The FOMC Is about 42% Unconstitutional
The Federal Open Market Committee (FOMC) is powerful, weird, and about 42% unconstitutional.
Powerful. The FOMC is a core policymaking body of the U.S. Federal Reserve System. It is the part of the Fed responsible for manipulating interest rates (which it does by means of “open market operations,” i.e., buying and selling Treasury bonds to modulate the supply of cash in the economy). Basically, in conjunction with the Fed’s Board of Governors, it is the Mother Brain of the U.S. economy.
Weird. The weirdness of the FOMC comes in part from its abstruse subject matter and the borderline alchemical vibe of its operations (see previous). But it is also structurally weird. The FOMC is a strange public/private hybrid whose twelve (12) voting members comprise the seven (7) members of the Fed’s Board of Governors plus a rotating contingent of five (5) presidents of the regional Federal Reserve Banks. Members of the Board of Governors are appointed by the President of the United States, subject to approval by the Senate. The presidents of the regional Reserve Banks, by contrast, are chosen by the Banks’ boards of directors, subject to approval by the Board of Governors. (Background here.) Among the vast and varied agencies wielding any measure of power in the federal government, this arrangement is unique—weird, even. And it is patently unconstitutional.
It is worth pausing to let the weirdness sink in. A major portion of the monetary policy of the United States—possibly the singlemost important lever of public control of the economy—is conducted by a committee of individuals, a large fraction (5/12) of whom are not even officers of the United States government. And the fraction is often even greater in practice due to routine vacancies on the Fed Board. When the Board operates with two vacancies, as it did for much of the last couple of years, it occupies only five seats on the FOMC, and the denominator of FOMC votes drops to ten—five from the Board, five from the Banks.
Unconstitutional. Now, you might think this mix creates a sensible balance on the committee, or you might think it an affront to democracy. Either way, it is a clear violation of the Article II Appointments Clause, which provides:
The President . . . shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments. (U.S. const. art. II, § 2, cl. 2.)
The Constitution allows for only two ways of appointing officers of the federal government. First (the default): an officer may be appointed by the President with Senate approval. Or second: where lesser offices are concerned, an officer may be appointed by the President, the courts, or department heads without Senate approval.
Voting members of the FOMC are top-level policymakers in a federal government agency; as such they exercise discretionary powers that distinguish officers of the United States from mere civil servants. The five members representing the regional Reserve Banks (“regional members”) are not appointed by the President or confirmed by the Senate and therefore do not satisfy the default appointment criteria. But nor are those regional members appointed by the President, courts, or the head of any department or agency of the federal government. They are appointed by the private and independent boards of directors of the regional Reserve Banks. So they also fail to satisfy constitutional criteria for appointment of inferior officers.
And there you have it. Five of twelve seats violate the Appointments Clause, making the FOMC just about 42% unconstitutional.
Politician for the Court?
Contra Ezra Klein and Matt Yglesias, I doubt that a politician would be especially effective—in the way that Earl Warren (who had been Governor of California before becoming Chief Justice) was effective in his day—on today’s Court. The legal technicians on the Court today understand as well as Warren did the importance of crafting arguments to hold together majorities and persuade their colleagues however they can. Justice Stevens, the consummate career legal technician, mastered this art. But the truth is that there’s not a tremendous amount of successful persuasion going on at that level. These guys know what they think going in, for the most part. And the skills of a contemporary politician—horse-trading and fundraising?—are not only inapplicable in a judicial setting, they’re totally out of bounds.
I do think it’s right to be focussed on persuasiveness, but you have to consider the audience. That audience comprises for the most part other lawyers, including other judges, law professors, and even law students. It’s important to try to persuade all these groups—or as much of them as you can—because in the long haul, arguments about the meaning of the law are stretched out over decades of cases.
In Praise of a Moderate Supreme Court
Matt Yglesias writes:
But as best I can tell, Barack Obama (and many other leading Democrats) don’t actually think that reviving old-school judicial liberalism would be a desirable outcome. That, rather than any political calculus, seems likely to me to drive a moderate pick.
That’s right, and it’s a good thing. We don’t need liberal activists on the Court anymore—we just need them in Congress! That wasn’t true from the 1930s through the 1970s, when progressive goals were more likely to be thwarted either by conservative judicial doctrines or by inaction in Congress. Now the jurisprudential vision of liberals should be much more about preserving established principles of deference to legislative judgment than about forging new rights.
Nominating Clinton to the Supreme Court Would Be a Terrible Idea
Ezra Klein questions the conventional wisdom that the president should avoid a contentious nominee to replace Justice Stevens, who will be stepping down from the Supreme Court this summer. Given the politics of the coming midterm elections, the confirmation battle is likely to be nasty even if the nominee is relatively benign or even considerably more conservative than Justice Stevens himself. Maybe a more aggressively liberal nominee would fare just as well in the confirmation struggle while having an energizing effect for Democrats in the midterms. Maybe.
Ezra casually tosses out the name Clinton as a desirable nominee with experience in legislative politics and statecraft—experience that breaks the mold of the career legal technicians on the Court today. Clinton, as in Hillary.
I can’t even really begin to enumerate the ways in which this would be a terrible idea. But suffice it to say this: While the Court is not impervious to the sway of politics, it should aspire to be and appear to be above the naked political preferences of its members. And its members should have and appear to have unquestionable integrity.
The appearance of integrity on the Court is crucial to its constitutional role and to the maintenance of some semblance of rational order in the legal system. I do not assume that Secretary Clinton lacks integrity. But I do not think it possible that a confirmation hearing that revisited Whitewater and the rest could conceivably end beneficially for the Court, the president, or the nominee.
We need not achieve consensus in the eventual nominee’s judicial philosophy, but we absolutely do need consensus that that the nominee is of the highest integrity. However unfair it may be, Hillary Clinton will not ever achieve that consensus. Even her marriage to the former president, famously disbarred from the practice of law, taints her public image more than we can or should overlook in a Supreme Court nominee. Caesar’s wife must be above suspicion, as they say.
The Headless Office of Legal Counsel
President Obama’s nominee to head the Office of Legal Counsel (OLC), Dawn Johnsen, has been held up in the Senate for as long as Barack Obama has been president. On January 20 of this year, a full year into his presidency, Obama re-nominated her for the position he’d first named her for before he even took office.
Democrats have been unable to muster 60 votes to get the nomination past a filibuster. Among the opponents of Johnsen’s nomination have been, on the Democratic side, Arlen Specter and Ben Nelson. And on the Republican side, you know, the Republicans. The issue spurring the opposition? Abortion.
The OLC is charged with formulating legal opinions for the president and the entire executive branch. It is the constitutional brain of the presidency. Its head is an Assistant Attorney General, and anyone who holds the post becomes a likely candidate for appointment to the federal appellate courts thereafter. William Rehnquist and Antonin Scalia each ran the OLC for several years before being nominated for the Supreme Court. But the importance of OLC is not that it is a springboard to bigger things. Rather, it is itself arguably the most important active body of experts in constitutional law. Unlike the courts, which are inherently reactive, the OLC participates in the events that make constitutional law and executive precedents while they are happening. And in the gaping areas of constitutional law that are considered non-justiciable political questions by the courts, and in the ever-growing areas of deference to the executive, the OLC is probably the biggest game in town.
Dawn Johnsen was a strong critic of the Bush administration OLC, which is widely considered to have given substandard—”outrageous,” in Johnsen’s words—legal advice to the president, particularly on the issue of the treatment of suspected terrorists. She also has some of the best credentials one could have for the job: she’s already done it. She was Acting AAG in charge of OLC from 1996-98. Since then she has become a leading academic expert on the OLC.
But apparently she is just too controversial, having worked for NARAL from 1988-1993. Because, of course, nothing illustrates an uncontrollable legal bias like a record of advocating for women’s constitutional rights.
Many observers are disappointed that Johnsen was not among the 15 recess appointments announced last Saturday. Chris Geidner thinks the administration didn’t push Johnsen through with a recess appointment because it doesn’t want to subject the office to further politicization, having been so damaged by abuses in the Bush years. Sounds plausible to me. I only wonder how far the president and his justice department must go to restore OLC’s stature. Because at some point, avoiding the appearance of executive-branch politicization begins to allow legislative-branch politicization to prevent that restoration from ever happening.
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