrimination on the basis of religion, and thereby leads to the invalidation of tax credit programs that do not themselves discriminate in this way.

Finally, it is worth mentioning the fact that Montana’s original Blaine Amendment was enacted in 1889, as part of a nationwide Blaine Amendment movement motivated by bigotry against Catholic immigrants. Justice Alito discusses the relevant history in some detail in his concurring opinion. Normally, this kind of bigoted motivation would be enough to strike down a government policy, even if it was ostensibly neutral on its face. Here, the issue of motivation is not crucial, because the Blaine Amendment does in fact discriminate on the basis of religion on its face. It explicitly discriminates against religious schools, relative to secular ones.

However, I also agree with the argument that the bigoted motivation behind the law provides an independent basis for striking down Blaine Amendments. If the enactment of a seemingly neutral law or policy is motivated by unconstitutional discrimination on the basis of religion (or some other forbidden criterion), it should be invalidated unless the government provides strong evidence that it would have enacted the same law or policy even in the absence of unconstitutional motives. I have defended this principle in other contexts, such as the Trump travel ban case, and it applies here too. It is unfortunate that both liberal and conservative justices seem to apply it inconsistently, depending on whose ox is being gored in the particular case at hand.

In the case of Montana, this is is admittedly complicated by the fact that the Blaine Amendment was reenacted in 1972, as part of the process of drafting a new state constitution. The 1972 framers arguably did not have the same bigoted motives as those who enacted the 1889 version.

This raises the issue of whether the reenactment “cleanses” the taint created by the bigotry of the 1880s. I cannot fully do justice to this complicated issue in a blog post that is already too long. But I will say that such “cleansing” can only occur if the reasons for reenactment are not themselves tainted by unconstitutional motives. In this case, such a standard will be difficult to meet, because the Amendment discriminates on the basis of religion on its face. Thus, the motives for reenactment necessarily involve some form of discriminatory hostility towards religious institutions, even if no longer focused primarily on Catholics. In his opinion, Alito makes some additional points on why the 1972 reenactment remained tainted by unconstitutional motives. He also (correctly) points out that the reenactment issue does not arise in the case of the many states that still have Blaine Amendments dating back to the original 19th century Blaine movement, and not reenacted since.

Ultimately, the issue of motive isn’t crucial in this case. It is enough that the Montana provision discriminates against religious institutions on its face.

While I am happy about the result of this decision, I am troubled, though not surprised, by the 5–4 division along ideological lines, which replicates the one that happened in the 2018 travel ban case (with the exception of Justice Kennedy, who has since retired from the Court). The conservative justices who turned a blind eye to religious discrimination in the travel ban case consider it imperative to strike it down here. The liberal justices, for their part, have the opposite bias. That ideological division is likely to be replicated in commentators’ reactions to the ruling, as well. It is, I fear another example of how both liberals and conservatives are often inconsistent in their approach to issues of religious discrimination.

[Cross‐​posted from Reason]

June 30, 2020 11:48AM

Remarkably Easy School Choice Case Was Still Only a 5–4 Decision

Neal McCluskey has already commented on the policy ramifications of today’s important educational/​religious freedom Supreme Court decision, but I wanted to pick up on the key legal point.

Espinoza v. Montana Department of Revenue was a simple case that exposed blatant anti‐​religious discrimination: Montana created a tax‐​credit scholarship program, which state authorities didn’t allow religious parents to take advantage of, and which the state supreme court shuttered rather than allowing those parents to send their kids to religious schools.

Our Constitution simply doesn’t permit that sort of thing.

What’s scary is that this easy call became a 5–4 vote. That’s the margin on which freedom of conscience rests in this country, at least with respect to government action. It shows why various states’ nefarious Blaine Amendments are a blot on our liberties, and why school choice is more important than ever.

See here for more background and to read Cato’s brief, which Justice Alito cited on the second page of his concurring opinion.

June 30, 2020 10:33AM

Unveiling the New Lib​er​tar​i​an​ism​.org

Today it is my pleasure to announce the launch of the new Lib​er​tar​i​an​ism​.org. The team has been working on this redesign for six months and we’re really happy with the result.

The new Lib​er​tar​i​an​ism​.org isn’t just a fresh coat of paint. While our principled message of justice, prosperity, responsibility, tolerance, cooperation, and peace remains the same, we’ve rethought everything about how we introduce and explore that message and the ideas and history that inform it. You’ll find the site much easier to use and more helpful in guiding you through learning about libertarianism, whether you’re brand new to the ideas of liberty or looking to dig deep into particular topics.

This begins with our “What is a libertarian?” page, setting out the basics. It introduces the history, and sketches out how libertarians inform public policy. We think this page is the best one out there for people wanting to know what libertarianism is and how it applies to politics and policy.

The rethinking of the website continues into the way we’ve organized our vast library of essays, podcasts, videos, and books. We’ve grouped these into topics, such as individual rights, foreign policy, taxation, capitalism, socialism, immigration, and feminism. Each topic is introduced with an article from the Encyclopedia of Libertarianism and, for many of them, we’ve also selected some of what we think is our best content to help you begin exploring.

I think you’ll find the new Lib​er​tar​i​an​ism​.org to be the best resource out there for discovering and learning about the philosophy, politics, and history of liberty. I want to thank all of my Cato Institute colleagues who worked to bring this new website to life. And thank you for being part of our mission to make the world a freer, more peaceful, and more prosperous place.

June 30, 2020 10:30AM

A Good Day for Educational Equality

It’s basic: Government must not discriminate for or against any group in the provision of services. That should be especially the case in education, which deals with nothing less than the formation of human minds. Today, the Supreme Court took another important step toward enshrining educational equality, declaring it unconstitutional to block a choice program because some families will freely choose to attend religious schools.

Freedom and equality under the law are the primary reasons to take heart about this ruling, but so is the power of school choice to bring greater peace in education. As Cato’s Center for Educational Freedom illustrates on our Public Schooling Battle Map—and described for the Court in two amicus briefs—public schooling forces wrenching social conflict by requiring diverse people to fund a single system of government schools. The result is if one group wants one thing done or taught—evolution, Huckleberry Finn, bathroom selection by gender identity—they have to engage in painful political combat with people who want something else. School choice defuses such conflict by ending the zero‐​sum game of public schooling. With choice, all families can seek out what they want without having to impose it on others.

There is a long way to go still to achieve full freedom, equality, and peace in education, which begins with states and local governments extending school choice to all Americans, not just the lucky half‐​million or so currently benefiting from vouchers, scholarship tax credits, and education savings accounts. But it is important progress to move one more obstacle out of the way of educational freedom: prohibitions on choice just because someone might choose religious education.

There will probably be more to discuss after I digest the whole decision.

June 29, 2020 4:59PM

Crime and the Takings Clause: They Go Together

Little noticed among the decisions the Supreme Court handed down today, buried in its long list of cert denials, is an especially egregious case, Lech v. City of Greenwood Village, a case with possibly disturbing implications for the police brutality issues now before the country. The facts were briefly outlined in Cato’s summary of our amicus brief urging the Court to take up the case:

Leo and Alfonsia Lech owned a home in Greenwood Village, Colorado where their son John lived. In early June of 2015, a shoplifter who was fleeing from the police chose the house at random to hide from the police. When the police arrived, they discovered that the shoplifter was armed and dangerous. Flushing him out of the house required two gas‐​canisters, breaking down the front and back doors, and blowing holes in the walls and windows. The shoplifter was captured, but the home was uninhabitable. This case is about who covers the costs of building a new house, the public who were protected from a violent criminal, or the innocent family that lost their home.

The Leches brought suit to recover their losses under the Fifth Amendment’s Taking’s Clause, which requires the government to pay owner’s just compensation when their property is taken for a public use. True, the clause ordinarily arises outside the criminal context, when the government needs to build a road, a dam, and the like. But the Court has had a capacious understanding of “public use,” as in the notorious 2005 Kelo decision where it held economic development and increasing a municipality’s tax base were public uses—or at least public benefits. At least there, however, Suzette Kelo received reasonable compensation. Here, the Leches got a pittance: $5,000.

And it isn’t as if the principle behind the Takings Clause had not been satisfied: the government cannot force “some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States (1960) Even if apprehending this shoplifter were worth this cost—a doubtful proposition—it surely should have been borne by the public as a whole, not fallen entirely on these innocent homeowners. Yet contrary to precedent, the Tenth Circuit invoked a police power exception, even though countless health and safety measures that give rise to compensation under the Takings Clause are undertaken pursuant to the police power.

It’s likely, however, that the “safety” at issue here sounded more in the criminal than in the civil context—as if that really mattered. To be sure, we have the police to protect our safety. But they cannot do so by any means. When the means they employ fall on innocent individuals, the least the government can do is make those victims whole. The Constitution requires nothing less. In fact, it requires a good deal more, as the current crisis is making clear.

June 29, 2020 3:38PM

Seila Law Doesn’t Add Up

In Seila Law, LLC v. Consumer Financial Protection Bureau, the Supreme Court today held that the CFPB’s design violates the Constitution because it concentrates too much power in the hands of one person.

The Court’s remedy, alas, was to concentrate power in the hands of a different person.

Let’s unpack this curious result (background & Cato brief).

A decade ago, in response to the last financial crisis, Congress transferred 18 regulatory programs to the newly created CFPB. Thus empowered, the agency enjoys sweeping authority to enforce the rules it writes.

To insulate the CFPB from politics on Capitol Hill, Congress exempted the agency from the normal appropriations process. Instead, the CFPB is funded directly by the Federal Reserve, and Congress is left out of the loop.

To shield the CFPB from presidential politics, Congress made it an “independent” agency, which means simply that the CFPB’s leadership can disagree with the president (on policy) without fear of being fired.

Almost always, such “independent” agencies are multi‐​member and bipartisan commissions. For the CFPB, however, Congress placed a single director in charge.

Taken individually, none of the CFPB’s characteristics are unprecedented. Plenty of agencies exercise sweeping authority. A couple may bypass the appropriations process. Many are “independent” agencies. And a handful are run by a single director.

The CFPB is special because it was the first agency to incorporate all the above qualities.

The primary question before the Seila Law Court was whether the CFPB’s unique structure violated the Constitution. A bare majority of Justices answered in the affirmative.

According to Chief Justice Roberts’s opinion, the CFPB “lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor.” The agency is, therefore, “incompatible” with the separation of powers.

So far, so good: The CFPB’s structure is unconstitutional.

The Seila Law opinion then turns to how the Court should remedy this constitutional violation. This is where the opinion leaps off the rails.

According to seven Justices, the “solution” to the CFPB’s unconstitutional structure is simply to remove the agency’s “independent” status. In practice, this means that the president may fire the CFPB’s director “at will.” The problem is that the Court’s remedy fails to diminish the constitutional harm as set forth by the holding.

On the merits, the Court determined that the CFPB’s design was unconstitutional for two main reasons. First, the agency represented an historical anomaly. Second, Congress vested too much unaccountable power in one person.

Well, under the terms of the Court’s remedy, the CFPB remains an historical anomaly that concentrates too much unaccountable power in one person.

To my knowledge, no other executive agencies (i.e., non‐​independent) are spared from Congress’s power of the purse. If I’m right, then the CFPB currently is no less unprecedented than it was before the Court’s decision today.

Moreover, the agency still reflects a constitutionally dubious consolidation of power, albeit now amassed in the president instead of the CFPB director. When it comes to the CFPB—a regulatory powerhouse—the president doesn’t have to haggle with lawmakers to get funding for his priorities. No more pesky oversight from appropriators! 

In sum, the Court’s opinion is a house divided. The Court rightly struck down the CFPB’s design as unconstitutional. But the Court’s remedy has the perverse effect of perpetuating the underlying harms. Had it followed its (correct) constitutional reasoning to the logical end, the Court would have sent the entire regime back to Congress. 

Only Congress can clean up this mess. At the very least, lawmakers should normalize the CFPB’s budget process.