Supermajority rules as a constitutional solution.

• Author: McGinnis, John O.

INTRODUCTION

The primary purpose of a constitution is to establish a government that operates in the public interest. Unfortunately, in fiscal matters, the United States Constitution has become progressively less effective in realizing this goal. One problem is that the federal government appears to have lost the ability to limit its spending. Since the early part of the twentieth century, federal expenditures have grown consistently in both good and bad economic times and under both Republican and Democratic leadership, with domestic federal spending now consuming over seventeen times the percentage of national income than it did in 1910.(1) A second problem is that the goals of federal spending have changed radically. In the last several decades, expenditures on public interest goods--goods that the public desires but the market cannot supply adequately--are being crowded out by spending on private interest goods--goods that merely transfer resources from one group to another.(2) The federal government thus spends ever more money and is ever less focused on promoting the public interest in its spending decisions.

Under current law, these changes in the size and composition of federal spending are destined to continue. The Social Security and Medicare programs are likely to expand dramatically in the next several decades as baby boomers retire.(3) At that time, government spending will balloon to unprecedented levels and include an even greater percentage of transfer payments.(4)

This transformation of federal spending from a modest budget devoted to public interest goods into a vast engine for the production of private interest goods has had several harmful consequences. First, there has been a surge in inefficient spending that has reduced the size of the economic pie.(5) Second, taxes have increased to sustain that spending, which has depressed personal income and hindered economic growth.(6) Finally, the rise in government spending has resulted in the creation of excessive government debt as politicians have sought to shift the costs of increased spending onto future generations.(7)

Excessive spending on private interests has not merely produced financial disarray; it also has contributed to the decline in our political culture. A regime structured to produce public goods unites the community by encouraging citizens to consider what they have in common, but one that countenances large scale transfer payments continuously pits citizens against one another and saps public spiritedness.(8) Although political theorists and politicians call for a dialogue of reasoned deliberation and decry today's factious politics, none addresses the most basic cause of divisiveness--a government structured to be a dynamo of private interest spending.(9)

Despite a series of much publicized efforts, Congress has failed to halt, let alone reverse, the growing percentage of national income that the federal government spends. For example, the Congressional Budget Act of 1974(10) was supposed to establish legislative procedures that would restrain unnecessary spending, but spending and debt mounted instead.(11) The Gramm Rudman Act(12) created a mechanism that would impose automatic spending cuts to reduce the deficit, but when the pressure to choose among programs became too great, the only automatic aspect of Gramm-Rudman proved to be Congress's decision to eviscerate the statute.(13) The Budget Enforcement Act of 1990(14) attempted to restrain spending through mandatory caps,(15) but Congress now has chosen to spend at levels that exceed those caps.(16)

For all the self-congratulations of its creators, the 1997 budget agreement followed this same pattern. The agreement did not halt the growth in spending. In fact, the agreement explicitly abrogated spending limits that Congress had previously imposed.(17) Consistent with past practice, in 1998 politicians appear already to have exceeded the new spending limits in the agreement.(18)

This persistent failure to restrain the growth in private interest spending suggests that our fiscal problems result not from a passing failure of political leadership, but instead from the inherent tendency of our constitutional structure to encourage excessive spending.(19) To address these structural problems, a growing number of constitutional amendments have been proposed and voted upon. Both the Balanced Budget Amendment(20) and an amendment to require a two-thirds vote to raise taxes have received the support of a substantial majority of legislators in the Senate or the House.(21) At the heart of both of these proposals is the same mechanism--a requirement that certain kinds of fiscal legislation attain the vote of a supermajority of legislators. Despite the growing political support for supermajority rules, no one has offered a theory of the supermajority mechanism or a defense of its efficacy. This Article attempts to fill this analytic void by proposing a theory of supermajority rules that explains the distinctive advantages of such rules as a method of government decisionmaking. In particular, we argue that supermajority rules often will be the best decisionmaking rule when Congress should be restrained and the courts cannot be trusted or are not equipped to enforce a constitutional limitation.

We illustrate the utility of supermajority rules by considering the appropriate governance of fiscal matters. Fiscal supermajority rules have the prospect of restraining both the amount of government spending and the percentage of private interest spending.(22) In addition to economic goals, these rules also may promote a more harmonious political existence by making it harder for interest groups to acquire other people's resources for themselves. Although critics of fiscal supermajority rules, including the Balanced Budget Amendment and the tax amendments, view them as radical innovations, we argue that such rules are better seen as the first drafts of a blueprint to restore the Framers' vision of a limited government. This Article builds on the ideas underlying these rules to describe the theory and operation of optimal fiscal supermajority rules. Such rules apply to government spending rather than to taxes or debt.

This Article will proceed in four sections. Section I suggests that the fundamental pathology of modern spending patterns stems from the superior influence that concentrated interest groups wield with legislators, even though such groups are far less than a numerical majority. This process creates a prisoner's dilemma for a modern citizenry, almost all of whom are members of some special interest group benefitting from some particular redistribution. Although most would be better off with a smaller government, it would be irrational for members of any interest group to surrender their subsidies unless members of other groups agree to do the same. The present budget crisis is in large measure a result of repeated iterations of this dynamic.

Section I also explains how the provisions of the original Constitution largely restrained such expropriation for over 150 years. Under the system of federalism, the federal government could not undertake large-scale redistribution because it had limited fiscal powers. The states also were prevented from such governmental excesses because they competed for capital in the interstate marketplace.

Unfortunately, the Framers' solution did not last. The original Constitution, paradoxically, was undermined by its very success: because it promoted a relatively stable society, interest groups grew and prospered. Changes in economic circumstances also diminished the effectiveness of the Constitution in restraining interest groups. These forces culminated in the New Deal's retreat from constitutional federalism, which essentially permitted the federal government plenary taxing and spending authority. The dissolution of constitutional restraints transformed a limited government that was designed to deliver public goods into today's special interest state.

Our description of the defects of the current constitutional regime sets the stage for Section II of the Article, which presents a theory of how appropriate supermajority rules may resolve the prisoner's dilemma that has caused excessive spending. We compare supermajority rules both to majority rules and to absolute constitutional limitations--such as those created by individual rights and the limitations that federalism places on the central government.

We maintain that supermajority rules can be preferable to majority rules for categories of legislation over which special interests have particular leverage. Specifically, we describe how applying supermajority rules to spending bills can improve the balance between public interest goods and private interest goods. If a supermajority rule were applied to all spending legislation, Congress would enact only spending bills that command a substantial consensus. Because private interest spending tends to result in a substantial number of individuals who are net losers, such spending often will fail to command the support of a supermajority. Thus, fiscal supermajority rules should act as a filter, posing a stronger barrier to the enactment of private interest spending than to the passage of public interest spending.

Supermajority rules in some areas also are superior to absolute limitations, in part because they assign to the judiciary a more limited role that comports better with the judicial function. For instance, a supermajority rule applicable to spending legislation does not require the judiciary to decide whether legislation is ultimately good or bad. That decision is left to the legislature. Courts need not determine any fact about the legislation except that it spends money. Supermajority rules therefore minimize judicial discretion, giving the courts only the authority to make judgments according to determinate rules.

Supermajority rules...