Thursday, August 27, 2015

The Citizen and The Court

Give me your tired, your poor,
Your huddled masses yearning to breathe free. . . .
— Emma Lazarus, Inscription for the Statue of Liberty

It is easy to make fun of Donald Trump just because we have never before had a candidate for president who had orange hair. But most commentators realize that when someone is hoping to become the president of the United States we should ignore his appearance and focus on more substantive matters. We should be especially grateful when a suggestion a candidate makes gives us historical pause and cause to review U.S. Supreme Court decisions. Mr. Trump’s suggestion about repealing the Fourteenth Amendment gives us the opportunity to not only examine the case that gave rise to the Fourteenth Amendment but to compare that case with a more recent U.S. Supreme Court decision. Both decisions involve citizenship and the rights accompanying that status. One expands the notion of what rights certain citizens have whereas the other restricts the rights of individuals born in this country.

The Fourteenth Amendment was passed in response to the 1857 U.S. Supreme Court decision in the case of Dred Scott, a black slave. Like the U.S. Supreme Court in 2010, the 1857 Court comprised Justices who had peculiar ideas of who citizens were and what rights were accorded them. In the case of Citizens United vs. Federal Election Commission, the question the Court considered was whether in the political speech context (which includes spending money to advance causes it supports) the government could impose restrictions on certain disfavored speakers such as corporations or whether that violated their First Amendment free speech rights. Five of the Justices concluded that the First Amendment to the United States Constitution invalidated laws that treated corporations as political citizens different from human beings as political citizens when considering limits on how much money the corporations could spend furthering their interests in elections. Justifying the decision Justice Kennedy explained: “Corporations and other associations, like individuals, contribute to the ‘discussion, debate and the dissemination of information and ideas’ that the First Amendment seeks to foster.” As a result he concludes, many thousands of words later, limits on how much corporations can spend in elections are invalid. As Justice Stevens observed in his dissent: “The basic premise underlying the Court’s ruling is its iteration, and constant reiteration, of the proposition that the First Amendment bars regulatory distinctions based on a speaker’s identity, including its “identity” as a corpo¬ration. While that glittering generality has rhetorical appeal, it is not a correct statement of the law. . . . The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case. . . .Under the majority’s view, I suppose it may be a First Amendment problem that corporations are not permitted to vote, given that voting is, among other things, a form of speech. “

Whereas Citizens United found that corporate citizens had rights that for many years had only been accorded human-type citizens, the 1857 case of Dred Scott v. Sandford went the other way. It made clear that Negroes were not citizens for any purpose. Dred Scott brought a lawsuit in federal court for damages as a result of physical abuse he had suffered when a slave. He alleged that he had the right to have his case considered by the Federal Court under the rule that says citizens of different states may sue one another in Federal Court. Chief Justice Roger B. Taney of the United States Supreme Court wrote the opinion in which he said that neither Mr. Scott nor any other Negro whose ancestors were imported into this country, and sold as slaves could ever become citizens. “We think they are not [citizens] and. . . were not intended to be included, under the word “citizens” in the Constitution. . . . It appears affirmatively on the record that he [Scott]is not a citizen, and consequently his suit against Sandford [the defendant]was not a suit between citizens of different States, and the court had no authority to pass any judgment between the parties. The suit ought, in this view of it, to have been dismissed by the Circuit Court, and its judgment in favor of Sandford is erroneous, and must be reversed.”

Following the end of the civil war the Fourteenth Amendment was enacted. It overturned the Dred Scott decision. That Amendment begins by stating that: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” It is that Amendment that Mr. Trump plans to repeal when elected. It is beyond the scope of this column to describe the procedure involved in amending the United States Constitution. It is not beyond the scope of this column, however, to hope that just as the Fourteenth Amendment to the Constitution was passed to overturn a patently absurd decision made in 1857, perhaps a similar amendment will be passed to overturn an equally absurd decision made in 2010 by a group of Justices every bit the intellectual equal of Chief Justice Taney and his colleagues.

Thursday, August 20, 2015

Many Happy Returns

When the end of the world comes, I want to be living in retirement. —Karl Kraus, Aphorism

This column is about a birthday present for Social Security. It is the present that Social Security wants more than anything in the world. And it’s the present Republicans have the hardest time figuring out how to give—money.

The reason Social Security wants money is not because it is 80 years old and forgot to prepare for its old age. It’s because of demographics over which it had no control. More and more baby boomers are attaining retirement age and qualifying for Social Security payments and Social Security is finding itself having to support a lot more people than it anticipated when it began. Furthermore, there are fewer workers paying Social Security taxes and more people are getting benefits. The result is that by 2033 the Social Security trust fund which is now covering shortfalls will be depleted and its income from taxes paid by the reduced number of workers in the work force will enable it to recoup no more than $.77 on each dollar it pays out. There is nothing future retirees can do to solve the problem but there are things Congress can do. Here are some of the solutions being considered by Congress. Readers may come up with others. The question you will be asked to answer at the conclusion of this piece is what is the best solution. Here are the options:

(a) Cut the benefits for present and future beneficiaries by 17%. People who rely on Social Security as their only source of income could adjust to this cut by lowering their spending by 17%. People with large retirement accounts or other wealth would not even notice the cut. That makes it an attractive solution for all but those who consider Social Security an important part of their retirement planning. One analysis says that this proposal would reduce the shortfall by 100%, funding the program for the next 75 years.

(b) Raise the retirement age. Instead of permitting people to begin collecting benefits at 67, as is the case for everyone born after 1960, increase the retirement age to age 68 for five years beginning in 2023 and then raise it to age 70 for the period between 2023 and 2069. As with the preceding proposal, the people this affects the most are those who cannot afford to quit working until they qualify for Social Security. Those whose retirement is not tied to when their Social Security payments begin won’t notice the change. That would reduce the shortfall by only 20%, not much of a birthday present for Social Security.

(c) Change the cost-of-living adjustments. Instead of increasing monthly payments by corresponding changes to the consumer price index, use a different way of calculating the increase that would increase more slowly. This would very likely only affect the monthly payments that retirees get by a very few dollars and will only be noticed by those without outside savings or sources of income. Those people will probably notice if their checks are reduced by a few dollars but they can adjust by lowering their standard of living ever so slightly. That would reduce the shortfall by 20%.

(d) Institute means testing for recipients of Social Security. Means testing is a way of reducing benefits for those who do not rely on Social Security as their sole source of support and would be seen by those who do as leveling the playing field since it affects those seen as better off. An arbitrary figure could be selected with the provision that anyone whose outside income is above a specified amount would lose a percentage of his or her Social Security benefits and someone with an outside income of an even greater amount would lose all his/her benefits. Whereas the other proposals described above are unpopular primarily with those who rely on monthly payments for security, this proposal is disliked by rich and poor alike. According to one report 64 per cent of Republicans and 60 percent of Democrats opposed this idea. Why those who usually are in favor of helping the poor oppose it is unclear.

(e) Eliminate the tax cap. Today all wage earners pay Social Security taxes on 12.4% of their wages up to $118,500 of earned income. Here is how that works. Jamie Dimon is the president of JPMorgan Chase. He earned approximately $20 million in 2014. He paid $7347 in Social Security taxes in 2015 and his employer paid the same amount. A worker who only earns $118,500 will pay exactly the same amount as Mr. Dimon. If there were no cap and all of Mr. Dimon’s compensation were subject to the Social Security tax, he would have paid $1,240,000 into the Social Security Trust Fund in 2015. The bank would have paid the same amount. Those and similar payments like them would make the trust fund solvent forever.

There are of course proposals in addition to those set out above that might give Social Security a happy birthday and readers will come up with their own. Here, however, is the quiz: if you were a member of Congress and had to vote on one of the preceding ways of helping to restore solvency to the Social Security Trust Fund, which one would you choose? If you selected (e) you should continue doing whatever it was you were doing before you started reading this column since there is no future for you in politics. If you voted for one of the other solutions you should consider a career in Congress. You have what it takes to serve.

Thursday, August 13, 2015

Pells and Prisoners

It is only the ignorant who despise education.
—Pubilius Syrus, Maxim 571

Here is a question that many readers did not know was in search of an answer: which students are more likely to go prison after graduating from high school: (a) those enrolled in a charter school or private school as a result of participation in a voucher program or (b) those enrolled in a public school, both groups coming from the same geographic area and having parents of similar income levels. For seeking the answer to that question (at taxpayer expense) we are indebted to Congressman Chris Collins from New York. On July 31, 2015, he introduced H.R. 3327. The Bill, it says, may be addressed with the catchy title of “Kids Before Cons Act.” The fascinating question for which it seeks an answer is only a small part of Mr. Collins’s Bill. The Bill’s main purpose is to address the recently surfaced pesky problem of whether or not the federal government should be giving Pell Grants to prisoners who are slated to be released in less than five years after qualifying for the grant. The reason that question has arisen goes back to 1994.

From 1965, when the Pell Grant program was first started, through 1994, prison inmates received $34.6 million a year in Pell Grants which was a small part of the $150 billion Congress hands out on a yearly basis in higher education grants and loans. In 1994 Congress, in its infinitely limited wisdom, increased criminal penalties for a wide variety of offenses and, at the same time, provided that prisoners in state and federal prisons were no longer entitled to receive Pell Grants. By increasing prison times for offenders, Congress enabled the United States, a world leader in many arenas, to add a new notch to its leadership belt. According to the Sentencing Project: “The United States is the world’s leader in incarceration with 2.2 million people currently in the nation’s prisons or jails-a 500% increase over the past thirty years.” The graph reveals that the most dramatic increase came after the 1994 sentencing reforms were enacted.)

The elimination of Pell Grants for prisoners forced many prison programs to close, and the cost of attending those that survived had to be paid by the families of attendees. A 2013 :study by the Rand Corporation demonstrates what a mistake it was to eliminate educational opportunities for inmates. The study found that inmates who participate in education programs had “43 percent lower odds of recidivating than those who did not.” Four to five dollars were saved as a result of not having repeat visitors to the prison system for every dollar spent on education.

A bill has been introduced to lift the ban on Pell Grants for prisoners but, as with all legislation in Congress, there is no way of knowing when or whether it will be enacted. If the ban on Pell Grants is legislatively lifted it would most likely occur when the Higher Education Act is reauthorized in the coming months. Unwilling to wait for that, however, on July 31 the administration announced that a pilot program was being initiated that would give some prisoners access to Pell Grants. Known as the “Second Chance Pell Pilot Program”, its goal is to restore Pell Grants for prisoners and measure the effect of the grants on employment when prisoners are released. Although Congress would have to approve a permanent lifting of the ban, the administration says it has the authority to run a pilot program without waiting for Congress to act.

No sooner was the pilot program announced than Rep. Collins introduced H.R. 3327 to block its implementation. Since he had obviously not read the Rand Report, he came out with a statement born of the sort of ignorance frequently associated with members of Congress, saying: “The Obama administration’s plan to put the cost of a free college education for criminals on the backs of the taxpayers is consistent with their policy of rewarding lawbreakers while penalizing hardworking Americans. . . . [H.R. 3327] closes the loophole the Obama administration is trying to exploit and protects taxpayers from footing the bill for criminals’ educations.” The second part of his Bill asks the question described at the beginning of this column. The downside to getting the answer to that question is that getting the answer will cost taxpayers money since the Bill says that the Secretary of Education has to carry out the study and then has to publish its results on its publicly available website. The upside is that the required study is probably the only study that has ever been conducted to determine how quickly secondary school graduates end up in prison as distinguished from how many go to college. An extension of the study might include asking the graduates who are incarcerated whether they harbor any ambitions to run for Congress once they are released. The actions of many in Congress (such as Rep. Collins) suggest that a few years in prison may be every bit as valuable in preparing to serve in that institution as a few years spent in a different sort of institution of higher education.