Saturday, June 29, 2024

The U.S. Supreme Court Reining in Regulatory Agencies: Implications for the Imperial Presidency

In Loper Bright Enterprises v. Raimondo handed down by the U.S. Supreme Court on June 28, 2024, a majority of the justices overruled Chevron v. Natural Resources Defense Council, which had been the precedent giving regulatory agencies considerable discretion in coming up with specific regulations, given the penchant of the Congress to write vague laws. In the overturning case, a group of fishermen had objected to having to pay for government observers to board the fishing boats to monitor the fishing. On the merits, it does seem unfair for regulatory agencies to charge the regulated to be regulated. In overturning Chevron, however, Loper has much broader implications, chief among them being in terms of separation of powers—specifically in reining in the expanding power of the executive branch, here at the expense of the judiciary.   

Chevron had “required courts to give deference to federal agencies when creating regulations based on an ambiguous law.”[1] Loper could stimulate thought on whether Congress must necessarily promulgate law using vague language. Certainly Congress is capable of being quite specific when writing in loop-holes, or “carve outs,” for particular companies or industries in exchange for political campaign contributions. Moreover, from hearings, Congressional committee staff are surely capable of narrowing the discretionary area in which regulators can exercise considerable power that is essentially that of law-making. So one effect of Loper could be a shift of power from the executive to the legislative branch.

The decision also stood to “shift the balance of power between the executive and judicial branches.”[2] Although CNN goes on to claim that the decision “hands an important victory to conservatives who have sought for years to rein in the regulatory authority of the ‘administrative state’,” strengthening the role of the judiciary to look at administrative rulings is not in itself pro-business, as a judge could come down on an agency as being too lenient to an industry. The notion of regulatory capture, wherein whether from relying on data from a regulated industry or in exchange for lucrative future jobs in the industry for regulators, especially given government salary levels, means that giving courts more of a role in being able to evaluate and overrule agency rule-making and decisions could be a needed check against compromised regulators. At the same time, it is true that because the Supreme Court is the head of the judicial branch of the federal government, a decision that shifts power from one or two of the other branches to the judiciary puts the Court in an institutional conflict of interest (and the justices in personal conflicts of interest as their power would likely increase). Perhaps Congress should have been the branch to decide on the role of the judiciary with respect to the agencies in the executive branch.

Shifting power from the executive branch to the two other branches, especially the judiciary in this case, can also be viewed as a mild correction to the steadily increasing power of the U.S. presidency. In The Imperial Presidency, Arthur Schlesinger traces the increasing power that has come at the expense of the other two branches. The claim of such a correction may be problematic, as reining in regulatory agencies is not the same as reining in a president’s power, such as in exercising the bully pulpit in being able to speak directly to the American people directly as well as through a president’s surrogates. Also, a president as commander in chief and in promulgating foreign policy is unaffected.

It can even be argued that as presidents have typically been oriented to proposing broad policies for Congress to enact through law, that a president’s attention has been minimal in running the administrative agencies—essentially in supervising the cabinet secretaries in their administrative roles at their respective agencies. Such overseeing geared to specific regulations is, I submit, a function that presidents should attend to even more than proposing policies for Congress to enact. In other words, presidents should resist the sensationalistic allure of forming and publicly and privately “selling” policies or ideas for new programs to the extent that the time and effort of a president is monopolized thereby such that functioning as head of the executive branch, which implements law, is slighted. It could even be argued that the latter function should be primary. Were it in fact primary, then Loper would indeed be capable of redressing the historical trend of the imperial presidency to some extent because taking an active role at the regulatory stage would be a significant part of the actual power exercised by presidents. As of 2024 at least, Loper did not really touch the problem of the imperial presidency increasingly compromising the balance of power between the three branches of the U.S.’s federal government.

If democracy is ever at risk in the U.S., it would likely succumb to the hubris of an imperial president rather than to lawmakers in Congress writing laws with more specificity or judges overruling regulatory rulings. According to General Haig, President Nixon considered sending military forces to the Capitol to stave off impeachment during Watergate. Decades later, in December, 2023, protestors of the Congressional counting of the presidential votes of the states’ electoral colleges headed over to the Capitol from President Trump’s rally at the White House and successfully delayed the counting. On the very same day as its Loper decision, the U.S. Supreme Court handed down a ruling on another case—a decision that “limited the power of prosecutors to pursue obstruction charges” against the January 6th protesters at the Capitol.[3] To the extent that that ruling could enhance the imperial presidency itself, June 28, 2024 at the Court may actually have been a net-gain for the presidency.


1. John Fritze, “Supreme Court Overturns 1984 Chevron Precedent, Curbing Power of Federal Government,” CNN.com, June 28, 2024 (accessed June 29, 2024).
2. Ibid.
3. John Fritze et al, “Takeaways from the Supreme Court’s Decision on January 6 Charges and What It Means for Donald Trump,” CNN.com, June 28, 2024 (accessed June 29, 2024).

Monday, June 24, 2024

On the E.U.’s Principle of Unanimity: The Case of Hungary

As of 2024, enlargement policy, foreign affairs, taxation, and the budget was “bound by the principle of unanimity,” which means that each state government has a veto in the European Council.[1] With 27 states, the E.U. could in effect be held hostage quite easily. Even in the context of the Russian invasion of Ukraine, the state of Hungary was blocking €55 billion in E.U. aid to Ukraine as of June 24, 2024, although revenue from frozen Russian financial assets in the E.U. could be used (because Hungary had not participated in the G7 decision) and Hungary had just reversed its veto against further sanctions against Russia. However, the €1.4 billion from the investment revenue pales in comparison and sanctions do not deliver desperately needed military hardware to the besieged country.

That Hungary’s de facto pro-Russian stance in E.U. foreign policy was contrary to the interest of the E.U. as a whole can be discerned from S&P Global’s report at the time, which states, “The geopolitical conflicts in the Middle East and Ukraine remain the main risks weighing on our immediate economic outlook.”[2] That the E.U. could ill-afford these foreign geopolitical headwinds economically is clear also from the report, which also claims “that European financial markets are too fragmented, too national, too expensive for issuers and for retail investors.”[3] The report then recommends that capital markets be federalized. What could stand in the way of that is the same residual problem underlying the antiquated principle of unanimity: namely, states’ rights, or, in European parlance, Euroskepticism, which in turn is rooted in nationalism ideology. That in turn had been responsible for so much war in the twentieth century. Indeed, the main rationale of the Shuman Plan in the wake of World War II had been to stave off another war. The European Coal and Steel Cooperative was intended to keep an eye on possible German re-militarization. Whether intentionally or de facto, the E.U. state of Hungary in 2024 was enabling Putin’s Russia and indirectly possibly increasing the risk of war within the E.U. by allowing Putin to divide the union.  

 That the E.U. had to go to the G7 decision to spend the revenue on frozen Russian funds in order to go around the opposition of Viktor Orban of Hungary is itself an indication that a “bug” was in the E.U.’s “software.” That János Bóka, Hungary’s Minister for European Affairs, “made it clear” that during Hungary’s presidency of the Council of Ministers during the second half of 2024, Hungary “would not help Kyiv open any of the 35 chapters that make up the six thematic clusters” of accession talks.[4] Instead, accession talks of Baltic states would be encouraged. Whether pro-Russian or anti-Ukrainian, the Hungarian state government’s use of its veto and temporary presidency of the Council on the federal level seems to put the interest of a part (of the union) above that of the whole.

That the E.U.’s supreme court, the European Court of Justice, had recently found the state of Hungary guilty of violating the E.U.’s basic law and ordered a significant fine be taken from the state’s allocation of federal money may be a factor in the active use of the state’s veto. At the very least, being fined by the E.U. put the state government in a conflict of interest in obstructing federal foreign policy. This is yet another reason why the E.U. could not afford the principle of unanimity. More bad news. Unfortunately, even efforts to correct this problem are fraught with a conflict of interest, as state governments would have to agree to give up the power they enjoy under the principle. Even if retiring the principle is in the interest of the whole (i.e., the E.U.), the political interests of the parts are not likely to subordinate their respective interests even for the good of the whole. Future enlargement of the union (which is not a “bloc” because the union is permanent and based in law) would most likely exacerbate the problems ensuing from putting the interest of a part, or the parts, above the good of the whole. And as argued above, belligerent foreign actors, such as Putin of Russia, could easily exploit this fundamental flaw in the E.U. for their own interests.

Who, therefore, is there to stand up for the E.U.’s interest? Perhaps as E.U. citizens, rather than the states, elect the representatives of the European Parliament, the way out of this pretzel may be to transfer some of the Council’s power to the Parliament, or at least to give the latter chamber more power as a check against excesses by state officials acting in the Council, including the Council’s presidency. That is to say, perhaps the conflicts of interest and the over-heavy interests of the parts at the expense of the whole in the E.U. are indicative of a need for a shift in power not only from the states to the union, but also within the union’s government itself.

On the U.S. Government’s Budget Deficits and Debt: American Democracy Unhinged

It is true that a government’s budget can be read as a blueprint of priorities in terms of what is valued, and what is not so highly valued. The blueprint itself, as a whole, also evinces a priority in terms of values. As the big-ticket items, such as large spending categories and massive tax-cuts, get the most attention, whether a budget is in balance can go by the wayside, and what that says about the electorate (and thus the state of democracy) can easily be missed. Ultimately, public policy and even the votes of the elected representatives point back to the popular sovereign, the People—more specifically, the electorate, and its values. By 2024, the deficit and accumulated debt of the U.S. Government had reached such gigantic numbers that something could be said to be amiss concerning those values. The underlying culprit, which can be said to be an illness that is human, all too human, had by then infected American democracy beyond the wherewithal of virtually any elected federal representative to enunciate well enough that the electorate could look clearly at itself, and thus size itself up beyond the partial diagnoses that can be found in partisan attacks.

In late June, 2024, the (nonpartisan) Congressional Budget Office forecasted a $2 trillion deficit for the year, up from an earlier estimate of $1.6 trillion.[1] At the time, the federal accumulated debt stood at $34 trillion. Whereas in the 1970s, the debt as a percent of GNP was in the low 30s, the percentage for 2023 stood at just over 120 percent. Clearly, the trajectory of deficits and debt was disproportionate even on a percentage basis. Furthermore, interest payments made by the U.S. Government, which the CBO director said were “large by historical standards,”[2] were poised to exceed the entire defense budget in 2024; and that recipients of interest-bearing bonds tend to be on the wealthy side, whereas the poor and middle-class pay taxes, the ballooning debt could be viewed as an engine of wealth-transfer from the poor to the rich via the U.S. Government, hence increasing economic inequality as an indirect effect of fiscal public policy. In short, something systemic was out of balance, with ethical implications.

Blaming large ticket items (i.e., federal spending) provides us with an easy target but only gets at a symptom. Regarding the 2024 fiscal year, the Congressional Budget Office pointed to the $145 billion cost of the President’s changes to student loans and the $95 billion foreign aid for Ukraine, Israel, and Taiwan enacted in April as the two largest factors.[3] Almost a trillion dollars for three countries. Healthcare costs came in third.

To be sure, the changes in student-loan policy under President Biden were in large part due to the spurious vocational claims of for-profit “universities and feckless accrediting agencies, with unemployed former students as the victims. The foreign-aid spending was associated with foreign policy objectives—holding back Russia and sending a message that military aggression (by Russia) is no longer acceptable in the 21st century being foremost. In short, both deficit-growing factors were oriented to protecting victims, and thus could be justified ethically. Increased public health-insurance costs too can be justified ethically, given the value of health irrespective of income and wealth.

Even lofty goals come with costs, however, which may not be affordable. A sovereign government with the authority to “print money” need not be constrained by what it can afford, absent constitutional language mandating a balanced budget. Of course, spending is only half of the deficit equation; taxation being the other. That spending had been outstripping revenue since the Clinton administration can be traced back to the Reagan tax cuts. Regarding the deficit in 2024, the Trump tax cuts should also be remembered. Moreover, the refusal of Congresses and presidents to raise taxes to cover increases in spending when the economy is fine or (especially) good is also a factor in how the U.S. Government’s debt got to $34 trillion.

Both the proclivity to increase government spending and the reluctance to increase taxes (or defeat tax-cut proposals) leads us directly “under the hood” to popular sovereignty: Government by the People. That is to say, the American electorate is ultimately to blame for not electing representatives, senators, and presidents who resist the twin temptations. To be sure, differing political ideologies on the proper size of government, and, more specifically, the federal government, are also legitimate in voting decisions.

A believer in a small federal government, harkening back to Thomas Jefferson, might vote for candidates in favor of tax cuts in order to “starve” the federal government. But this strategy ignores the unlimited ability of that government to enact spending bills. A “small government” ideology should go after spending and taxes with enough tax revenue over spending in the out years to pay off the accumulated debt.

A believer in a large federal government (in absolute terms and relative to those of the states) has no problem resisting tax-cut proposals; it is the notion that a government can or should grow by increased spending, especially without increased taxation to cover both the additional spending and to pay off the accumulated debt, that is problematic.

In the 1980s and early 1990s, the U.S. deficits (and debt) were significant in political discourse. David Stockton, President Reagan’s head of the OMB (Office of Management and Budget), wrote The Triumph of Politics to explain why Reagan failed to bring down the deficit numbers. The imbalance was in the public’s aversion to cutting domestic spending, Reagan’s increase in defense spending, and the president’s tax-cuts. In terms of the American electorate, the desire for immediate consumption, which includes tax-cuts, combined with the lack of responsibility can be cited as the ultimate source of the imbalance that may be inherent in democracy itself.

It is significant that Thomas Jefferson and John Adams agreed long after they were out of the political arena that a viable republic requires an educated and virtuous citizenry. Put another way, self-government requires a sense of responsibility in terms of fiscal governance. That the debt of the U.S. Government had been allowed to reach $34 trillion by 2024 can be interpreted as a verdict, or an x-ray, on just how fit the American electorate had been to govern itself through its chosen representatives. The real threat to American democracy lies within. The threat, in fact, by 2024 may have become much more serious than even that of unbalanced fiscal policy.  For the proverbial invisible “elephant in the room” may no longer have merely been the failure of the American electorate to exercise its popular sovereignty with fiscal responsibility on governmental taxation and spending: the rising unexamined question may ironically have already relegated fiscal responsibility altogether in silently asking whether $34 trillion ever gets paid off. Like an insect whose legs are still twitching even though it is already dead, the U.S. Government may have already been effectively bankrupt without anyone realizing it. If this was already de facto the case by 2024, then the damning verdict, not seen yet in plain sight, would be on another level entirely. 


1. Jennifer Scholtes, “$2T in Red Ink: Foreign Aid, Biden’s Student Loan Policies Hike U.S. Deficit Forecast,” Politico, June 18, 2024 (accessed June 22, 2024).
2. Ibid.
3. Ibid.