How Congress tricks Americans (with David Schoenbrod)

American Enterprise Institute Resident Scholar Kevin Kosar spoke with David Schoenbrod about his new book DC Confidential: Inside the Five Tricks of Washington.

David is a Trustee Professor at New York Law School, where he teaches and studies environmental law, regulation, and other heady subjects. He also is a senior fellow at the Niskanen Center.

Find the podcast on Apple Podcasts.

Transcript below:

Kevin Kosar:

The title of your latest book is DC Confidential: Inside the Five Tricks of Washington. This is a book first and foremost about Congress. What prompted you to write this book? Was it concern about the state of Congress or something else?

David Schoenbrod:

I am alarmed that both parties in Congress have, in recent decades, adopted ways to legislate that allow its members to evade responsibility for what they have government do to us, their constituents. And that undermines democracy and it sows distrust of government. And it makes voters feel desperate and we see the desperation all around us.

Kevin Kosar:

Yes, most certainly the public approval ratings as recorded by Gallop over the past 20 years are at historic abysmal lows in terms of approval of Congress. Now you’re also the author of the classic 1993 text Power Without Responsibility: How Congress Abuses the People through Delegation. How does your new book relate to that book?

David Schoenbrod:

Power Without Responsibility is about just one way that Congress evades responsibility by delegating to agencies to lawmaking power that the constitution assigns exclusively to Congress. DC Confidential is about delegation and the other important ways that Congress evades responsibility. Also Power Without Responsibility sought a of solution in having the Supreme Court hold such delegations to be unconstitutional. DC Confidential in contrast shows how voters could force Congress to stop the nonsense.

Kevin Kosar:

All right, so you moved from a third branch approach to solving things into a first branch approach.

David Schoenbrod:

Right.

Kevin Kosar:

So let’s talk about the third branch. Let’s talk about Congress and tricks. You identify five different tricks in the book, and before we discuss any of those particular tricks, let me ask what do these five tricks have in common? And what makes them so problematic from a governance perspective?

David Schoenbrod:

Well, the constitution sought to make government accountable to the people by requiring elected legislators to make the big policy choices and in so doing take personal responsibility for both the popular and unpopular consequences. The legislators shouldered that responsibility for almost two centuries, but around 1970, they devised legislative schemes that allow them to take credit for the popular consequences, but shift to other’s blame for the unpopular consequences. And I say this started around 1970 and about the same time is when trust in government started to go down. It’s not just in the last couple of decades. It’s gone down since Congress started this nonsense.

Kevin Kosar:

As mentioned, the book lays out five tricks that Congress engages in. I want to limit our discussion to two of them, both in the interest of time and because I want listeners to read about the other three in your book. So let’s first talk about the money trick. And then we’ll get to the regulation trick. What is the money trick? And what’s an example of it?

David Schoenbrod:

Well, the constitution assigns Congress exclusive responsibility for authorizing spending and imposing taxes. It did not however require Congress to impose taxes sufficient to pay for its spending every year. I mean, after all the United States had fought the revolutionary war with deficit spending financed by borrowing, besides a balanced budget requirement did not seem necessary back then because voters insisted that government run surpluses in good times to pay off the debt needed to deal with emergencies such as Wars or depression. So for example, right up until World War II, Congress ran surpluses to pay off the debt incurred during World War II. Come the late 1960s however, Congress began to run deficits in good times and bad, which meant that the debt started going up faster than the growth of the economy. Now, the problem with that from an accountability democracy point of view, it lets legislators take credit for popular spending or for popular or tax cuts, but avoiding blame for paying the piper later on.

Kevin Kosar:

Yeah. That’s a really interesting point. And let me ask a follow-up question or two about that. Congress has always had the power to borrow money basically to run a deficit and to run a multi-year deficit or debt. But there was this long standing habit of paying that down and that has disappeared. Deficits and the debt have become perennial. So it’s not about the constitutional powers. Those haven’t really changed, but it’s, as you say, the structure of the policy. For our listeners, could you point to a policy that exemplifies this problem of providing lots of benefits right now, but refusing to pay for them.

David Schoenbrod:

Social security is an example. I mean, the spending that people are depending upon getting in the future by way of benefits is not matched by the income that the program brings in. In contrast, when the program was adopted in 1935 Congress and President Franklin Roosevelt built into the program taxes sufficient to pay for the security benefits then, and in the future. It was like buying private insurance. Here however, it’s like, Congress is Santa Claus. Here you got a present. You don’t have to pay for it. Isn’t that great? And I think what brought about the change or what allowed Congress to get away with it is that in the 1960s, we were the richest country on earth. We left all other countries economies dead in the dust. So it seemed like there was no limit to our power. Plus the Keynesian idea of running deficits to help overcome a depression or a recession gained currency. And so people got used to the idea of intentional deficits.

David Schoenbrod:

And so this that I think affected not just Congress, but the electorate to think that we could get something for nothing. But we know now that this can’t go on forever, that the debt is rising to an unprecedented level in peace time. And it just can’t continue. We’re going to have to either increase taxes or cut spending.

Kevin Kosar:

Yeah. It occurs to me that this issue of delivering greater benefits than one is willing to pay for, that’s a very tempting proposition for a legislature. I know that the US postal service, for example, has promised its current employees that when they retire, they’re going to have pretty good, not just pension, but also healthcare benefits. But the current calculation is that when you look at these unfunded long-term obligations, the postal service owes about 150 or $160 billion. And it’s just not at all clear how those will be paid. Is the money problem something that’s really kind of endemic to entitlements? Or does it go beyond entitlements to other sorts of policy?

David Schoenbrod:

Oh, it’s all over the place. I mean tax cuts are an example. I mean, that’s handing out money too, or at least that’s how it feels to voters. They’re popular with many voters. So it’s entitlements, it’s ordinary other kinds of spending and it’s tax cuts. And the only way we’re going to be able to do something about that is to make clear to voters that it’s going to cost them and how much it’s going to cost them. And my book has the suggestion for how to do that. It kind of goes like this, we need to let voters know how much these tax cuts and spending increases are going to cost them in the long run. Now we can’t tell each individual voter what the costs will be, but we could calculate it for the average family. And the premise is, and the starting point is, it’s simple and obvious government can’t spend more in the long run than it takes in in taxes.

David Schoenbrod:

I mean, government may well be able to have a debt forever, but even with the debt it’s still going to have to raise as much in taxes as it spends. Because it if borrows the money then it’s going to have to raise the money to pay off the debt. So we could calculate how much there needs to be in tax increases or spending cuts to equalized spending and income. And then once we know that number, we can know how large that number is for the average family. And how much worse that number has been made or better it’s been made by the most recent Congress.

David Schoenbrod:

So what I want to see done is for government to put in every voter’s mailbox every year a letter that says, this is how much it’s going to cost the average American family per year if we start now to straighten things out. And so I think that will make palpable that it’s not nothing it’s going to cost us. It’s going to cost us a good bit. And because it’s going to also point out whether the most recent Congress increased or decreased that cost to the average family, members of Congress are going to be a lot more accountable for the overspending.

Kevin Kosar:

Yes. To a degree what you’re saying is that we need to present the bill. And one of the larger themes of your book is that we’ve lost accountability because the public does not see the national legislature debating the trade-offs. I mean, there is no free lunch. There are always costs and benefits to everything, but congressional debates about policy you just don’t see those on the floor anymore. You don’t read about them in the newspaper. It’s always, Hey, we’re talking about a new program, whether it’s a new green deal or a stronger national defense and the costs and the trade-offs just aren’t spoken of.

David Schoenbrod:

It’s like banks and other lenders used to make loans to people, but not make clear how much they have to pay off. And so we now have a statute called the truth in lending act that says that a bank that makes loans without telling the customer how much they’re going to have to pay is guilty of a crime. What we need is the truth in spending act that requires Congress to make clear to the electorate how much their current deficit spending is going to cost us. I’m not for eliminating deficits forever, or having a blanket plan on deficits, but we ought to have truth in spending.

Kevin Kosar:

So we’ve talked a bit about one of the tricks, the money trick. And I’d like to move to the second one we’ll discuss today, which is the regulation trick. What is that?

David Schoenbrod:

When Congress itself makes the rules regulating society as the constitution anticipated, legislators get credit for the regulatory protection that is created, but also blamed for the regulatory burdens. But starting with the Clean Air Act in 1970 Congress applied drafting techniques that allowed its members to take credit for the promise that the agency would impose laws sufficient to protect health, but allowed the legislators to later blame the agency for regulatory burden, so the failure to protect health. And indeed some of the legislators that took credit for protecting health, then lobbied the agency not to impose the burdens needed to protect health. It was completely dishonest. And it was passed unanimously just about, only a few members of Congress voted against it. It wasn’t a Democrat or Republican thing. It was universal thing. And I’m not complaining about the Clean Air Act because I’m against clean air. I was the lawyer at the Natural Resources Defense Council that led the litigation effort to get lead out of gasoline. I’m all for clean air, but what we need is a Congress that takes responsibility for the burdens as well as the benefits.

Kevin Kosar:

Yeah. So essentially this is Congress taking legislative authority, the ability to say you a particular industry can only pollute at a certain level, or you may not produce certain chemicals or what have you. And just shirking that and shifting it over to an agency. In the book you remind us that sometimes these agencies are not just one agency sitting in Washington, DC, but there are multiple levels of government. There are state level agencies. The EPA is a prominent example, which our listeners may not be familiar with it’s complicated structure.

David Schoenbrod:

So, and we have the federal EPA and Congress tells it to protect health, but the actual rules needed to protect health like regulating any given industry, that has to be made by the EPA. The EPA also has the power to shift responsibility from it to the state level. So the EPA could, in essence, tell state governments you have to protect health that way Congress and the EPA get credit for protecting health, but the burdens on the public are issued by the state government. And that’s another aspect of the trickery, the federal government taking credit for protection. But the burdens for creating the protection must be assumed or the the blame must fall on state officials. So it’s one Ponzi scheme after another.

Kevin Kosar:

Right. A legislature can claim, we passed a statute to do something wonderful, but the actual responsibility to make that happen, all the specifics have to be ironed out by someone else. And it also appears to be the case that by breaking this responsibility up, by having decisions not made by Congress, but by an agency and then the agency subcontracting to a degree to States or others, you’re also creating more venues for folks to lobby against the statute. Is that right?

David Schoenbrod:

That’s true. And even worse than that is it creates polarization. If Congress could legislate to protect health, so to speak, but leave the blame for the burdens needed to achieve that to others. Then there’s no reason why Congress shouldn’t be 100% for protecting health. We want to protect the health of children. And that’s what Democrats now in this day and age tend to say. And then the Republicans say, well, I’m against having regulation interfere with jobs. So I’m for a statute that’s going to stop any impact on jobs. And so we end up with polarization, but if Congress had to vote on the actual rules, how much is industry X going to cut its pollution? Then it would necessarily have to be balanced because the Democrats don’t want to vote for something that’s going to kill a lot of jobs. And the Republicans don’t want to vote against something that is going to leave a lot of people injured by the pollution.

David Schoenbrod:

So Congress taking responsibility leads to balance, whereas these tricks lead to polarization and then ultimately gridlock. And so no wonder people, no wonder voters distrust government. It’s a charade the way it works now.

Kevin Kosar:

As you note in the book, legislators have been using these tricks for many decades. What can be done to stop Congress from continuing to engage in this blame shifting behavior which obscures accountability?

David Schoenbrod:

Yeah. I agree. Congress has been doing this for a long time. I date this really to the late sixties and the early seventies, but it can be changed. And I have a proposed statute that I had discussed in the book called the Honest Deal Act, not the new deal, the honest deal. And it would force the credit and the blame to fall on Congress. And it’s not unthinkable that it could be done. I mean, there were forwards to the book by Governor Howard Dean, former chairman of the Democratic National Committee and Mike Lee, a prominent Republican Senator. The Honest Deal Act is not for the agenda of the left or the agenda of the right, it’s for an honest government. And so in the book, I lay out the demands that I would like to see people make to require Congress to once again shoulder the responsibility that it shouldered for the first 180 years of our Republic.

Kevin Kosar:

And I think an important aspect of what you propose is that it’s policy neutral. It’s not pushing policies that benefit one side or another, or one group of stakeholders or another, but it’s really about first branch of government and its legislative authority and how that legislative authority gets used in a way to revive the feedback mechanism that’s been lost between the elected officials and those who elect them.

David Schoenbrod:

Exactly.

Kevin Kosar:

Professor David Schoenbrod, thank you so much for talking with us about your book DC Confidential: The Five Tricks of Washington.

David Schoenbrod:

It was a pleasure.