The most extraordinary feature of the bill before us today is the incongruity between its title and its content.
The title—the “Protect Women’s Health from Corporate Interference Act”—is clear and straightforward. It suggests the bill is aimed at the important and worthy goal of protecting women’s health.
But the text of the legislation plainly demonstrates that the true objective of the bill is to circumscribe Americans’ religious liberties within the narrow confines of the Democratic Party’s partisan agenda and the whims of politicians and bureaucrats.
While maintaining the appearance of preserving all the current legal protections of religious freedom in America today, this proposal quietly adds to them a subtle, yet deeply problematic and inappropriate, qualification: the federal government will not prohibit the free exercise of religion…until the federal government decides it wants to.
Under this bill, your religious liberties stop at the doorstep of the Democratic National Committee.
And so I rise today in opposition to this bill because it doesn’t do anything to protect women’s health and it does much to undermine the bulwarks of liberty enshrined in our Constitution that have made America the most religiously diverse and tolerant nation in human history.
Although this proposal is only the latest maneuver attempted by my Democratic colleagues to assert the power to restrict religious freedom in America, it also represents the culmination, at least for now, of their opposition to the Supreme Court’s recent decision in Burwell v. Hobby Lobby.
On June 30 of this year, the Supreme Court ruled that the federal government cannot force closely held businesses to violate their sincerely held religious beliefs in order to comply with the contraceptive mandate under the Affordable Care Act.
This decision has received a great deal of attention, but for all the wrong reasons.
Contrary to what many critics have suggested, the Hobby Lobby decision did not promulgate national health care policy; nor did it render any opinion on the virtues of contraception and religious faith.
No, the issue in Hobby Lobby involved not a dispute of competing rights, but a straight-forward application of plainly written law.
As the Constitution states in Article III, Section 2, the role of the Supreme Court is to adjudicate legal disputes by hearing “cases and controversies” that arise when two laws come into conflict.
In Hobby Lobby, the two laws in dispute were the Religious Freedom Restoration Act (passed by an overwhelming, bipartisan majority in Congress and signed by President Clinton in 1993) and a federal mandate issued by the Department of Health and Human Services, acting under the powers delegated to it by the Affordable Care Act.
The Religious Freedom Restoration Act (or RFRA) reaffirmed Americans’ commitment to the fundamental religious liberty protected by our Constitution.
With RFRA, a Democratic Congress and a Democratic President – in cooperation with Republican minorities - declared that when the federal government seeks to infringe on Americans’ religious liberty, it must clear two thresholds.
First, it must show that the law in question serves a compelling state interest. And second, if it does, the law must do so by the least restrictive means possible.
Given that the government openly acknowledged there were a number of far less restrictive means to ensure affordable access to the drugs at issue, the Supreme Court rightly ruled that the contraception mandate violated RFRA.
However unwarranted, the overheated response to the Hobby Lobby decision among some ideological extremists on the Left has led some of my colleagues to introduce a bill that would not simply overturn that modest and narrow decision, but fundamentally rewrite America’s social contract as it pertains to matters of personal conscience.
Whereas the Court’s ruling was limited to “closely held,” for-profit companies, like Hobby Lobby, this bill would empower the federal government to coerce employers of all faiths and no faith into violating their deepest personal convictions.
It would deny any employer—devout or secular, individual or corporate, for-profit or nonprofit — conscience protection under RFRA against all present and future government mandates.
Perhaps most troubling is the warped theory of rights underlying the text of this bill.
This theory holds that the American people possess constitutional and legal rights only when acting alone, but not when acting in a group. These rights, along with any duties one may hold as a person of faith, must be forfeited whenever acting in association with others, on penalty of fines paid to the federal government.
This view of religious liberty might be summarized as an amendment to Matthew, chapter 18, verse 20: “For where two or three are gathered together in My name, there is the IRS in the midst of them.”
This view is extreme, out of touch with the constitution, common sense, and America’s heroic history of religious tolerance.
From our earliest days, one of the sources of our strength as a people and one of the reasons for our success as a nation has been our robust understanding of religious liberty. The breadth and depth of that conception has allowed and encouraged people of all faiths and traditions to live here in friendship and cooperation with one another.
As two members of the U.S. Commission of International Religious Freedom put it:
“…respect for the flourishing of people requires respect for their freedom—as individuals and together with others in community—to address the deepest questions of human existence and meaning. This allows them to lead lives of authenticity and integrity by fulfilling what they conscientiously believe to be their religious and moral duties. […] It also includes the right to witness to one's beliefs in public as well as private, and to act—while respecting the equal right of others to do the same—on one's religiously inspired convictions in carrying out the duties of citizenship.”
Expanding as wide as possible the space in which all people can witness their faith alongside one another has for two centuries elevated, enriched, and united American society.
This robust conception of religious liberty was so essential to American unity that not only did the Founding generation reinforce its protection in a Bill of Rights – which many Framers actually thought was redundant – but that it was the first freedom articulated in the first amendment.
They understood, as most Americans still do, that the proper role of government is not to define people’s happiness, but to protect all individuals equal rights to pursue happiness, according to her own hopes and values and conscience.
Yet for all its legal and constitutional protections, America’s exceptional tradition of religious toleration ultimately rests on the uniquely American principle of equal dignity and respect for all women and men, not simply as “fellow passengers to the grave,” but as fellow pilgrims in search of their own promised land.
The authors of this bill know all this. They know the American people reject their intolerance of diversity and indifference to the First Amendment. We know their bill cannot become law. Indeed, we know this for a fact, because if the regulations they support were actually written in the law, Obamacare itself never would have passed. It was slipped in after the fact, by bureaucrats not subject to public accountability.
This legislation is more than an insult to the people it would target; it is an embarrassment to the party leadership that has embraced it.
I still hold fast to that principle and the freedom it preserves, and thus strongly urge my colleagues to vote against this bill.
 “Religious Freedom Is About More Than Religion,” Robert P. George and Katrina Lantos Swett, The Wall Street Journal, July 25, 2013. (http://online.wsj.com/news/articles/SB10001424127887324783204578624510558738282).
The Senate is in the process of considering one of the most important presidential nominations of Barack Obama’s second term. Sylvia Burwell, the current Director of the Office of Management and Budget (OMB), was nominated by President Obama to replace Kathleen Sebelius as the next Secretary of the Department of Health and Human Services (HHS). It is now the Senate’s responsibility to review Ms. Burwell’s candidacy and then vote to confirm or reject the President’s nomination.
While Ms. Burwell has impressed the Senate with her sterling character and credentials, her tenure at OMB, as well as her performance in the Senate committee confirmation hearings, gives me concern that she will continue in the pattern of obfuscation and evasion established by outgoing Secretary Kathleen Sebelius.
Given that the next HHS Secretary will be responsible for much of the implementation of Obamacare—a hugely complex and controversial law that delegates unprecedented authorities to the HHS and other executive departments—I believe it would be unwise to hand over the reins of one of the most important agencies within the executive branch at a time when questions remain unanswered and information is still undisclosed.
On April 11 of this year President Obama nominated Sylvia Burwell to be the new Secretary of the Department of Health and Human Services (HHS), a position that was vacated that same day by former Secretary Kathleen Sebelius.
Article II, Section 3, Clause 2 of the United States Constitution grants the President, as the chief executive, plenary power to nominate members of his cabinet. But that same clause reserves the power of appointment—that is, the power to accept or reject the nominee—exclusively to the Senate.
The Constitution explains this unique division of power as follows: the President “shall nominate, and”—this is important—“by andwith the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other officers of the United States.”
Far from a perfunctory practice, the responsibility to review the fitness of presidential nominees is one of the essential mechanisms in our Constitution’s system of checks and balances.
And for the members of this body who took an oath to “support and defend” the Constitution, this is one of the most solemn duties incumbent upon those occupying the office of United States Senator.
I rise today to urge my fellow Senators to demand that prior to confirmation Ms. Burwell provide concrete, specific, and forthright answers—in writing—to the questions that have been asked of her by members of this body.
I rise today because I refuse to sit idly by and witness the same Washington charade in which stated commitments to transparency are more important than actual demonstrations of candor.
I rise today because if we do not insist that Ms. Burwell’s appointment be contingent upon the transparency of her confirmation process, we will have established a dangerous precedent for the future of this body.
Let’s not forget: much of the authority that resides in HHS ultimately derives from the delegation of authority from Congress. And whenever Congress delegates power to the executive branch, we do so based on the premise that we retain the power of oversight.
Therefore we cannot, in good faith, hand over the reins of one of the most important executive departments at a time when questions remain unanswered and information is still undisclosed. Doing so would undermine the institutional prerogatives of the Senate.
When we only partially carry out our constitutional duties to check and balance the other branches, we alone are to blame for the continued accumulation of power in the executive, where unelected bureaucrats are not always as wise or as impartial as their proponents claim them to be.
The unprecedented accumulation of power in the executive today is a demonstrable fact. But it remains an open question whether we in Congress care enough to do anything about it.
At this point, there’s good reason for pessimism—if the kind of acquiescence demonstrated in this confirmation process is any indication.
But I remain optimistic, because I know that the American people still get it. Outside the Beltway, Americans still instinctively understand the universal truth articulated by James Madison, the Father of the Constitution, over 200 years ago—that “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”
This is precisely the type of accumulated power possessed by executive departments like HHS.
This power cannot be curtailed or dispersed overnight. But it will continue to expand inexorably toward tyranny unless Members of Congress—exercising our powers as officers of a separate and co-equal branch of government—don’t push back.
We can begin by subjecting this nomination to the close scrutiny it deserves.
The first thing we must recognize is that this is not your average presidential nomination. We’re not talking about the next secretary of the Department of Motor Vehicles. Quite the opposite: Ms. Burwell has been nominated to preside over one of the largest and most important departments in the federal government. No matter who the nominee, this is a job that should be filled with caution and circumspection.
By way of illustration, the HHS Secretary oversees an annual operating budget of about $1 trillion—that’s nearly 25 percent of all federal spending—as well as 11 separate operating divisions, including the very important Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA).
Moreover, the next HHS Secretary is going to assume the helm of an executive leviathan in the midst of implementing the Patient Protection and Affordable Care Act. Obamacare is not only the most complex—and controversial—law in recent memory, but it delegates an unprecedented amount of authority to the HHS Secretary.
Often this delegation comes in the form of sweeping, open-ended grants of power that give the Secretary discretion to shape and reshape the law. Like an unending series of blank checks to the bureaucracy, Obamacare contains 700 instances of the ultimate carte blanche—“The Secretary shall…”—to give the Secretary wide latitude to “develop standards,” “award grants,” “establish committees,” “make adjustments,” etc.
This kind of massive delegation of authority is justified—especially by those who see it as a convenient way to avoid the difficulties of lawmaking—on the theory that Congress will retain and exercise some degree of oversight.
And it is true that both chambers of Congress have the ability to hold hearings in which we subpoena executive officials to testify and answer questions about laws, rules, and regulations under their jurisdiction. But as we have seen over the past few years with the implementation of Obamacare, this power is significantly impeded if those executive officials refuse to answer our questions.
These facts raise the central question that ought to guide the Senate’s consideration of Ms. Burwell’s nomination—namely, how will Ms. Burwell exercise the expansive authority delegated to HHS vis-à-vis the powers and responsibilities of Congress?
Much of the job of the next HHS Secretary will be to facilitate Congressional oversight of the Department, especially in its implementation of Obamacare. Therefore, the Senate’s decision should be contingent upon Ms. Burwell’s record of engaging with Congress.
Sadly, Ms. Burwell’s tenure as the Director of the Office of Management and Budget, as well as her performance in the Senate committee confirmation hearings, gives me concern that she will continue in the pattern of obfuscation and evasion established by outgoing Secretary Kathleen Sebelius.
I therefore respectfully submit that we should proceed cautiously in consideration of this nominee. More cautiously, indeed, than we have up to this point.
For over the past six weeks, since the President nominated Ms. Burwell, many in this body have neglected our end of the constitutional division of power—preferring to act as if Ms. Burwell’s appointment was a fait accompli.
This state of affairs is troubling—and not simply because questions remain unanswered, and information undisclosed, about Obamacare. The problem is more fundamental than any one law.
The Senate’s reluctance to protest against the equivocation and distortion seen in this confirmation process undermines the separation of powers and the system of checks and balances upon which our constitutional order depends.
Respecting and upholding these principles of our Constitution is not a matter of adhering to some arcane formality or following some outdated tradition of the 18th century.
At issue here is whether or not this institution still believes in the reason our Constitution divides power in the first place. Do we still believe, as Madison said, that “power is of an encroaching nature, and that it ought to be effectually restrained from passing the limits assigned to it”?
If we do, then we must employ the tools at our disposal to assert our institutional prerogatives. Doing so will demonstrate to the other branches that the power of government is not simply up for grabs.
Here again Madison’s insights are instructive: in the famous Federalist 51, he says, “the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. […] Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place.”
But if we disagree with Madison about the encroaching nature of power… if we are undisturbed by the great accumulation of power in the executive branch, which predates and will outlive Obama’s presidency… if we prefer to elevate policy preference and party allegiance over love of liberty and the constitutional rights of Congress… then we must not be surprised when—not if—our government takes on the character and the spirit of tyranny.
Let me be clear: the kind of tyranny that threatens us is not of the Saddam Hussein or Bashar al-Assad variety. The tyrannies of Saddam’s Iraq and, today, Assad’s Syria are barbarous, murderous dictatorships that extinguish every semblance of freedom and maintain their power through violence and brutality.
What I’m talking about is the kind of soft despotism that arises when power is consolidated under the auspices of a paternal, benevolent government.
At the end of his study of democracy in 19th-century America, Alexis de Tocqueville explained how this kind of tyranny could emerge within a democratic republic such as ours. Standing as a kind of warning for us today, Tocqueville envisioned “an immense and tutelary power” that “extends its arms over society as a whole,” covering it “with a network of small, complicated, painstaking, uniform rules through which the most original minds and the most vigorous souls cannot clear a way to surpass the crowd.” It does not “break wills,” he said, “but it softens them, bends them, and directs them; it rarely forces one to act” — even Tocqueville didn’t foresee the individual mandate! — “but it constantly opposes itself to one’s acting; it does not destroy, it prevents things from being born.”
This is certainly a dark image. But we cannot forget that Tocqueville was bullish about America. He believed that American democracy had the right attributes needed to avoid descending to these depths.
Chief among these attributes were our constitutional structures that divided power and, more importantly, the spiritedness, courage, and love of freedom that animated the American people and transformed the mere “parchment barriers” of the Constitution into true limits on governmental power.
It is precisely this spirit of freedom that the Senate must recover if we are going to fulfill our constitutional obligations in this confirmation process. Once we recognize the need to assert and defend our interests as a separate and co-equal branch of the government, we will begin to focus on what’s really at stake in our consideration of this nominee.
The main issue here is not Ms. Burwell’s character or credentials—both of which are first-rate—but whether or not her appointment will improve or further deteriorate the legislature’s oversight over the executive departments to which Congress has delegated vast amounts of authority.
The question is not whether Ms. Burwell deserves to be HHS Secretary, but whether the HHS, under Ms. Burwell’s management, will continue in the pattern of obstinate autonomy and limited cooperation established under her predecessor.
If the answer is no, we cannot possibly vote to confirm this nominee.
 The Federalist, No. 47. (http://www.constitution.org/fed/federa47.htm)
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf (page 83)
 Charles C. W. Cooke, “The ‘Living’ Law,” National Review Online, 8/21/13 (http://www.nationalreview.com/article/356322/living-law-charles-c-w-cooke).
Federalist No. 48.
In an influential law review article, the late Professor Bill Stuntz noted the academic consensus lamenting criminal law’s constantly expanding breadth. Professor Stuntz wrote that virtually all scholarship in the field “consistently argues that existing criminal liability rules are too broad and ought to be narrowed.” But, Professor Stuntz continued ominously,
[This] [n]ormative legal argument makes sense on the assumption that lawmakers care about the merits, that the side with the better policy position has a better chance of getting its preferred rule adopted, at least over time. But the legislators who vote on criminal statutes are, or at least appear to be, uninterested in normative arguments. To take an obvious example: For the past generation, virtually everyone who has written about federal criminal law has bemoaned its expansion. But the expansion has continued apace, under very different sorts of Congresses and Presidents. Normative argument does not seem to have mattered.
One can put the point more generally: American criminal law’s historical development has borne no relation to any plausible normative theory — unless ‘more’ counts as a normative theory.
I’m here today because I do care about the normative arguments regarding our ever expanding criminal state. I believe federal overcriminalization in particular is detrimental in terms of the financial, social, and human costs it imposes on our country. And I am far from alone. In fact, I believe we are seeing increasing, bi-partisan sensitivity to overcriminalization issues and an increasing openness on the part of members of congress to reevaluate federal criminal laws and regulations with an eye towards making common-sense, incremental changes. In conversations with colleagues, more often than not, I hear agreement that federal overcriminalization is a serious issue. The Smarter Sentencing Act, which I introduced with Senator Durbin to address issues regarding federal overcriminalization related to sentencing for drug violations already has 23 cosponsors, including six Republicans. And the House Judiciary Committee recently reauthorized its bipartisan overcriminalization task force, chaired by Representative Sensenbrenner, which has done and I’m sure will continue to do exceptional work on this topic.
I am optimistic that as conferences like this one shed light on the severity of federal overcriminalization and the potential harms caused by the breadth and scope of federal criminal laws and regulations, the momentum for reform will continue to grow.
With the time I have today, I want to lay out three principles that guide my approach to federal criminal law—the Constitution’s protection of liberty, the importance of intent or mens rea standards in criminal law, and the role the constitutional principle of separation of government powers should play with respect to criminal law. I will discuss the evidence and arguments that lead me to believe federal overcriminalization is a serious problem about which something must be done, and I will note measures I believe Congress must take responsibly to address what could otherwise become a crisis of individual liberty.
Liberty and the Constitution
Every action government takes—each law or regulation it imposes—results in one degree or another in a restriction or limitation on the liberty of the individuals under its jurisdiction. This is true to an even greater extent with criminal laws and regulations. Whether by means of incarceration—which nearly extinguishes an individual’s liberty for a period of time, or by means of the stigma of a criminal conviction—which may also include restrictions on the ability to participate in democracy, criminal sanctions fundamentally alter the relationship between the state and the individual subject to punishment. In sum, at no time does the government pose a greater threat to individual liberty than when it enacts or enforces criminal sanctions.
The Constitution recognizes the threat that criminal sanctions pose to individual liberty. As a general matter, the Constitution’s structural safeguards are designed to prevent Congress from creating too much mischief. First and foremost, the Constitution enumerates those specific powers the national government shall exercise and reserves to the states and the people all other powers. In other words, from the outset, the federal government is fundamentally different than state and local governments. Local government by its nature exercises a general police power to regulate the health, safety, morals and general welfare of its people. The federal government, on the other hand, is not authorized to exercise a general police power and is instead constitutionally constrained to exercise only those powers expressly enumerated in the Constitution.
Next, Article I of the Constitution commits “all legislative power” to the Congress. Regardless of how lenient the Supreme Court may be when reviewing questions of congressional delegation commonly referred to as the non-delegation doctrine, Congress has an independent duty to take the constitutional text seriously. And the text plainly places the legislative power in Congress and thus limits the manner in which Congress may delegate lawmaking power to administrative agencies to enact laws and regulations, including criminal laws and regulations.
Specific constitutional provisions confirm the care the Framers intended the government take when crafting criminal penalties. To avoid a kind of “trial by legislature” whereby Congress might single out an individual in legislation, the Constitution prohibits bills of attainder. Further to prevent unfair targeting of individuals, as well as to respect the basic concept of notice, the Constitution prohibits ex post facto laws. And, of course, the Constitution confirms the right of habeas corpus, and specifies the narrow circumstances and the manner in which that right might be suspended.
Despite these structural elements of our nation’s founding document—all of which suggest that the federal government should have only a minimal and careful role to play in the sphere of criminal law—Congress has enacted somewhere around 4,500 federal criminal laws—although no one knows for sure how high the count is, and federal administrative agencies have promulgated another 300,000 some odd regulations that include criminal penalties—but again, no one can be certain of the number.
The solution to this problem—and perhaps to the problem of federal overcriminalization more generally—is fairly straightforward: members of Congress must take seriously their independent duty to give effect to the Constitution’s structural limitations on power. Congress must stop granting administrative agencies broad delegations of power and must limit any such delegations of power, as well as any other criminal legislation, to the enumerated areas specified in the Constitution. Where crimes interfere with core functions of the federal government or are truly interstate in nature, Congress has the prerogative and duty to act. But most federal criminal laws are enacted pursuant to an interpretation of the Constitution’s Commerce Clause that, although blessed by a Supreme Court that has essentially chosen to defer to Congress on the issue, bears no responsible relationship to the text. State governments have the ability and incentive vigorously to pursue criminal activity. By staying our hand at the federal level, we will empower them and restore in practice the federalist structure that was so sacred to the Framers and central to the document they drafted.
The next principle I will discuss touches on the importance of including a sufficient intent requirement (referred to as a mens rea standard) in criminal laws and regulations. Mens rea is a well-known concept to lawyers the importance of which, at least in the abstract, garners virtual consensus. Before and since Edward Coke (“Cook”) famously stated that actus non facit reum nisi mens sit rea—or “an act does not make a person guilty unless their mind is also guilty”—numerous commentators have articulated the significance of the principle of mens rea, its pedigree, and self-evident nature. For example, in Morisette, Justice Jackson famously explained:
The contention that an injury can amount to a crime only when inflicted by intention is no provincial or transient notion. It is as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil. A relation between some mental element and punishment for a harmful act is almost as instinctive as the child’s familiar exculpatory “But I didn’t mean to,” and has afforded the rational basis for a tardy and unfinished substitution of deterrence and reformation in place of retaliation and vengeance as the motivation for public prosecution.
But despite what again would seem to be rather overwhelming reasons why the federal government should approach criminal law a certain way, it has consistently chosen to act in another—less sensible—manner.
The federal code is sprinkled with criminal laws that either do not specify an intent requirement or do not include a sufficient intent requirement, and the federal register contains many similarly deficient regulations. The Supreme Court has, at least in some circumstances, offered a bit of help by reading a mens rea standard into criminal laws that lack one. But relying on the Supreme Court alone is plainly insufficient, not only because the Court doesn’t always get it right, but more importantly because as a member of Congress I have an independent duty to get the law right. This duty includes the responsibility to vote for only those criminal laws that penalize truly criminal conduct. And I cannot do that unless I am sure the criminal law at issue includes a sufficient intent requirement.A bit of historical perspective helps illuminate both how we got to where we are and why the practice of not including intent requirements makes no sense. In the 18th century British legal system that heavily influenced the American approach, substantive criminal law was largely a product of common law. As Professor Arthur Leavens has explained, in developing criminal law, judges at common law generally assumed “criminal” meant “morally blameworthy.” In other words, judges at common law didn’t find an individual guilty of a crime like murder, arson, or assault without a showing of criminal intent or moral blameworthiness because, rather correctly I think, they viewed the concepts of criminality and criminal intent as inseparable.
The states, which as I have noted have the proper authority to prosecute substantive crime, have largely put into statute the crimes previously punished at common law and by most accounts have done a decent job of including mens rea requirements. The federal government, on the other hand, has become involved in substantive criminal law by a more circuitous route, and not surprisingly, has done a much poorer job of paying proper attention to mens rea. Beginning in the late-nineteenth century and with alarming frequency in recent decades, the federal government has extended its jurisdiction beyond the bounds of the Constitution and into the realm of substantive criminal law. In so doing, the federal government generally has not merely been codifying common law crimes that may have a federal nexus. Rather, it has been attempting to accomplish a broad regulatory agenda by means of imposing criminal sanctions for regulatory violations. For example, so-called “public welfare” or “regulatory” crimes, which often lack a significant intent requirement, are justified on the basis that the criminal penalty attached to the offense serves the purpose of communicating the serious nature of the regulatory violation at issue and the widespread harm that may result from such a violation.
But just because a regulatory violation may cause harm, does not mean that the conduct at issue is morally wrong or criminal. Indeed, many unintentional actions may result in harm. But whereas truly accidental arson is not punished as arson under the law (and indeed it would hardly make sense to call a stove fire arson), the accidental violator of a regulatory statute is not given that same benefit of the doubt. Instead, under current federal law, she is a criminal. Thus, to cite instances of which many in the audience may be aware, the man who packages lobsters incorrectly, the company that unknowingly imports the wrong kind of wood, and the girl who helps a hurt woodpecker are—due to the federal government’s unnatural expansion into the realm of criminal law—criminals.
The transition to a criminal regulatory approach has, by its very nature, made criminal many actions that are not malum in se (or self-evidently morally wrong), but rather are malum prohibitum (or criminal only because the law says they are). It was of course necessary that judges at common law pay attention to mens rea requirements, but even had they not done so, many and perhaps most cases of murder, theft, arson, and other common law crimes naturally included intent (arson is only arson if you meant to do it). The new types of crimes Congress and executive agencies have created, on the other hand, do not generally by their nature include an element of intent.
The Congressional and administrative failure to include sufficient mens rea requirements in these new types of malum prohibitum laws and regulatory violations has thus resulted in a kind of double-whammy on our constitutional liberty. The federal government has criminalized much otherwise innocent conduct. In some cases it has done so after deliberation because it believed—whether wisely or not, and in many cases I think not—that the potential harm resulting from the conduct merited imposing a draconian sanction. But in still other cases, the federal government has simply failed to pay much attention to mens rea—perhaps out of the habit of creating new, statutory or regulatory malam prohibitum crimes practically out of thin air with scant if any precedent at common law.
The Congressional and administrative lack of attention to mens rea is, I think, somewhat ironic in light of the Supreme Court decisions in the early 20th century such as U.S. v. Balint and U.S. v. Dotterweich, which upheld criminal regulations that lacked a mens rea requirement. In those cases, the Court relied heavily in its analysis on the presumed deliberation Congress gave the regulations. If only that were the case! Sadly, in my role on the Judiciary Committee, I routinely encounter draft legislative proposals that include criminal penalties and insufficient mens rea standards. And I struggle to believe that Congress or administrative agencies have given much thought to the proper mens rea requirement—let alone careful thought—for many of the regulations that carry criminal penalties.
We must take account of the lack of sufficient intent requirements in federal laws and regulations and ensure that innocent persons are not held criminally liable for otherwise innocent conduct, except where Congress explicitly desires (and has a good reason) that that be the case. To do this, I believe Congress should pass a new law that provides for a default mens rea standard both for those statutes and regulations that do not already specify such a standard and for those statutes and regulations that may be enacted in the future without specifying a mens rea standard.
Separation of Powers
The third principle I will discuss today relates to the Constitution’s separation of government powers. In this respect, I would like to address arguments some have made that overcriminalization is not a serious problem because statistics show that broad criminal laws and strict liability regulations are very seldom prosecuted and offenders of such laws and regulations make up an extremely small portion of the federal prison population.
Not many of us I don’t think, and not many of the Framers I would expect, would be comfortable with a regime that vests complete discretion in the executive branch to prosecute as a crime any conduct it believes is harmful. And yet, with thousands of criminal statutes and hundreds of thousands of criminal regulations, it seems at times as if Congress is entirely okay with such an approach.
I believe the rule of law means that individuals have a right to know beforehand the laws to which they are subject and that they will not be made subject to the whims of individual men and women who enforce legal norms in an unpredictable manner. Yet even under this basic definition, it seems that—to an uncomfortable degree—our federal, criminal administrative state is not a system subject to the rule of law. Rather, at least at the federal level, we appear to be living in a system of executive discretion whereby that branch of government may pick and choose from an endless array of laws and regulations the rule of the day that they will enforce (or as seems more recently the case, not to enforce). This state of affairs is the result of Congress criminalizing all or nearly all conceivably harmful conduct, much of which had already been criminalized at the state level.
As I mentioned, some have noted that less than ten percent of federal criminal convictions per year involve one of the miscellaneous thousands of statutes that are not well known to the public, and less than one percent of those currently in federal prison were prosecuted for federal regulatory crimes. *But any argument on that basis proves either very little or entirely too much. If these laws and regulations are not being used, then why do we need them? And if they are being used to deter (or, as I would contest, to chill) individual conduct, then of what relevance are data about the infrequency of prosecution?
It seems instead that, to an unfortunate degree:
- Members of Congress urge enactment of additional, unnecessary criminal laws to garner political credit;
- administrative agencies use criminal sanctions because they can and because they come to believe that every regulatory violation in their jurisdiction is a big deal that merits serious punishment;
- and interest groups seek criminal regulations to create obstacles and barriers to entry for competitors.
None of these approaches in my view offers any real benefit against which we can reasonably compare the costs of overcriminalization—which at a bare minimum involve an immense amount of red tape and heightened chilling of legitimate behavior.
Concerns related to the Constitution’s separation of powers—and concerns about the executive branch wielding too much power with respect to criminal law—also arise with respect to mandatory sentences. Here too states have taken a more enlightened approach, with a number of states recently reducing or doing away with mandatory minimums and seeing a continued trend of reduced crime in their jurisdictions. Nonetheless, at the federal level, we continue to take a different approach—an approach that I believe places too much power in the hands of prosecutors and shortchanges the role of the judiciary and the importance of individualized justice.
In this respect, it is worth noting that the Bureau of Prisons is operating at nearly forty percent over capacity and half of all federal prisoners are incarcerated based on drug charges. Taking account of the federal government’s reliance on mandatory minimums in the context of crimes for drug possession and distribution, and making modest, incremental changes to these mandatory minimums, would have a real effect on federal prison overcrowding. It would also return to communities and households those men and women that—because of a one-size-fits-all approach to sentencing that doesn’t take account of individual circumstances—have already served enough time for the crimes they committed.
The federal government has a legitimate role in policing some limited forms of crime. But since 1980, the federal prison population has grown almost 800 percent. This ballooning prison population mirrors other problems of federal overcriminalization too neatly to be ignored in the larger discussion. It is difficult for me to believe that crime has increased by 800 hundred percent over the last few decades. Rather, I believe this increase is due to the federal government’s undue involvement in substantive federal law, combined with the use of rigid sentencing laws that are in need of modest updates.
I am committed to addressing the issues of federal overcriminalization that chill legitimate conduct and threaten individual liberty. To do so, I believe Congress must enforce the Constitution’s structural limitations on federal power, give proper attention to mens rea standards, and respect the Constitution’s separation of government powers. I would like to thank the Administrative Conference for inviting me to speak today and wish you the best for the remainder of the workshop.
 William J. Stuntz, The Pathological Politics of Criminal Law, 100 MICH. L. REV. 505, 508 (2001) (the passage ends with: “Criminal law scholars may be talking to each other (and to a few judges), but they do not appear to be talking to anyone else.”).
 In the succinct phrasing of Professor Barkow: “The state poses no greater threat to individual liberty than when it proceeds in a criminal action.”
 See, e.g., John C. Coffee, Jr., Does “Unlawful” Mean “Criminal”?: Reflections on the Disappearing Tort/Crime Distinction in American Law, 71 B.U. L. Rev. 193, 216 (1991) (“By one estimate, there are over 300,000 federal regulations that may be enforced criminally.”); Susan R. Klein & Ingrid B. Grobey, Debunking Claims of Over-Federalization of Criminal Law, 62 Emory L.J. 1, 28 (2012) (“An enormous number of new regulatory crimes were enacted in the period 1980-2011, so many that we were unable to count even a fraction of them . . . .”).
 Morissette v. United States, 342 U.S. 246, 250-51 (1952).
 See, e.g. id.
 Arthur Leavens, Beyond Blame—Mens Rea and Regulatory Crime, University of Louisville Law Review, Vol. 46, 2007, at 8-13.
 See Balint, 258 U.S. at 254 (“Congress weighed the possible injustice of subjecting an innocent seller to a penalty against the evil of exposing innocent purchasers to danger from the drug, and concluded that the latter was the result preferably to be avoided.”); Dotterweich (“Hardship there doubtless may be under a statute which thus penalizes the transaction though consciousness of wrongdoing be totally wanting. Balancing relative hardships, Congress has preferred to place it upon those who have at least the opportunity of informing themselves of the existence of conditions imposed for the protection of consumers before sharing in illicit commerce, rather than to throw the hazard on the innocent public who are wholly helpless.”).
Apr 30 2014
Remarks to the Heritage Foundation April 30, 2014
It is always a privilege to be back at the Heritage Foundation, the heart of America’s conservative movement. And it is to that broad, diverse movement that I have come to speak today about an issue with the potential to unify and revive our coalition.
As I see it, there are two great domestic challenges facing our country today.
Problem number one is America’s large and growing Opportunity Deficit. Up and down our society - which used to be defined by unmatched economic growth and social flourishing - a new and unnatural sclerosis is taking hold. For millions of working families of or aspiring to our middle class, the American Dream is slipping out of reach.
Problem number two is that, for the moment, the United States still lacks a political party ready to solve problem number one. I am here today because I believe conservatives are in a unique position to begin to solve both.
America’s Opportunity Deficit presents itself in three principal ways:
- First, in the growing crisis of immobility among the poor, where families and communities are trapped in poverty, sometimes for generations, and are increasingly disconnected from the networks of opportunity that more affluent Americans take for granted.
- Second, in the crisis of insecurity within our middle class, where the hallmarks of the American Dream – from family stability and work-life balance to affordable education and health care – have grown too elusive for too many.
On these first two fronts there is some good news to report.
A new generation of conservative leaders is emerging to meet these growing challenges with principled, positive reforms, including repairs to our welfare, prison, job-training, tax, energy, and education systems.
Running through each is a recognition that for many Americans today, especially for the poor and middle class, the greatest obstacles to the pursuit of happiness are actually misguided government policies. These conservative reformers understand that to restore equal opportunity to all Americans, it’s not enough to just cut big government. We also have to fix broken government – to restore and expand access to America’s exceptional free-enterprise economy and voluntary civil society.
These reforms aim, in the words of Abraham Lincoln:
“to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance in the race of life.”
The emergence of this new Conservative Reform Agenda – while it is still a work in progress - is an exciting development for our cause. It harkens back to an earlier era when Ronald Reagan’s generation of conservatives turned a moribund G.O.P. into America’s party of ideas, and built a national majority that changed history.
But as crucial as this work is, it remains incomplete. As I mentioned earlier, there is a third part of America’s Opportunity Deficit that compounds the other two. For the same kind of dysfunctional big government that unfairly excludes the poor and middle class from earning their success on a level playing field… sometimes unfairly exempts the wealthy and well-connected from having to earn their success.
This is America’s crisis of crony capitalism, corporate welfare, and political privilege: in which government twists public policy to unfairly benefit favored special interests at the expense of everyone else.
Cronyism simultaneously corrupts our economy and our government, turning both against the American people. It forces American families who “work hard and play by the rules” to prop up, bail out, and subsidize elite special interests that don’t. It therefore represents a uniquely malignant threat to American exceptionalism.
And so, the third part of a new, Conservative Reform Agenda must restore equal opportunity to the top of our society, too: to root out cronyist privilege from the law, and from our party, to re-empower the American people, and restore fairness, dynamism, and growth to our economy.
Free enterprise works – morally and materially – because it aligns the interests of the individual and society. It’s a system governed by an “invisible hand” that rewards the creation of value, and by an “invisible foot” that punishes complacency, especially at the top.
In the marketplace, personal success depends on interpersonal service. So even the most fortunate and successful have to earn their bread working for everyone else.
Steve Jobs didn’t succeed by rigging the computer industry – he figured out how to make technology accessible and helpful to ordinary people. Oprah Winfrey didn’t try to bury other talk-show hosts in red tape – she spent decades perfecting her own show, informing and inspiring millions of viewers. Michael Jordan never mandated us to watch him play basketball – he just played so well that we wanted to.
On the other hand, the American people didn’t want to buy Edsels, New Coke, or Zunes - so those much-ballyhooed products failed. In America, even giant corporations like Ford, Coca-Cola, and Microsoft were powerless over an un-impressed public.
In a properly functioning free-enterprise economy – in which success can be earned, and has to be – successful CEOs stay up nights either obsessing about innovating to better serve their customers, or panicking about competitors who are.
Thus free enterprise simultaneously yields economic growth and cultivates social solidarity. The system is not perfect, but it is fair - because its power resides in the people. And so rewards flow to those who add real value to the lives of their neighbors and their nation.
Cronyism turns all of this upside-down.
It empowers and enriches the few by disenfranchising the many. Like a black hole, cronyism bends the economy toward the state, inexorably shifting wealth and opportunity from the public to policymakers.
The more power government amasses, the more privileges are bestowed on the government’s friends, the more businesses invest in influence instead of innovation, the more advantages accrue to the biggest special interests with the most to spend on politics and the most to lose from fair competition.
Once profits depend on serving congressmen instead of customers, the interests of the elite diverge from those of the nation. Innovation slows, and true inequality – inequality of opportunity - emerges. The American people are forced to work for big businesses instead of the other way around. The middle class falls and the middle-men rise.
Far from the rivals of popular mythology, the elite leaders of Big Government, Big Business, and Big Special Interests are more often than not partners, in collusion to help each other climb to the highest rungs of success, and then pull up the ladder behind them.
To be clear, the problem I’m describing is not that there is too much money in politics. It’s that there’s too much politics in the economy: three-and-a-half trillion dollars in direct federal spending, and almost $2 trillion more redirected through regulations.
Exposing even a significant fraction of that amount to political influence would distort enough enterprise to pull the economy off its moorings. And that’s precisely what has happened.
What we’re left with today is a warped economy increasingly built on connections instead of competitiveness. Record corporate profits and jaw-dropping gains among elites, but slow growth, stagnant wages and limited opportunities for everyone else. Except, of course, in the Washington, D.C. area, home to six of the ten wealthiest counties in the United States.
There is a reason opinion surveys show that America’s largest political and economic institutions have lost the public’s trust. Those institutions have ceased to be trustworthy. Americans across the ideological spectrum - from the Occupy Left to the Tea Party Right - are figuring out that America’s Opportunity Deficit is not a mystery. It’s a government program.
Or rather, it’s thousands of government programs. Special-interest privilege has become so prevalent, it’s a wonder anyone can make an honest buck anymore.
Cronyist policies come in many shapes and sizes, but the upshot is always the same: making it easier for favored special interests to succeed, and harder for their competitors to get a fair shot.
There are direct subsidies, like those that are supposedly necessary to protect family farmers.
Except every year, 75 percent of the $24 billion we spend on agriculture handouts goes to the top 10 percent of recipients. The bulk of these subsidies aren’t going to the Little House on the Prairie; they’re going to The Wolf of Wall Street.
(Which I have not seen, by the way. I heard there’s dancing.)
Cronyism also entails indirect subsidies, like the loan guarantees issued by the Export-Import Bank. Here again, more than three-quarters of ExIm’s billions of dollars in loan guarantees go to just three corporations that are perfectly capable of securing private financing anywhere in the world.
We all know about the booming proliferation of tax carve-outs and loopholes. Today, the internal revenue code is about four million words long. Depending on your brand of right-of-center politics, that works out to about five copies of the King James Bible… or six copies of Atlas Shrugged.
But the tax code is just one of many cases in which the sheer size and complexity of the law operates as a cronyist subsidy all by itself.
Complicated regulations – however imposed – always increase the costs of doing business. Those higher costs in turn advantage the largest firms because they can always afford to hire more lawyers and lobbyists, while smaller, younger competitors can’t.
For this reason, very often the most onerous regulations governing an industry are endorsed by the largest players in that sector. The largest light-bulb manufacturers supported the 2007 ban on incandescent bulbs. The largest toy manufacturers supported onerous new testing standards in 2008. The largest tobacco company supported 2009 legislation to give the FDA regulatory oversight over its product. And lest we forget, the largest pharmaceutical companies supported Obamacare. In every case, the resulting regulations helped cement the incumbents’ dominant market positions – as intended.
This process – what economists call “regulatory capture” - is also the stock-in-trade of state and local cronyism. You may have heard about local restaurants lobbying for regulations to drive off food trucks, or taxi companies trying to bar Uber and ride-sharing start-ups from city streets. But the problem is much deeper.
Today, one in three Americans works in a profession that requires special government permission to earn a living. I’m not talking about district attorneys and anesthesiologists, but hair-braiders, eye-brow threaders, massage therapists, and fortune tellers. The true purpose of occupational licensing – especially in lower-skilled trades that have always been avenues of opportunity for lower-income Americans – is to exclude as many newcomers as possible while keeping customer prices artificially high.
But a recent study by the Kaufmann Foundation found that fully 100 percent of net American job creation between 1977 and 2005 came from start-up firms. Thus regulations that favor established incumbents over younger competitors specifically hamstring the very businesses we need to create jobs.
Sometimes cronyist schemes go so badly, so quickly, that the corruption actually causes a scandal, as was the case with politically connected solar-panel manufacturer Solyndra, which went bankrupt and lost every dime of a $535 million federal loan guarantee. But more often, special-interest privilege burrows so deep into the policymaking process that the parasite starts to overwhelm its host.
Consider federal financial regulation.
Prior to 2008, the inflation of the housing bubble was a bipartisan initiative. Under presidents and Congresses of both parties, Fannie Mae, Freddie Mac, and the Federal Housing Authority collaborated with Wall Street to conceal the risks associated with subprime mortgages.
Then, when the inevitable collapse came, the $700 billion TARP program bailed out the big banks, when the market was ready to discipline them and reward their smaller, more prudent competitors. And now, the Dodd-Frank financial reform law that was supposed to end “too big to fail” has instead codified Wall Street’s implicit taxpayer guarantee – which according to one study may account for those firms’ entire profit margins.
Under this so-called reform, the biggest banks have grown bigger than ever, while community banks are disappearing, regional banks are being unfairly squeezed, and lower-income Americans are being locked out of the banking system altogether.
Or look at the federal sugar program, where an array of taxes, mandates, and subsidies conspire to jack up the prices Americans pay on sugar – by as much as $3 billion every year. The program hurts economic growth, and redistributes wealth from the American people to a handful of corporations who effectively control regulation over their industry.
Though these partnerships between big government and big business are especially offensive, big non-profits play the same game.
The myriad federal laws that advantage big labor unions can be just as pernicious as those that privilege corporations. The auto bailouts and the Davis-Bacon Act are merely two prominent examples of this pathology. Another is the Mad Men era exclusion of private-sector employees from popular comp-time benefits.
Even our education system is distorted by special-interest privilege, breeding inequality within the very institution that’s supposed to be our society’s “great equalizer.” Across the country, lower- and middle-income families are priced out of the best elementary and secondary schools, and denied affordable alternatives. Meanwhile, our higher-education policies entitle existing universities to inflate prices while denying access to non-traditional students and more affordable schools.
And of course, there is the epic cronyist disaster movie, Obamacare, which:
- privileges certain corporations by penalizing Americans who don’t buy health insurance from them;
- subsidizes the purchase of those products;
- protects those corporations from true price competition and market innovation;
- exempts special interests like labor unions, government employees, and large corporations from various mandates under the law; and,
- may even guarantee those corporations’ survival - even if they lose money - through an open-ended taxpayer bailout.
The lesson for conservatives in all this is that big government is worse than inefficient – it’s unfair.
Now the Left, they see Big Government’s consolidation and redistribution of economic opportunity as a feature, not a bug. Liberals have no problem privileging special interests, so long as they’re liberal special interests. And if and when it all blows up in their faces, they can always advocate… even bigger government.
This kind of corporatism, by which large, established players in government, industry, labor, and special interests work together to “manage” the economy, has always been part of progressive ideology. Herbert Croly, one of the intellectual founders of progressivism, put it bluntly over a century ago, when he wrote: “In economic warfare, the fighting can never be fair for long, and it is the business of the state to see that its own friends are victorious.” That’s how liberals today still think.
But for conservatives, this thinking is a trap. Because properly considered, there is no such thing as a conservative special interest. It’s progressives who slice the country into politically assigned subgroups, manipulating cooperative citizens into selfish special interests. It’s big government that divides us – picking “friends” and “enemies.” Freedom unites us.
And freedom depends on equal opportunity for all. To conservatives, there should be no such thing as “our” people. There is just the American people… all in this together…ve in a free-enterprise economy and voluntary civil society… working hard and playing by the rules… helping each other and especially those who can’t help themselves.
That ideal is part of what has always made America exceptional. After all, cronyism has been the norm throughout human history. Friends of the king have always prospered. What makes free enterprise special is that it allows everybody else to prosper, too.
And so, just as a new Conservative Reform Agenda should seek to once again allow the poor and middle class to compete on a level playing field, it must once again force the wealthy and well-connected to do so as well. The level playing field works only when it works for everyone.
And I mean everyone, including the rich. Make no mistake: conservative, anti-cronyist reform should never be confused with – or descend into - the cheap, ugly populism of class warfare. We want successful Americans to succeed. All we ask is that they earn their success on a level playing field, subject to the judgment of the market – as truly successful Americans always have.
Just as the real victim of the baseball steroids scandal was the marginal player who never got a fair chance because he didn’t cheat, the true victims of crony capitalism… are the true capitalists: honest entrepreneurs, employees, consumers, and investors who are today unfairly forced to play uphill in a rigged game.
So it seems to me, given the scope and consequences of America’s Opportunity Deficit – and of the benefits of reform - the only option for conservatives today is a clear and simple zero-tolerance policy toward cronyist privilege of any kind.
That means first and foremost tax reform, to simplify the code and rid it of special treatment for special interests. One of the best aspects of the tax reform proposed by House Ways and Means Committee Chairman Dave Camp was its simplification, cutting unfair and unnecessary special-interest carve-outs.
Last year, I introduced legislation to eliminate most credits and deductions from the individual tax code, while lowering the mortgage-interest deduction to $300,000 worth of principal. My plan also increased the child tax credit to help equalize treatment for working parents, who today face an unintended policy inequity of their own.I have also begun working with Senator Marco Rubio on a broader pro-family, pro-growth tax reform proposal to eliminate special interest privilege from the corporate code and level the playing field for small and large businesses.
We also need a broad regulatory-reform agenda, to make sure big government and big special interests are not rigging the rules for each other and against the public. Here, Senator Rand Paul’s “REINS Act” is an excellent start. The REINS Act would introduce transparency and accountability to the system by requiring congressional approval of any major new executive-branch regulations.
While REINS provides an excellent solution to new regulations, we need complementary reforms to deal with cronyist manipulation already in place.
Toward that end, Senator Rubio has proposed a Regulatory Budgeting mechanism to bring more accountability into the system. And I’m working on my own plan to create a new, annual Regulatory Authorization process. This process would require Congress to prioritize and approve the cost and content of all regulations Washington imposes on the economy every year.
On the other side of the Capitol, House Budget Committee Chairman Paul Ryan has been a longtime champion of anti-cronyist reform, and made the elimination of special-interest privilege a point of emphasis in this year’s Budget Resolution.
But beyond broad tax, regulatory, and budget reform, conservatives need to start identifying and eliminating specific policy privileges as well.
Some already have.
For instance, Congressman Mike Pompeo has introduced a bill to end special tax treatment in the energy sector: to level the playing field for green energy and fossil fuels.
Senator Rubio has proposed legislation to protect taxpayers from the implicit health-insurer bailouts in Obamacare. A Senate vote on his proposal could help clarify the law and the politics, and further the cause of full repeal.
House Banking Committee Chairman Jeb Hensarling is leading the fight in the House against the reauthorization of the cronyist Export-Import Bank this year – to level the playing field for all American exporters, not just the well-connected few. The fight against reauthorizing the Ex-Im Bank is probably the most important and winnable anti-cronyist effort conservatives can take up this year.
We also need to break up federally created cartels that protect insiders and disadvantage taxpayers and consumers.
Last fall, I proposed legislation to introduce competition and innovation in higher education accreditation – to lower prices and increase access to college.
And Congressman Tom Graves has proposed a bill to let state and local governments build their own roads and infrastructure without having Beltway bureaucrats, labor bosses, and federal eco-cronies inflate the costs and skim off the top.
We need to modernize federal labor law, to give independent and union workers equal access to comp-time and the right-to-work.
And we’re also going to have to do something about “Too Big To Fail,” which still appears to be providing an implicit subsidy from taxpayers to Wall Street’s biggest banks.
How we go about fixing the perverse incentives in our financial system is still an open question. But it’s one conservatives must answer before the next crisis comes.
Perhaps the solution is a new bankruptcy process – like the one proposed by Senators John Cornyn and Pat Toomey – that would transfer authority over failed banks from political regulators to more impartial courts. If we can’t be sure there will never be another bailout request, perhaps changes to capital-reserve requirements – an approach supported by Senators David Vitter and Sherrod Brown – could force big banks to operate more responsibly, preventing the next crisis from ever emerging.
But whatever we decide, the purpose of reform should not be to protect the rich and powerful in ways that encourage them to take foolish risks with other people’s money, but to protect the taxpayer in ways that encourage both entrepreneurial dynamism and corporate responsibility.
Taken together, these reforms would begin to eliminate cronyist privilege, create opportunity, and drive down the inflated costs of the staples of middle class aspiration and security, including housing, education, health care, and child-rearing.
Anti-cronyist reform is more than good policy. It’s an issue that can unify conservatives, at a time when we need more of them. That’s why, for the moment, the policy specifics in many ways matter less than the larger political commitment of the conservative movement to make this cause our own.
Just like the crises of lower-income immobility and middle class insecurity, the crisis of special-interest privilege is not Barack Obama’s fault. It predates his presidency. And though his policies have made it worse, past Republican presidents and Congresses share some of the blame.
The policies that contribute to America’s Opportunity Deficit have deep roots and powerful friends. Reforming them won’t be easy or pleasant. It will require closing the G.O.P.’s lucrative branch of the Beltway Favor Bank, and learning a hundred ways to say “no” to former staffers and colleagues with large accounts in that bank.
This may sound like a heavy lift, a fundamental transformation of how our party and this city function. But that’s what they used to say about earmarks. And much more to the point, this is stuff we are already supposed to believe.
Every Republican candidate in the country campaigns on free enterprise, equality of opportunity, and the rule of law. Crony capitalism is even singled out for condemnation in the party platform. And yet, Republican votes have helped pass many of the unfair, cynical policies mentioned above. Too many in Washington have convinced themselves that special-interest privilege is wrong only when the other side does it. But not surprisingly, they have not convinced the public.
Americans intuitively understand that crony capitalism is not a form of private enterprise; it’s a form of public corruption.
To the hundreds of millions of Americans who believe in a level economic playing field – most especially to the working families of the poor and middle class whose aspirations and opportunities utterly depend on it – self-dealing among political and economic elites is not compromise. It’s a monstrous betrayal. And from the party that advocates the moral and material superiority of free enterprise, it’s rank hypocrisy. Whether we realize it or not, we are the ones whose ideals cronyism corrupts, and whose arguments cronyism discredits.
The Left openly supports special-interest favoritism, while the Right claims to reject it. So the fact that both parties engage in it is a much more powerful indictment of Republicans than Democrats. As long as our economic agenda can plausibly be mocked as “low tax rates and protected profits for the One Percent,” the American people have good reason not to trust us.
To win back their trust – and we must - it’s not going to be enough to merely atone for past transgressions. We will have to “go and sin no more.”
To the conservatives who hope to lead congressional majorities in 2015, or seek the presidency in 2016, this is more than a matter of talking points and tactics. It’s about first principles: the fundamental morality of our cause, and the purpose of our coalition.
It seems to me that a principled, positive agenda to remove government-created barriers to upward mobility and middle-class opportunity - to level our economic playing field and put economic elites back to work creating jobs and growth for everyone else – represents everything conservatism should stand for.
It further seems to me that in the twenty-five years since Ronald Reagan left office, we have tried it the establishment’s way. We have tried being a party of corporate connections and special-interest deal-making. And we’ve lost five of the six presidential popular votes since.
And so it is reasonable for conservatives to put the onus on the establishment to explain why we don’t need fundamental course correction, starting with a commitment to basic fairness, equal opportunity, and a zero-tolerance policy toward special-interest privilege – consistent with our own stated principles.
To the professional consultants and pundits who habitually cast a skeptical eye on anti-establishment ideas: this is not some quixotic purity test or fund-raising gimmick. Anti-cronyist reform is at once pro-growth, principled, and popular – unclaimed political high ground.
Substantively, it’s necessary to get the economy growing again, creating jobs and opportunities for working families and communities too short on both. Morally, a wary American public has ever right to expect that conservative welfare reform ought to start with corporate welfare. And as always, good policy makes for good politics. Re-aligning our agenda with our values will realign it with middle-American aspirations. It would expose the Left’s addiction to government-driven inequality, and force progressives to finally choose between their populist rhetoric and their corporatist agenda.
For every well-heeled ally a new, anti-cronyist G.O.P. might lose on K Street, it stands to make a thousand new friends on Main Streets, all over the country. It would signal to the forgotten families of America’s middle class that someone in Washington is finally standing up for them again.
That Republican Party could not only unify and inspire the Right – from libertarian populists to compassionate conservatives - but also appeal to hardworking families in the purple and blue communities that President Obama’s cronyist economy is leaving behind.
For three years now, since my rambunctious class of legislators arrived in Washington, establishment leaders have challenged anti-establishment conservatives to accept political reality, engage the politics of addition, and produce a viable plan to make principled conservatism appealing and inclusive — to grow our movement into a majority.
Well, here it is: a commitment to economic fairness and competition at the top of our economy to help restore jobs, growth, mobility, and opportunity to the poor and middle class.
Though what I propose is a change, it’s not unfamiliar.
People sometimes forget that the British policies that lit the fuse of the American Revolution did not merely oppress the colonists. Indeed, the Tea Act of 1773 actually lowered taxes. The problem was, it only lowered taxes for one corporation, the politically connected East India Company, giving it an unfair, artificial advantage over smaller, local American competitors.
That is why the tea went into the Harbor.
In many ways, it was a fight for equal opportunity against special-interest privilege that made our nation.
A renewed conservative commitment to that same fight today can help re-make our nation… revive our movement, and rebuild a fair and prosperous American economy of, by, and for the people.
Apr 09 2014
The American economy is the envy of the world, primarily because it is still seen as a place where anyone – regardless of who you are or where you come from – can work hard, play by the rules, and succeed.
That belief is predicated on the notion that America has a thriving, competitive and free enterprise economy in which the best ideas and hardest workers win the day, while those who are less successful always have a fair chance to try again.
The free enterprise system is not perfect, but it is fair. Unfortunately today, Americans increasingly believe our system is rigged. And in President Obama’s America, they have good reason.
From the stimulus to cash-for-clunkers, from the bailouts to cap-and-trade, from Dodd-Frank to Obamacare, every name-brand initiative of the president’s term has distorted public policy to privilege well-connected insiders and elites at the expense of taxpayers and consumers.
The Export-Import Bank is another taxpayer-funded example of distorted public policy that further erodes Americans’ confidence in our markets and our system.
In short, ExIm Bank exists to dole out taxpayer-backed loan guarantees to help American exporters. Most of the benefits go to large corporations that are perfectly capable of securing private financing anywhere in the world. That is to say, Congress allows ExIm Bank to risk taxpayer money unnecessarily to subsidize well-connected private companies.
This kind of public policy privilege, best described as “crony capitalism,” is a threat to the free market and its moral underpinnings.
Crony capitalism corrupts the free market by rewarding political connections over competitive excellence. It subverts the rule of law by codifying inequality. It undermines social solidarity by pitting citizens against one another, twisting cooperative communities into rival special interests.
That’s why in Obama’s crony-economy we are seeing record corporate profits, but stagnant middle class wages and an anemic, jobless recovery. Cronyism has promoted and exacerbated inequality. It has isolated the poor and squeezed the middle class.
There are three principal reasons why we should start making this part of the debate right now.
First, we should do this to fix the economy. Nearly all net job creation comes from firms that have existed for five years or less. But cronyist policies tilt the playing field against those very firms and make it next to impossible for them to succeed, grow, and create new jobs. Leveling the playing field creates competition in both directions: it allows smaller, younger firms to compete, and it forces larger, older firms to do the same. That dynamic competition is what creates new jobs, growth, and opportunities up and down the economy.
Second, it’s a matter of basic justice. The American people have a fundamental right to equal opportunity under the law, and it’s government’s job to protect it. If the people who “work hard and play by the rules” are forced by government to bail out, prop up, and subsidize elite insiders who don’t, then the land of opportunity isn’t.
Third, as those who most support free enterprise and equal opportunity, Republicans must bear the burden of reform. We believe in the power of free markets and a voluntary civil society to expand opportunity, lift people out of poverty, and support a secure and prosperous middle class. So it’s our responsibility to follow through on our convictions and close our own branch of the Beltway Favor Bank.
And it starts with conservatives having an agenda to end cronyism. Fortunately, some of us have already started working on it.
These proposals focus on protecting the American people from the economic harm that comes from the collusion of big government, big business, and big special interests.
For example, we have policy reforms that:
- force Congress to periodically reevaluate expensive regulations,
- level the playing field for all energy producers,
- open our higher education system to new students, teachers, and competition,
- give Americans the right to choose whether or not to join a union,
- cut out the bureaucrats who waste critical infrastructure funding,
- and, yes, eliminate taxpayer subsidies to organizations like the ExIm Bank.
This agenda will create jobs, grow the economy, and increase opportunities by allowing small businesses - and forcing big businesses - to compete on a level playing field, where success depends on customer service, not political connections.A conservative agenda to get right on cronyism will be good for jobs, good for the economy, and, above all, the right thing to do.
Eventually this year, the reauthorization of the ExIm Bank will be before the Senate and I hope my colleagues keep these points in mind.
But before us today is the nomination of Wanda Felton to be First Vice President of the Export-Import Bank.
Ms. Felton sat on the board of the ExIm Bank at a time when it declined to take several recommendations from its own Inspector General to lower its risks, which, in turn, put taxpayers at greater risk.
The ExIm Bank has also continued to make claims about the importance of ExIm on job creation without necessary caveats or references to their methodology, claims that the GAO heavily criticized.
I cannot support putting someone back into this position after largely ignoring these recommendations by government watchdogs.
For all of the reasons I've mentioned, I respectfully ask my colleagues to oppose the nomination of Wanda Felton to be First Vice President of the Export-Import Bank of the United States.