The Obama Administration, fundamental institutional change, and the constitutional lawmaking system.

• Author: Rappaport, Michael B.
• Position: Symposium: Conservative and Libertarian Reactions to the Obama Administration

As a fusionist, (1) or moderate libertarian with conservative influences, I was alarmed by the election of Barack Obama and a largely Democratic Congress. Based on Obama's campaigning and his voting record, I believed that he was likely to strongly favor a variety of programs that would significantly increase the size of government. Combined with a Congress that had large Democratic majorities in both houses, the stage seemed set for a large expansion of government.

Increasing the risk of government growth was the financial crisis that preceded the election. The financial sector's significant problems led many people to anticipate a severe economic downturn, perhaps one approaching that of the Great Depression. With an emergency of that kind, people often look to the government to do something to address the problem. Thus, President Obama and the Congressional Democrats seemed to have both the power and opportunity to significantly grow the government. Moreover, the Administration appeared to recognize this too, as suggested by Chief of Staff Rahm Emmanuel's infamous statement that "[y]ou never want a serious crisis to go to waste." (2)

The possibility of another New Deal is a scary thought to someone with small government views. Yet, this was certainly not the only possible result. The last time there was a Democratic President, with large Democratic congressional majorities, who sought to restructure health care, the result was not larger, but smaller government. The two years when President Clinton and the Congressional Democrats governed led to a rejection of health care restructuring and a Republican takeover of Congress. Thus, one possibility is that the Obama presidency might lead the country to reject big government ideas and to replace them with the smaller government notions. I have called this "the Carter/Clinton scenario"--a reference to the last two times that Democrats controlled all three lawmaking branches, which led to the smaller government victories of Ronald Reagan and Newt Gingrich. (3)

Reflections on these different possible results--of a Second New Deal, of the Carter/Clinton scenario, and of something in between--naturally leads one to ponder the forces in the political system that determine whether one party rule leads to fundamental institutional change, like the New Deal, or to a rejection by the voters. It also leads one to ponder the normative question of whether, and how much, a constitutional system should place limits on a majority's ability to enact fundamental change.

In this short essay, I explore fundamental institutional change and argue that a desirable constitution should constrain such change. I argue that many of the reasons that justify strict limitations on the passage of constitutional amendments also justify constraints on fundamental institutional change. I then show that the modern American constitutional system does place significant limits on basic institutional change. Far from allowing a single election in which a short term majority can secure power to enact enormous change, it employs several limitations on radical change, including the American tri-cameral lawmaking system and the institution of midterm elections. I then examine three historical periods, that of the New Deal, the Great Society, and the early Clinton Administration, to support my analysis. I conclude by applying the analysis to the Obama Administration and suggesting that if it does enact fundamental institutional change, it will do so only by surmounting the not insubstantial checks that the American constitutional system places on such change. Finally, I should note that this essay was completed, except for minor style edits, at the end of October, 2009, when it was not clear whether, and if so, in what form, the Democrat's health care restructuring would pass. I have not changed the essay to reflect subsequent developments.

1. THE TWO SENSES OF CONSTITUTIONAL CHANGE

   In examining the ability of a majority to effect fundamental change, it is useful to distinguish two different senses of the constitution of a country and two corresponding senses of constitutional change. The first meaning of a constitution is a document that contains the fundamental law of the nation. Under this meaning, constitutional change occurs when the document's provisions are altered. The most obvious way to alter them is through constitutional amendments, but sometimes the courts can as a functional matter, if not a formal one, effect constitutional change by reinterpreting the constitution's meaning.

   The second meaning of a constitution is an older one. One can understand the constitution of a nation as "the basic principles and laws of a nation ... that determine the powers and duties of the government and guarantee certain rights to the people in it." (4) There is nothing in this definition about a written document. (5) Instead, it refers to the basic principles and laws of a nation. Under this definition, the most important legal and political institutions would count as the constitution of the nation, even though they were not described in a single document. Constitutional change would then occur when those fundamental principles and laws were altered. To distinguish this type of constitutional change from the previous one, I shall call this type "fundamental institutional change."

   The New Deal involved both types of constitutional change. First, during the New Deal, the Supreme Court altered its interpretation of the Constitution to vastly expand federal power and to relax other constitutional limitations, such as the separation of powers and the protection of economic liberties. While the document was not formally amended, the functional meaning of the Constitution was dramatically changed.

   Second, the New Deal changed the nation's fundamental institutions, moving us from a country of limited government and federalism to one with a larger government, at both the state and federal level, that regulated the economy and provided an economic safety net. It is true that an interpretive change of the document's meaning was necessary to effect these changes in fundamental institutions. Without those interpretive changes, most of the institutional changes might have been deemed unconstitutional, as the National Industrial Recovery Act was. (6) But even if no interpretive changes had been necessary, the large number of significant institutions that the New Deal enacted, including the Social Security Retirement Program, unemployment insurance, federal deposit insurance, the Tennessee Valley Authority, the Works Progress Administration, the securities acts, and the National Labor Relations Act, transformed the nature of American government and society. (7)

   Of these two types of constitutional change, it is the second type that is raised by the election of Barack Obama. It is true that President Obama could have significant effects on the Supreme Court, since the Court is now often split 5-4, with Justice Kennedy as a swing vote. If Justice Kennedy or one of the four more conservative justices were to step down, then the replacement that Obama appoints could be quite important, shifting the Court's balance of power. But as significant as this might seem, it is not what now appears most consequential for the nation. The Court has been closely divided for a long time. Moreover, it seems unlikely that Justice Kennedy or the four more conservative justices would voluntarily step down to allow Obama an appointment. Thus, a vacancy of this kind, although not impossible, seems unlikely, at least during Obama's first term.

   Rather, it is the possibility of the second type of constitutional change that is the prime concern. There is a range of legislation that the Obama Administration seems to support that would effect dramatic change. To mention just the most important examples, the Obama Administration, first, favors a substantial restructuring of health care, with a significant public option that is often discussed by both left and right as a means of moving towards a governmental system. (8) Second, the Administration also favors a substantial cap and trade law that would significantly restrict greenhouse gases by allocating allowances to businesses. (9) Third, the Administration has proposed large changes to the financial regulatory system, with new agencies and additional regulatory powers. (10) Fourth, the Administration seems likely to support the Employee Free Choice Act. (11) Under this legislation, which Obama co-sponsored as a Senator, (12) unions could be formed by a majority of workers signing a card, rather than through a secret ballot, and mandatory arbitration could be used to resolve the first union contract. Finally, the Administration supports a large number of programs that increase government involvement in education at levels ranging from preschool to higher education. (13)

   If all of these programs were enacted, they would establish quite dramatic, perhaps radical, change in government institutions. The basic laws, institutions, and principles of the American system of government--its constitution--would have been altered.

2. HOW SHOULD A CONSTITUTIONAL SYSTEM GOVERN FUNDAMENTAL INSTITUTIONAL CHANGE?

   The possibility of such dramatic change raises the question of what limitations a constitutional system should place on such fundamental institutional change. In this section, I argue that fundamental institutional changes, like changes of the constitutional document, should be significantly constrained to further important goals, such as consensus, nonpartisanship, and more accurate decision making. Such fundamental institutional change should only occur if it can surmount significant procedural hurdles.

   To analyze limitations on institutional change, we can imagine a system in which no significant limits on such change exist. Assume, then, a stylized version of the political system of Great...