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Welcome back to Hack Watch! Before our main story today, we wanted to highlight some of our recent work. Don’t worry, your regularly scheduled programming is just a couple paragraphs down!
IN CASE YOU MISSED IT:
Hey, Maybe The People Getting Rich Off A Pyramid Scheme Should Pay Taxes
Our Timi Iwayemi is out with a new piece in The American Prospect this morning covering Treasury Secretary Janet Yellen’s failure to issue tax regulations that would bring crypto tax cheats to heel. The regulations which would clarify reporting changes for the industry could net up to $28 billion in tax revenue through 2031.
However, Treasury’s dithering (regulations are six months late and could be delayed for an additional year) means that real tax revenue sits uncollected. This is functionally a win for the industry, which mobilized to prevent Congress from passing the legislation that stipulated the new reporting changes.
This Guy Tried To Stage A Coup, Now He Wants To Gut the Consumer Financial Protection Bureau
Disgraced lawyer John Eastman recently filed an amicus brief supporting CFSA v. CFPB, an upcoming Supreme Court case that would gut the Consumer Financial Protection Bureau. Eastman is currently facing disbarment proceedings over his efforts to help Trump overturn the 2020 presidential election
In a blog post this morning, our Vishal Shankar took a closer look at Eastman’s ties to Big Money CFPB opponents and how the media should cover his brief. As Vishal put it:
“The news media should reward Eastman for his shamelessness by highlighting his amicus brief in all future coverage of the CFSA case. Trump’s co-conspirator has offered his complete and total support for this latest right-wing power-grab, and the public deserves to know it. From now on, the CFSA case should be known as the Coup Plotter-Endorsed Lawsuit To Protect Payday Lenders.”
The Supreme Legislature…Err…Court: It’s Getting Harder to Tell the Difference
As June rolled to a close last week, so did the Supreme Court’s session. This latest round of verdicts largely cemented the court’s rightward swing, which has been the case since Trump reshaped the court’s dynamic with the appointment of three conservatives to the bench. While nothing can outdo the shock of last year’s overturning of Roe v. Wade (and threatening other rights based on an implied right to privacy, including same-sex and interracial marriage), the court’s contempt for the public has also reflected in its clear mission to hollow out the administrative stave by stripping the federal government of the tools required to protect Americans from rapacious corporate interests.
There are endless breakdowns of what the latest rulings mean for American democracy and politics and how they will impact the public. Likewise, there has been significant focus on how the justices seem to be increasingly making things up (ignoring precedent, standing, and more!) to justify ruling towards conservative political preferences. However, there has been nowhere near enough discussion of how all of this fundamentally changes the role the court plays in governance. More than ever, the Supreme Court justices have made themselves into economic policy makers.
This is certainly not unprecedented; many of FDR’s New Deal programs were struck down by the court, which was a form of economic policy making after a sense. But there is a meaningful difference in degree. Now, the judiciary is creating policy beyond interpreting the law as it is already written. Look at two examples from this latest session: cases about student debt relief and the Clean Water Act. In each case, the conservative majority (although Kavanaugh joined liberals in the Clean Water case) crafted opinions that effectively legislated new restrictions on executive action—which is not what they’re supposed to be up to.
In Biden v. Nebraska, the majority found that the administration did not have the authority to forgive students’ loans, despite at least two pieces of legislation giving the President (or the Secretary of Education, who is answerable to the president) that power. As I explained in The American Prospect, the HEROES Act is rather explicit about this authority, especially relative other economic powers that the court has taken no issue with:
“The legal justification is clear as day, and the authority itself is used regularly. According to the Higher Education Relief Opportunities for Students Act of 2003, the Education Department can forgive student loans as it sees fit in a national emergency. Per the statute, the secretary of education “may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the Act as the Secretary deems necessary in connection with a war or other military operation or national emergency.”
Surely the biggest pandemic in a century qualifies, especially since it was officially declared so by both President Biden and President Trump. But despite a clear, explicit legal authority, student debt forgiveness hangs in the balance…”
Likewise, in Sackett v. Environmental Protection Agency, the conservative wing effectively rewrote the law. The majority said that “waters of the United States” could only apply to contiguous waterways visible from the surface, a stipulation that is nowhere in the actual Clean Water Act passed by Congress. The court’s interpretation, rather than being grounded in the law, was instead catering to the preferences of real estate developers. For more on this, see the “Issue Areas – Water” portion of the EPA section from RDP’s Corporate Crackdown Project – Climate report.
Both of these clear departures from long-established laws cannot be described as anything other than legislating from the bench. And if SCOTUS continues to exercise de facto legislative authority, well funded interest groups ala corporate lobbying arms will seek more and more to circumvent the restrictions on how aggressively they can push Americans aside in the pursuit of profits.
It’s all too concerning that the media is whiffing on discussing this incredibly important shift in the balance of power between the federal government’s branches. Across most of the recent high-profile coverage of the student debt case in The New York Times (see here and here), The Wall Street Journal (see here, here, here, here, and here), The Washington Post (see here, here, here, and here), and NPR (see here, here, and here), only one article from the Post even devoted more than a single short paragraph to the notion that the Supreme Court was legislating economic policy. (To be fair, older coverage might be better, such as this NPR piece from February that discussed the point.) In every piece, the main allusion to that idea was a reference to Justice Kagan’s dissent (joined by Justices Jackson and Sotomayor), but all but that one Post piece gave it only a couple of lines.
That stands in stark contrast to how the same set of pieces covered the case as an issue of executive branch economic policy, where nearly every single one placed the framing of Justice Roberts’ majority opinion—arguing that this was an example of executive overreach—front and center. Similarly, most of them framed this as a ruling from a Supreme Court “skeptical” of administrative power. But, by and large, none of them even bothered to investigate whether that skepticism is even based on the actual law! Executive overreach can be a real thing*, but this extreme deference to the court where reporters constantly refuse to even mention that judicial overreach is another explanation is wildly one sided. If you read the text of the actual legislation—the HEROES Act invoked to forgive student loans or the now-dismantled Clean Water Act —the restrictions being imposed by SCOTUS are totally absent from the actual legislation.
And when the judiciary is functionally granting itself the power to legislate changes to the letter of the law, their rulings determine what economic policy the federal government follows. Pro-corporate groups like the Chamber of Commerce have been wise to this possibility for a while. It’s time for the media to catch up.
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** A note from RDP Executive Director Jeff Hauser: “Actually dangerous executive overreach is also almost always tied to wildly expansive purported inferences from Article II of the Constitution, such as those Dick Cheney and David Addington pushed during the Reagan and (especially) George W. Bush presidencies, rather than the interpretation of the interstitial spaces within legislation. Congress can always rein in an executive interpretation of legislation, whereas only the Supreme Court can prevent a president from claiming monarchical powers purportedly based in the Constitution.”