NSCLC Recommends Revisions to Executive Order on Federalism

The Federal Rights Project recommends to the new administration carefully crafted reversal of the prior administration’s acquiescence to business demands for federal preemption of state consumer protection laws and other safeguards.

February 10, 2009

MEMORANDUM FOR:        Melody Barnes

                                        Gregory Craig

                                        Jocelyn Frye

                                        Peter Orszag

                                        Michael Strautmanis

 

FROM:                              Alliance for Justice

                                        Constitutional Accountability Center

                                        National Health Law Program

                                        National Partnership for Women & Families

                                        National Senior Citizens Law Center

                                        Progressive States Network

                                        Public Citizen*

 

SUBJECT:                         Executive Order on Federalism                                            

 

We look forward to working with you and your colleagues on the many facets of President Obama’s programs that hold out such great promise for our respective constituencies, members, and goals.  We are writing today to recommend that, if the administration considers revising the current Executive Order on Federalism, it include revisions necessary to affirm President Obama’s support for robust federal authority to meet the needs and secure the rights of all Americans. 

 

In a separate letter, dated December 3, 2008, a group of organizations asked the President and the new Administration to take steps to limit administrative agencies’ assertions that federal regulation preempts state-law damages remedies by, among other things, revising Executive Order 13132 of August 4, 1999, on Federalism (hereinafter “1999 EO”). We concur in those recommendations; some of us signed the earlier letter as well.  We write now to ask that President Obama also revise language in the 1999 EO that suggests undue limitations on federal authority.  These changes would be fully consistent with the changes suggested in the earlier letter, and we believe both sets of changes would considerably improve the existing Executive Order.

 

The 1999 EO provides guidance for agencies when adopting policies or regulations that might preempt state laws; it revoked prior Executive Orders concerning federalism issues, and remains in effect today. While the 1999 EO is in large part a salutary document that seeks to preserve principles of respect for state diversity and autonomy, some of its language is outdated and problematic, in three respects. The structure and language of the 1999 EO are taken almost completely from Executive Order 12612 of October 26, 1987 (“1987 EO”). Some of this language, read in light of certain trends in U.S. Supreme Court decisions over the last fifteen years, could be interpreted to endorse unwarranted limitations on the power of the national government to address problems of national significance. Additionally, some language in the 1987 EO, carried forward in the 1999 EO, could be construed as endorsing a restrictive view of constitutional liberties, and does not advance the Order’s purpose of providing guidance to federal agencies. Finally, the 1999 EO failed to recognize the special nature of federal-state cooperative programs, which do not raise the same federalism implications as preemption of states’ traditional regulatory powers, and which require compliance with uniform federal standards in order to achieve their goals. The changes we suggest would make a revised Executive Order on Federalism a stronger and more effective tool to protect the proper balance of governmental power and responsibility. Our specific proposals and the reasons for them are further explained below.

 

            Implications of Supreme Court decisions

 

            Supreme Court decisions rendered between 1995 and 2001 announced unprecedented limitations on Congress’ power under the Constitution’s Commerce Clause to enact legislation to protect the public welfare.  For example, the Court struck down laws intended to protect school children from gun violence and women from violence.  See United States v. Morrison, 529 U.S. 598 (2000); United States v. Lopez, 514 U.S. 549 (1995).  Other Supreme Court decisions granted broad new immunities to state agencies that violate federal civil rights law or other important federal laws.  See Bd. of Regents of the Univ. of Ala. v. Garrett, 531 U.S. 356 (2001); Kimel v. Fla. Bd. of Regents, 528 U.S. 62 (2000); Fla. Prepaid Postsecondary Education Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999); Alden v. Maine, 527 U.S. 706 (1999); Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996).  Another undermined programs that require local officials to collect information useful for federal law enforcement.  See Printz v. United States, 521 U.S. 898 (1997).

 

All of these rulings were decided by a 5–4 vote, and subsequent decisions suggest that a majority of Justices may be unwilling to further constrain federal authority along the lines of these decisions.  See, e.g., United States v. Georgia, 546 U.S. 151 (2006) (recognizing broad Congressional authority to remedy state violations of fundamental rights); Gonzales v. Raich, 545 U.S. 1 (2005) (reaffirming Congressional power to regulate local activity that Congress determines may affect interstate commerce); Tennessee v. Lane, 541 U.S. 509, 522–28 (2004) (holding that Congress has broad authority to remedy state violations of fundamental rights); Nevada Dept. of Hum. Res. v. Hibbs, 538 U.S. 721, 735 (2003) (holding that Congress has broad authority to remedy gender discrimination).

 

The view of limited federal authority and limited state accountability embodied in the 1995-2001 Court opinions undermines the Administration’s ability to protect the rights and welfare of the public.  Yet some language in the 1999 EO, unchanged from the original Reagan-era formulations, can be read to endorse that inappropriate view.  Our proposed amendments will avoid any implication that the new administration prefers decisions like Lopez and Garrett to decisions like Raich and Lane.

 

Recognition of constitutional liberties

 

Some portions of Section 2 of the 1999 EO (like the 1987 EO) suggest an overly restrictive view of constitutional liberties that is inconsistent with oft-stated commitments of the incoming Administration. For example, the 1999 EO’s statements that the states are subject “only to restrictions in the Constitution itself,” and are otherwise free to define matters of “moral[ity],” suggest hostility to core constitutional liberties such as the right to privacy. Similarly, the statement that “judicial” “[a]cts of the national government” – i.e. federal court orders – violate principles of federalism if they “exceed the enumerated powers” in the Constitution suggests a hostility to judicial review to protect core constitutional liberties.

 

The unique nature of federal-state cooperative programs

 

The 1999 EO, following the model of the 1987 EO, also failed to distinguish adequately between areas in which state and federal law are independent and areas in which states administer federal law using federal funds. Federal regulations providing for the operation of federal-state cooperative programs may necessarily and appropriately place limitations on the states’ use of federal funds. Nevertheless, federal officials should approach all such funding mandates in ways that support and provide reasonable flexibility to state and local governments to enable them to achieve the goals of the program in question.  Obviously, under federal-state safety-net programs, such as Medicaid and the Section 8 housing assistance program, full compliance with federal mandates is essential to protecting vulnerable populations and achieving federal goals. But states seeking to achieve greater protections for vulnerable populations or greater coverage under programs such as SCHIP should not face the obstacles and limits they have faced under the past administration. We therefore suggest that a revised Federalism EO make clear that regulations meant to preserve full compliance with federal funding mandates are the proper function of the federal government.  But, where appropriate, such laws and regulations should be designed in ways that enable states and local governments to pursue the goals of the program beyond minimum federal requirements. We also make additional suggestions intended to preserve full compliance with federal mandates under these programs.

 

These revisions to Executive Order 13132 will provide improved guidance to federal agencies in implementing important federal policies, while respecting the prerogatives of state governments. We would be pleased to work with the new administration to implement these recommendations. 

 

 

 

 

 

 

Explanation of changes from Executive Order 13132

 

Section 1(a) – Definition of “policies that have federalism implications.”

 

Amend to add at the end of the subsection: “but does not refer to Federal statutes and regulations administered by the States under a Federal spending program.

 

 This is the key term around which Sections 2, 3, 6 and 8 of the Order are based. As already discussed, in contrast to preemption of state laws, the administration of Federal-State programs raises unique concerns and much stronger arguments for adherence to uniform federal standards. Accordingly, policies and regulations for the administration of these programs should not be considered “policies that have federalism implications” for purposes of this Order.

 

Section 2(b) – Description of federal and state powers.

 

Amend to add at the end of the first sentence: “including broad powers to regulate interstate commerce, to tax and spend for the general welfare, and to enforce the Thirteenth, Fourteenth and Fifteenth Amendments to the Constitution.” Amend to replace “sovereign” with “governmental.”

 

While more a matter of style than content, these changes are important because the 1999 EO language could be construed as endorsing an overly limited view of congressional power. Similarly, the description of the states as “sovereign,” since the Supreme Court decisions of the 1990s, has taken on the undesirable implication of a broad immunity from federal law. The amended language eliminates these implications while still making clear that federal power is not unlimited and that the states maintain broad traditional spheres of governmental authority.

 

Section 2(c) – Description of federal-state relationship.

 

Delete. 

 

This subsection is redundant in light of the paraphrase of the language of the 10^th amendment in the preceding subsection 2(b).  Adding this subsection (c), especially the particular phrasing of the subsection, could lead to an interpretation that the Obama administration endorses constitutional theories that are highly restrictive of federal authority – theories that had some rhetorical echoes in certain Supreme Court decisions between 1995 and 2001, but which are not established law and which we do not believe this administration would wish to support.

 

Section 2(d) – Description of state powers

 

Amend to replace the phrase “restrictions in the Constitution” with the phrase “restrictions arising from the Constitution” and to replace the words “moral, political, and legal character of their lives” with “their own public policy.”

 

The original language could be construed to endorse a narrow interpretive method which does not embrace a constitutional right to privacy.  Amending this subsection as suggested would clarify that state authority to set public policy is constrained by all individual rights arising under the Constitution.

 

Section 2(g) – Description of Improper Acts of National Government.

 

Delete. 

 

This subsection either merely states the obvious and is therefore unnecessary, or it could be construed to intend to endorse the radical view that governmental actions, including judicial decisions, that address subject-matter or prescribe rights not specifically referenced in constitutional text, are improper or unconstitutional. 

 

Section 2(i) – Federal deference to states.

 

Strike “the greatest caution” and replace with “due care.  Strike “State or local governments have identified” and add “exist.” 

 

This common-sense change would require federal officials to act with “due care” – i.e., reasonably – rather than an unreasonably strict standard of “greatest caution.”  The change would also make the trigger for the exercise of due care depend on whether actual uncertainties exist about federal authority, not whether such uncertainties have merely been alleged, with no basis.

 

Section 3(c)(2) – Federal deference to states.

 

Replace “possible” with “consistent with applicable Federal policy objectives.”

 

This is a common-sense amendment to ensure that guidelines for policy-makers are reasonable and do not impede steps necessary for effective implementation of legitimate federal policy objectives.

 

Section 3(c) – Administration of federal statutes and regulations by states

 

Delete.

 

This subsection provides for giving states “the maximum administrative discretion possible” in administering federal statues and regulations. Giving states “maximum administrative discretion” in administering federal law is not always desirable, as the exercise of such wide discretion in implementing programs for vulnerable populations may tend to hinder federal objectives, particularly when a state budget shortfall arises. Active federal oversight is often necessary, even when it is perceived as “intrusive” by state officials. Alternatively, this provision could be maintained and amended to provide that states be given “the maximum administrative discretion appropriate, consistent with applicable Federal policy objectives and the protection of individual rights,” or similar language.

 

Section 4 – Special requirements for preemption.

 

Amend to exclude federal statutes and regulations administered by the states under a federal spending program.

 

Section 4 is a particularly important part of the Order, and, as noted above, it has  elsewhere been suggested that its provisions be strengthened to further limit assertions of preemption by federal agencies. However, as already discussed, limitations placed on how states spend federal funds do not raise the same concerns as limitations placed on states’ traditional governmental powers. The provisions of federal regulations governing these programs, by necessity, limit the legislative and regulatory actions states may take in their use of federal funds. This amendment would clarify that the limitations placed on potentially preemptive agency actions do not apply in that context.

 

Section 5(b) – Relationship of grant conditions to purposes of grant

 

Delete.

 

Many important federal laws owe their effectiveness to conditions placed on federal funds. Some of these laws are quite broad, linking the conditions to the acceptance of any federal funds. The alleged lack of a “reasonable relationship” to the purposes of federal grants has sometimes been a ground for legal challenges to important federal laws, including civil rights laws such as the Rehabilitation Act. See Bradley v. Ark. Dep’t of Educ., 189 F.3d 745, 757 (8th Cir. 1999), rev’d en banc sub nom. Jim C. v. United States, 235 F.3d 1079 (8th Cir. 2000); see also Barbour v. Wash. Metro. Area Transit Auth., 374 F.3d 1161 (D.C. Cir. 2004). While these challenges have thus far been unsuccessful, section 5(b) appears to lend them credence. Moreover, it adds an unnecessary, complicating consideration for federal agencies. Of course, states remain free to decline grants that come with undesirable conditions.

 

Section 7 – Flexibility for state and local waivers.

 

Amend subsection (a) by adding at the end: “while maintaining public transparency.” Amend subsection (b) to add before “is otherwise appropriate”: “and the protection of individual rights.”

 

In contrast to other provisions of the 1999 EO, we do not believe that the application of this section to federal-state cooperative programs is generally inappropriate. We do, however, suggest minor but important changes that would help ensure the appropriate use of waivers, particularly in the context of federal-state programs such as Medicaid that are vital to millions of Americas. In recent years some waivers of federal spending requirements have been approved without sufficient opportunity for public notice and input. The suggested revisions would help ensure, first, that the process of waiver approvals is a transparent one that incorporates public input wherever possible; and second, that agencies making waiver determinations consider not only broad federal policy objectives but also respect for the important statutory rights of individuals.