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The system of checks and balances that the Constitution established is an essential safeguard against government overreach. Yet, the ever growing administrative state often undermines fundamental checks and balances. “Fourth branch” agencies frequently take on legislative, executive, and judicial roles simultaneously. And to make matters worse, administrative officials are much less accountable to the people than their counterparts in the traditional three branches.

One especially alarming example of the breakdown of essential separation of powers within the administrative state is the Securities and Exchange Commission’s use of administrative law judges (ALJs). ALJs adjudicate most of the SEC’s enforcement actions. They have the authority to impose significant civil penalties and can bar respondents from working in the securities industry.

The SEC’s use of ALJs to decide important cases violates the Constitutional principle of an independent judiciary. ALJs are housed within the same agency that initiates the proceedings they adjudicate. While notionally independent, the lack of distance between ALJs and the SEC’s enforcement counsel may serve as a source of bias and conflict of interest. The SEC selects the ALJs that hear cases, even though the Supreme Court has deemed it problematic when “a man chooses the judge in his own cause.”

There is also the risk that ALJs may feel pressure, whether explicit or implicit, to support their employer agency.  The SEC’s win rate is better in cases heard by ALJs than cases brought to federal court.  While there may be some selection bias at play, the optics are not good and, in matters of justice, the appearance of injustice can be harmful in itself.

In addition to these separation of powers and due process issues, ALJs are insulated from public accountability, meaning there is very little any elected official can do to check instances of bias or overreach. Cato recently filed an amicus brief in Lucia v. SEC, a case regarding ALJs’ lack of accountability to the public.

The SEC classifies its ALJs as employees rather than officers. Under the Constitution’s appointments clause, federal government officials are divided into two primary categories, officers and employees. All officers in the executive branch are subject to presidential removal power. The president’s power to remove officers that fail to preform their duties is essential for his ability to faithfully execute the law. Presidential removal power is also necessary in order for officers to be held accountable to the public.

Position holders that exercise significant power and discretion therefore must be labeled officers so that the president can carry out the laws and that officials can be held publically accountable. It is for that reason that jurists going back to the Founding understood that the definition of an officer includes any public official who exercises coercive authority over others. It is also why the Supreme Court defined an officer as an official that “excecis[es] significant authority” in Buckley v. Valeo while describing employees as subordinate “lesser functionaries.”

Given that SEC ALJs issue decisions in high impact cases involving significant dollar sums it is hard to argue that they are “lesser functionaries.” Indeed, the Supreme Court has ruled that the holders of similar positions like tax court special trial judges are officers, not employees. But the SEC insists its ALJs are mere employees. It argues that ALJs are not officers because the SEC Commission can review their decisions. However, this claim ignores the role of ALJs in influencing respondents to settle cases before appeal.

The SEC wants to have its cake and eat it too by trying enforcement cases before judges that are not independent yet still insulated from the public. Defendants should have the right to have their cases heard by federal judges, with all the due process protections that implies. But subjecting ALJs to presidential removal power is an important first step towards restoring accountability.    

In his call to repeal the Affordable Care Act, also known as Obamacare, House Speaker Paul Ryan contended “there are two ways of fixing healthcare…have the government run it, ration it, and put price controls…[or] have a vibrant free market where people…go out in a free market place and buy the health care of their choosing.”

A new survey from the Cato Institute finds that 55% of Americans believe “more free market competition among insurance companies, doctors, and hospitals” offers the “better way” to provide affordable high-quality health insurance to people. In contrast, 39% say that “more government management of insurance companies, doctors, and hospitals,” would better achieve this goal.

Respondents sort themselves along partisan lines. A majority (62%) of Democrats including leaners think that more government management of insurance companies, hospitals, and doctors is the better approach to health care reform. In contrast, majorities of non-partisan independents (57%) and Republicans including leaners (84%) think free market competition offers a better alternative.

The divide between Republicans and Democrats widens as they attain higher levels of education. Fifty percent (50%) of Democrats with high school degrees believe that free market competition would better provide high-quality affordable health care. However, this share drops to 17% among Democrats with college degrees—a 33-point swing. The share of Republicans who believe free markets better deliver high-quality affordable coverage increases from 81% among those with high school degrees to 94% among college graduates. Non-partisan independents’ attitudes don't change much with education.

These results are consistent with the theory that partisans become more likely to learn about and accept partisan cues on health care policy as they gain more political information. Independents, on the other hand, feel less inclined to accept partisan cues regardless of their political knowledge.

This is not the only survey which finds Americans prefer a free market approach to reducing costs in health care.  A Kaiser Family Foundation survey found that 51% of Americans thought free market competition would better reduce prescription drug prices than government regulation (40%).

For decades Americans have debated how to best provide access to high-quality affordable health care. Some argue that health care markets operate differently and thus require more government management to ensure people get the care they need. Others contend that, just like in other sectors, injecting free market forces into health care would incentivize lower costs, increase quality, and expand access.

These results indicate public appetite for taking a new approach to health care reform: injecting free market forces into the system in order to provide access to affordable high-quality health insurance.

Women certainly should be celebrated for their many contributions, and “Day Without a Woman” did a little of that and a lot of advocacy for labor policies yesterday. According to the organizer’s website, the strike was intended to “call out decision-makers” on topics like the minimum wage, the gender pay gap, women’s healthcare, vacation time, and child care.

An impartial observer would likely believe that women’s prospects must be quite depressing, given the missed work, public school closures, and street protests that occurred in some U.S. cities. Luckily, American women’s social welfare and economic prospects are better than many strikers realize.

Take female leadership, for example: it would probably surprise Day Without a Woman strikers that 42% of legislators, senior officials, and managers in America are female. This figure is higher than comparable places like Canada, Western Europe, and Eastern Europe. According to World Bank data, the U.S. is at the top of the pack and has been for at least the last decade.

 

Of course, comparisons to less-developed geographies, like Asia, Africa, and the Middle East are substantially more stark. For example, American women outperform Indian women by around 30 percentage points on this female leadership indicator, despite India taking aggressive actions – like reserving one-third of Village Council head positions for women – since the mid-1990’s. 

It may also surprise strikers that American women are successful on various labor market economic indicators. For example, U.S. women participate in the labor force at levels close to or surpassing other developed countries. The percentage of women in the labor force in the U.S. is about tied with Western Europe, a little over 1 percentage point under that of Eastern Europe, and six percentage points higher than the world average. 

When it comes to personal freedom, American women do especially well. Ian Vasquez and Tanja Porcnik’s 2016 Freedom Index uses OECD information on missing women, equal inheritance regulation, parental-rights, freedom of movement, and female genital mutilation to rank countries across three metrics. On each metric, American women score a 10 of 10, and the report ranks overall welfare of North American women close to the highest in the world. 

Finally, take the so-called gender pay gap: though strikers have been led to believe that women make 78-82% of what men make doing the same work, this simply isn’t true. When researchers compare men and women with the same levels of education, years of experience, job title, age, and geography, the pay gap all but disappears.

So, although men and women in the United States are dealing with different social and cultural pressures, and certainly face unique challenges as a result, the average American working woman should be optimistic. In any event, genuine progress on any issue is only possible when we review all of the available facts. When that happens, the picture that emerges empowers females to do more of the bold things that strikers advocate, not less.

One of Donald Trump’s first actions as president was to sign a presidential memorandum freezing federal government employment. But the order specifically exempts certain federal agencies, including all military personnel and all law enforcement. At the same time that he signed this supposed hiring freeze, he also signed an executive order requiring that the hiring of 5,000 new agents for Customs and Border Protection. This increase would ramp up Border Patrol spending to its highest levels ever and do it at a time when the agency is doing less than it has in decades.

First of all, this increase in agents is being proposed a time when the number of border crossers is at record lows. Since 2010, each border agent apprehended fewer than 2 crossers per month, as the figure below shows. This is less than 1 every other week. This figure includes a large number of “apprehensions” of asylum seekers and unaccompanied children who simply turn themselves over to border agents and who made up 1 in 3 apprehensions last year. Thus, the actual number of border crossers that Border Patrol agents needed to race down was just 14 per agent for the entire year. That means that each agent caught on average someone sneaking into the United States once every 26 days in 2016.

At the same time, Congress continues to throw enormous sums at this agency. Border Patrol has spent an average of $172,000 per agent from 2000 to 2016. This amount has fluctuated between a high of $205,000 in 2006 to a low of $146,000 in 2009. The median has been $176,000, and last year’s total was $183,000. Thus, this hiring surge will likely cost almost $1 billion per year. A leaked Border Patrol memo concludes that the costs of “recruiting, hiring, supporting, and training” the new agents will be $328 million in fiscal year 2017 (which ends in October) and $1.884 billion in fiscal year 2018, meaning that the price tag could be even greater than my projection. The GOP Congress has increased the Border Patrol budget in real terms by only $223 million since 2011.

Figure: Apprehensions Per Border Patrol Agent and Border Patrol Budgets (2016$)                                          

 

Sources: CBP(agents), CBP (apprehensions), CBP (Budgets, PCE-adjusted figures)

Any increase of this magnitude will require special appropriations from Congress, meaning that at most the president’s executive order could speed up the hiring of agents provided by Congress. But even still, Border Patrol has struggled to meet its hiring mandate of 21,380 agents as it is. Since 2012, so many agents are leaving the force that the agency has struggled to keep up. “We are not able to hire as fast as attrition,” CBP Commissioner Gil Kerlikowske told Congress last year. He asked Congress to reduce the mandate by 300.

The Inspector General’s office found last year that Border Patrol and CBP “do not have the staff or comprehensive automated systems needed to hire personnel as efficiently as possible,” finding “significant delays in hiring.” Only 1 in 52 applicants make it through the application process, which makes it difficult to speed up hiring. Last time that Congress pressured the agency to rapidly expand, corners were cut on background checks, and internal corruption reviews were cast aside. About 30 applicants admitted that they were sent by drug cartels.

Border Patrol was still trying in 2015 to cut back on the interview process, and the leaked Border Patrol memo from this month shows the agency is still trying to make it easier to hire people with fewer checks. This is despite the fact that an independent advisory council found just last year that Border Patrol was still “vulnerable to a corruption scandal that could potentially threaten the security of our nation.”

Border security has certainly improved, but when Border Patrol agents are doing as little as they are, Congress should be asking itself whether this agency should receive the funds it is currently getting, not whether it should receive even more. It especially should not consider cutting corners to make hires that the agency cannot guarantee are qualified.

During his campaign President Trump made it clear that his administration would strictly enforce immigration law while also seeking to limit immigration. Trump’s executive orders so far are consistent with his campaign rhetoric, including a revitalization of the controversial 287(g) program, threats to withdraw grants from so-called “Sanctuary Cities,” the construction of a wall on the southern border, a temporary ban on immigration from six Muslim-majority countries, and the hiring of 10,000 more Immigration and Customs Enforcement (ICE) agents. Recent reporting reveals that these agents, tasked with implementing significant parts of Trump’s immigration policy agenda, will have access to an intelligence system that should concern all Americans who value civil liberties.

Earlier this month The Intercept reported on Investigative Case Management (ICM), designed by Palantir Technologies. ICE awarded Palantir a $41 million contract in 2014 to build ICM. ICM is scheduled to be fully operational by September of this year.

Here is The Intercept’s breakdown of how ICM works:

ICM funding documents analyzed by The Intercept make clear that the system is far from a passive administrator of ICE’s case flow. ICM allows ICE agents to access a vast “ecosystem” of data to facilitate immigration officials in both discovering targets and then creating and administering cases against them. The system provides its users access to intelligence platforms maintained by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, and an array of other federal and private law enforcement entities. It can provide ICE agents access to information on a subject’s schooling, family relationships, employment information, phone records, immigration history, foreign exchange program status, personal connections, biometric traits, criminal records, and home and work addresses.

In addition to access to federal law enforcement databases, ICM at full implementation will, according to 2014 documents, allow users to have access to a wide range of intelligence systems (see Appendix B). These systems include but are not limited to:

  • Falcon - An ICE analytical system designed by Palantir, which allows ICE’s Homeland Security Investigations (HSI) agents “to track immigrants and crunch data on forms of cross-border criminal activity.”

  • Seized Asset and Case Tracking System (SEACATS) - A Customs and Border Protection (CBP) system that tracks arrests, seizures, and property.

  • Student and Exchange Visitor Information System (SEVIS) -  According to the ICE website, SEVIS “is a web-based system for maintaining information on international nonimmigrant students and exchange visitors in the United States.”

  • The Alien Criminal Response Information Management System (ACRIMe) - “an information system used by U.S. Immigration and Customs Enforcement (ICE) to receive and respond to immigration status inquiries made by other agencies about individuals arrested, subject to background checks, or otherwise encountered by those agencies.”

  • Analytic Framework for Intelligence (AFI) - Palantir played a role in developing this system, which, according to one civil liberty expert, can provide the profiling algorithms necessary for the Trump administration to carry out “extreme vetting.”

The picture below from this document will give you some idea of the data available to ICM users.

Although it’s clear the ICM is used as part of immigration enforcement that doesn’t mean that it can’t affect American citizens. As the screenshot from an ICE funding page below shows, American citizens are part of ICM (the highlighting is mine).

You only need to take a fleeting glance at the history of American domestic surveillance to see how law enforcement priorities change. My colleague Patrick Eddington has put together an excellent timeline of surveillance, covering the last one hundred years or so. At the moment, Islamic terrorism and undocumented immigrants are at the forefront of the Trump administration’s law enforcement priorities. But Patrick’s timeline shows that in the last century socialists, pacifists, labor organizers, anarchists, civil rights leaders, Quakers, the ACLU, Japanese-Americans, folk singers, and others have all been the target of government surveillance.

No one knows what federal law enforcement priorities will be in the next few decades, but when we consider tools like ICM we should be aware of the fact that it and similar systems can and will be used on the next surveillance targets, whether they’re gun owners, progressives, conservatives, pro-life/choice advocates, marijuana users, or the many, many other groups that could upset a future Oval Office occupant.

Federal courts criticized President Trump for initially failing to demonstrate that his executive order suspending immigration from several majority-Muslim countries was based on a real threat to the country. In his revised order, President Trump was careful to include specific evidence to support the idea that refugees and immigrants from these countries pose a threat to the United States and that banning immigration temporarily to review vetting procedures is therefore justified.

Yet the president’s evidence, laid out in a single paragraph in the order, is so exceptionally weak that it exposes his security defense as little more than a fig-leaf to cover his blanket discrimination.

  • The executive order provides no evidence for singling out certain countries.

The executive order states:

Recent history shows that some of those who have entered the United States through our immigration system have proved to be threats to our national security.

This vague language provides no estimate of the level of the threat. The Cato Institute’s recent paper on immigration and terrorism risk does estimate that level: a U.S. resident had a 1 in 3.61 million chance of being killed by a foreign-born terrorist from 1975 to 2015. For comparison, a person had a 1 in 14 thousand chance of being killed in a regular homicide. There is simply no evidence of intolerable terrorism risk from the immigration system generally or from these countries in particular. No person from the six banned countries has killed any U.S. resident in a terrorist attack during those years.

Moreover, two Department of Homeland Security assessments have also rejected the argument that certain countries pose a unique threat to national security. The first stated that “country of citizenship is unlikely to be a reliable indicator of potential terrorist activity” because, of the 82 foreign-born individuals who died in pursuit of or were convicted of any terrorism-related offense, “more than half were native-born United States citizens. Of the foreign-born individuals, they came from 26 different countries.” The second assessment concluded that “most foreign-born, U.S.-based violent extremists likely radicalized several years after their entry,” meaning increased vetting would have no impact.

  • The executive order cites convictions that were not for terrorism offenses.

The executive order states:

Since 2001, hundreds of persons born abroad have been convicted of terrorism-related crimes in the United States.

“Terrorism-related” includes any crime that begins with a terrorism investigation. As my colleague Alex Nowrasteh has described, less than half of the 488 cases of foreign-born people with “terrorism-related” convictions—in a list published by Attorney General Jeff Sessions—were actually convicted of a terrorism offense. Mr. Sessions even included thieves who stole a couple of trucks of cereal. Moreover, only 8 percent of the foreign-born residents with terrorism-related convictions (40 people total) actually planned a terrorist attack inside the United States.

  • The executive order cites a case where the individuals were not planning a domestic attack.

But surely these 40 individuals were so dangerous that it makes sense to shut down our immigration system from these places for a while. The executive order provides two examples to attempt to highlight the danger:

… in January 2013, two Iraqi nationals admitted to the United States as refugees in 2009 were sentenced to 40 years and to life in prison, respectively, for multiple terrorism-related offenses.

My colleague Alex Nowrasteh reviewed this case yesterday—two Iraqi interpreters who attempted to send weapons to Iraq to aid insurgents there. First, they were not planning an attack here, and second, even if they were, this new order specifically exempts those who worked for the U.S. government, so this order would not apply to them. Third, President Obama instituted new vetting procedures that would have caught them anyway. If the goal was to frighten the public, this is about the worst case to cite.

  • The executive order cites a case of a person who entered as a child to justify more vetting.

The executive order also provides this example:

… in October 2014, a native of Somalia who had been brought to the United States as a child refugee and later became a naturalized United States citizen was sentenced to 30 years in prison for attempting to use a weapon of mass destruction as part of a plot to detonate a bomb at a crowded Christmas-tree-lighting ceremony in Portland, Oregon.

As I wrote yesterday, the use of this case about a child who came to the United States as a two-year-old thoroughly undermines the argument that this ban is about vetting. This was a failure of assimilation, not vetting. No review of screening procedures will prevent a similar situation. In any case, the would-be bomber never actually had any real explosives. The threat was so remote that the FBI agents were laughing when they arrested him as he was trying to detonate their fake bomb. The FBI called him a “confused college kid that talks mildly radical jihad out one ear, and drugs, sex, drinking out the other.”

  • The order cites “investigations” as a reason for the ban, even though very few investigations turn into convictions.

The executive order states:

The Attorney General has reported to me that more than 300 persons who entered the United States as refugees are currently the subjects of counterterrorism investigations by the Federal Bureau of Investigation.

As I explained in a post yesterday, 99.7 percent of all FBI terrorism investigations end without a terrorism conviction, and 99.95 percent of all FBI investigations end without a terrorism conviction of a person who was attempting to carry out terrorism against the United States. These statistics predict that only 1 in 300 of these investigations will turn into a terrorism conviction and that it will not involve a domestic terror plot.

In any case, these 300 represent less than 0.1 percent of all refugees admitted since 1975. As the Cato Institute’s recent report found, only 20 refugees have planned, attempted, or carried out a terrorist attack in the United States from 1975 to 2015. Only three killed anyone, and all were before 1980. During those years, the annual risk of death to a U.S. resident by a refugee terrorist in the country is 1 in 3.64 billion. The United States is not being threatened by refugees.

Yesterday, John Bolton had an op-ed in the WSJ criticizing the dispute settlement process used at the World Trade Organization.  He argued that this process “is often criticized for failing to deter violations of the WTO’s substantive trade provisions,” and it also exceeds its mandate “by imposing new obligations on one or more parties, particularly against American interests.”  Somehow, then, in his view, the process is both ineffective AND infringes on sovereignty, an impressive achievement.  My colleague Dan Ikenson systematically dismantles the piece here.

Talking about international dispute procedures in the abstract can be a little hard to follow sometimes, but something happened earlier this week that helps illustrate the value of the WTO dispute process.  This is from a Reuters report on an outbreak of bird flu in Tennessee which has led to some U.S. trading partners imposing import restrictions on U.S. products:

Top U.S. chicken and egg companies ramped up procedures to protect birds from avian flu on Monday, a day after the federal government confirmed the nation’s first case of the virus at a commercial operation in more than a year.

The U.S. Department of Agriculture said on Sunday that a farm in southern Tennessee that is a supplier to Tyson Foods Inc. had been infected with the virus. All 73,500 birds there were killed by the disease, known as avian influenza (AI), or have since been suffocated with foam to prevent its spread.

Already, U.S. trading partners, including South Korea and Japan, have restricted shipments of U.S. poultry because of the infection in Tennessee.

There are more details on the import restrictions here.

While some of Trump’s trade policy staff obsesses over trade deficits or the number of Americans working in manufacturing, the practical side of trade policy these days is often about regulatory trade barriers such as these, which are said to be about food safety but are sometimes just disguised protectionism.  In this case, our trading partners definitely have a reason to be concerned.  But are the actions they take in response based on sound science, or is the disease outbreak being used as an excuse for protectionism?  The restrictions may be justified now, but will they be removed when the threat is gone?  That’s one of the core functions of trade agreements:  Detailed rules and a neutral dispute process to decide whether regulatory measures are legitimate or are disguised protectionism.  In fact, the United States filed a WTO complaint against India in 2012 on these same issues, after India imposed restrictions that were purportedly to address concerns about outbreaks of bird flu.

There will continue to be pushback against the Trump administration’s misguided view of trade deficits and economics more generally.  But there is also the practical question of how this administration will approach day-to-day trade concerns like this one.  In the past, the staff at the U.S. Trade Representative’s Office has shown great skill in using the dispute process at the WTO to address these issues.  Hopefully the Trump administration will let them continue to do their work.

With steel industry lawyers and executives populating key trade policy positions in the Trump administration, we are witnessing the return of an old, rusty narrative that portrays the World Trade Organization as unaccountable global government intent on running roughshod over U.S. sovereignty.  On the Forbes website, today, I explain why that is a protectionist canard.

Here are the opening paragraphs:

John Bolton took to the pages of the Wall Street Journal yesterday to assert America’s interest in abandoning international institutions that threaten U.S. sovereignty. In identifying the World Trade Organization’s Dispute Settlement Body as such an institution, Bolton was reinforcing a central theme of the Trump administration’s recently-minted 2017 Trade Policy Agenda. That document is short on specifics, but makes one thing clear: Under threat of going rogue, the United States will leverage its indispensability to compel changes at the WTO that accommodate a more expansive, less surgical application of domestic trade laws.

“Defending our national sovereignty over trade policy” and “strictly enforcing U.S. trade laws” are, explicitly, the top two priorities on the agenda. Taken together, those priorities suggest the Trump administration will aggressively execute U.S. trade laws with little regard for whether that execution violates internationally-agreed rules established to prevent and discourage abuse of such laws. Agreeing that “all animals are equal,” then adding the famous caveat “but some are more equal than others” is what is meant by “defending our national sovereignty.”

Given the prominence of domestic steel industry representation in the Trump administration, these priorities aren’t surprising. High on the list of talking points of the Washington-swamp-savvy U.S. steel lobby is the assertion that the WTO’s DSB, by finding U.S. antidumping and countervailing duty practices in violation of WTO obligations on numerous occasions over the years, usurps U.S. sovereignty over its own laws. This is a complaint frequently made by Robert Lighthizer, Trump’s USTR-designate, who for decades has represented domestic steel interests in AD/CVD cases before U.S. agencies.

And here are the concluding paragraphs:

The prominence of the claim that U.S. sovereignty is threatened reflects the over-representation of steel interests in the Trump administration. It is intended to add credibility to the implied threat that the United States will ignore DSB rulings with which it disagrees unless and until there are changes made to the WTO texts that render compliant the United States’ non-compliant actions on trade remedies.  But it is irresponsible to risk blowing up the system, especially on behalf of an industry that accounts for less than 0.3 percent of the U.S. economy.

The bottom line is that the WTO dispute settlement system, though not perfect, offers a reasonable formula for balancing the simultaneous imperatives of preserving the rule of international trade law and national sovereignty.

But there are many paragraphs in between that I hope you will find time to read here.

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