General Practice, Solo & Small Firm DivisionMagazine


Legislative Update/E. E. Anderson

E. E. Anderson, a retired general in the U.S. Marine Corps, is the director of the Solo and Small Firms Division of the ABA General Practice, Solo and Small Firm Division.

Census Sampling Battle Continues

The House of Representatives filed a lawsuit on February 20, 1998, in the U.S. District Court for the District of Columbia, contending that the sampling announced by the Census Bureau to be used in the Decennial Census was illegal because the Constitution requires an “actual enumeration” every ten years.

A similar lawsuit was filed on February 12, 1998, in the U.S. District Court for the Eastern District of Virginia by four counties and residents of 13 states. Both district courts held that the Census Bureau’s plan for the 2000 census violated the Census Act (13 U.S.C.§ 1 et seq.), and inter alia, enjoined the government from using statistical sampling to determine the population for congressional apportionment. On direct appeal, the Supreme Court consolidated the two cases for oral argument.

On January 25, 1999, the Supreme Court, in a 5-4 decision, held that § 195 of the Census Act prohibits the proposed uses of statistical sampling to determine the population for congressional apportionment purposes ( Department of Commerce v. U.S. House of Representatives, Nos. 98-404, 98-564 (U.S. Jan. 25, 1999)). In 1976, § 195 was amended to read: “Except for the determination of population for purposes of apportionment of Representatives in Congress among several States, the Secretary shall, if he considers it feasible, authorize the use of the statistical method known as “sampling” in carrying out the provisions of this title.” Because the Court concluded that the Census Act prohibited the proposed uses of statistical sampling in calculating the population for purposes of apportionment, it ruled that it was unnecessary to decide whether the Constitution also prohibited the use of sampling for such purposes.

During oral arguments on November 30, 1998, the justices expressed reluctance to get involved in what they labeled as essentially a partisan fight between the Congress and the White House. Justice Antonin Scalia told the lawyer for the House Republicans, Maureen Mahoney, “I don’t like injecting us into a battle between the two political branches.” When Mahoney replied that the “differences were intractable” to the two sides, Scalia said, “There are 900 ways the House can stymie the president if it has the political will to do it.” He went on to say, “You’re saying that the House does not have the political will, so you’re asking us to do it for you.” Other justices worried that the ruling in this case would set a dangerous precedent that would force the Court to resolve further disputes between the president and the Congress.

While there was hope that the Supreme Court would definitely settle the sampling issue, it did not. In her opinion, Justice Sandra Day O’Connor said, “As amended, [§ 195] now requires the Secretary to use statistical sampling in assembling the myriad demographic data that are collected in connection with the decennial census. But the section maintains its prohibition on the use of statistical sampling in calculating population for purposes of apportionment.”

Where do we go from here? Census results determine how the $180 billion in federal money is distributed annually to the states. This money is allocated through 20 grant programs, including the health care program for the poor, assistance for immigrants, road building, and educational aid to poor children. Should census sampling be the standard in determining the census results? The two parties disagree on this issue. The battle is intensifying, with President Clinton announcing to the nation’s mayors on January 29, 1999, that his administration remains committed to using scientific sampling in the 2000 census. The administration’s plan appears to follow a two-pronged census. One, using the traditional questionnaire and door-to-door count for deciding congressional apportionment, and another using the sampling method that would adjust the count to compensate for those people missed by the former method.

The Republicans object strenuously to the use of the two-number proposal. Dan Miller (R-FL), chair of the House Subcommittee on Census, said: “It’s a nonstarter as far as I am concerned.” Matthew Glavin, the president of the Southeastern Legal Foundation, which first challenged the Census Bureau’s proposal, said, “If those sampled numbers are used for redistricting, the administration is going to find itself in Court again.” Rep. Carolyn B. Maloney (D-NY), the ranking Democrat on the census subcommittee, countered: “I guess House Republicans recognize they lost the case since they’re already threatening to shut down the government.” On February 3, 1999, she introduced a bill that would permit wide use and application of “scientific sampling” for head count purposes. In effect, passage of her bill would nullify the Supreme Court decision, and chances of passage are not high.

Using numbers obtained by sampling for redistricting could have greater political effect than the use of sampling for reapportionment. While it has been estimated that perhaps only four seats would be shifted among the states if sampling figures were used in reapportionment, the effect on congressional districts within states could be significantly greater. One firm that does redistricting research estimates that in California, five to six seats could shift from the Republicans to the Democrats.

Social Security Reform

Social Security reform looms as one of the biggest fights between Congress and the White House this term. The current program is financed through a payroll tax of 6.2 percent from employees and 6.2 percent from employers. The tax is estimated to generate sufficient income benefits until 2013, but by 2032, the trust fund will be bankrupt. The program started in 1935 under President Franklin D. Roosevelt. Today it provides retirement, disability, and survivor benefits to 44 million Americans.

The president’s program would channel hundreds of billions of dollars into the stock market with the federal government as the investor. It would also devote $2.8 trillion in future government surpluses to shore up Social Security. The Republicans, however, support individual private investment accounts by diverting part of the payroll taxes to the financial market. They are opposed to direct government investment on the theory that it would interfere with the free market. They are supported in this view by Federal Reserve Board Chair Alan Greenspan and many other economists. At a recent meeting of the Securities Industry Association, this trade group affirmed its position that any overhaul of Social Security should include private accounts that offer investment choice, but are administered by the private sector, not the government.

The Republicans know that in the past they have lost elections over Democratic allegations that they prefer tax cuts to the expense of the Social Security program. However, it appears that the 106th Congress has the opportunity to address the Social Security problems on a more bipartisan basis. Even House Ways and Means Committee Chair Bill Archer (R-TX) has said, “We would be willing to reserve 62 percent of the surplus until Social Security has been saved.”

In a speech in Buffalo following the State of the Union address, President Clinton spoke of the government investing $700 billion of the budget surplus in the stock market and said, “We can give it all back to you and hope you spend it right. But if you don’t spend it right,” he predicted all sorts of catastrophes. Critics felt that his statement smacked of paternalism, and that he was essentially saying the American people are not smart enough to save for their retirement.

On February 1, in offering a $1.766 trillion budget, President Clinton made good on his State of the Union promise to earmark 62 percent of the federal budget surplus over the next 15 years for Social Security reform. The budget, with respect to Social Security, states that the 62 percent of the budget surplus credited to the Social Security trust fund for a year would be blocked from use by the Congress and the White House on any other program, including tax cuts.

Alan Greenspan has told Congress and the president that they cannot rely on budget surpluses alone to extend Social Security’s life. He said, “To ensure that taxes and interest income will always be sufficient to pay benefits, Social Security taxes would have to be raised much more—perhaps something on the order of between 4 and 5 percent of taxable payroll.” Alternatively, he suggested considering curbing growth of benefits by raising the retirement age and reducing the cost-of-living increases. The danger of relying on the uncertainty of budget projections is outlined by the Congressional Budget Office (CBO) in its new volume on budget projections. In it, the CBO indicates that relatively small changes in the economy can have a significant effect on long-range budget figures. For example, if the interest rate is raised by only 1 percent, the CBO’s ten-year surplus of $2.6 trillion slides $214 billion. A meager one tenth of 1 percent in projected growth causes the surplus to drop by $186 billion.

In the February 1, 1999, issue of the Wall Street Journal, Martin Feldstein, former chairman of the President’s Council of Economic Advisors and now a professor of economics at Harvard, criticized Clinton’s proposal for Social Security reform. He said, “The most obvious fault of the Clinton plan is that it fails to ‘save Social Security.’ Even Mr. Clinton claims only that it would postpone bankruptcy to 2055 from 2032. After that, maintaining promised benefits would require raising the payroll tax rates to more than 18 percent from today’s 12.4 percent. Without a tax increase, benefits would be cut by more than one-third.” He went on to say, “Extending Social Security solvency to 2055 is based on a complex accounting sham so duplicitous that it is hard to believe.”

The Review & Outlook section of the February 3, 1999, issue of the Wall Street Journal reported that “[p]erhaps the worst part of this budget is its dishonesty about Social Security. Granted, all Presidents have contributed to the fib that payroll tax money is saved in some Social Security fund somewhere when those taxpayers retire; in fact, the trust fund is mainly an accounting tool. But at least this notion preserved Social Security as an insurance program financed solely out of payroll (FICA) taxes. Mr. Clinton’s deceit is to begin to use general tax revenues (from income and other taxes) to finance Social Security benefits.” Furthermore, the Wall Street Journal predicted that “unless taxes are raised, by mid-century as much as 90% of the federal budget would be allocated to health care and pensions for the elderly.”

While the two sides are far apart on the specifics for a program to correct the Social Security problem, both are eager to reach a deal on Social Security.

The 106th Congress

The second session of the 105th Congress is likely to be remembered as the one in which impeachment proceedings were launched against President Clinton, rather than for its legislative achievements. While the House passed a campaign finance bill, it died in the Senate (See this column, Spring 1998). Congress passed International Monetary Fund legislation providing $18 billion in return for some Agency reforms (see this column, January/February 1999). A $218 billion authorization bill for highway and mass transit projects was adopted (see this column, July/August 1998). Congress also passed a budget-busting omnibus spending bill of $500 billion (see this column, January/February 1999). The omnibus bill included eight of the 13 annual appropriation bills. With Republicans wanting to avoid being accused of closing down the government, and wanting to go home for the election, they capitulated and gave President Clinton much more in the bill than he would have received had Congress sent him individual appropriation bills. On October 21, 1998, the second session of the 105th Congress adjourned.

The first session of the 106th Congress convened on January 6, 1999. In this Congress, the members are older than those in the 105th, and have more political experience. With the impeachment trial of President Clinton and the Gingrich to Livingston to Hastert switch of House Speakers, not much legislative accomplishment has been made to date. The Repub-licans, however, want a 10 percent across the board tax cut for every working American. This effort will once again compete against Pres-ident Clinton’s announced Social Security reform program.

The Republicans, with some Democratic support, will push to accelerate the deployment of anti-missile defenses for U.S. territory. Greater defense spending than what the president requests will be pursued. This will include a 4.8 percent increase in military pay, and increased funds for combat readiness and modernization of equipment. Other proposed legislation includes Superfund reform proposals; reauthorization of the Juvenile Justice and Delinquency Prevention Act; bankruptcy reforms; amendment of the Parental Kidnaping Prevention Act to provide federal jurisdiction to resolve state jurisdictional conflicts in custody cases; reform of individual retirement accounts; and the elimination of the so-called “marriage penalty tax.”

An interesting and exciting legislative year! CL
Table of Contents

Back to Top