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Recess Appointments And The Fed

At Dan Pfeiffer’s talk this morning at Netroots Nation, he seemed to express the view that it’s not possible to use recess appointments to fill vacancies on the Federal Reserve Board of Governors. This is, to the best of my knowledge, false. Doing a Fed recess appointment would be unusual but this Congressional Research Service document (PDF) on recess appointments indicates that Ronald Reagan did it. What’s more, it indicates that the controversy that step created had some useful consequences:

On May 31, 1984, President Reagan nominated Martha R. Seger to be a member of the Board of Governors of the Federal Reserve System. The Senate Banking Committee had held four days of hearings and approved her nomination by the close vote of 10 to 8. A spirited floor debate was expected, but that was foreclosed when Reagan gave her a recess appointment on July 2 after Congress took a three-week break for the Fourth of July holiday (from June 29 to July 23). Senator William Proxmire, chairman of the Banking Committee, accused Reagan of abusing his recess appointment powers and promised to devise remedies that would restrict the President’s authority. Lawmakers also objected to other recess appointments made by Reagan.

On August 8, Senator Max Baucus offered an amendment to a supplemental appropriations bills, calling on President Reagan to withdraw the recess appointment for Seger. The Senate voted 53-43 to table the amendment. A day later, Senate Minority Leader Robert C. Byrd introduced a Senate resolution (S.Res. 430), stating that it was the sense of the Senate that the power to make recess appointments should be confined to situations in which the Senate has formally terminated a session or in which the Senate will be in recess for longer than 30 days. That resolution was never put to a vote, but a year later the Senate passed a different resolution offered by Senator Proxmire (S.Res. 194), expressing the sense of the Senate that recess appointments should not be made to the Federal Reserve Board except under unusual circumstances, and only for the purpose of fulfilling “a demonstrable and urgent need” in the administration of the board’s activities. The Senate also agreed to consider nominations to the board in an expeditious manner. The resolution was agreed to by voice vote.

On June 13, 1985, the Senate confirmed Seger by voice vote for a term expiring in 1998. On this occasion the Senate Banking Committee voted 11-4 for her confirmation. Although there was controversy over her recess appointment, there was never a question of using a funding restriction to deny appropriated funds for her salary. The Federal Reserve relies on nonappropriated funds to support its operations.

Not to prescribe any particular approach, but I think the general lesson here is that if you want to make progress on nominations you need to press forward. The Obama administration started its term by not making Fed nominations in a timely manner, they then never pressed publicly (or as far as I know privately) for speedy confirmation of their nominees, then they never publicly objected when Peter Diamond was blocked, then they declined to use (or threaten to use) their recess appointment powers, and they haven’t publicly put forward any alternatives to Diamond. It’s genuinely unclear how much of a difference the details of the composition of the Federal Reserve Board has made to policy outcomes, but at a minimum it’s difficult to see how having more governors urging more stimulative action in place couldn’t have made things at least a little bit better.

NEWS FLASH

Obama Overruled Top Justice And Defense Department Lawyers On Libya | In a breaking story, the New York Times’s Charlie Savage reports that President Obama “rejected the views of top lawyers at the Pentagon and the Justice Department” when deciding that the U.S. military involvement in Libya was legal and did not amount to “hostilities.” By taking the “unusual” step of overruling Pentagon general counsel Jeh Johnson and the Office of Legal Counsel’s Caroline Krass, Obama made the argument that he is not subject to provisions of the War Powers Act that would have required him to terminate military activities or scale back the mission by May 20.

DOJ Appeals ‘Citizens United on Steroids’ Decision

Our Guest Blogger is Mark Ladov, Counsel for the Brennan Center’s Democracy Program.

As readers of this blog know, a Virginia district court judge overseeing a criminal prosecution recently took the radical and wrongheaded step of declaring the federal ban on corporate contributions directly to candidates to be unconstitutional.  This decision extends beyond Citizens United because that case only permits corporations to run their own ads or otherwise act independently of a candidate’s campaign. Federal prosecutors today filed an appeal of that decision with the Fourth Circuit Court of Appeals.

The Fourth Circuit should have no trouble reversing the lower court’s ruling.  Indeed, as Think Progress recently noted, the Ninth Circuit just upheld San Diego’s similar ban on corporate and union contributions.  The Ninth Circuit’s careful reasoning stands in sharp rebuke to the U.S. v. Danielczyk opinion, which misinterpreted Citizens United and the controlling Supreme Court precedents.

Despite the damage wrought by Citizens United, the Supreme Court has done nothing to challenge the validity of contribution limits.  The Court has always recognized that contribution limits are an important anti-corruption tool.  And the federal ban on contributions by corporations and unions—like San Diego’s similar ban—ensures that contribution limits are not evaded.  This isn’t an idle concern.  In states that allow corporate contributions (like New York and Maryland), there is plenty of evidence that wealthy donors use corporations and subsidiaries—and create shell corporations and LLCs—to evade contribution limits and buy extra influence.  Striking down the federal corporate contribution ban would create a similar loophole for Congress, and could render federal contribution limits meaningless for wealthy special interests.

There’s nothing new or particularly noteworthy about the corporate contribution ban.  Congress enacted it in 1907, based on complaints of undue corporate influence on Progressive Era politics.  The Supreme Court upheld this ban less than a decade ago in a case called FEC v. Beaumont—in part due to the well-founded fear that corporate contributions would be used to circumvent federal limits.

Despite the misconceptions of the Virginia district court, Citizens United did nothing to disturb that ruling.  Citizens United may have erred by taking an overly narrow view of corruption, and by wrongly assuming—without any proof—that independent political spending cannot corrupt elected representatives or the political process.  But it never questioned the need to protect reasonable contribution limits.  As was easily recognized by the Ninth Circuit (following similar rulings by the Second and Eighth Circuits), Citizens United expressly declined to cast any doubt on the Supreme Court’s long-standing rule (dating back to 1976 and Buckley v. Valeo) that contribution limits are permissible because they entail “only a marginal restriction upon the contributor’s ability to engage in free communication.”

The Danielczyk court, alone among federal courts, found otherwise.  In doing so, it flouted Supreme Court precedent.  Unfortunately, however, the district court acted well within the spirit of “extreme judicial activism” represented by the Citizens United decision.

By reaching beyond the narrow questions posed in Citizens United and ruling so broadly, the Supreme Court gave an emphatic green light to wealthy special interests that have long sought to dominate our politics.  The Court did not merely strike down restrictions on corporate spending that stood for over a century.  It also encouraged big political spenders to redouble their efforts to evade the rules that we have implemented to prevent political corruption.

It’s no surprise that big money is taking up this invitation.  For example, we’ve recently seen a scheme by the Republican Super PAC that would encourage federal candidates, officeholders and party officials to violate federal rules against the solicitation of unlimited contributions.  These solicitation rules (like San Diego’s corporate contribution ban) are designed to shore up reasonable contribution limits—and to prevent our elected officials from selling access and influence to the highest bidder.  The Brennan Center and others have asked the Federal Election Commission to hew to the rule of law and advise that this scheme remains a clear violation of federal statute and Supreme Court precedent.

But it’s more disappointing when a federal judge ignores the rule of law in favor of the radical spirit of Citizens United.  We hope that when the Fourth Circuit reviews the Danielczyk decision on appeal it follows the reasoned and conservative approach taken by the Ninth Circuit and other federal courts.

Justiceline: June 17, 2011

Welcome to Justiceline, ThinkProgress Justice’s morning round-up of the latest legal news and developments. Remember to follow us on Twitter at @TPJustice.

  • Former Sen. Russ Feingold (D-WI) says many of his fellow Democrats are “dancing with the devil” by adopting Republican tactics to raise unlimited campaign funds.
  • The Justices also reached the fairly obvious conclusion that a woman who is imprisoned can challenge her conviction under any constitutional amendment she likes — although they said nothing about whether her claims are likely to win.
  • Sen. Jerry Moran (R-KS) has joined his fellow Kansan Sen. Pat Roberts (R) in throwing a tantrum because judicial nominee Steve Six refused to conduct anti-Planned Parenthood witch hunts when he was Kansas’ attorney general.

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