Archive for May, 2009

Weekly Web Watch (5/24-5/31)

May 31, 2009

President Obama nominated Second Circuit Judge Sonia Sotomayor to replace retiring Justice David Souter on the Supreme Court. The Blog of Legal Times rounds up of reactions from issue-based interest groups, Hispanic organizations, conservative organizations, and liberal organizations and also spotlights dueling web ads on her nomination. The Los Angeles Times features a debate between Erwin Chemerinsky and Ilya Somin on the defining issues surrounding the nomination. The Wall Street Journal and Washington Times assert that Judge Sotomayor is a liberal ideologue and that her nomination confirms that Obama is far from “post-partisan.” E.J. Dionne says, however, that her record shows she is decidedly non-ideological. The editors of the New Republic agree, asserting that she was the safe pick and that Obama will have to act more boldly next time if liberals want to take the courts back. Gordon Silverstein, though, suggests that progressives should be grateful that she is not the “standard-bearer for the second coming of the Warren Court.” The New York Times writes that Sotomayor is fond of spirited debate in oral arguments, hinting that she may rival Justice Antonin Scalia’s adversarial style. Judge Sotomayor’s views on racial diversity figured prominently in some commentary, including a piece by Alan Dershowitz suggesting that diversity as a criteria is silly and one by Erwin Chemerinsky arguing that it is quite important. Responding to some commentary on the matter done in poor taste, Scotus Blog’s Tom Goldstein surveys all 97 of Sotomayor’s votes on race-related cases and concludes that it is “absurd to say that Judge Sotomayor allows race to infect her decisionmaking.” Scotusblog’s Kevin Russell points out the areas where Judge Sotomayor may differ from Justice Souter and, thus, could shift the Court’s jurisprudence. Finally, CQ Politics notes the significance of Sotomayor bringing experience as a federal trial court judge to the Supreme Court, the first to do so in half a century.

Writing in the Wall Street Journal, Walter Berns invokes a novel originalist interpretation to defend expansive executive power and still affirm the need for a truth commission. Balkinization’s Sandy Levinson recommends the piece and argues that a truth commission should not die simply because some Democrats may also be exposed as complicit with Bush-era abuses. Hamid Khan at ACS makes a comprehensive case for a Truth Commission to “sweep aside the politics and get to the facts.”

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Executive Action Report 5/20/09 – 5/27/09

May 28, 2009
  • On Wednesday, May 20th, Congress denied President Obama’s request for $80 billion to close the Guantanamo Bay Detention Facility. Congress also voted to ban detainees from being transferred within the United States.
  • On Thursday, May 21st, President Obama and former Vice-President Cheney gave ‘dueling’ national security speeches in D.C. emphasizing their views on the direction and safety of the country. While Cheney focused on maintaining safety and the absence of attacks since 9/11, President Obama discussed the need to not compromise fundamental values and freedoms.
  • On Thursday, May 21st, it was revealed that the Obama Administration may be considering a new agency aimed at consumer protection to aid in implementing regulations and reforms after the current financial crisis.
  • On Friday, May 22nd, President Obama delivered the commencement address at the United States Naval Academy, pledging to send them into harm’s way “only when it is absolutely necessary.”
  • On Saturday, May 23rd, President Obama announced his nomination of Charles F. Bolden Jr. to head up the National Aeronautics and Space Administration. A retired Marine general and former astronaut, Bolden would be the first permanent black NASA director.
  • On Monday, May 25th, North Korea announced it had conducted its second nuclear test underground. The Obama Administration has responded by urging action from the U.N. Security Council and condemning North Korea’s test.
  • On Memorial Day, Monday, May 25th, President Obama visited the Arlington National Cemetary to lay wreaths at the African-American Civil War, Confederate and Unknown Soldier memorials. There was controversy over continuing the tradition of placing a wreath at the Confederate war memorial, after a group of professors petitioned Obama to cease the practice. However, Obama did continue the tradition, adding the a new tradition of honoring the African-American Civil War Memorial.
  • On Monday, May 25th, a secret Israeli report obtained by the Associated Press revealed that Israel believes Venezuela and Bolivia are supplying Iran with uranium for its nuclear program.
  • On Tuesday, May 26th, an audio tape of now Senator Roland Burris and former Governor Blagojevich was released to the Senate Ethics Committee. Burris has continued to maintain that he did nothing inappropriate in receiving the Senate position, but did speak with Blagojevich.
  • On Tuesday, May 26th, it was revealed that U.S. Treasury Department will ultimately own 70% of the embattled General Motors Corporation and provide $50 billion in financing. G.M. is expected to file for Chapter 11 bankruptcy this weekend, and the United States will emerge as the primary owner once the company restructures.
  • On Tuesday, May 26th, the Supreme Court, in Montejo v.Louisiana,  overturned a 1986 opinion to loosen Miranda restrictions on interrogations by police and prosecutors. Scalia, writing for the majority, held the previous standard ‘unworkable.’ The Obama Administration advocated for the majority position.
  • On Tuesday, May 26th, President Obama nominated Judge Sotomayor, from the Second Circuit, to take retiring Justice Souter’s seat on the Supreme Court. She would be the first hispanic on the Court, and the third woman.  She is generally considered to be a left-leaning judge, however, controversy has arisen over several statements she has made regarding race.
  • On Wednesday, May 27th, North Korea threatened military strikes against South Korea if the latter makes any attempts to search its ships.

Weekly Web Watch (5/17-5/24)

May 24, 2009

Congratulations to Executive Watch’s own Christopher Schroeder who has been nominated by the Obama Administration to head up the Department of Justice’s Office of Legal Policy.

President Barack Obama delivered a speech from the National Archives laying out his vision on national security and, moments later, former Vice President Dick Cheney disputed Obama’s assertions and expressed his belief that the course the Bush Administration took was superior. The New Republic’s Michael Crowley says that Obama spoke in shades of grey, while Cheney spoke in black and white and declares Obama the winner. The Weekly Standard’s William Kristol, though, declares Cheney the winner because he spoke like a statesman, while Obama spoke like a professor. The New York Times’ Room for Debate features viewpoints that span the ideological spectrum. Benjamin Wittes says that Obama wisely chose a path that “does not claim unbridled executive authority but does insist on an executive capable of disabling the enemy.” David Cole largely echoes Wittes’ sentiments, applauding Obama’s sound articulation of executive power, its limits, and the need to respect due process rights. Diane Marie Annan, however, writes that Obama’s words echo John Yoo’s.  Andy McCarthy perhaps wishes that were true, attacking Obama from the Right and saying that his speech “is the September 10th mindset trying to come to grips with September 11th reality.” Matthew Waxman believes that both speeches missed the mark, Obama’s for insufficiently grappling with details and Cheney’s for clinging to the false hope that all risks can be eliminated, rather than merely managed. The ACLU, Salon’s Glenn Greenwald, and the Washington Post’s Dan Froomkin all expressed ambivalence about Obama’s speech, praising his proclamations concerning executive power, but worrying about his practices.

With an announcement on President Obama’s Supreme Court nominee expected on Tuesday, the American Constitution Society spotlights Executive Watch contributor Peter Shane’s observation that the pick could shape the contours of executive power. The New York Times’ Charlie Savage has a thorough write-up on the issue as well.

The U.S. Senate overwhelmingly voted to strip funding for the closing of Guantanamo Bay. Senate Democratic Majority Leader Harry Reid says that he does not want detainees on U.S. soil. The National Review’s Andy McCarthy lists the reasons why holding detainees in U.S. prisons is a bad idea. The Washington Post reports, however, that U.S. Supermax prisons already hold international terrorists and ThinkProgress notes that officials in Hardin, Montana have asked for 100 detainees to be held in its new facility. In other Gitmo-related commentary, the New York Times reports on an unreleased Pentagon report that concludes one in seven prisoners transferred out of Guantanamo joined in terrorism or militant activity. The Weekly Standard’s Thomas Joscelyn, who has long harped on the memo, reiterates his belief that it went unreleased for political reasons. Opinio Juris’s Peter Spiro notes that the recidivism rate is actually much lower than that of criminals and, furthermore, needs to be weighed against the high costs of keeping Guantanamo Bay open.

President Obama, flanked by environmentalists and industry representatives, announced tough new national standards for car emissions and fuel efficiency. Time’s Brian Walsh addresses the significance of the announcement and shows why Obama’s real tests on environmental policy are still ahead of him.

Jack Goldsmith, an Assistant Attorney General under President Bush, pens an important piece for the New Republic in which he says: “The main difference between the Obama and Bush administrations concerns not the substance of terrorism policy, but rather its packaging.” David Brooks writes approvingly of the piece and explains that Bush repudiated Cheney’s vision long ago and that Obama’s first term is in many ways a continuation of Bush’s second.

In a 5-4 decision, the Supreme Court ruled in Ashcroft v. Iqbal that plaintiff Iqbal’s claims against high-ranking Bush administration officials were too vague to allow the suit to survive a motion to dismiss. Scotusblog’s Lyle Denniston details why the ruling may immunize high-ranking officials from liability related to other abuses such as torture.

Finally, the New Republic’s Jonathan Chait explains why there’s one less torture proponent in America.

Executive Action Report: 05/13/2009 – 05/19/2009

May 21, 2009
  • On Wednesday, May 13, Vice President Biden submitted his first quarterly report on the progress of the American Recovery and Reinvestment Act (ARRA). These reports are intended to update the President on the effects of ARRA spending.
  • In a reversal of previous policy, President Obama announced that he will seek to prevent the release of photographs documenting prisoner abuse in Iraq and Afghanistan. The Court of Appeals for the Second Circuit has ordered the release of the photographs, but the White House indicated that it does not believe the government presented its strongest case.  In a statement, the President said he was concerned that the release of the photographs would further inflame anti-American sentiment and endanger members of the Armed Forces.
  • On Thursday, May 14, the Treasury released its proposal for an overhaul of the rules governing the financial markets. The proposed legislation would allow the government to regulate derivatives, the complex financial instruments that contributed to the current economic crisis.
  • On Friday, May 15, the President released a statement outlining his proposals for changes to the rules governing military commissions. As previously reported, the administration now plans to use military commissions to try some of the individuals detained in the War on Terror. The commissions will operate under revised rules intended to bolster the rights of the accused; however, some human rights groups say the revisions still do not provide the protections to which defendants are entitled in federal court.
  • Also on Friday, President Obama announced that he has appointed the Commissioner of the New York City Health Department, Dr. Thomas Frieden, to be the Director of the Centers for Disease Control and Prevention. Dr. Frieden has worked closely with Dr. Margaret Hamburg, the President’s nominee for commissioner of the Food and Drug Administration. The two worked on a campaign to stop the spread of drug-resistant tuberculosis.
  • The President issued an executive order extending sanctions on Myanmar (Burma). The sanctions have been in place since 1997. The Obama Administration was reportedly considering a more moderate approach toward Myanmar until the government decided to initiate further proceedings against opposition leader Aung San Suu Kyi. (more…)

Bicameralism and Presentment in Reverse

May 21, 2009

For most of our nation’s history, the constitutional procedure of bicameralism and presentment has defined the manner by which government programs are adopted:  Congress initiates and defines federal programs subject to the President’s veto.  The division has never been perfectly neat, of course.  Presidents have been deeply involved in initiating and shaping the programs that Congress authorizes.  Moreover, Congress has frequently delegated the Administration authority to provide much of the specific definition of how programs will actually operate.  Nevertheless, the model has consistently been one of congressional initiation and authorization. 

It seems that this is no longer the case.  During the George W. Bush Administration, the President frequently instituted his own programs without seeking authority from Congress.  Many (including me) objected to this mode of governing as contrary to the Constitution’s structure.  But now it seems that the Senate actually demands that things proceed this way.  At l east, this is the stance Senate Majority Leader Reid has taken with respect to closing the prison at Guantanamo Bay.  Here is what Reid had to say, as reported in the New York Times: (more…)

Military Commissions and the Souter Retirement

May 19, 2009

Reflecting two weeks ago on Justice Souter’s impending retirement, I opined that “issues surrounding the scope of presidential power” are “undoubtedly the most important constitutional questions raised by the last Administration and perhaps the most important set going forward” for the Supreme Court.

Now that the President has determined to revamp, rather than abandon military commissions, I cannot help but repeat the point.

Glenn Greenwald has accurately observed that “[w]hat makes military commissions so pernicious is that they signal that anytime the government wants to imprison people but can’t obtain convictions under our normal system of justice, we’ll just create a brand new system that diminishes due process just enough to ensure that the government wins.”  It is precisely for this reason that the process of court-induced incremental reform of the military commissions has come to resemble an episode of “The Price is Right” in reverse.  The object, so far, has been to extend as little procedural protection as possible without going below constitutional, statutory or international law standards.

President Obama is fortunately committed to setting the fairness bar higher than the Rumsfeld Defense Department.  His recent announcement on military commissions included five salutary principles for the revamped procedures:

“First, statements that have been obtained from detainees using cruel, inhuman and degrading interrogation methods will no longer be admitted as evidence at trial. Second, the use of hearsay will be limited, so that the burden will no longer be on the party who objects to hearsay to disprove its reliability. Third, the accused will have greater latitude in selecting their counsel. Fourth, basic protections will be provided for those who refuse to testify. And fifth, military commission judges may establish the jurisdiction of their own courts.”

The question remains, however, exactly how these principles will be implemented. One assumes the commissions will be less protective than courts-martial of defendants’ rights – otherwise, why have commissions?  Determining whether the new processes preserve fundamental fairness for any particular defendant will require a conscientious case-by-case balancing that does not accept national security as an automatic justification for short-circuiting justice.

Justice Souter’s vote has been critical in the Court’s post-9/11 Gitmo jurisprudence.  He was part of the 6-3 majority in Rasul.  He dissented in Hamdi from the proposition that the government could detain U.S. citizens as enemy combatants, but concurred in the defendant’s entitlement to a determination of enemy combatant status that satisfied the demands of due process.  Souter was part of the five-person majority in Hamdan, joining Justice Kennedy’s highly critical view of military commissions.  He accompanied his critical fifth vote in Boumediene with an important concurrence of his own, underscoring the critical holding that “there is . . . constitutional habeas jurisdiction over aliens imprisoned by the military outside an area of de jure national sovereignty.”  We should demand no less constitutional sensitivity from any new Justice.

Indeed, Justice Souter’s Boumediene concurrence plaintively underscored the importance of judicial review thus far to preserving anything like the rule of law for enemy combatants.  He wrote: “After six years of sustained executive detentions in Guantanamo, subject to habeas jurisdiction but without any actual habeas scrutiny, today’s decision is no judicial victory, but an act of perseverance in trying to make habeas review, and the obligation of the courts to provide it, mean something of value both to prisoners and to the Nation.” 

The ultimate application of constitutional standards to revamped military commissions may require as much perseverance from Justice Souter’s successor as it did for the incumbent. In reviewing the President’s nominee, the Senate must not neglect its duty to focus on executive power as a critical jurisprudential domain for the immediate future.

Postscript:  Intriguingly, there is further evidence this week that a newly constituted Supreme Court will also have occasion early next year to weigh in on “unitary executive” theory.  The preposterous notion that the President is constitutionally the commander-in-chief of all government policy making should have been put to rest by Morrison v. Olson.  But the Supreme Court has just granted certiorari in a case – Free Enterprise Fund v. Public Company Accounting Oversight Board, 537 F.3d 667 (D.C. Cir. 2008) – that could invite a rethinking of Morrison.  This is a scary prospect given the Court’s four nearly invariable votes for executive prerogative – Roberts, Scalia, Thomas, and Alito.  We do not even know whether Justice Kennedy, who recused himself in Morrison, actually adheres to its teaching.  More on this in a future post.

Weekly Web Watch (5/10-5/17)

May 17, 2009

In a week that saw surprising announcements from President Barack Obama that photos of detainees abuse would remain concealed and that military commissions would be revived, freshman Rep. Tom Perriello (D-VA) strikes a chord with many on the Left, saying: “The difference between the last administration and this one is the difference between night and dawn. But we’re looking for day.” A New York Times news analysis by David Sanger sees the developments as part of a trend of Obama leading by second thought while an editorial from the paper says that Obama is running the risk “of missing the chance to make sure the misdeeds and horrors of the Bush years are never repeated.” The Weekly Standard responds by arguing that the New York Times “misunderstands the entire nature of the war al Qaeda and its allies are waging on Western Civilization.”

President Barack Obama’s decision to revive and retool military commissions for approximately 20 detainees being held in Guantanamo Bay enraged rights advocacy organizations such as the ACLU as well as liberal commentators like Glenn Greenwald.  Writing for Salon, the ACLU’s Denny LeBoeuf captures the Left’s frustration, noting that the commissions are irredeemably flawed since they permit so many evidentiary “shortcuts” like confessions extracted by torture and cannot measure up to a legitimate system of justice refined over 200 years. Meanwhile, the Wall Street Journal heaps praise on Obama for recognizing that “civilian courts are largely unsuited for the realities of the war on terror” and the National Review’s Rich Lowry says the move vindicates the worldview of former Vice President Dick Cheney. Executive Watch guest contributor Scott L. Silliman and the Atlantic Monthly’s Andrew Sullivan take a middle course, contending that Obama is striking the right balance by removing the worst procedural flaws of the Bush-era commissions while still recognizing that Al-Qaeda detainees are better thought of as combatants than criminals. Opinio Juris’s Julian Ku reminds readers that Obama’s assistant Solicitor General Neal Katyal successfully challenged President Bush’s military commissions in Hamdan v. Rumsfeld as illegal under the Uniform Code of Military Justice and the Geneva Conventions; Ku is anxious to see Katyal’s justification for reviving the commissions. The Atlantic Monthly’s Marc Ambinder says that America’s allies are skeptical of the commissions’ validity. Although many liberals were quick to say Obama was breaking a campaign pledge and many conservatives such as the National Review’s Andrew McCarthy were eager to call Obama disingenuous, CQ Politics’ David Nather makes the important observation that Obama carefully chose his words on the campaign trail and never condemned the idea of commissions outright.

In other Guantanomo-related news, Obsidian Wings’ Hilzoy responds (parts 1 and 2) to Newt Gingrich’s recent ruminations about the troubling consequences of releasing 17 Chinese Muslim Uighurs on U.S. soil by making clear that they were not trained by al-Qaeda and that there is no evidence that they even harbor ill will against America. Lakhdar Boumediene, a former Guantanamo detainee who successfully challenged a portion of the 2006 Military Commissions Act, has arrived in France where he will face terrorism-related charges.

President Obama’s refusal to release photos of detainee abuse (reversing an earlier determination) in relation to an ACLU lawsuit also sparked a firestorm of controversy. The Washington Post’s David Ignatius says that it is an act of political opportunism and distancing from the Left, Obama’s “Sister Soulja” moment. The ACLU charges Obama with adopting “the stonewalling tactics and opaque policies” of his predecessor and says the country must acknowledge the crimes of the past if it wants to move forward. Obama justified his decision by noting that release of the photos would not enhance our understanding of the acts carried out by a small number of individuals, but would inflame anti-American sentiment and “have a chilling effect on future investigations of detainee abuse.” Reason’s Matt Welch and the Washington Independent’s Spencer Ackerman find Obama’s justifications wanting, if not absurd – the former because the release of the Abu Ghraib photos did add to the gravity of the horrendous acts and the latter because only torturers would be chilled. Anonymous Liberal says it’s contradictory for conservatives to steadfastly defend torture, but then admit releasing photos of such acts would “radicalize the Muslim world or help al Qaeda recruit.” Commentary Magazine’s Jennifer Rubin applauds Obama’s decision and says that it reveals he listens to the soundest reasoning, not the best campaign rhetoric. University of Chicago Law professor Geoffrey Stone writes in the Huffington Post, however, that Obama’s decision deprives the United States of a public debate that should be “at the very core of our self-governing society.” Empty Wheel also argues that it violates Obama’s new Freedom of Information Act guidelines. The New Republic’s Jason Zengerle and True Slant’s Ryan Sager examine the same social scientific evidence about jurors’ responses to gruesome evidence and reach opposite conclusions about the photo’s release – Zengerle suggesting that it might inflame violence against American troops and Sager noting that it would motivate citizens to punish torturers. Finally, Foreign Policy’s Tom Ricks says that Obama has gotten rolled by his generals, while his Foreign Policy colleague, Peter Fever says it’s just as likely that Obama is “getting informed” by his generals and making sound decisions in light of their advice.

The Senate Judiciary Committee, under the leadership of Chairman Patrick Leahy (D-VT), held hearings on torture. Talking Points Memo’s Zachary Roth has an excellent roundup of the major news emerging from the hearings. The Project on Government Secrecy reports on former State Department Phillip Zelikow’s testimony, where he noted that he had authored a memo advancing a stricter standard for torture’s legality and was thwarted by other Administration officials in 2006. He also accused Administration officials of attempting to destroy all copies of the memo, but revealed that a copy had finally turned up. The Weekly Standard’s Thomas Joscelyn spotlights and refutes other statements by Zelikow such as his claim that many detainees “do not show large signs of future dangerousness.” ThinkProgress writes about the testimony of another key witness, FBI interrogator Ali Zoufan, who reiterated that Abu Zubaydah revealed useful information under standard interrogation techniques and said that President Bush had been told (and repeated) “half-truths” about his interrogation. ThinkProgress also notes that federal judge Jay Bybee specifically declined Patrick Leahy’s invitation to address the commission.  Concerning the broader topic of legal advice on torture, the American Constitution Society’s Harold Bruff lays out the case that Bush Administration lawyers betrayed their oaths to the Constitution and to their profession. Writing in the Wall Street Journal, the former chief counsel for the Senate Intelligence Committee Victoria Toensing refutes this view, arguing that the critics of the torture memos still haven’t read them and that the lawyers were merely providing their best advice on methods the CIA wished to use. The Atlantic Monthly’s Marc Ambinder reports that the Obama Administration is growing wearier of a Truth Commission, fearing that it will paralyze the ability of the nation’s spy services to execute their tasks.

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Prosecuting the Guantanamo Bay detainees: Choosing the Best Option

May 14, 2009

Today’s post is by guest contributor Scott L. Silliman

This Post was edited on Sunday, May 17, at the request of the author, to reflect the Administration’s announcement on Friday, May 15th as to the intended use of revised military commissions.

Upon taking office, President Barack Obama immediately suspended the military commissions at Guantanamo Bay to give his administration time to determine the best system to try detainees suspected of terrorism and violations of the laws of war. Up until the suspension, the commissions, authorized by the Military Commissions Act of 2006, had been criticized both domestically and internationally for not protecting the rights of detainees and for being overly politicized.

On Friday, the president announced he would be restarting military commissions but revising trial procedures to include a much greater measure of due process. The revised commission system will adhere more closely to the rules and modes of proof for courts-martial under the Uniform Code of Military Justice – the system we use to prosecute our own service personnel when they commit crimes. The president has chosen the best option.
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Executive Action Report: 5/6/09 – 5/12/09

May 13, 2009
  • On Wednesday, May 6, the Inspector General’s office at the Justice Department released a report on the FBI’s terrorist watchlist, which concluded that the FBI has erroneously kept nearly 24,000 individuals on the watchlist on the basis of poor intelligence, while omitting many people who represent a genuine threat. The FBI indicated that it had adopted report’s recommendations for improving the watchlist.
  • According to an early draft of a DOJ report compiled by the Office of Professional Responsibility, in 2006 John Yoo recommended that President Bush pardon anyone convicted of offenses related to harsh interrogation practices, and even engage in jury nullification in such cases. Nonetheless, the DOJ report does not recommend criminal prosecutions against Yoo or other Bush, and professional sanctions may be hard to come by as well.
  • After alleging near the end of last month that the Bush White House “attempted to collect and destroy” copies of a 2005 memo disputing the legality of the administration’s interrogation policies, Philip Zelikow, a former counselor to Condoleeza Rice, suggested to Mother Jones that former VP Dick Cheney was to blame. Congressional Democrats have requested that Secretary of State Hillary Clinton order a search for the Zelikow memo, as well as any documents mentioning it or evidencing a cover-up.
  • Also on Wednesday, May 6, President Obama met with President Hamid Karzai of Afghanistan and President Asif Ali Zardari of Pakistan at the White House, pledging the United States’ “lasting commitment” to each of them. Appearing with both Karzai and Zardari after the summit, President Obama responded to reports that as many as 100 Afghani civilians had been killed in a U.S. airstrike by committing to make “every effort to avoid civilian casualties.” Hillary Clinton and Robert Gates likewise expressed regret for the tragedy.
  • On Thursday, May 7, the Treasury announced “stress test” results for the 19 largest financial institutions undergoing the tests, showing that 10 of them will have to raise a total of roughly $75 billion if economic deterioration continues. Although Fed Chairman Ben Bernanke thinks that banks still need to assess other internal risks, on May 11 he stated that the early response to the test results was “encouraging.”
  • With “stress test” results out in the open, several banks will likely start paying back bailout funds this year (some officials expect that healthy banks may return more than $35 billion). Tim Geithner insists that it is permissible to recycle returned funds, but some have questioned the legality of this move. Senator John Thune (R–S.D.) recently introduced legislation to block Geithner’s TARP fund recycling, but last week the Senate voted it down by a narrow margin. Thune hopes to raise the issue again. (more…)

Obama and the Balance Between Federal and State Regulatory Regimes

May 11, 2009

By William P. Marshall

On January 26, 2009, less than one week after taking office, President Obama, directed the Environmental Protection Agency to reconsider a Bush-era decision that prevented California and other states from setting stricter limits on auto emissions than that required by the federal government. As a matter of environmental policy, the decision was not surprising. Environmentalists had long argued for this change and candidate Obama promised during the 2008 campaign that he would take this action if elected. And, without doubt, the auto emissions decision was a significant environmental policy decision signaling that the new Administration would be vigorous in pursuing environmental protection.

Some observers, however, also saw this action as potentially having import beyond environmental policy. Specifically, it was suggested that this action might herald a new era of federal-state relations in which the federal government would be more hospitable to state regulatory efforts. The Bush Administration had not been so welcoming. Not only had the Bush Administration pursued a decidedly laissez-faire approach to is own regulation (non-regulation?) of business practices, it had also gone out of its way to attempt to pre-empt state regulatory efforts through its administrative actions and its support for legislative proposals designed to curb state authority.

The states, however, proved resilient and endeavored to take on an increased role in guarding the public against business abuses while the federal government remained asleep at the wheel. It was the states, for example, and not the federal government, that led the first regulatory efforts against predatory lending, and it was the states that first identified, and first started to combat, the mortgage crisis brought on by sub-prime lending. Many of these actions proved successful and settlements were reached with financial companies such as Countrywide Financial, for example, that provided substantial tangible relief to distressed debtors.

(more…)


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