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Sunday, July 15, 2012

My cavil with Cooter-Siegel on federalism: Why Article I cannot (only) be about collective action problems between the states

Neil Siegel has an interesting post at Balkinization against reading Congress' powers more narrowly when Congress invades so-called "areas of traditional state concern." According to Neil, focusing on whether the states have traditionally regulated some area is both unworkable and undesirable. The approach is unworkable, because state and federal power so overlap nowadays that figuring out whether state power has predominated in some policy area will simply be impossible -- sort of like figuring out where a snake's body ends and tail begins. The approach is undesirable because "the question of customary allocation is unrelated to a principal reason why Congress possesses the power to regulate interstate commerce: solving collective action problems involving multiple states."

I have a lot of sympathy with Neil's gloss on Article I in terms of states' collective action problems (as I have elsewhere noted in the context of healthcare). Despite objections from textualist die-hards like Kurt Lash, I am convinced that failing something like the Cooter-Siegel "do-the-states-face-a-collective-action-problem?" test ought to be a necessary condition for judicial invalidation of a federal statute. But is failing this criterion a sufficient condition for judicial intervention? As I remarked to Bob Cooter three years ago when he was up at Michigan work-shopping the Cooter-Siegel paper, I do not think that the need to "solv[e] collective action problems" with a national decision-maker can explain why the Constitution enumerates Congress' powers or why the courts ought to enforce the limits implied by that enumeration.

Sure, we would want a national decision-maker to step in when states are incapable of acting. But why not just give Congress plenary power to determine when states face a collective action problem? Why painstakingly list Congress' powers and expressly state that Congress should not regulate in ways not included on the list? In short, why entrench a constitutional limit on Congress' judgment about when federal legislation is necessary? If our only problem is that states sometimes are not competent to address an issue individually, then we should just let Congress regulate unhampered by pesky constitutional limits, confident in Congress' electoral incentives not to nose in where federal law is unnecessary. (Why, after all, would members of Congress want to regulate issues that states can control and invite constituent complaints about overweening federal bureaucrats and inefficiently uniform federal rules?)

To explain the constitutional entrenchment of limits on Congress, therefore, one must not only explain how states face a collective action problem: One must also specify how members of Congress face a collective action problem: Why does Congress needs constitutional restraints on legislating, despite their apparent electoral incentives not to over-extend federal law and to regulate only where state law cannot address some collective action problem?

After the jump, I will suggest why the answer to this critical question helps explain why courts quite properly focus on "traditional" state concerns.

Consider two reasons why Congress might not be able to show self-restraint in legislating, even when federal legislation is unnecessary because states face no collective action problem in addressing some issue without federal help.

1. The Problem of Fostering Credible Commitments Across Time Between Rival Political Parties: Members of the current majority in Congress may be reluctant not to impose their policy preferences on the entire nation for fear, that, when their rivals later capture Congress, those rivals will not show similar self-restraint.

Imagine, for instance, that your party controls Congress and is passionately committed to protecting each citizens' right to bear arms. You understand, however, that the nation is deeply divided about the scope of the right: If you impose your preferred libertarian pro-gun regime on the entire nation, you will please your partisan backers in states where your rivals control the state government, but you will also invite your opponents to retaliate by enacting their preferred and maximally restrictive anti-gun regime when they take over Congress (as they inevitably will, in a competitive two-party system). Ideally, you might want to call a truce with the rival political party such that both parties abstain from pressing for their preferred law nationally, saving precious agenda time in Congress for issues that the states cannot handle while letting the states go their different ways on gun control.

But how can you enforce this truce? Once you take over Congress, your diehard base will be pressing you to enact the party's agenda regardless of the regulatory capacities of state governments. If you respond to your "base" that you are holding back to maintain a truce on a contentious issue at the national level, your base may properly respond that you have no assurance that the rival party will be so self-restrained when they take over. How can one be assured that one's self-restraint now will be rewarded by the other party's self-restraint later? Absent such assurance, each party rationally says, "carpe diem" and enforces their ideal regime as a national law -- gun-free zones, licensing laws, tort liability for negligent manufacture of guns, narrow definitions of self-defense, and so forth, if they are anti-gun folks, and robust Second Amendment rights if they are pro-gun.

To resist these blandishments, one needs a theory of federalism compliance with which is easy to verify. The problem with the Cooter-Siegel line, however, is that it is almost impossible to police politically or judicially: It is legally unmanageable. One can make a plausible case, for instance, that even intrastate use and sale of firearms eventually leaks over to other states. If one's rival enacts a national gun licensing regime on the theory that, after all, even local possession of guns can affect other states in ways that cause some sort of collective action problem, who is to say that they are wrong? Not the courts, and not the electorate: The informational demands of the Cooter-Siegel theory are simply too high.

What's an alternative? Look for activities that states have played the dominant role in regulating for a very long time as stable focal points for an inter-party bargain. Sure, such activities might generate some spillover effects that, in a perfect world, would be handled by a national decision-maker. But if states have actively regulated an activity for a century or so, this very fact might be a crude indication that the spillover effects are modest. By contrast, the salience of the category -- its being a "traditional state concern," if you will -- makes the line ideal as a focal point for a bargain, because compliance with crude and categorical rules is easier to measure than compliance with vague and wavering abstractions like the Cooter-Siegel "collective action problem" theory.

2. The Problem of Fostering Credible Commitments Across Space Between Rival Congressional Districts:

There is a second conventional justification for constitutionally restricting Congress from enacting federal laws dealing with intrastate matters: Individual congressional districts compete with each other for federal money. Giving Congress broad authority to deal with interstate external effects, therefore, does not solve a collective action problem so much as re-locate it: As Congress appropriates funds to expend on national public goods (say, interstate highways, critical scientific research in which the feds enjoy scale economies, military colleges, etc.), each district is tempted to demand money for goods that have dubious or entirely bogus claims to the status of being "national." In theory, Congress would save money by separating the wheat from the chaff, funding only truly national goods that the states, because of collective action problems, cannot adequately fund. In practice, however, Congress is a "they," not an "it": One member's vote against another member's favored localistic item invites retaliation. Moreover, at least according to Barry Weingast's famous 1979 theory, because low-visibility budgeting for infrastructure does not tend to be a partisan issue, members tend to band together into a "universal" coalition on budgetary matters to approve everyone's preferred pork for fear of being carved out of the coalition if one is high-minded about what is national and what, "local."

To hold the line on spending, therefore, Congress needs an easy-to-verify line that divides national from local spending. But the Cooter-Siegel test is an utter failure as a mechanism for rooting out federal funding for Lawrence Welk museums and bridges to nowhere, because it is simply too squishy to be monitored. (Lawrence Welk -- with likely sincerity -- defended his museum as a national public good). Again, bright-line categories work better as a focal point for creating a stable coalition for curtailing spending.

And what categories are truly stable bases for some sort of congressional bargain fixing budgetary self-restraint? "Traditional" ones: Forts and arsenals, navigable rivers, interstate highways, etc. (To be sure, these limits, while necessary, are not sufficient, as Congress' need for a military base-closing commission attests).

In sum, Cooter-Siegel's theory -- like any theory of enumerated powers -- must explain not only how states fail but also how Congress fails. Both states and Congress face collective action problems: Relocating some policy to the national level, therefore, does not eliminate such collective action problems but merely relocates them. Once one specifies this second congressional collective action problem that makes constitutional limits necessary, one must specify a constitutional limit that actually addresses the congressional problem -- that is, a limit that can be monitored by either courts or Congress or the voters themselves. I do not think that the Cooter-Siegel line constitutes such a verifiable limit.

Posted by Rick Hills on July 15, 2012 at 02:09 PM | Permalink


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