Hans Bader

Obama Recess Appointments Violate Constitution; Another Appeals Court Rules Against the NLRB

by Hans Bader on May 16, 2013 · 0 comments

in Legal, Personal Liberty, Politics as Usual, Zeitgeist

Another federal appeals court has ruled that President Obama’s so-called “recess appointments” to the National Labor Relations Board were unconstitutional because the Senate was not in recess at the time: “We hold that the Recess of the Senate in the Recess Appointments Clause refers to only intersession breaks.” So ruled the majority of a three-judge panel of the Third Circuit Court of Appeals, in its 2-to-1 ruling in NLRB v. New Vista Nursing and Rehabilitation. Generally, our Constitution’s system of checks and balances requires Senate approval of Presidential appointees, but this requirement, found in Article II’s Appointments Clause, contains an exception for temporary recess appointments made during “the recess” of the Senate.

The appeals court noted that other courts such as the Eleventh Circuit have permitted recess appointments not just in “intersession breaks” but also “breaks within a session (i.e., intrasession breaks) that last for a non-negligible time.” But President Obama’s “recess” appointments would not be valid even under that broader reading of his powers (as I previously explained).

Obama’s appointments of the NLRB members would be valid only under a still broader, radically expansive interpretation of the Recess Appointments Clause that would gut the Senate’s power to review Presidential appointments. The NLRB and the Obama administration argue that recess appointments can be made whenever “the Senate is not open to conduct business” — presumably including when the Senate goes home for the evening or even takes a lunch break — and even includes “periods in which the Senate holds pro forma sessions” but is not available to vote on nominations. This argument is of “recent vintage,” noted the appeals court, and is plainly contrary to the Recess Appointments Clause’s “meanings at the time of ratification” of the Constitution.

(The court’s opinion, issued on May 16, is quite lengthy: the majority opinion totals 102 pages, while the dissent runs 55 pages.)

In an earlier ruling in Noel Canning v. NLRB, the D.C. Circuit Court of Appeals reached the same conclusion as the Third Circuit, finding that there was simply no “recess” in existence to authorize the President to make these so-called recess appointments. In its January 25 decision, the D.C. Circuit also noted that Obama’s appointments were invalid for an additional reason: the Recess Appointments Clause only authorizes appointments to fill vacancies that “happen” during a recess, and even the Obama administration admits that the vacancies occurred before, rather than during, any recess.The Obama administration has recently filed a petition with the Supreme Court asking it to review and reverse the D.C. Circuit’s decision. Its petition contradicts prior administration claims by admitting that the D.C. Circuit’s ruling will, if allowed to stand, also invalidate other Obama administration “recess” appointments, such as the appointment of Richard Cordray to head the powerful Consumer Financial Protection Bureau (CFPB). Cordray’s appointment was as invalid as the NLRB appointments, since he was “recess” appointed by Obama during the same non-existent recess.

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IRS Investigated Groups for Teaching about the Constitution

by Hans Bader on May 13, 2013 · 1 comment

in Legal, Nanny State, Personal Liberty, Zeitgeist

The IRS didn’t just investigate groups based on their perceived political views, but also targeted groups for “educating on the Constitution and Bill of Rights” or advocating limits on government. The Washington Post reports:

At various points over the past two years, Internal Revenue Service officials targeted nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general.

The documents, obtained by The Washington Post  from a congressional aide with knowledge of the findings, show that on June 29, 2011, IRS staffers held a briefing with senior agency official Lois G. Lerner in which they described giving special attention to instances where “statements in the case file criticize how the country is being run.” . . . the agency revised its criteria a week later.

But six months later, the IRS applied a new political test to groups that applied for tax-exempt status as “social welfare” groups, the document says. On Jan. 15, 2012 the agency decided to target “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement.,” according to the appendix in the IG report, which was requested by the House Oversight and Government Reform Committee and has yet to be released.

As Politico notes, the agency also scrutinized “groups focusing on specific issues including ‘government spending,’ ‘government debt,’ . . . and all groups that ‘criticize[d] how the country is being run.’”

The Wall Street Journal similarly reports:

The Internal Revenue Service’s scrutiny of conservative groups went beyond those with “tea party” or “patriot” in their names—as the agency admitted Friday—to also include ones worried about government spending, debt or taxes, and even ones that lobbied to “make America a better place to live,” according to new details of a government probe.

The investigation also revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted—nearly a year before then-IRS Commissioner Douglas Shulman told a congressional committee the agency wasn’t targeting conservative groups.

Such viewpoint discrimination is forbidden, even in allocating discretionary government benefits such as tax exemptions where certain types of content discrimination might be permissible. As the Supreme Court noted in a case involving a college’s discrimination against a religious magazine in access to student-activity funds, ”viewpoint discrimination is . . . an egregious form of content discrimination.” (See Rosenberger v. Rector & Vistors of the University of Virginia, 515 U.S. 819, 829 (1995).) The IRS employees responsible should be terminated.

In other news, the Obama administration declared on Thursday that the federal civil-rights laws Title IX and Title IV require colleges to adopt campus speech codes broader than those that have been previously struck down by some federal appeals courts. It also demands very stringent snooping and micromanagement of students’ private lives. Education writer Joanne Jacobs writes that the new rules are so broad that they effectively “make every student a sex harasser.” The civil-liberties group FIRE objects to the new rules here at this link. So the IRS is not alone in disregarding the First Amendment.

Federal Title IX Enforcers Effectively Define Dating and Sex Education as “Sexual Harassment”

by Hans Bader on May 10, 2013 · 7 comments

in Legal, Nanny State, Personal Liberty

No one would believe you if you made this up, but it’s now actually happened: The Justice Department and the Education Department’s Office for Civil Rights now have effectively defined dating and sex education as “sexual harassment.” The definition is found in a May 9 Title IX Letter of Findings and Resolution Agreement involving the University of Montana. In a radical departure from Title IX jurisprudence, the federal government declares that “any” unwelcome sexual speech or other conduct is “sexual harassment” regardless of whether it is severe, repeated, or pervasive, and regardless of whether it would offend a reasonable person. In its findings, it rejected narrower definitions rooted in federal court rulings, declaring that “sexual harassment should be more broadly defined as ‘any unwelcome conduct of a sexual nature.’” (The federal government has also effectively mandated “unconstitutional speech codes at colleges and universities nationwide,” notes the Foundation for Individual Rights in Education.)

By contrast, the Supreme Court has ruled that to constitute illegal sexual harassment, sexual advances or other verbal or physical conduct must be severe and pervasive, create a hostile environment, and be “objectively offensive” to a “reasonable person.” See, e.g., Davis v. Monroe County Board of Education (1999). According to the Supreme Court, isolated instances of trivially offensive sexual speech are not illegal, and are not considered “sexual harassment” in even the broadest possible sense: the conception of harassment that applies under federal law’s anti-retaliation provisions, which allow employees to sue when they are disciplined for reporting what they in good faith believe to be sexual harassment, even if does not rise to the level of sexual harassment in a narrow legal sense. See Clark County School District v. Breeden (2001).

The definition of “sexual harassment” that the federal government demands that the University of Montana adopt is far broader than the sexual harassment policies declared unconstitutionally overbroad by federal appeals courts in DeJohn v. Temple University, Saxe v. State College Area School District, and McCauley v. University of the Virgin Islands, which made clear that there is no “sexual harassment” exception to the First Amendment.

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Youth Unemployment Is at Highest Sustained Level Since World War II

by Hans Bader on May 8, 2013 · 0 comments

in Economy, Employment

Real youth unemployment is at 16.1 percent, the highest sustained rate since World War II. As the non-partisan youth advocacy group Generation Opportunity notes,

  • The [official] youth unemployment rate for 18-29 year olds for April 2013 is 11.1 percent (NSA).
  • The effective unemployment rate is 16.1 percent, which adjusts for labor participation rate by including those who have given up looking for work. The declining labor force participation rate has created an additional 1.7 million young adults that are not counted as “unemployed” by the U.S. Department of Labor because they are not in the labor force, meaning that those young people have given up looking for work due to the lack of jobs.
  • The April 2013 youth unemployment rate for 18-29 year old African-Americans is 20.4 percent (NSA).

Evan Feinberg of Generation Opportunity argues that “It is a rough time to be a young person in America. . . with about 2 million college students graduating this month, there is no sign of an economic recovery for my generation. Half of all graduating seniors aren’t going to find meaningful work in the coming months.”

The New York Times noted that the most recent jobs “numbers mask a stubborn jobs problem.” “The economy continues to add jobs in proportion to population growth. Nothing less, nothing more.” But “job activity does not seem to be accelerating.” “Construction employment has barely budged.” And in “Europe, policy makers delivered a grim forecast.”

AEI’s James Pethokoukis argues that lousy jobs growth has been artificially concealed due to Obamacare, which replaces full-time jobs with part-time jobs, resulting in a typical newly-created job being of less economic value than previous jobs. We discussed earlier how official unemployment figures conceal rising joblessness, as Obamacare strangles job creation. Other government mandates are also hurting hiring. For example, the EEOC, which flouts federal laws, is discouraging hiring by creating a bad legal climate for employers.

First Amendment Menace: Obama Administration to Expand Americans with Disabilities Act over Websites?

by Hans Bader on May 8, 2013 · 4 comments

in Legal, Nanny State, Personal Liberty, Regulation, Tech & Telecom

Can websites be forced to change to accommodate the disabled — by using “simpler language” to appeal to the “intellectually disabled,” or by making them accessible to the blind and deaf at considerable expense?

Generally, the First Amendment gives you the right to choose who to talk to and how, without government interference. There is no obligation to make your message accessible to the whole world, and the government can’t force you to make your speech accessible to everyone, much less appealing to them. The government couldn’t require you to give speeches in English rather than Spanish to reach a larger number of listeners. And the Supreme Court once noted that the poem Jabberwocky is protected by the First Amendment, even though it makes no sense to most people.

But now, the Obama administration appears to be planning to use the Americans with Disabilities Act (ADA) to force many web sites to either accommodate the disabled, or shut down. Given the enormous cost of complying, many small web sites might well just go dark and shut down. The administration wants to treat web sites as “places of public accommodation“ subject to the ADA, even though they are not physical places. Courts used to reject this argument when it was made just by disabled plaintiffs, but now that the Justice Department is making it, too, some judges are beginning to buy it, opening the door to trial lawyers surfing the web and sending out extortionate demand letters to every small business whose web site is not accessible to the blind (or perhaps too hard to understand for the mentally-challenged).

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Historian: Housing Nominee Mel Watt Helped Spawn the Subprime Crisis

by Hans Bader on May 6, 2013 · 0 comments

in Bailout Watch, Economy, Legal, Politics as Usual, Zeitgeist

In the Daily Caller, historian and presidential biographer Charles C. Johnson writes that “Housing nominee Mel Watt helped create the subcrime crisis.”  Watt has been nominated by President Obama to be director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.  As John Berlau discussed earlier, Watt’s record also flunks privacy, transparency and government-accountability tests.

As Johnson notes, while in Congress, Watt “pushed government programs to help welfare recipients buy homes during the creation of the subprime mortgage bubble,” ultimately at taxpayer expense.  “Watt, a 20-year Member of Congress from North Carolina’s 12th district, also had a hand in programs allowing borrowers with poor credit to buy homes with no down payment.”  Later, “millions of bad borrowers defaulted on their loans, setting off a market crash that wiped out nearly 40 percent of the net worth of Americans.”  As Johnson points out, “Watt, alongside then-Rep. Barney Frank, D-Mass., blocked Bush administration efforts to reduce Fannie and Freddie’s overexposure to subprime loans” in 2003.  “In 2007, a full year after the real estate market peaked and began to plummet under the weight of millions of mortgage defaults, Watt and Frank co-sponsored a bill forcing Fannie and Freddie to meet even higher quotas for affordable lending and to invest in an “Affordable Housing Fund” for inner city communities.”  As Johnson observes, “Many of those risky loans ultimately led to the housing bubble and financial crisis.”

Pressure on lenders and the mortgage giants to promote affordable housing — ratcheted up during the Clinton administration — led to the mortgage meltdown.  Earlier, in the New York Times, I discussed the role played by the government-sponsored enterprises, Fannie Mae and Freddie Mac, in spawning the financial crisis and burdening taxpayers to the tune of hundreds of billions of dollars. The two mortgage giants bought up risky sub-prime mortgages partly  to satisfy government affordable-housing mandates, as even the liberal Village Voice found in its investigative reporting.  New York Times reporter Gretchen Morgensen, and AEI’s Peter Wallison, also have written about the role of the mortgage giants, and the affordable-housing mandates they put up with in exchange for their legally privileged status, in spawning the 2008 financial crisis.

Banks and mortgage companies have long been under pressure from lawmakers such as Watt — as well as regulators — to give loans to people with bad credit, so as to provide “affordable housing” and promote “diversity.”   That played a key role in triggering the mortgage crisis, judging from a New York Times story. It noted that “a high-ranking [Congressional] Democrat telephoned executives and screamed at them to purchase more loans from low-income borrowers.”  The executives of government-backed mortgage giants Fannie Mae and Freddie Mac “eventually yielded to those pressures, effectively wagering that if things got too bad, the government would bail them out.”  But they realized the risk: “In 2004, Freddie Mac warned regulators that affordable housing goals could force the company to buy riskier loans.”  Ultimately, though, Freddie Mac’s CEO, Richard F. Syron, told colleagues that “we couldn’t afford to say no to anyone.”

Later, after the loans went sour, taxpayers had to bail out Fannie Mae and Freddie Mac, at a cost of $170 billion.  Unlike the private banks, these government-backed mortgage giants have not repaid their bailouts. Their dominant role was reinforced and expanded by the 2010 Dodd-Frank Act, which imposed mortgage rules on their competitors that they were exempt from, leaving them free to traffic in mortgages that better-managed private institutions cannot touch because of Dodd-Frank.  Democratic lawmakers blocked attempts to reform Fannie Mae and Freddie Mac, as they continued to buy up risky mortgage loans at taxpayer expense.  The Obama administration rewarded managers of Fannie and Freddie for promoting its political agenda with $42 million in pay.

Watt, a staunch partisan, would replace Ed DeMarco, the non-political current head of the FHFA.  Under pressure from the Obama administration, DeMarco has signed off on some bailouts for certain mortgage borrowers, such as reductions in interest payments for certain borrowers, and debt forgiveness for certain delinquent mortgage borrowers willing to do short sales and get out of the house.

But DeMarco has resisted bailouts on a vast scale, such as massive principal reductions for people just because they are behind on their mortgage.  Last July, he concluded any purported economic benefits of principal reductions would be outweighed by the costs of inducing borrowers who could pay their loans to default.  DeMarco also was  concerned about the unfairness of reducing mortgage principal for delinquent borrowers who lived beyond their means, when others who have sacrificed to stay current would receive no similar bailout.  As a result, although the Obama administration engineered bailouts for delinquent borrowers (including speculators) whose loans were held by various private banks, there has not been a general bailout for borrowers whose mortgages are held by the government-backed mortgage giants Fannie and Freddie.

Some backers of the Obama administration have pushed for a trillion-dollar mass mortgage bailout, to try to drive up consumption and reduce saving, which they believe would provide a short-term boost to the economy (and the administration’s political fortunes).  Never mind consumption is higher than before the 2008 financial crisis, but investment, business investment in particular, has lagged.  (The Obama administration consistently has sought to raise taxes on investment income, and Watt repeatedly voted to raise taxes on investment income while in Congress).

Watt likely will dramatically expand bailouts, at taxpayer expense.  As the Washington Post noted on May 3, Watt is a “favorite of congressional Democrats and liberal housing policy advocates whose top priority for Fannie and Freddie is not long-term but short-term: to underwrite more aggressive loan modifications, including principal reductions,” at taxpayer expense.  (The administration has carried out only a limited number of bailouts at taxpayer expense, including bailouts that benefited irresponsible people who, despite ample incomes, saved so little money that they made only a tiny downpayment, and thus later ended up with negative equity in their homes.).

As the Washington Post notes, what is needed is “a permanent fix to the mortgage-finance system. That means winding down Fannie and Freddie and building new structures free of their design flaw — socialized risks and privatized profits. President Obama’s Treasury Department urged such a solution more than two years ago but has yet to propose legislation.”  Mel Watt is unlikely to propose any such solution, since doing so might undercut his ability to pursue the failed policies he promoted in the past — policies that helped trigger the 2008 financial crisis.

Obama: A Sweet Pension for Himself, But Not For America’s Savers or Investors

by Hans Bader on May 6, 2013 · 0 comments

in Bailout Watch, Economy, Politics as Usual, Property Rights, Sanctimony, Zeitgeist

In The Washington Post, Allan Sloan points out that while President Obama wants to cap American citizens’ IRAs at $3 million or substantially less—discouraging saving and investment in the process—Obama’s own-taxpayer-subsidized retirement benefits are worth more than twice as much, a generous $6.6 million. A sweet pension for me, but not for thee, seems to be Obama’s thinking.  Discussing the president’s “proposal to limit the value of 401(k)s, pensions and other tax-favored retirement accounts to about $3.4 million” (or much less, as interest rates rise), Sloan notes that Obama want “to limit savers’ tax-favored accounts to only about half the value of what he stands to get from his post-presidential package. Based on numbers from Vanguard Annuity Access, I value his package at more than $6.6 million. . . .And that doesn’t include [his] IRA  . . . Or the $18,000 (plus cost of living) a year he will get at age 62 for his service in the Illinois Senate.”

He also notes that “the point at which Obama wants to eliminate the ability of you and your employer to deduct contributions to your retirement account isn’t actually the $3.4 million in his budget proposal—that’s just an estimate. The real number is how much a couple age 62 would have to pay for an annuity that yields $205,000 a year. That $3.4 million—which applies to the combined values of your pension and retirement accounts—is subject to a sharp downward change in the future because annuity issuers charge significantly less for an annuity when interest rates are higher than they do today, with rates at rock-bottom levels.”

Obama has discouraged saving in other ways, such as raising taxes on capital gains and dividends, imposing a new Obamacare tax on investment income, and by giving costly bailouts to irresponsible people who, despite ample incomes, saved so little money that they could not “afford” more than a tiny downpayment, and thus ended up with negative equity on their home later on due to declines in the value of their home, qualifying them for the bailouts that certain favored underwater mortgage borrowers have received.

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U.S. Government Bans French Cheese Based On Food Prejudices

by Hans Bader on April 30, 2013 · 0 comments

in Features, Health and Illness, International, Nanny State, Personal Liberty, Precaution & Risk, Regulation, Trade

Post image for U.S. Government Bans French Cheese Based On Food Prejudices

The U.S. government is banning a standard, normal-smelling French cheese based on its own squeamishness. The cheese in question is Mimolette, a commonplace, orange French cheese so mild in flavor that I once confused it with cheddar when I visited my French relatives and ate it for the first time. The ban has triggered protests in New York City, reports the Global Post:

Around 40 protesters took to the streets of New York on Saturday to demonstrate against a US ban on mimolette that has angered lovers of the distinctive French cheese.

Since March, several hundred pounds of the bright orange cheese have been held up by US customs because of a warning by the Food and Drug Administration that it contained microscopic cheese mites.

The mites are a critical part of the process to produce mimolette, giving it its distinctive grayish crust.

The US decision has angered importers and consumers, who have even set up a Facebook page titled “Save the Mimolette.”

Benoit de Vitton, an importer of the cheese. . . said he was baffled by the recent blockade, noting he has imported mimolette for two decades without a problem.”They are afraid of allergies,” he said. “But we’ve been doing this for 20 years without any problem.”

Who cares if it has tiny, invisible mites in it? Cheese is the product of bacteria. Good yogurt has live cultures of bacteria in it, and that is beneficial for your health. Food that is alive can be good for you. The human body is full of living, friendly microbes that keep us alive. The cheese mites in Mimolette are there to enhance its flavor: as Wikipedia notes, the “crust of aged Mimolette is the result of cheese mites intentionally introduced to add flavor by their action on the surface of the cheese.”

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New York Times: Obama Administration Discrimination Settlement Was “Magnet For Fraud” That Enriched Trial Lawyers

by Hans Bader on April 26, 2013 · 1 comment

in Agriculture, Bailout Watch, Economy, Features, Legal, Politics as Usual, Zeitgeist

Obama RacineA page 1 New York Times story today describes how the Obama administration, despite opposition from civil servants, radically expanded a legal settlement that had already become a “magnet for fraud,” paying out vast sums of money over baseless claims of discrimination at the Agriculture Department in the Pigford case. As the Cato Institute’s Walter Olson notes, its story “today breaks vital new details about how career government lawyers opposed Obama appointees’ insistence on reaching a gigantic settlement for claims of bias against female and Hispanic farmers in the operation of federal agriculture programs” over the objections of “career government lawyers.” As the Times reports,

On the heels of the Supreme Court’s ruling [adverse to claimants and favorable toward USDA], interviews and records show, the Obama administration’s political appointees at the Justice and Agriculture Departments engineered a stunning turnabout: they committed $1.33 billion to compensate not just the 91 plaintiffs but thousands of Hispanic and female farmers who had never claimed bias in court.

The deal, several current and former government officials said, was fashioned in White House meetings despite the vehement objections — until now undisclosed — of career lawyers and agency officials who had argued that there was no credible evidence of widespread discrimination. What is more, some protested, the template for the deal — the $50,000 payouts to black farmers — had proved a magnet for fraud.

The ever-growing settlement became “a runaway train, driven by racial politics, pressure from influential members of Congress and law firms that stand to gain more than $130 million in fees.”

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Obama’s Controversial Nominee For Labor Secretary To Be Voted On

by Hans Bader on April 25, 2013 · 2 comments

in Economy, Employment, Labor, Legal, Personal Liberty, Politics as Usual, Regulation, Zeitgeist

Cato Institute attorney Ilya Shapiro wrote Tuesday about “Thomas Perez, the assistant attorney general for civil rights who personifies . . . this administration’s flouting of the rule of law.” As he notes, Perez “is due this week for a vote in the Senate Health, Education, Labor, and Pensions Committee on his nomination to be Labor Secretary.”

Shapiro provides this “recap of Perez’s nefarious dealings” (drawing on the work of Quin Hillyer, who provides more detail at this link):

  • Interference with the Supreme Court case of Magner v. Gallagher, getting the City of St. Paul to dismiss its appeal to prevent what would’ve been a sharp . . . rebuke to the federal government regarding its use of “disparate impact” racial theories in housing policy . . . [CEI discussed Perez's misuse of "disparate impact" law here]
  • Refusal to comply with subpoenas from the U.S. Commission on Civil Rights [which CEI discussed here];
  • Dismissal of the Justice Department’s already-won prosecution of the Black Panthers for voter intimidation during the 2008 election [which CEI discussed at this link];
  • . . . running a department dedicated to the proposition that voting rights and other civil rights law don’t protect white people [CEI discussed an example here];
  • Willfully misleading and lying to Congress under oath several times [D.C. District Court Judge Reggie Walton said he made false claims in response to queries about the black panther case];
  • Racial abuse of the New York fire department, to the detriment of public safety and qualified minority applicants;
  • Hiring for “career” (non-political appointee) slots only attorneys who have demonstrable left-wing credentials—making Alberto Gonzales’s politicized-hiring foibles look like the model of civil service administration [see examples here];
  • Trampling on religious liberties to the point the Supreme Court unanimously rejected his arguments in Hosanna-Tabor v. EEOC regarding the “ministerial exception” to employment laws;
  • Conducting government business from a personal email account as many as 1,200 times (!) and now refusing to comply with congressional subpoenas to release those emails. [CEI lawyers have repeatedly uncovered such abuses, and the use of false-identity alias email addresses, by Obama administration officials, as you can see here and here].

CEI earlier discussed the Magner case and why the Obama administration’s position in that case could undermine the stability of the financial system and cause future financial meltdowns. (CEI joined in an amicus brief opposing the Obama administration’s position, in the Supreme Court). It also highlighted the Obama administration’s (and Perez’s) massive, ethically dubious payoff to the City of Saint Paul to drop the case. Earlier, CEI discussed the Obama administration’s extreme position in the Supreme Court’s Hosanna-Tabor case and how it would have undermined First Amendment freedoms, religious autonomy and the separation of church and state. CEI also examined the Justice Department’s politicized hiring during the Obama administration.

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