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WASHINGTON'S LABYRINTHINE WAYS
Otto J. Hetzel is a professor of law emeritus at Wayne State University and practices law in Washington, D.C.
• 2004 Budget Not Approved Until January 23, 2004, Almost Four Months Late. The $328 billion Omnibus Act President Bush signed completed federal spending action for FY 2004. It covered expenditures for the remaining seven of the thirteen annual appropriations bills. It funded eleven of the cabinet departments. Under Congress’ own rules, that action should have been completed before October 2003. Part of the reason for some of the delay is that the Act contained controversial provisions sought by the White House to override congressional actions taken earlier in the session to: limit FCC liberalization of cross-ownership restrictions on communications companies; lift the travel ban to Cuba; prevent secret searches of private property under the Patriot Act; and restrict Labor Department reductions in eligibility for overtime pay.
Other provisions enacted delay country-of-origin labeling on meat products, bar issuance of patents on human organisms, and require destruction within twenty-four hours of background checks for gun buyers. Such substantive provisions are unusual for an appropriations act, but this practice has become more frequent because only one, up or down, vote is required to take action on a variety of issues. Congress, meanwhile, is actively working on its 2005 budget following the President’s proposals highlighted by his State of Union address.
• Prospects for Similar Delays in Enactment of a 2005 Budget Are High. While Congress has taken initial actions on resolutions setting the general scope of the budget, given that this is an election year, it is probable that only three of the thirteen appropriation bills will be enacted before Congress adjourns for elections: Defense, with needed funds for Iraq and Afghanistan engagements; Military Construction; and Homeland Security. Coming back for a “lame-duck” session did not occur in 2003 and is equally unlikely after the elections take place. Therefore, many are planning for another Omnibus Act for FY 2005, as occurred with this year’s budget. Don’t be surprised if many spending decisions are left to a new Congress that takes over in January 2005.
• Increased Concern over Mounting Budget Deficits. The 2005 deficit that would result from the President’s budget proposals was estimated by the Congressional Budget Office (CBO) at $478 billion and $2.7 trillion over the next decade. This unprecedented level has made the deficit an election year issue. Many conservatives from both parties are alarmed over deficit levels and the White House has responded and claims it will cut deficits by half within several years. It faces a quandary, however, because it is also continuing to push for further tax cuts by making permanent earlier tax reductions scheduled to revert back to original levels in 2011. A concern to many hard-pressed state and local governments is that domestic funding is likely to take much of the brunt of efforts to reduce the deficits.
On March 12, the Senate on a 51–45 party line vote took the first step in its 2005 budget process, adopting a $2.4 trillion budget resolution intended to set outside limits on individual appropriations bills that will follow. It represents a $56 billion reduction over five years in the President’s 2005 budget request. The resolution also contained a provision, inserted by Democrats (approved by a 51–48 vote), that will require sixty votes to pass any tax cuts in the next five years unless offset by spending cuts or tax increases. While that provision is unlikely to survive the reconciliation process, when differing Senate and House bills must be reconciled, its enactment shows that the President will face real difficulties before fall elections in making permanent his $1.7 trillion tax cuts passed in 2001 and 2003.
Deficit concerns also affected House budget actions. Its resolution was delayed when Republican rank and file members tried to force their leadership to impose a “pay as you go” restriction to require spending cuts or new taxes to justify any increases in expenditures. The President’s task was made even more difficult when Federal Reserve Chair Alan Greenspan testified that tax cuts could not be justified unless Social Security benefits were correspondingly reduced. In an election year, that would seem impossible. In efforts to deflect criticism over the deficits, the White House has been taking the position that the deficits preceded the Republican assumption of the Presidency. The nonpartisan National Bureau of Economic Research, however, says the downturn started in March 2001. Who’s to tell, but a few months can make a difference.
• Senate Considering Preserving a Reduced Estate Tax Rather Than Its Repeal. Senator Don Nichols (R–Okla.), retiring chair of the Senate Budget Committee, has indicated he would settle for a reduced “death tax” as opponents like to refer to it, rather than trying to make its repeal permanent. Significant additions to the deficit would occur if Bush’s 2001 tax cuts that extend through 2010 were to be made permanent. For instance, exemptions from estate taxes are scheduled to increase annually, reaching $3.5 million by 2009. Amounts over that level would be subject to tax rates of 45 percent rather than the current 55 percent. While in 2010 there would be no estate taxes, in 2011, the tax rates and exemptions would revert to pre-2001 levels. Given rising deficits, Nichols has said he will propose instead that estate taxes continue, but that rates be lowered by 2 percent annually until they reach 20 percent and that a permanent $3.5 million exemption be implemented immediately. So, don’t throw away your estate law treatise yet.
• Grim Prospects for Domestic Spending Levels After 2005 Under Administration’s Proposed Budget. The Center on Budget and Policy Priorities reports that the President has proposed severe cuts in most domestic spending over the next five years. These cuts would also institute binding caps locking them in through 2009. Because they were not included in OMB’s budget books, little notice has been given thus far. For instance, energy programs while scheduled for a 7 percent cut from current levels for FY 2005 would be cut by another 27 percent by 2009. Similar cuts of 10 percent and 20 percent would collectively be experienced for environmental and natural resource programs.
Only defense, international affairs, general science, and space technology would be excepted. Despite touted increases for 2004, special education programs by 2009 would be down $500 million. Examples of other areas to be cut are: Title I education ($600 million by 2009); loans to states for sewer treatment plants ($507 million, a 37 percent cut); housing vouchers for low-income, disabled, and elderly families ($6.1 billion, a 40 percent cut affecting support for 800,000 families); Head Start (62,000 fewer children would be served); supplemental nutrition for low-income pregnant women, infants, and young children (450,000 fewer would be served); and veteran’s health benefits ($5.7 billion, a 17 percent cut). By 2009, except for Homeland Security, domestic programs would be 12 percent, or $49 billion, below 2004 levels. The Center charges these cuts won’t even reduce the deficit because proposed Administration tax cuts that are contemplated would exceed any reductions.
• OMB Proposes Drastic Changes to Housing Vouchers, the Primary Federal Housing Program. The Administration would convert amounts for Section 8 housing vouchers (the principal federal low-income housing assistance program created thirty years ago under the Nixon Administration) into block grants to local housing authorities. Called the Flexible Voucher Program, it would repeal existing statutory requirements that 75 percent of vouchers be provided to families with incomes below 30 percent of area medium income. The increased flexibility would likely result in several fundamental changes and reduce funding levels.
The national organizations representing local housing authorities have pointed out that current levels of federal support for this housing, over $14 billion in 2004, are already insufficient given unmet needs and that over time federal funds are intended to be reduced further. Compared with estimated funding needs in FY 2005, they note the Administration proposal for renewal funding for those with expiring vouchers is reduced by approximately $1.8 billion. This cut could deprive an estimated 250,000 or more low-income families of housing assistance. The reduction for 2005 could also lead to an estimated $125 million cut in administrative fees for local housing agencies that handle the voucher program.
The primary rationale for the change is alleged exploding rental costs. However, the CBO, in contrast to OMB which speaks on behalf of the White House, projects a marginal growth in program costs of only 0.1 percent for 2005. Further reductions in federal funding are likely to occur under a block grant that is not easily measured as funding levels are now by the numbers of families assisted. Supporting these fears are the Administration figures for 2009 that reflect a $6.1 billion reduction from current funding levels, a 40 percent cut by that time.
The programmed reductions in federal support would clearly result in either fewer low-income families receiving assistance, an increase in amounts that families using vouchers would have to pay toward rent themselves, or the shifting of housing assistance to higher income families. If enacted at funding levels proposed for 2005, as noted above, 250,000 families could lose access to vouchers. Alternatively, the 2 million families who receive vouchers, many with incomes below the poverty level, would have to substantially increase the amounts they have to pay themselves toward rent to make up the shortfall if federal funds are limited, reducing their amounts available for food, clothes, and transportation. A further potential effect of reductions in rent coverage for voucher users is further concentration of low-income families in high-poverty areas to obtain lower rents thereby exacerbating social effects that vouchers were originally formulated to offset by allowing dispersion.
• Funds for Two Federal Programs to Support Redevelopment Projects Threatened Again with Termination. Last fiscal year, the Administration tried to terminate two federal programs used to support local government redevelopment activities: Funds for HOPE VI grants to housing authorities, used to replace and improve public housing facilities, were zeroed out, but Congress overrode such efforts by approving new funds in the 2004 budget enacted in January. OMB is again trying to terminate this program, which has been popular with local housing authorities who use it to leverage funds for new public housing projects to replace obsolete, deteriorated facilities.
Section 108 grants have allowed local governments to use a portion of their future Community Development Block Grants as collateral for borrowing for major development projects. The grants rarely have any budget impact because HUD approval of them requires a stream of income from other sources as the primary means of loan repayments. Many local jurisdictions have used this collateral to carry out projects that otherwise could not have been funded. Last year Congress rejected both Administration proposals and is likely to do so again.
• Congressional Support for Funding Needed for Housing and Urban Development Programs Will Be Under Considerable Pressure Given Administration’s Proposed $1.2 Billion Under-Funding of Veteran’s Health Benefits. A significant threat to maintaining federal funding levels is that HUD is under the same appropriations subcommittee as the Veterans Administration (VA) and the Space Program (NASA). This means that once a “mark” is given to the subcommittee under that house’s budget resolution for all funding authorized by it, to meet any shortfall in funding to one agency will require taking it away from another under the subcommittee’s jurisdiction. The Administration has proposed a shortfall of at least $1.2 billion in funding to the VA for veteran’s health benefits that the committee has identified and in light of military activities in Iraq and Afghanistan appears likely to provide. This will increase pressure to reduce funding for housing and urban development programs used by state and local governments. In addition, Bush endorsed new NASA expenditures to support a manned trip to Mars. While the latter is an unlikely recipient of congressional funds in current circumstances from the start, prospects for adequate funding for domestic programs was unlikely and the need to cover costs of support for veterans as a practical matter is likely to further limit available funds. It is hard not to suspect that the conflict generated by the White House was not unintentional.
• Immunity for Gun Manufacturers/Dealers Shot Down. When proponents managed to get more than the sixty votes needed to force Senate consideration of a measure to provide immunity to gun manufacturers and dealers, that bill appeared assured of passage. It was aimed at preventing recovery under any of the actions filed by local governments for costs resulting from shooting deaths in their jurisdictions. Overriding a filibuster, however, does not prevent making of amendments to the pending legislation. Opponents offered two amendments that were approved, one to provide for a ten-year extension of the assault weapons ban that will expire this September, and another to close an existing loophole by requiring background checks on all firearm transactions occurring at gun shows, i.e., “events that provide a venue for the sale, offer for sale, transfer or exchange of firearms.” The amendments also included a federal override of state laws prohibiting the carrying of concealed handguns that would have exempted qualified current and former law enforcement officers.
Just before the vote on the bill as amended was to take place on March 3, Super Tuesday, proponents decided that no bill was better than one with these amendments. So, the Senate by a 90–8 vote rejected S. 1805, the Protection of Lawful Commerce in Arms Act. The importance of the vote was seen by the then contenders for the Democratic nomination, Senators Kerry and Edwards, as sufficient to leave their campaigns to cast their votes. President Bush had indicated previously that while he supported an extension of the assault weapons ban, he didn’t feel it needed to be in the pending bill. Based on the vote for the amendment, it now appears likely that separate legislation will be enacted this year to ensure extension of the assault weapons ban.
• Bush Makes Recess Appointments of Two Very Controversial Circuit Court Nominees to Bypass Senate Refusals to Consent to Appointments. Using recess appointment powers that can be exercised only when Congress is not in session, and has seldom been used for such important positions, President Bush made “recess” appointments of two of his most controversial nominees to courts of appeal during a congressional recess: Charles W. Pickering, Sr., to the Fifth Circuit and William H. Pryor to the Eleventh Circuit. Pryor was also re-nominated on March 12. Recess appointments lapse at the end of the current term of Congress. So, there will be a lot at stake for these two persons, whose continued presence on those courts will require the President’s reelection so they can be nominated again in 2005, and sufficient Republican gains in the Senate to override the filibusters that have prevented the nominations from reaching the Senate floor.
• Republican Committee Staff Breach Congressional Security by Accessing and Revealing Confidential Memos in Democratic Judiciary Committee Members’ Files. Two committee staff members who vacated their jobs while under investigation are reported to have invaded computer files of Judiciary Committee members and then to have released confidential memos of Democratic senators regarding strategy for handling of judicial nominees proposed by the President. As often happens, however, they went too far when they also invaded the committee chair’s computer files, as well, bringing down his wrath. The Senate sergeant-at-arms issued a sixty-page report (identified by his authorship as the Pickle Report) documenting the actions by two Republican staff members, a junior and a senior aide on the committee. The latter left the committee to become an aide to the Majority Leader on judicial nominations. Using Secret Service agents and a private firm’s computer experts, Pickle determined the aides got into confidential committee files, copied, and then leaked certain memos discussing Democratic plans for blocking some of the President’s judicial nominees. The report noted the possibility of violations of criminal statutes relating to false statements and receiving stolen property.
The perpetrators, who originally denied leaking the materials, allegedly downloaded 4,670 files over eighteen months between 2001 and 2003 belonging to Democratic staff. They also accessed about 100 files of the committee chair, Orrin G. Hatch (R–Utah). The file invasion came to light when The Wall Street Journal, the Washington Times, and a conservative website produced fourteen memos from Democratic Senators Ted Kennedy (D–Mass.) and Richard Durbin (D–Ill.) discussing the Democratic nominations strategy.
These actions have further increased the extremely bitter tensions between Senators from each party on the committee. Not surprisingly, requests for appointment of a special counsel rather than leaving it to the Justice Department to investigate potential criminal violations came from Democrats involved. Hatch and the ranking Democrat, Senator Patrick J. Leahy, jointly strongly criticized the staff actions. Leahy pointed out that the actions were “intentional, repeated, long-standing, . . . systematic and malicious.” The senior of the two aides claimed no criminal acts were involved and called instead for an investigation into the substance of the issues revealed in the memos. Now what did happen to Martha Stewart when she denied making false statements? Of course, don’t forget to use those passwords.
• Alphonso R. Jackson, HUD Deputy Secretary, Becomes Acting Secretary Pending Stalled Senate Confirmation. Secretary Mel Martinez resigned at HUD to run in the Florida primaries for senator. Jackson who is from Texas and was nominated to succeed him is an experienced public housing administrator who has headed authorities in several cities, including Dallas and Washington, D.C. He also has private executive experience and served as a city official and university professor. Objections by Senator Wayne Allard (R–Colo.), chair of the Senate Banking Subcommittee, Housing and Transportation, holding hearings on the nomination, to a revised RESPA rule dealing with real estate transactions proposed by Martinez, resulted in a hold on consideration of Jackson’s nomination. Soon, however, on March 22, HUD announced the objected-to rule had been withdrawn for further study. Just days later the Senate affirmed. Nominations at times provide a useful opportunity for senators to force executive branch actions. Bush has nominated Roy Bernardi, HUD CPD assistant secretary, to deputy secretary when Jackson moves up.
• School Voucher Experiment Funded for D.C. A provision in the D.C. appropriation in the Omnibus Act approved in January 2004 provides funding for a five-year school voucher experiment involving some 1,300 low-income students in poorly performing schools. It will provide roughly $7,500 per student for a voucher program to be used for tuition, books, and transportation. The D.C. mayor and school board president prevailed over opposition from D.C. Congressional Delegate Eleanor Holmes Norton, teacher unions, public school administrators, and civil rights advocates concerned about breakdown of separation of church and state. The West Wing television drama incorporated the subject into an episode that showed President Bartlett being persuaded by the D.C. mayor not to veto the measure. Supporting it was a no-brainer for Bush.
• Efforts to Impose Federal Medical Malpractice Caps Held at Bay. While the House passed a $250,000 cap on medical malpractice awards in state or federal courts for pain and suffering, attempts to do so in the Senate have been unsuccessful. After a failed proposal in 2003, Republican supporters tried a new tactic this year by limiting the measure initially to obstetricians and gynecologists, but the bill still fell twelve votes short of the sixty needed to cut off debate in the Senate. Supporters describe it as a battle between doctors and businesses against a greedy and powerful trial lawyer lobby. The issue may get more focus if John Edwards, a former trial lawyer, becomes the Democratic vice-presidential candidate. Opponents point out that high insurance rates are set by insurers, and not by awards actually realized, and that women patients are most likely to be those who would be unable to be adequately compensated.
• Supreme Court to Hear Cheney’s Challenge to 2–1 D.C. Court of Appeals Decision Refusing to Overrule Trial Court Order Requiring Release of Records of Industry Involvement in Vice President’s Energy Panel. Cheney, citing presidential powers, has claimed the records need not be disclosed. The procedural issue in the case is whether an appeal’s court should intervene in an interim discovery decision of a district court judge before a final judgment has been rendered. In the meantime, the energy legislation that embodies some of the complained about input from industry representatives involved in the panel appears too controversial for now and a narrowly drawn measure is the best that proponents expect to move forward before fall elections.
• Criteria for Recusal of Supreme Court Justice Raised in Cheney Case. The case has also generated an embarrassing issue for Justice Scalia who shared a duck-hunting trip with the Vice President shortly after certiorari was granted. He also accepted transportation on Air Force 2 from Cheney for the trip to Louisiana “as a convenience.” The hunting took place on an energy services company official’s private property. One of the litigants, the Sierra Club, has questioned Scalia’s “appearance of impartiality” and asked in a motion to the Court that he recuse himself. The statute says, “any justice, judge or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” The Court responded: “In accordance with the historic practice, the court refers the motion to recuse in this case to Justice Scalia.” Scalia responded with a twenty-one-page opinion detailing his reasoning that he didn’t feel his impartiality could reasonably be questioned. He noted that Justices frequently have social interactions with government officials who are named in lawsuits in their official capacity and they often are friends of high officials who nominate them.
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