DYNAMIC LEGISLATION.

Author:Kysar, Rebecca M.
 
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INTRODUCTION 811 I. IS THE STATUS QUO BIAS A PROBLEM? 815 II. POTENTIAL TOOLS IN OVERCOMING THE STATUS QUO BIAS 818 A. Veto Bridges 818 B. Prompting Legislation 821 1. Sequestration 822 2. Sunset Provisions 824 3. Prompting Legislation and the Status Quo Bias 825 C. Dynamic Legislation 827 III. DEMOCRATIC CONSIDERATIONS 831 A. Interaction with the Administrative State 832 B. Entrenchment Concerns 835 1. Veto Bridges and Entrenchment 836 2. Prompting Legislation and Entrenchment 837 3. Dynamic Legislation and Entrenchment 841 C. Political Economy and Fairness Concerns 844 1. Veto Bridges and Fairness 844 2. The Political Economy of Prompting Legislation 846 3. The Political Economy of Dynamic Legislation 849 D. Integrity of the Budget Process 851 1. Budgetary Games, Prompting Legislation, and Veto Bridges 852 2. Dynamic Legislation and the Budget Process 854 IV. IMPLEMENTATION 855 A. General Principles for Applicability 856 B. Potential Applications 858 1. Pigouvian and Similar Taxes 858 2. Nontraditional Phase-Ins and Phase-Outs 859 3. Countercyclical Laws 861 4. Regionally Targeted Legislation 863 5. Intralegal and Budgetary Measures 864 a. Overall budget constraints 864 b. "Reverse Earmarking" 865 c. Tax "Triggers" and Responsible Tax Cutting 866 CONCLUSION 868 INTRODUCTION

In recent years, Congress has lurched from one fiscal or budget crisis to another. Expiring tax laws, government shutdowns, debt ceiling limits, and sequesters have created an atmosphere of legislative chaos, requiring congressional action to avoid dire consequences. On the precipice of each cliff, real costs have ensued from the anticipation that Congress will fail to reach a deal. (1) Future crises seem inevitable, as the nation's debt repeatedly approaches the ceiling, clashes over annual spending levels increase, sequestration continues to loom, and temporary tax policies once again take hold. (2)

Yet these events are of Congress's own making, a direct and foreseeable product of the legal mechanisms it has created. Why then does Congress keep setting itself up for failure, creating games of chicken that have the potential to end catastrophically? (3) In designing these mechanisms, Congress recognizes its limited capacity to respond to evolving circumstances. The legislative process contains a status quo bias, making congressional response to changing social, technological, environmental, economic, and foreign policy conditions challenging. Other factors have combined with constitutional design to create a system of government that, in the view of many, is hopelessly gridlocked. To compensate for the status quo bias in lawmaking, lawmakers have developed devices that aim to provide paths to legislative change, such as prodding Congress into action by threatening policy cliffs or crises.

Although scholars have long addressed extracongressional means of addressing this status quo bias, such as judicial expansion of the common law, dynamic statutory interpretation, and agency delegation, (4) only recently has focus shifted to these congressional tools. (5) Assuming it is possible to achieve, locating the solution to legislative inertia within the lawmaking body itself, as opposed to the judiciary or agencies, is preferable from the perspective of institutional competence and separation of powers. Yet, as the legislative crises of the past decade demonstrate, the tools that Congress most often employs can have devastating effects. It thus seems wise to explore Congress's entire arsenal of anti-status quo devices, including those that are less often exercised.

The congressional anti-status quo devices can be divided into three main categories. (6) Procedural mechanisms--like the reconciliation process--may eliminate barriers to legislating. I label these mechanisms "veto bridges" as an antonym to the often used "veto gates," which refer to those points in the legislative process that can derail legislative proposals. (7) Laws may also prompt Congress to act through sunset dates or penalties like sequestration or other undesirable policy outcomes. I identify this category as "prompting legislation." Finally, the legislative product itself may automatically update without further action by Congress through the use of what I call "dynamic legislation." (8) This type of legislation spontaneously adjusts legal rules to future circumstances based on predetermined, external criteria.

I contend that it is this last category--dynamic legislation--that has the most untapped potential from a democratic process perspective. (9) Specifically, I argue that dynamic legislation outperforms the other anti-status quo devices because it leverages the resources of the administrative state without succumbing to excessive deference, does not impermissibly entrench the current majority, and is not as susceptible to the pathologies of the political economy and budget processes. Democratic considerations, in other words, weigh in favor of dynamic legislation as a preferred tool against legislative inertia. This Article thus builds the case that dynamic legislation has much to offer categorically. It therefore departs from the scant scholarship that exists on the topic, which has traditionally judged dynamic legislation from the standpoint of the particular policies at issue. (10)

From a practical perspective, each of the aforementioned tools have limitations. Veto bridges are unenforceable and nonsubstantive in nature. Prompting legislation disrupts planning by private and public actors. Dynamic legislation is often costly to design, requiring information upfront. (11) The impact of these limitations is context specific, but dynamic legislation holds the most potential in areas where quantitative indices can be developed to minimize its design costs. It also will be desirable when the area of law presents acute concerns in the democratic categories outlined above--criteria in which dynamic legislation performs favorably.

Notably, fiscal policy shares all of these qualities. This partially explains why this area already contains a greater degree of dynamic legislation than other areas. Several features of the tax code, for instance, are indexed to inflation. (12) Recently, during consideration of the 2017 tax bill, lawmakers proposed that the bill's tax cuts be automatically ratcheted down if the bill failed to generate sufficient economic growth, (13) and that other tax increases be turned off if a revenue hurdle was met. (14)

Other areas of fiscal policy also use dynamic legislation to some extent. For instance, certain unemployment insurance benefits are keyed off a states overall unemployment level. Some features of Social Security are indexed for inflation, and Medicare premiums are tied to health care costs to an extent. Even still, dynamic legislation is underutilized in these and other contexts. The design features of dynamic legislation could be particularly useful in designing Pigouvian taxes because they could be calibrated to the cost of current negative externalities as they reveal themselves. (15) Phase-ins and phase-outs that adjust according to varying circumstances, rather than dates on the calendar, hold promise, as do countercyclical and regionally targeted laws. Finally, laws could be tied to one another or, like the 2017 tax proposals, to a budgetary goal. Notably, many of these examples show that dynamic legislation also provides a mechanism by which Congress can evaluate itself, automatically adjusting laws depending on how well they are performing.

In Part I, I first address the antecedent question of whether the current level of status quo bias in lawmaking is desirable. In Part II, I lay out possible tools that Congress can use to overcome the status quo bias--veto bridges, prompting legislation, and dynamic legislation--and their effectiveness at achieving that goal. In Part III, I examine democratic considerations, including those relating to interaction with the administrative state, entrenchment, the political economy, and the budget process. Across all of these categories, I argue that dynamic legislation outperforms the other tools. Finally, in Part IV, I consider in what circumstances dynamic legislation should be employed and offer suggestions for its implementation.

  1. Is THE STATUS QUO BIAS A PROBLEM?

    Before addressing solutions to the status quo bias in American lawmaking, one may rightfully ask if there even is a problem. After all, the Constitution's many hurdles to lawmaking are part of its contemplated design, intentionally balancing between policy stability and the whims of majority rule. (16) Veto gates like bicameralism and the executive veto collectively weigh heavily in favor of maintaining the status quo. (17)

    Yet much of today's legislative stalemate can be attributed to dynamics wholly apart from constitutional design. Supermajority rules, for instance, are absent from the Constitution yet contribute significantly to congressional stalemate. (18) Additionally, the committee system is an extraconstitutional culprit of congressional gridlock, adding yet another combination of decisionmakers who must reach consensus. (19)

    Nonetheless, from a normative perspective, it might seem that the status quo bias in lawmaking is not problematic. For instance, because we follow majority rule, we should respect existing laws since they represent the preferences of the majority. (20) Stable law also encourages investment and facilitates planning. (21) There are, however, circumstances where we may wish to depart from allegiance to the status quo.

    The legislative process, at times, fails to reflect the preferences of lawmakers and constituents. This breakdown is due to various phenomena such as cycling problems, strategic behavior, and the inability to gauge the intensity of legislative preferences. (22) Condorcet's paradox, for instance, illustrates that, under certain conditions, the order in which decisions are made...

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