The ACLU has issued a related report here.

This blogpost was co-authored by Trevor Burrus.

A seemingly complicated legal case that has caught Cato’s attention, CCA Associates v. United States, boils down to a simple constitutional question: If the government reneges on a contract and forces a property owner to rent apartments at below-market rates for longer than originally agreed, does it constitute a taking under the Fifth Amendment (which would require the government to pay just compensation)?

In 1961, Congress amended the National Housing Act to create incentives for private builders to supply housing to low- and moderate-income families. Builders were given below-market mortgages backed by the federal government and, in return, the owners agreed to certain restrictions from the Department of Housing and Urban Development, the most relevant being limitations on raising rent. Owners were also given the right to pre-pay the 40-year mortgage after 20 years, however, freeing them at that time from their rent-control obligations.

In 1990, as one 20-year period came to a close, Congress took away the owners’ right to pre-pay their mortgages. In 1996, however, Congress returned the property owners’ right to pre-pay. Therefore, between 1991 (when the original 20-year period would have lapsed) and 1996, the property owners were forced to rent at below-market rates.

CCA Associates is one of many similarly situated property owners who are suing the federal government for its clear act of duplicity. CCA Associates’ case, among many others, has been bouncing back and forth between the Court of Federal Claims and the Federal Circuit for many years.

One of the key questions is how to determine the degree to which the government’s actions economically affected CCA Associates’ property. One view is that there was substantial economic impact during the five-year period between when Congress eliminated and then restored the pre-pay right — CCA Associates lost approximately 81% of the property’s possible value during those five years. Another view looks at the impact during the five-year period as fraction of the entire life of the property, not just the diminished value during the five-year period. Under this calculation, CCA Associates only lost 18% of the total value of the property.

The Federal Circuit adopted the latter formula and held that 18% is not a substantial enough economic impact to constitute a Fifth Amendment taking. Cato has joined the National Federation of Independent Business, the Center for Constitutional Jurisprudence, and Professor Steven Eagle of George Mason University Law School on an amicus brief urging the Supreme Court to take CCA Associates’ case.

We argue that adopting the Federal Circuit’s answer to the so-called “denominator question” — that is, whether the denominator in the “economic impact” fraction should be the entire life of the property or the shorter (here five-year) period during which the government temporarily took the owners’ right to rent at the market price — could preclude all possible claims that the government committed a “temporary taking.” By choosing a big-enough denominator, courts can always characterize an economic impact as being below the constitutional threshold.

We also argue that, in applying the Supreme Court’s factors in the famous 1978 Penn Central case (which set up the analytical framework for regulatory takings), the Federal Circuit incorrectly treated the factors as a magic formula and ignored other relevant factors. Finally, we point out how courts are obviously confused about the proper standards to apply in these cases, thus creating a perfect time for the Supreme Court’s guidance.

The Court will decide this fall whether to hear CCA Associates v. United States.

Today POLITICO Arena asks:

Is Jeb Bush right that his father and President Reagan would find themselves out of step with today’s Republican Party because of its strict adherence to ideology and the intensity of modern partisan warfare?

My response:

Jeb Bush’s remarks about the Republican Party represent the views of some members of a party that, like the Democratic Party, has become more sharply defined than it was under his father’s or brother’s presidencies. Looking at the longer and deeper view, however, that’s not surprising, because the Bush presidencies were more anomalous than indicative of the party.

For much of the post-War period the Republican Party, especially under the eastern establishment, was little but “Democrat-lite.” That began to change with Barry Goldwater in 1964, suffered a setback under Nixon and Ford, but nonetheless continued under Governor and then President Reagan, who brought a fair measure of ideological discipline to the Party—affecting the Democratic Party in the process. (Compare the ideological opposition to Reagan to that of Ford, for example.) Despite the two Bushes thereafter, the intellectual and activist institutions that had underpinned the Reagan revolution continued to grow, especially as the Democratic Party itself became more polarized, and those forces increasingly influenced the Republican Party, encouraging it to stand for something, unlike the earlier “always-in-the-minority” party—the party Democrats remembered fondly as the “reasonable” Republicans.

There were plenty of counterexamples to those developments, of course—the collapse of the Gingrich bubble late in 1995, the rise of the Tom DeLay opportunists, and the spending of Bush II. And there were issues that continued, and continue even now, to deeply divide members, like immigration and the drug war. But increasingly the two parties have become more sharply defined—“polarized,” if you prefer—as the 2010 mid-term elections made especially clear. And contrary to the Washington establishment, that’s not a bad thing, because voters now have a real choice, not just a choice between two parties, both of which stand for essentially the same things, their respective candidates seeking simply to stay in power. Today, in the main, Republicans stand for the private sector and limited government, Democrats for the public sector and government services. We’ll soon see which course the American people want to take.

On Friday, under leadership mostly associated with the Roman Catholic Church and the anti-abortion movement, protesters rallied in more than 150 cities against the HHS Obamacare mandate requiring church-affiliated universities, hospitals and other institutions to furnish access to “reproductive health services” that run counter to their church’s teachings. In today’s Washington Examiner, columnist Tim Carney writes, “What should have been obvious is becoming clearer to religious conservatives: Government is always a rival, and often an enemy, of religion.” An accompanying AP picture of a demonstration in Little Rock, Arkansas shows protesters waving crosses inscribed “Don’t Tread on Me.”

Carney goes on to discuss another controversy in the news, last week’s ruling by the New Mexico Supreme Court Court of Appeals that a photographer’s business counts as a “public accommodation,” which requires her to photograph a gay wedding for a prospective client despite her religious objections. (New Mexico does not legally recognize gay marriage; its courts instead ruled under a general anti-discrimination law covering sexual orientation.) Like Carney, and like most people I’ve talked to about the case, I find this result an appalling intrusion on the photographer’s wish to live her own life and run her own business as she pleases.

So I was taken aback when Carney goes on to assert that all this proves “Libertarians need to reassess their allegiances on social matters.” Who does he think has been on the front lines on these questions, during long stretches in which organized religion chose not to get involved, if not libertarians?

Take the photographer case. Google “Elane Photography” + “New Mexico” and the top entry you find is from libertarian-leaning law professor Eugene Volokh, who has spoken out strongly against the ruling as contrary to First Amendment values. Another of the top ten is from our friend Hans Bader at the Competitive Enterprise Institute, who calls the decision “wrong” and “the imposition of progressive orthodoxy by judicial fiat.” Notably, two among the other top ten results are from writers at gay websites who argue on generally classical-liberal grounds that it is wrong to coerce the photographer.

The story is similar on the ObamaCare contraception mandate: any number of libertarians and classical liberals who do not necessarily share the Catholic Church’s views on contraception or gays have nonetheless spoken up for the importance of letting it run its institutions under its own lights, an argument that extends to other social service areas such as adoption.

Meanwhile, as Carney rightly observes, many who share his own religious convictions “have too often embraced government, either in the name of social justice or traditional values.” It might be noted that modern discrimination law accords “protected group” status to religion itself, an inclusion that remains curiously uncontroversial among many religious conservatives even though it carries with it a rich potential for chipping away at private conscience rights and the autonomy of private institutions.

As I understand it, the libertarian position is to prize religious liberty, while also disapproving the use of government as an instrument of culture war. That’s no contradiction. It’s the American way.

Ensconced at Brookings and Georgetown, opining twice weekly at the Washington Post, and a frequent PBS/NPR voice, E.J. Dionne is your quintessential inside-the-beltway liberal. His column this morning, “Government is the solution,” doesn’t disappoint. Democrats should “just say it,” he argues. If they really believe in government, then stop beating around the bush, apologizing, qualifying. Look at Gov. Scott Walker’s win last week in Wisconsin, “helped by the continuing power of the conservative anti-government idea in our discourse. An energetic argument on one side will be defeated only by an energetic argument on the other,” he counsels.

Trouble is, it’s not just the energy, or the clarity: It’s the argument. As we say in horse racing, no matter how good the jockey, he can’t carry the horse across the finish line. And the government horse has a pretty bad track record.

You’d never know it, however, from the rest of Dionne’s exhortation. Going back to the nation’s beginnings he invokes Hamilton’s and Clay’s road and canal building projects — they who “read the Constitution’s commerce clause as Franklin Roosevelt and progressives who followed him did, as permitting the federal government to serve the common good.” Alas, Dionne’s constitutional history is amiss. In his 1791 “Report on Manufactures,” which Congress rejected, Hamilton invoked not the Commerce but the General Welfare Clause. And the canal projects, like the railroad projects 20 years later, involved improvident donations of government land, under Article IV’s Lands Clause, resulting in the panics of 1837 and 1857, respectively, all of which is nicely documented in Harvard Law Prof. Charles Warren’s wonderful little volume, aptly entitled Congress as Santa Claus, published in 1932, on the eve of the New Deal.

But it doesn’t get any better when Dionne turns from law to economics. Here his main point is to urge Democrats to say that “government creates jobs.” Thus, he writes that it was “salutary that Douglas Elmendorf, the widely respected director of the Congressional Budget Office, told a congressional hearing last week that 80 percent of economic experts surveyed by the University of Chicago’s Booth School of Business agreed that the stimulus got the unemployment rate lower at the end of 2010 than it would have been otherwise.” Who could argue with that? Indeed, more stimulus spending would have lowered the rate even further: there was no unemployment in the Soviet Union, if you want serious stimulus spending.

The point is that government spending is not cost-free. The money comes from the private sector now, where it might otherwise be employed creating private-sector jobs, or is borrowed from the future. And it’s no answer to contend, as Dionne does, that we need government “investments” in such things as transportation and clean energy (high speed rail? “green fuel” requirements for the Defense Department?) because “the private sector is no longer investing” and hence no longer creating jobs — not if you ignore the massive regulatory uncertainty that is impeding private-sector investing. But what’s any of that to someone who believes that “government is the solution.”

No, I’m not talking about Guantanamo or interrogation techniques or anything else related to national security. I’m talking about various unconstitutional actions by administrative agencies and law enforcement that ultimately resulted in unanimous defeats at the Supreme Court, as I described in my Wall Street Journal op-ed.

That analysis — focusing on cases decided this year in the areas of religious liberty (Hosanna-Tabor v. EEOC), criminal procedure (U.S. v. Jones), and property rights (Sackett v. EPA) – has generated plenty of positive reaction from a variety of perspectives. One criticism that I’ve seen a few times, however, is that I’m being disingenuous because in all three cases I dissect, the DOJ was merely defending actions and policies that originated when George W. Bush was president. “The Solicitor General, who is the government’s top lawyer, has, in almost all cases,” notes Media Matters, “an obligation to defend government actions and federal laws, including those actions undertaken by previous administrations.”

There is some validity to this point: Hosanna-Tabor did indeed involve an employment discrimination lawsuit filed by the EEOC during the Bush administration; Sackett involved an order issued by the Bush administration’s EPA; Bush’s Justice Department instigated the federation prosecution at issue in Jones.

Of course, these lower-level administrative actions probably didn’t reach the radar screens of actual Bush-era political appointees and policy makers — bureaucrats will do their own thing, trying to expand their own power regardless of who’s in the White House — and DOJ lawyers who actually represent an administration’s legal policy typically aren’t involved until the appellate stage (under Obama in these cases). But even if they had here, that doesn’t somehow excuse Obama’s Justice Department, which made dangerous legal arguments betraying an incredibly expansive view of federal power, ones that didn’t gain a single vote at the Supreme Court. Bush attorney generals John Ashcroft, Alberto Gonzales, and Michael Mukasey (or solicitor generals Ted Olson, Paul Clement, and Greg Garre) weren’t the ones filing these briefs.

Moreover, while the solicitor general’s office does indeed have the duty to make the strongest plausible legal arguments supporting federal laws, that doesn’t mean that the Obama administration as a whole was handcuffed. The solicitor general (be that Don Verrilli or his predecessors, Neal Katyal and Elena Kagan) could’ve decided not to seek Supreme Court review of cases that were clear losers for the federal government. Or he, along with his boss, Attorney General Eric Holder, could’ve settled the cases and worked to change the EEOC, EPA, and FBI policies that led to the unconstitutional actions.

Or, indeed, if the administration really thought that there were no less-ridiculous arguments to be made, President Obama could’ve instructed DOJ officials not to defend these cases any further — as he did with the Defense of Marriage Act.

Finally, even if the Bush administration had acted exactly the same way, making exactly the same legal arguments (impossible to imagine in Hosanna-Tabor and Sackett, at least), two constitutional wrongs don’t make a right. And I don’t think President Obama’s defenders really want to rely on the argument, “All administrations regularly violate the Constitution and get reversed 9–0 by the Supreme Court.”

In sum, I’ll stick with my claim that the legal arguments the Obama Justice Department has made before the Supreme Court “don’t pass the smell test” and constitute a fundamentally flawed vision of federal power.

Happy Birthday to my friend and Cato senior fellow Nat Hentoff. He turns 87 today, but he’s busier than ever with book and article deadlines.

Let’s take a quick look at his work. This week New York Governor Andrew Cuomo proposed a measure to rein in marijuana stops, arrests, and convictions in New York City. Nat Hentoff was sounding the alarm on that problem years ago!

Here he relates his encounter with Che Guevara: