State & Local News Vol. 22, No. 4, Summer 1999 Washington's Labyrinthine Ways by Otto J. Hetzel, Washington It's Never Too Early to Take Positions for the Year 2000 Elections. Ironically, the fading specter of impeachment is perhaps having its most lasting effect in the near unanimous support by witnesses against reauthorizing the independent counsel law that expires this July. Both Congress and the White House already have turned to other matters. In particular, both parties have started to position themselves for next year's elections. Presidential candidates in both parties are already well into their campaigns with primaries less than a year away. The tenuous Republican five-member majority tempers much of what transpires in the House, and Democrats are salivating at the opportunity to regain control by the end of 2000. So, setting up the agendas for next year's elections has increased in importance all around. House Leadership Blues. The weakness and instability of the House Republican leadership was demonstrated first by Newt Gingrich's bowing out, and then the resignation of Speaker Designate Bob Livingston, both of which can be traced in part to the impeachment process. Gingrich foresaw the difficulty of guiding a polarized Republican Caucus, and chose to withdraw gracefully. Livingston, who supported bipartisan relationships, fell victim to opposition from conservative, religious right adherents who could not accept his personal imperfections. Dennis Hastert (R-Ill.), who inherited the position in January, appears to favor a more moderate posture. He and Trent Lott, the Republican leader in the Senate, are likely to have difficulty, however, in satisfying sufficiently the various wings of their party. These considerations are likely to impede their ability to lead successfully and produce results for Republicans to run on in 2000. The Republican Tax Cut. In their rejoinder to the President's proposals in the State of the Union message, Republicans announced they would seek a 10 percent across-the-board tax cut to return a portion of the budget surplus to taxpayers. In that a substantial portion of the surplus is created because social security trust funds are counted for the surplus, a fundamental question that will need answering is what is the real surplus, especially if Social Security is to become self-supporting and off-budget. Republican tax proposals also included a renewed attack on the marriage penalty, that results in higher taxes for higher income spouses when both are employed, and proposed alternative versions of individualized savings accounts in lieu of the President's proposal for USA Savings Accounts. The 10 percent tax cut, however, seems to have suffered a quiet death given late recognition that spending caps are likely to limit options for achieving it. Other Republican Agenda Items. Conflicting positions regarding NATO's actions in Yugoslavia came to the fore in the House reflecting the lack of a Republican consensus on that issue. As to a grand compromise on saving Social Security, chances for a bipartisan resolution now appear slim. Without such cooperation, it is unlikely that a solution can be found. Some success has already occurred, however, in legislation enacted that would give states more flexibility in using federal education funds and in the congressional interim budget allocation, which was untypically achieved on time. A showdown is likely to occur soon over White House-supported Y2K legislation, which would restrict litigation, prevent class action suits, and encourage alternative dispute resolution, and over bankruptcy act revisions as well. Access to Social Security Funds. In an effort to neutralize Social Security as an issue for Democrats, who had promised not to allow invasion of social security trust funds, the Republican congressional leadership has tried to put its own stamp on keeping trust funds off-limits through a "Social Security Lock Box" bill. It would ensure that the funds be used only for the national retirement system except in severe emergencies. Under the proposal, in order to access any of the $1.8 trillion in social security funds expected over the next decade, a two-thirds super-majority would be required to authorize use of the funds if a "real" emergency arose. While the House may well pass it, the Senate is another matter, having previously rejected that approach. The $15 Billion Emergency Bill. What constitutes an emergency justifying incursions into trust funds, however, may be more in the eyes of the beholder. It is ironic that over twice the amount requested by the President ($6 billion) was approved in a designated emergency bill of which $13 billion was funded out of the trust fund surplus. Its original objective was primarily to fund the war in Yugoslavia and provide a pay raise for the military. Disaster relief for Central America in the wake of Hurricane Mitch, for Midwestern farmers and tornado victims, and for support for Jordan in the Middle East, further expanded the costs. In addition, several billion dollars were included for "unnecessary and ill-advised projects," as the President characterized them when signing the bill, for specific congressional districts or constituents. The White House Initiatives. Starting with the President's State of the Union message, the White House, by one count, announced at least fifty-four new Administration proposals. Something for almost every constituent group. Most were contingent on continuation of the anticipated budget surplus over the next fifteen years, and on not invading Social Security funds. The primary focus, "fixing" Social Security through allocation of some 62 percent of the surplus, would involve some $2.7 trillion over fifteen years, part of which would be used to buy public bonds for the social security trust fund, reduce the federal debt, and thereby lower interest rates. Controversy over Proposed Federal Investment in Indexed Funds. As part of the Social Security "fix," the President proposed investment of an additional $700 billion of social security funds in the stock market to provide retirees the benefits of market increases. The proposal immediately stimulated a good deal of debate. While most states, cities, and counties have for years been involved in handling pension fund investments for their employees, an expansion of the current federal role that uses such market investments to undergird a portion of federal employee pensions (executive, legislative, and judicial) generated fears of the potential market impact the investment could have, the fund's exposure to unstable markets, and the potential of political decisions affecting investment determinations. The proposal anticipates use of funds indexed to market indicators, rather than specific stock investments, to help beneficiaries obtain the benefits of the trend of market increases during the last seventeen years. But, does anyone know if the boom will continue? The Democratic Congressional Agenda. Measures that would raise the minimum wage, often popular just before elections, and that would provide for a patient bill of rights in dealings with health care providers, along with increased gun controls, are among the major elements of the Democratic legislative strategy. Cracks in a Democratic united front in Congress, however, can already be observed in the fate of the gun control efforts in the Senate. While asserting a victory for Vice President Al Gore, who got the limelight for casting the deciding vote in the Senate, the nature of the victory was tarnished by the concessions that were made to existing gun control restrictions. Gun Control Provisions. What actually occurred in the Senate was not tougher legislation, but rather the closing of a loophole by requiring mandatory background checks for persons purchasing guns at the some 4,400 gun shows held each year. These provisions were part of new juvenile justice legislation. It does not necessarily extend to sales later in the parking lot, according to critics. In fact, this measure was the least controversial portion of the Democratic gun control agenda, and it only passed by one vote. A restriction limiting purchasers to only one gun purchase a month didn't even have a chance. The Senate provisions set a timetable to destroy records of gun purchases after only ninety days, providing a specific date originally left vague in the 1993 Brady law. This limitation was fueled by resistance to what was perceived as a first step in federal registration of gun owners. This modest coverage of gun shows was the best that could be achieved even with the current rash of shootings in schools. Over 65 percent of voters are generally estimated to support controls on gun ownership rather than gun owner rights according to a recent Pew Research Center poll. For Republicans, controls are favored 53-43, for Democrats, 76-19, and for independents 63-33. As to gender, women basically match the percentages for Democrats while men support controls consistent with the Republican percentages. How the control measures will fare ultimately in the House looks promising despite the continuing effectiveness of National Rifle Association lobbying, because of support for these measures from the House leadership. They read the headlines. Juvenile Justice Initiative. Under provisions currently being considered in both houses, sentences for juvenile killers would be increased through tougher federal homicide laws and incentives to states to increase sanctions. This runs counter to Justice Rehnquist's argument against further federalization of crimes now covered by state laws. Federal murder legislation would cover death resulting from a pattern of child abuse. Sentences would increase for violent crimes committed in the presence of a child. Felony murder concepts provide a precedent. Premeditation would not be required, reversing current state doctrines that require proof the defendant meant to kill the child. Grants of $10 million are to be made to a dozen cities to promote prevention and intervention programs and support a summit on children and violence. Suits Against Gun Manufacturers. Buoyed by the success against tobacco companies, large cities, led by Mayors Morial of New Orleans and Daley of Chicago and including Los Angeles and San Francisco, have filed suits against the $1.4 billion firearm industry, some twenty-eight manufacturers and distributors, their trade associations, and pawnshops, in order to recoup costs expended by local governments related to misuse of guns, including public safety expenditures and expenses for medical services related to firearm use. One argument is that manufacturers could have provided recognition technologies that would disable weapons unless used solely by the owner. Restricting the flood of cheap handguns in urban areas is also perceived as an important measure in limiting gun violence particularly affecting juveniles. The California cities accuse manufacturers of deliberately selling to disreputable dealers and in states where controls are lax. Is Your Planning for Next New Year's Eve Flexible? Aside from the desire to welcome in the millennium in spectacular fashion, the potential disruption of provision of services and supplies due to Y2K problems is receiving attention from a number of perspectives. Several states, including Washington and Wisconsin, are anticipating activating their National Guard at that time. Lawyers also have started to anticipate a rush of lawsuits that could ensue as soon as glitches occur. Aware of this potential threat of mass litigation, a strong consortium has evolved in favor of legislation that would impose in most circumstances governmentally mandated immunity in suits involving Y2K claims. H.R. 775, which passed the House in May, is entitled the "Year Two Thousand Readiness and Responsibility Act." Its objective is to encourage remediation as opposed to litigation. It would provide for a "cooling off period" prior to permitting litigation and would promote alternative dispute resolution. It also would limit liability and punitive damage awards in certain cases unless personal injury had occurred. Other provisions would limit personal liability for corporate officers and directors, encourage plaintiffs to mitigate damages, impose proportionate liability, and limit use of class actions. In the Senate, S. 96 contained largely similar provisions. That forum will shape what will end up in the Conference Committee and the bill's version. The White House now appears to have accepted a new Senate version by Senator Dodd (D-Conn.), despite opposition from trial lawyers who argue that the bill basically would take away the right to sue in certain circumstances and would discourage prevention before the Y2K impact occurs. Announced Increase in Military Spending Imperils Domestic Programs. The Clinton Administration, anticipating and preempting Republican calls for increases in military spending to restore military capability and respond to Iran, Bosnia, and other trouble spots, is likely to significantly weaken domestic spending. Justified by reductions in military expenditures of 31 percent in real terms over the last decade, increased funds are urged to fight in two major regional conflicts simultaneously and keep abreast of technological developments in weapons. The proposed action, however, would have the effect of resetting the firewall that had existed to protect domestic spending from military increases. It would provide more than $110 billion for military support over the next five years, starting with an additional $12 billion this year. If so, there would be that much less of the pie to allocate to urgent domestic priorities, since the budget surplus cannot satisfy all demands. Domestic Spending Cuts Likely to Provide Pressure for Release of Spending Caps. The preliminary budget figures for fiscal year 2000 (starting in October 1999) for the thirteen congressional appropriation subcommittees would result in substantial domestic reductions amounting to $26 billion. The 1997 Balanced Budget Agreement set domestic discretionary spending caps. Were these to stay in place, for instance, the VA/HUD/Independent Agencies budget authority would be reduced by $5.8 billion from FY 1999 in the House and by $10.3 billion in the Senate Appropriations Subcommittee preliminary figures. This would mean an 8 percent cut in the House and a 14 percent cut in the Senate, if reductions were applied evenly across the various programs under the subcommittees' jurisdiction. HUD community development and low-income housing programs, however, are a more likely reduction target than funding for the other agencies and the VA. Similar scenarios are likely to result with appropriations for other discretionary domestic programs. What appears likely, however, is that Congress may decide to lift or adjust the existing caps to avoid reductions in programs with strong constituent support so close to next year's elections. The problem is that the process that is likely to take place to deal with these issues will require a level of bipartisan coordination that is unlikely in current circumstances. There is significant concern, therefore, that final resolution of the interim budget allocations under the current congressional budget resolution will generate yet another continuing crisis, extending even beyond the end of the fiscal year to resolve conflicts between the White House and the Republican controlled Congress. That scenario threatened the continued operation of government and previously produced a backlash against Republicans that they sorely wish to avoid again, especially so close to a pivotal election year. Your Correspondent Otto J. Hetzel is a Professor of Law Emeritus at Wayne State University and practices law in Washington, D.C. State & Local Law News home page | Table of Contents