Washington's Labyrinthine Ways By Otto J. Hetzel The Battle Has Been Joined and the President's Veto Pen Is Poised. With House Republicans moving on a number of legislative fronts to meet their commitments under their "Contract With America" to bring all items to a vote within 100 days, it is apparent that a number of the measures which have already passed the House are likely to be unacceptable to the President. They will cause him to unleash his veto pen unless the Senate modifies them sufficiently. To date, the President's strategy seems to be to keep his ink dry, and rely instead upon veto threats to obtain compromises on unsatisfactory provisions in pending legislation. Whether this tactic will work in the long run is questionable. Veto contests are increasingly likely to take center stage soon. It would appear in the interests of House Republicans to persist in pushing their own agenda and attempt to paint the President as creating gridlock when he exercises his veto. Their tactic will be to send him measures that he is unable to counter effectively with the public when perceptions support Republican actions. The trick for the White House will be to draw lines in the sand that are supported by a majority of the electorate. It has been doing just that by labeling various positions taken by House Republicans, such as revisions to the Crime Bill that will "take needed police off the street," thereby triggering public concerns about street crime. Similarly, the President has effectively labeled Republican provisions terminating school food programs and eliminating food stamps as "attempts to starve poor children," appealing to public concerns for the less fortunate, particularly children. In what was originally perceived to be a productive strategy, Republicans have sought cover for what are likely to be significant cuts in federal expenditures, by changing federal programs to block grants to states and combining domestic programs in a number of areas while committing to maintain current funding levels for five years. In contrast to current programs, however, states would not be required to maintain their own current level of funding in these areas. Block grants would allow states, not federal administrators, to direct use of funds more in keeping with local priorities. Thus far, however, the subtleties have been missed and the President's strategy of pressing the public's "hot buttons" seems to be working. Senate Brakes Applied to House's Rush to Judgment. While House Republicans scramble to meet their self-imposed deadline, the Senate has brought a tempering influence over the more controversial provisions. This difference was most clearly apparent in the Senate's rejection of the Balanced Budget Amendment. A major argument mounted against the amendment was that it would ultimately result in significant reduction in federal funds provided to states and local governments as a result of the need to balance subsequent federal budgets. The potential impact of Social Security funds was also a major influence on those opposing passage. While the House passed its version of a Balanced Budget Amendment with only two days of floor discussion, the Senate failed to adopt the amendment after a number of weeks of debate that parliamentary efforts of Senator Robert Byrd maneuvered to prolong discussions to build opposition. Last minute Republican efforts to capture a few more Democratic votes were ineffective to reach a two-thirds majority required for approval. A curious modification, crafted to entice Senator Nunn, would have prevented judicial interpretations of the amendment's reach. Despite a highly criticized one-day delay imposed by Majority Leader Robert Dole to seek additional support, contrary to an agreed-to date certain for the vote, the amendment failed by one vote. Feelings ran high, and Mark Hatfield, the lone Republican senator to reject it, has been subjected to threats of removing his committee chairmanship. As other controversial measures move from the House to the Senate, the Senate's role and pressures on its members will increase. One effect of the rejection of the Budget Amendment, a principal prong of the "Contract," may be to encourage defections on other controversial elements of the Contract as well. Generational Conflict Underlies Key Decisions Being Taken. Republicans are now discovering what many Democrats learned years ago, that elderly Americans don't miss a vote and care strongly about their benefits. The generational conflict is real and is likely to get even rougher before the end of the century. The invocation of Social Security protection, in fact, provided cover for a number of senators who rejected the Balanced Budget Amendment. It also is likely to affect decisions about structuring reductions to meet the " Middle Class Tax Cuts" promised by both the Administration and many Republicans, let alone how to continue to reduce expenditures and thereby the budget deficit. States and local governments will also need to be concerned about what funds coming to them are likely candidates for reductions to accumulate sufficient funds for the relatively modest middle class tax cuts. Keeping Score on Republican "Contract With America" Commitments. House Republicans have been carrying on marathon sessions to get through their agenda. Predictably, tempers are starting to flair and the long hours and Monday votes are destroying the touted "family friendly" atmosphere that was to come from Republican control of both chambers. Overall, Republican successes at this point have been very modest, despite majorities in both houses. Internal conflicts have now surfaced as reflected by the intra-party anger toward Senator Hatfield's failure to keep to the party line; the tension is between party loyalty and the member's personal evaluation of the measures under consideration. After more than seventy days, Republicans in both houses had enacted just two measures into law; the first was effectively an in-house issue: Congressional Reform. Both houses agreed to impose worker protection laws from which Congress had previously exempted itself. Beyond that, many Contract items are still in committee or, if passed by the House, are pending consideration in the Senate, which clearly does not feel the same urgency to take up the legislation. Over the next weeks, it will need to confront more difficult and controversial matters. The House, however, will probably at least meet its commitment of bringing every matter to a vote. There seems little excuse not to, since Republicans can force anything forward they want, when they want. Only when they lose some of their own members on particular measures is there a problem. This has already happened with respect to part of their program for changes in defense policy. The second Contract item to be enacted was Restricting Unfunded Mandates. It would prevent imposing obligations of more than $50 million on states and local governments without federal provision of the funds to carry them out. Despite urging from governors to adopt a blanket prohibition on unfunded federal mandates, it has become apparent to Congress that a number of areas of federal concern could be affected, restricting subsequent federal policy options. Thus, the legislation will allow Congress to override the restriction when it decides otherwise. While the Act may deter federal mandates unless the decision to impose them is specific, it is likely to leave significant flexibility for Congress to continue to fob off costs to states. At least now Congress will need to fess up when it does so. A Number of Contract Items Have Passed in the House. The House has passed a number of its Contract items and sent them to the Senate. These include: A Line-Item Veto provision, providing unprecedented presidential power to delete specific portions of a bill. Crime Bill Revisions to last year's Act, putting a Republican twist to its funding objectives through a block grant approach to states that would still impose local requirements for spending funds, but on prisons rather than police and prevention programs as now required, and permitting a "good faith" exception for evidence obtained by police despite the exclusionary rule prohibiting admission at trial of improperly seized evidence. A Republican Defense Bill, passing three out of five provisions proposed in the Republican Contract, restricting spending on peacekeeping operations, creating a defense strategy panel, and restricting U.N. command of U.S. troops. Two issues, revitalizing Reagan's "Star Wars" and requiring congressional approval for peacekeeping operations, were unsatisfactory even to numbers of Republicans and were rejected. The Private Property Protection Act providing a legislative interpretation of the Fifth Amendment to give relief to property owners and allow them compensation in regulatory takings when at least 20 percent of the value of their land is affected. The objective is to create an itemized bill to federal authorities who would impose environmental regulations, identifying the costs of federal action. The bill has been narrowed to cover primarily wetlands and endangered species actions that would reduce property values; owners could require government to purchase their property when at least 50 percent of the value is affected. Food Stamp Cuts of over $17 billion would be authorized over five years, reducing average benefits of $69 per month for recipients. Farm state members have been resisting this cut to protect their farming constituents. As the GOP plan takes shape, the measure would be part of draconian cuts in welfare and has been called immoral and mean-spirited by opponents. The GOP Welfare Changes have been termed "budget cutting . . . wrapped in the cloak of welfare reform" by the President. Clearly major reductions are called for; lacking empowered opponents, it may happen. In a major policy change, the principle of guaranteed benefits to those eligible may be abandoned once specific spending caps to be imposed are reached. This would end a policy of universal eligibility for those who need the safety net support. On mandatory work requirements in both Democratic and Republican bills, the difference is the GOP version would cut off benefits and not provide jobs beyond two years, leaving participants to fend for themselves after that. In contrast, Administration revisions would ensure that at least public service jobs would continue to be available for those willing to work after training and benefits are withdrawn after two years. Since the shape of this legislation still has a long way to go, jockeying for public support has been the main activity up to this point. Changes in the Legal System. The House has passed three measures involving legal reforms. The Attorney Accountability Act could have profound effects upon both federal and state legal systems, let alone the pockets of the legal profession. "Kill the Lawyers" may not be rhetoric much longer. The House version would impose "loser pays" requirements in diversity cases under certain circumstances in federal court, when a party rejects a settlement and achieves a poorer result at trial. In addition, Federal Rules of Civil Procedure Rule 11 sanctions would again become mandatory for filing frivolous lawsuits, a provision deleted in Supreme Court rule changes adopted in 1993. Lawyers would be made directly liable to compensate the other party. In addition, lawsuits would have to demonstrate the scientific validity of supporting evidence and its valid connection to the issues in the case. There is some inconsistency in the Republican posture on Legal "Reforms" on several grounds. First, even the modified loser pays approach being urged may have the effect of driving much litigation currently heard in federal court to state courts, effectively imposing another unfunded mandate on states. Other portions of the legislation would impose a federal prohibition on state laws setting product liability and would also limit punitive damages to no more than $250,000, subjecting states to federal dictates, again inconsistent with federalism concepts championed by Republicans. It seems that the posture on states' rights may depend upon whose ox is being gored, consumers and the poor or corporate interests. In any event, changes to the legal system have generated threats of a presidential veto. The President has stated he will veto all three measures as proposed in the House Republicans' Ninth Contract item, "Common Sense Law Reform." The President has been able to put himself on the side of states' rights on this one. Proponents sense a real opportunity for victory, however, with increased support after almost two decades of trying to limit their tort exposure. While there are good arguments to curtail punitive damages and to set some limits on product liability, the dialogue has not been on the issues; rather, the debate has been termed misleading and unprincipled. As with health-care reform, some strongly motivated to destroy concepts of product liability are attempting to influence public opinion with a television campaign in which the substance has been largely unsubstantiated and the facts are misleading. For instance, continuation of Little League Baseball is presented as dependent on enactment of Common Sense Law Reform, and unauthorized assertions of the need for Girl Scouts to sell 87,000 boxes of cookies to cover potential liability costs have been aired. The real issue, of course, is product liability, and balancing protection of consumers while ensuring needed products reach the market. Given the level of discussion so far, the probability is that more heat than light will fuel the debate. Recision Bill Portends Major Reductions in Funds to the Poor for Food, Housing, and Other Necessities. While 1995 appropriations were already enacted and funds have already been drawn down under programs previously authorized by the last Congress, House Republicans have not been content to wait for fiscal year 1996 to impose their policy predilections. Under appropriations laws, Congress can offer recisions in previously authorized appropriations of funds, although the final results will require presidential approval. What has occurred already is a $17 billion cut in various domestic programs, over $7 billion from HUD programs alone. A major problem with the tactic is that it will be imposed in even more draconian fashion than intended, since only those jurisdictions that draw down funds later in the fiscal year are likely to have to absorb the cuts under the current legislation. It would seem apparent that what were intended to be stiff 25 percent reductions may actually turn out to be cuts of over 50 percent for some who get their funds later. As predicted, the Term Limits constitutional amendment bill has stalled as House Republicans seem unable to decide whether four, six, or twelve years (six terms) will be enough for them. Two terms are pegged for the Senate. Transitioning from an election promise to limiting one's own term has not been easy. D.C. Woes: A Congressional Takeover Along with Government by Court Decree. As a result of the deepening fiscal crisis in D.C., more fully disclosed only after Mayor Marion Barry took office the first of the year, a congressional takeover of D.C.'s fiscal management is underway and is likely to be imposed shortly. In the interim, many of the hard decisions to cut services and employees are being taken by the mayor. In addition, he has acknowledged that the scope of D.C.'s self-government may not have been realistic. At the heart of the matter is that D.C. has been absorbing costs carried by states, but without their sources of revenue. Along with these problems, and exacerbated by its fiscal shortfalls, D.C. has been losing its authority to govern to the courts. While other cities have been sued by beneficiaries of federal programs alleging improper administration locally, D.C. appears to have come under fire more than any other jurisdiction over the last decade. A recent Washington Post article detailed twenty-six pending cases involving judicial supervision or involvement in D.C. government operations. Cases in both federal and D.C. Superior Court have essentially taken over direction of a variety of municipal functions, including corrections, provision of educational facilities, administration of foster care/child welfare, juvenile justice facilities, deinstitutionalization of mental health facilities, water quality control, public housing, fire department hiring and promotion policies, homeless assistance, medicaid processing, and hospital operations. Receivers and masters now threaten to intrude upon much of D.C.'s governmental operations. One example was the failure of D.C.'s school administrators to fix 1,800 life-threatening conditions in its schools in a timely fashion. The judge delayed school openings, requiring corrections and repairs before students could return to the buildings with violations. Since all repairs have not been fully completed, it seems likely the judge will again prevent use of some schools where repairs are lacking when he soon revisits his prior order. Another relates to a D.C. judge's imposition of a receivership on D.C.'s public housing following recommendations of the court's master who reviewed current operations and recommended such action. Basing his authority upon two controversial theories, one a rather unusual third-party beneficiary theory and the other that failure to repair uninhabitable units effectively constituted a "demolition," prohibited under federal law, the court embarked upon what could be a lengthy period of involvement in administration of D.C.'s public housing program if the decision is upheld on appeal. Not since Boston's public housing was brought under a receivership, a procedure specifically authorized there under state law, has a public housing program been put under judicial control without local government consent. While most public housing authorities are relatively independent of municipal administration, generally subject at most to a mayor's appointment of board members, D.C.'s program and a few others around the country are operated directly under city aegis, often as a city department. Extensive judicial intervention, therefore, is likely to be required to deal with various D.C. functions impacting upon public housing operations, including handling of personnel policies, budgets, and provision of city services to public housing sites. The matter is on appeal, a stay of the receivership order has been granted, and settlement discussions with the new Barry Administration and HUD to agree to a receiver are well underway. HUD Wants to Permit Demolition of Decrepit Public Housing. While requiring congressional approval to delete prior restrictions on demolitions, so long as the same number of persons will be served by rental of other housing, HUD included funds and authority to carry out demolitions in the Administration's budget submitted to Congress. As part of its Reinvention Blueprint, warehousing poverty in large, run-down projects is no longer acceptable. HUD would "transform public housing" by tearing down the worst units. The only problem is that Republican-controlled committees may want to go even further. Another complication is that funds that could be used for tearing down the units are currently deleted in the appropriations committee's recision package of over $7 billion in HUD funds. This is subject to change in the Senate. Continuing to pour further funds to retain tenants in the ten projects nationwide, in Washington, Baltimore, Chicago, Dallas, Denver, Detroit, Houston, New Orleans, and Newark, would seem an even worse option. Your Correspondent Otto J. Hetzel is a professor of law at Wayne State University and also practices law in Washington, D.C., with the firm of Pepper, Hamilton & Scheetz.