Lasting legislation.

• Author: Kysar, Rebecca M.

This Article argues that, due to certain pathologies of the legislative process, legislation enacted with sunset provisions lacks benefits hailed in recent scholarship while also harming the political process and its output. Proponents have argued that such "temporary legislation" enhances fiscal responsibility because official-cost estimates reflect the full cost of the legislation. The cost estimates, in other words, relay the entirety of expenses to Congress upon each sunset date. In contrast, when enacting nontemporary legislation, the theory goes, Congress receives official costs only for the duration of the budget window, or the length of time set forth in the annual budget resolution, as the relevant period within which Congress makes spending and revenue decisions.

This theory is flawed. Many factors--shifting baselines, exceptions to the revenue offset or "pay as you go" rules, costs that temporary legislation engenders beyond the budget window, and the ability of lawmakers to consider the full cost of legislation--thwart the theoretical fiscal restraint of temporary legislation. Nor do sunset provisions tend to provide lawmakers with enhanced information or flexibility, as proponents of temporary legislation have argued; instead, lawmakers likely will be unable to determine the appropriateness of the sunset, or its most effective scope and length. Furthermore, "pro-temporary legislation" scholars understate the costs of such legislation because temporary legislation increases rents from interest groups, entrenches current majoritarian preferences, and produces planning conundrums for public and private actors alike. Accordingly, this Article recommends a policy presumption against temporary legislation and in favor of legislation that does not expire by its own terms, or "lasting legislation." This presumption should be stronger in the context of provisions made temporary due to budgetary constraints, where the identified concerns are more likely to arise, and weaker in emergency or experimental situations, where the identified concerns are less likely to exist.

INTRODUCTION I. BACKGROUND A. History of Temporary Legislation B. The Endogeneity of Legislative Rules II. THE BUDGET PROCESS AND TEMPORARY LEGISLATION A. Budget Rules 1. The Instability of Baseline Estimates 2. PAYGO Forgone B. Effects of Temporary Legislation Beyond the Budget Window C. Estimating Full Costs III. THE INFORMATION-PRODUCING AND FLEXIBILITY FUNCTIONS OF TEMPORARY LEGISLATION A. Deliberation and Temporary Legislation B. Setting the Scope of Temporary Legislation C. Determining the Length of Sunset Periods IV. DISADVANTAGES OF TEMPORARY LEGISLATION A. Political-Economy Concerns B. Entrenchment Issues C. Planning Disruptions V. RECOMMENDATION CONCLUSION INTRODUCTION

This Article sets forth a view of the legislative process that accounts for the endogenous nature of the rules that govern it--that is to say, the enforcement of the rules governing the proposal, debate, and adoption of legislation depends largely upon powers vested within, rather than without, Congress. (1) Although Congress may adopt mechanisms-budget rules, for example-with lofty ambitions to legislate in the public interest and to promote fiscal responsibility, Congress is all but unfettered in its ability to sidestep these mechanisms when it sees fit. (2) The endogenous nature of these rules, moreover, is not merely of academic interest in view of the constant and intense political pressures on Congress to spend overly and unwisely. Indeed, the endogeneity of the legislative process (3) causes these political pressures to operate on hydraulics: although the pressures may be blocked at one channel, their power can still be exerted via another route.

This starting point--that Congress governs the legislative process, if at all, through inherently weak, self-enforced rules--has substantial implications for the scholarly debate over "temporary legislation." Specifically, this Article finds implausible recent claims that legislation enacted with sunset provisions, (4) or temporary legislation, encourages fiscal restraint and deliberative decisionmaking. Instead, the endogenous model outlined above predicts that, when encouraged by political pressures, legislators can elude the sunset provisions' restraints on their behavior--a prediction borne out time and again by experience. But temporary legislation is worse than ineffective: such legislation creates serious political-economy concerns, entrenchment problems, and planning disruptions. For these reasons, this Article recommends a policy presumption against temporary legislation in most cases, replaced with a presumption in favor of legislation that does not expire by its own terms, or "lasting legislation." (5)

Troublingly, however, Congress has escalated the use of temporary legislation; sunset provisions allow members of Congress to enact low-cost legislation and to avoid triggering rules that attempt to enforce budget constraints. At the beginning of the most recent century, for example, more than one hundred sunset provisions threatened tax legislation with automatic cessation, including some of the largest tax cuts in American history. (6) In comparison, only a decade prior, in the early 1990s, less than two dozen relatively inconsequential tax provisions were set to expire. (7)

Due to economic pressures and legislative rules that substantially favor the (apparent) low revenue costs of temporary legislation, the use of sunset provisions in the tax context is rampant. (8) The consequences of Congress's increasing reliance on temporary legislation soon became clear at the end of 2010, when legislators renewed important pieces of tax legislation, such as the estate-tax repeal and the tax-rate reductions on dividends and capital gains. (9) Evaluation of temporary legislation, therefore, remains essential, especially in light of recent scholarship arguing strongly in its favor. (10) Despite the heightened use of sunset provisions and these new defenses asserting their utility, this Article concludes that lasting legislation remains the preferred route to prudent lawmaking.

Part I of this Article provides a brief historical overview of sunset provisions, focusing on their most recent incarnation in the Internal Revenue Code (the "Code"). It then details the lack of external enforcement of legislative rules, concluding that the ensuing easy evasion of such rules in the budget process has caused the rise in temporary legislation. (11) For instance, sunset provisions reduce the cost of tax legislation, preventing a member of Congress from challenging the legislation as readily under "pay as you go" (PAYGO) rules, which are legislative rules that require spending decreases or tax increases to offset revenue-reducing legislation. (12)

One predominant argument advanced recently in support of sunset provisions is that the legislative process accounts completely for the costs of temporary legislation but fails to do so for lasting legislation because the extension of temporary legislation requires congressional action. At the point of extension, the argument goes, Congress takes into account the full cost of the temporary program. This characteristic is said to be in contrast to lasting legislation, the estimated costs of which are provided upon its single enactment only for the duration of the budget window, (13) and thus requires no further congressional action to continue the legislation's effects.

A central problem with this argument for temporary legislation is that it assumes a proper functioning of background budget constraints. To evaluate the theory in a more realistic scenario, Part II first explores several features of our byzantine budget process. It asserts that the pro-temporary legislation view depends on the erroneous assumptions that the baseline estimate from which the legislation's costs are measured will always treat temporary laws as temporary, that the length of budget windows will be constant, and that legislators will faithfully apply PAYGO rules to temporary legislation. Unfortunately, nothing binds Congress to such procedural commitment devices, and, indeed, as will be shown, Congress has regularly deviated from them precisely in the manner posited. (14)

Part II then demonstrates that temporary legislation often has economic effects beyond the budget window, even though such legislation

has a formal end date. (15) In such cases, temporary legislation suffers from the same purported defect as lasting legislation in that the budget process will not account for costs beyond the budget window. Although pro-temporary legislation scholars have maintained that temporary legislation can provide an official revenue estimate equivalent to its full cost and presumably allows Congress to make smarter decisions, there is currently no external enforcement mechanism to make Congress fully consider this estimate. Thus, even if accurate and complete cost information regarding temporary legislation is available, there is no guarantee that the estimate will inform Congress's decisionmaking. On the other hand, if Congress does have incentives to consider the costs of legislation, then Part II demonstrates that Congress will likewise have the means to consider the full cost of lasting legislation, not just its officially stated cost within the budget window.

Part III then asks whether sunset provisions afford congressional members an opportunity to review outdated policies and to enact legislation that addresses only temporary concerns, which are two strengths commonly attributed to temporary legislation. That Part answers the question in the negative, albeit with qualifications. It contends that the breadth and aim of sunset provisions generally cast too large a net to capture only problematic policies. Moreover, it also suggests rejection of efforts to limit temporary legislation to policies of...