Reply to Buchanan

Introduction

Prof. Buchanan has identified three major problems of the current effective constitution of the United States and proposed three amendments to the Constitution to address these problems. I share his concern about the problems that he has identified. But the three amendments that he has proposed are not sufficient to address these problems. And, to my surprise, Buchanan has not proposed one or more structural amendments that would be more effective general restraints on the abuse of powers by the federal government.

The Proposed Amendments

The Balanced Budget Amendment

The primary problem of the proposed balanced budget amendment is that it would not limit an increase in the implicit debt of the federal government. The implicit debt is the present value of the difference between the future benefits the government has promised and the expected future revenues – primarily for Social Security and Medicare – and is already about 20 times the privately-held explicit debt. A constitutional limit on the increase in the explicit debt would provide only the illusion of fiscal responsibility unless it was broadened to include the increase in the implicit debt.

The specific form of the proposed amendment, moreover, could be improved. The spending limit for a specific fiscal year should be made a function of the actual revenues in the second prior fiscal year, say 10 percent larger. This would eliminate the uncertainty inherent in an estimate of revenues for the year following the year in which the budget is considered and approved, reduce the variance of spending relative to temporary changes in the economy, and give both the president and Congress a strong incentive to support a low-inflation monetary policy. This limit should be automatically suspended upon the declaration of war. Any suspension for other reasons should require the support of two-thirds of both the House and the Senate, not the three-fourths proposed by Prof. Buchanan, which is higher than any other voting rule on federal legislation.

The Nondiscrimination Amendment

The primary problem of a nondiscrimination amendment is that the basis for determining discrimination is not self-evident and would be a continuing point of political controversy. Should required tax payments, for example, be the same amount for all adults, the same proportion of income, or the same proportion of consumption? Should government expenditures for income support, education, and medical care, for example, be independent of age, income, and health status – conditions that are not entirely of one’s own choosing? Or should discrimination be judged only among those in the same group? In a 1989 article, Prof. Buchanan recognized that risk-averse people might choose some forms of social insurance at the constitutional stage with full knowledge that such programs lead to some misallocative behavior in the post-constitutional stage.1

Other problems of a nondiscrimination amendment are that it is not clear how to write such an amendment in a way that would avoid continuing political controversy and that there is no apparent broad support for such an amendment.

The Noninterference Amendment

Prof. Buchanan proposes that government regulation be limited to “the prevention of interferences with voluntary exchanges and should not extend to either prohibition of or coercive dictation of the terms of such exchanges,” in effect amending the Constitution to incorporate the 1905 Lochner decision. He recognizes that this is the most revolutionary of his three proposed amendments, as it is derivative of a concept of natural law that is not broadly understood or shared. In effect, a noninterference amendment would authorize voluntary private agreements even if the purpose and effect of such agreements would be to limit the potential voluntary exchanges among other parties, limiting the government to regulate the effects of such agreements but not the agreement itself.

I share his concern about over-regulation, especially by the federal government. After years of working on this issue, however, I am inclined to address this problem in two smaller steps.

The continuing delegation of rule-making from Congress to the regulatory agencies is a corrosive problem, like water dripping on a stone. After a brief preamble, the first words of the Constitution are that “All legislative Powers herein granted shall be vested in a Congress of the United States … “ For decades, however, Congress has delegated detailed rule-making to regulatory agencies with only the most general guidance. The regulatory agencies, in turn, usually represent much narrower interests than the range of interests represented in Congress.

Congress has full authority but too little incentive to recapture the power to approve regulations. All too often, members of Congress prefer to endorse broad legislation expressing concern, for example, about clean air or disabled people, while reserving the right to complain about costly or unpopular regulations that some agency promulgates under this authority. I am not convinced that there is any quantitative measure, such as the expected cost or number of people affected, to identify those regulations that are likely to be of most concern.

My preferred approach to avoiding undue delegation would be simple procedural legislation with two provisions. First, no regulation would be effective for 60 legislative days following approval by the regulatory agency. Second, during that period, any member of Congress, on a point of order, could force a floor vote on whether to approve the pending regulation. This would transform the regulatory agencies from rule-making and enforcing agencies into rule-drafting and enforcing agencies. The potential burden of reviewing many pending regulations would probably also lead Congress to write more intelligible principles in the substantive regulatory legislation and to reduce the total volume of new regulation.

The other necessary step would require the Supreme Court to restrict the reach of the Commerce Clause to cases with a significant effect on interstate commerce. This would allow state and local governments more regulatory scope than would Buchanan’s proposed noninterventionist amendment, but this is the price of not knowing enough about what is right for everyone to endorse an amendment to the federal Constitution. Over several cases, the Rehnquist court had moved in this direction until the unfortunate 2005 decision in the Raich case.

Alternative Structural Amendments

The most general problem of the federal government is that it now acts as if it has the authority to define its own powers. The Constitution authorizes the federal government to exercise only 18 rather narrowly defined powers. And it requires that an amendment to the Constitution be proposed by two-thirds of Congress and approved by three-fourths of the states. Starting in the 1930s, however, the scope of federal powers has expanded enormously without a single amendment to the Constitution to authorize these additional powers. The effective constitution is now the set of rules approved by the president, a majority of Congress, and a majority of the Supreme Court – not the broader interests necessary to propose and approve a formal amendment to the Constitution.

The most important common policy challenge in a democracy is to assure that any change in the effective constitution reflects the broad support of the subject population. Americans have long counted on the Supreme Court to serve this role, even though there is no explicit constitutional authority for judicial review of constitutional disputes. As Alexander Hamilton recognized “ … it would require an uncommon portion of fortitude in the judges to do their duty as guardians of the Constitution, where legislative invasions of it had been instigated by the major voice in the community.” No group that could all be thrown in one police van can stop a parade.

My judgment is that some group outside the federal government should be given the authority to enjoin a federal action on the grounds that it is unconstitutional–some group that is too strong for the federal government to override with impunity. Some change in the structure of the Constitution is necessary for this purpose. One or more of the following three amendments merits consideration:

Repeal the 17th Amendment

The 17th Amendment was the beginning of the end of limited constitutional government in the United States. This amendment, ratified in 1913, replaced the selection of U.S. Senators by the legislature of each state with direct popular elections. Prior to the 17th amendment, state legislatures routinely instructed the Senators that they had selected about how to vote on major issues, and this process was very effective in limiting an increase in federal powers at the expense of state powers. In effect, the U.S. Senate served the role that we now, often naively, expect of the Supreme Court.

Repealing the 17th Amendment and, thus, restoring the role of state legislatures in the selection of U.S. Senators would be very effective in limiting additional federal powers that are not authorized by constitutional amendments, but would have little effect on redressing the unconstitutional prior expansion of federal powers without a major change in the political orientation of the House of Representatives. Moreover, since Congress would almost surely oppose the repeal of this amendment, a proposal for this repeal would probably have to be made by a convention called by the states.

A Nullification Amendment

The Constitution does not establish an adequate procedure for forcing a constitutional test of the assertion of undelegated powers by the federal government. Article V provides an adequate procedure for testing the consensus on any formal amendment proposed by Congress or a convention, but there is no procedure for forcing a constitutional test on issues for which the Supreme Court is unwilling or unable to enjoin actions by Congress, the president, or of a decision by the Court itself. In that sense, the Constitution is asymmetric: a vote by more than one-fourth of the states would block any formal amendment, but there is no corresponding procedure for any number of states to force a constitutional test by enjoining a change in the effective constitution.

The procedural solution to this asymmetry is as old as the Magna Carta and has been circulating in the backwater of American political theory since the beginning of our Republic: some proportion of the parties to a constitutional contract must be able to enjoin the actions of the government established by that contract in order to force a formal constitutional test of a unilateral assertion of powers by the larger government. The constitutional reform that derives from this analysis would be to authorize some specified share of states to enjoin any federal law, regulation, or court ruling within some specified period. A specific amendment to the Constitution consistent with these principles would provide for the nullification of any federal action by the vote of more than, say, a majority of the state legislatures within one year after the date of the last vote. This amendment would provide a considerable period for both reasoned evaluation of the federal action and a continued federal abuse of its constitutional powers, but it should protect the nation against both ephemeral whim and an indefinite extension of federal powers. The primary expected effect of such an amendment would be to force a compromise that would avoid exercise of the nullification authority on most issues.

A Secession Amendment

One other asymmetry in the Constitution, of course, is that it provides specific rules for admitting or forming a new state but no rule for secession. Those public choice scholars who have addressed this issue, including Prof. Buchanan, all conclude that a secession clause would be desirable if there is any threat of a geographically based permanent coalition.2

The desirable terms of a secession clause, I suggest, are the following:

First, secession should not be based on a casual or ephemeral decision. For that reason, secession might be conditional on the approval by two successive votes in the affected region, separated, say, by two years.

Second, the secession clause should include clear provisions affecting the disposition of the local assets and the general liabilities of the larger government.

Subject to these terms, secession should not depend on the approval of the larger government.

Adding a secession clause to the Constitution, however, does not seem worth the effort. The major fault lines in American politics, despite the recent metaphor of red states and blue states, are no longer very correlated with state borders. Few people have any significant loyalty to a state. A secession clause would be an insurance policy against a dominant coalition that is geographically based but one that is unlikely to be very valuable in the foreseeable future.

A Personal Conclusion

The unique potential strength of a compound republic is the opportunity to use each level of government to protect individuals against abuses of constitutional authority by the other level. Only power can check power. The full benefits of a compound republic will not be realized until we are assured that the federal government would protect our constitutional rights against actions by the state and local governments and the state governments would protect our rights against an abuse of authority by the federal government. Toward that end, the repeal of the 17th Amendment would be my highest priority.

Notes

1James M. Buchanan, “Coercive Taxation in Constitutional Contract,” in Explorations in Constitutional Economics, (College Station: Texas A &M Press, 1989).

2James M. Buchanan and R.L. Faith, “ Secession and the Limits of Taxation: Towards a Theory of Internal Exit,” American Economic Review, Volume 77 Number 5, 1987.

Also from This Issue

Lead Essay

  • Three Amendments: Responsibility, Generality, and Natural Liberty by James M. Buchanan

    Nobel laureate James M. Buchanan argues that the Constitution should include amendments requiring a balanced budget, forbidding discrimination in outlays, and guaranteeing the natural liberty to exchange within and across our borders. “The ‘regulatory state’ has not worked,” Buchanan writes. “Abandonment of its constitutional legitimacy offers a starting point for constructive dialogue.”

Response Essays

  • Reply to Buchanan by Akhil Reed Amar

    Yale Law School professor Akhil Reed Amar says Buchanan’s essay offers a “veritable feast” for thought, but he turns up his nose at the menu, arguing that Buchanan’s amendments are either insufficiently supported by theory and evidence, likely to lead to distasteful consequences, or so indefinite in formulation that it is hard to say whether or not they could be made feasible.

  • Reply to Buchanan by Alex Kozinski

    Judge Alex Kozinski of the United States Court of Appeals for the Ninth Circuit maintains that an America that would ratify Buchanan’s proposed amendments would be an America that didn’t need them. They may not be the best ideas even if feasible, he argues. Under the nondiscrimination amendment, Kozinski predicts, “we’d have Bush v. Gore going on 365 days a year, all over the country.”

The Conversation