Steve Simpson and Paul Sherman of the Institute for Justice have written an excellent short essay about Stephen Colbert’s effort to undermine the Citizens United decision. But the joke is on Colbert:

Campaign-finance laws are so complicated that few can navigate them successfully and speak during elections—which is what the First Amendment is supposed to protect. As the Supreme Court noted in Citizens United, federal laws have created “71 distinct entities” that “are subject to different rules for 33 different types of political speech.” The FEC has adopted 568 pages of regulations and thousands of pages of explanations and opinions on what the laws mean. “Legalese” doesn’t begin to describe this mess.

So what is someone who wants to speak during elections to do? If you’re Stephen Colbert, the answer is to instruct high-priced attorneys to plead your case with the FEC: Last Friday, he filed a formal request with the FEC for a “media exemption” that would allow him to publicize his Super PAC on air without creating legal headaches for Viacom.

How’s that for a punch line? Rich and successful television personality needs powerful corporate lawyers to convince the FEC to allow him to continue making fun of the Supreme Court. Hilarious.

Of course, there’s nothing new about the argument Mr. Colbert’s lawyers are making to the FEC. Media companies’ exemption from campaign-finance laws has existed for decades. That was part of the Supreme Court’s point in Citizens United: Media corporations are allowed to spend lots of money on campaign speech, so why not other corporations?

Because some animals are more equal than other animals, I suppose.

What Did Orwell Say? is a post from Cato @ Liberty - Cato Institute Blog

Today, the Supreme Court agreed to review McComish v. Bennett (consolidated with Arizona Free Enterprise v. Bennett), which challenges Arizona’s public financing of elections as an unconstitutional abridgment of speech. Because the case concerns a crucial new battleground in the fight between free speech and “fair” (read: government-controlled) elections, Cato filed an amicus brief supporting the cert petitions filed by our friends at Goldwater Institute and the Institute for Justice.

McComish centers on Arizona’s “Clean Elections” Act, which provides matching funds to publicly funded candidates if their privately funded opponent spends above certain limits. In other words, by ensuring that his speech will not go “unmatched” by his opponent, the privately funded candidate is penalized for working too hard and speaking too much. The law violates established Supreme Court precedents that have consistently held that forcing a speaker to “disseminate hostile views” as a consequence of speaking abridges the freedom of speech. Although the Ninth Circuit upheld the Arizona law, the Second Circuit recently struck down a similar Connecticut law, thus creating a circuit split that undoubtedly encouraged the Court to take the case.

In 2008 the Court decided Davis v. FEC (in which Cato also filed a brief), which overturned the “millionaires amendment” to the McCain-Feingold campaign finance “reform.” That provision gave similar assurances to candidates faced with the possibility of being outspent by their opponent. There, however, the concern was with rich, self-funded candidates: The act provided increased fundraising limits — triple the amount normally allowed — for candidates whose opponents spent too much (by the government’s judgment) of their own money on their campaign. The Davis Court held that this provision “impose[d] an unprecedented penalty on any candidate who robustly exercises [his] First Amendment right.”

The Arizona law is even worse. It doesn’t even delve into the messiness of fundraising — tripling the contribution limit does not, after all, mean that those funds will be raised — but rather guarantees that a candidate’s “robus[t] exercise[] of [his] First Amendment right” will be met with contrary speech from his opponent. And the law sweeps still broader: it applies the same matching funds provision to groups that spend independently from any campaign but are nevertheless deemed to be supporting a given candidate. Such “uncoordinated speech” by third parties — speech that, many times, the candidate does not want even if it is thought to be on his behalf — also triggers matching funds for the candidate’s opponent.

The end result, as extensive evidence shows, is that numerous speakers — from the candidate to the independent groups — will be reluctant to spend money to speak (which is, of course, required for nearly all effective campaign speech) because their opponents are guaranteed the funds needed to reply. In elections, where the freedom of speech “has its fullest and most urgent application,” such laws simply cannot fly.

Finally, it is also worth remembering what is at stake when we allow politicians to pass laws that determine the very rules by which they hold their jobs. Justice Scalia put this most poignantly in Austin v. Michigan Chamber of Commerce: “the Court today endorses the principle that too much speech is an evil that the democratic majority can proscribe. I dissent because that principle is contrary to our case law and incompatible with the absolutely central truth of the First Amendment: that government cannot be trusted to assure, through censorship, the ‘fairness’ of political debate.” As we now well know, the Court overruled Austin this past January in Citizens United, vindicating Scalia’s pro-free speech position.

It will be exciting to see how McComish unfolds. Expect another Cato amicus brief early in the new year, oral arguments in the spring, and a decision by the end of June.

Supreme Court Accepts Another Chance to Reverse Ninth Circuit, Uphold First Amendment is a post from Cato @ Liberty - Cato Institute Blog

Perhaps I am a little confused, but didn’t the Obama Administration tell the American public only months ago that TARP was turning a profit?   But now the same administration is proposing to assess a fee on banks to cover losses from the TARP. Maybe President Obama is coming around to the realization that the TARP has indeed been a loser for the taxpayer. He appears, however, to be missing the critical reason why: the bailouts of the auto companies and AIG, all non-banks. This is to say nothing of the bailout of Fannie Mae and Freddie Mac, whose losses will far exceed those from the TARP. Where is the plan to re-coup losses from Fannie and Freddie? Or a plan to re-coup our rescue of the autos?

If the effort is really about deficit reduction, then it completely misses the mark.  Any serious deficit reduction plan has to start with Medicare and Social Security.  Assessing bank fees is nothing more than a rounding error in terms of the deficit.  Let’s put aside the politics and get serious about both fixing our financial system and bringing our fiscal house into order.  The problem driving our deficits is not a lack of revenues, aside from effects of the recession, revenues have remained stable as a percent of GDP, the problem is runaway spending.

The bank tax would also miss what one has to guess is Obama’s target, the bank CEOs.  Econ 101 tells us (maybe the President can ask Larry Summers for some tutoring) corporations do not bear the incidence of taxes, their consumers and shareholders do.   So the real outcome of this proposed tax would be to increase consumer banking costs while reducing the value of bank equity, all at a time when banks are already under-capitalized.

Obama Bank Tax Is Misguided is a post from Cato @ Liberty - Cato Institute Blog

I (and several colleagues) have blogged before about Citizens United v. Federal Election Commission, the latest campaign finance case, which was argued this morning at the Supreme Court.  The case is about much more than whether a corporation can release a movie about a political candidate during an election campaign.  Indeed, it goes to the very heart of the First Amendment, which was specifically created to protect political speech—the kind most in danger of being censored by politicians looking to limit the appeal of threatening candidates and ideas.

After all, hard-hitting political speech is something the First Amendment’s authors experienced firsthand.  They knew very well what they were doing in choosing free and vigorous debate over government-filtered pablum.  Moreover, persons of modest means often pool their resources to speak through ideological associations like Citizens United.  That speech too should not be silenced because of nebulous concerns about “level playing fields” and speculation over the “appearance of corruption.”  The First Amendment simply does not permit the government to handicap speakers based on their wealth, or ration speech in a quixotic attempt to equalize public debate: Thankfully, we do not live in the world of Kurt Vonnegut’s Harrison Bergeron!

A few surprises came out of today’s hearing, but not regarding the ultimate outcome of this case.  It is now starkly clear that the Court will rule 5-4 to strike down the FEC’s attempt to regulate the Hillary Clinton movie (and advertisements for it). Indeed, Solicitor General Elena Kagan — in her inaugural argument in any court — all but conceded that independent movies are not electioneering communications subject to campaign finance laws.  And she reversed the government’s earlier position that even books could be banned if they expressly supported or opposed a candidate!  (She went on to also reverse the government’s position on two other key points: whether nonprofit corporations (and perhaps small enterprises) could be treated differently than large for-profit business, and what the government’s compelling interest was in prohibiting corporations from using general treasury funds on independent political speech.)

Ted Olson, arguing for Citizens United, quickly recognized that he had his five votes, and so pushed for a broader opinion.  That is, the larger — and more interesting — question is whether the Court will throw out altogether its 16-year-old proscription on corporations and unions spending their general treasury funds on political speech.  Given the vehement opposition to campaign finance laws often expressed by Justices Scalia, Kennedy, and Thomas, all eyes were on Chief Justice Roberts and Justice Alito, in whose jurisprudence some have seen signs of judicial “minimalism.”  The Chief Justice’s hostility to the government’s argument — “we don’t put our First Amendment rights in the hands of FEC bureaucrats” — and Justice Alito’s skepticism about the weight of the two precedents at issue leads me to believe that there’s a strong likelihood we’ll have a decision that sweeps aside yet another cornerstone of the speech-restricting campaign finance regime.

One other thing to note: Justice Sotomayor, participating in her first argument since joining the Court, indicated three things: 1) she has doubts that corporations have the same First Amendment rights as individuals; 2) she believes strongly in stare decisis, even when a constitutional decision might be wrong; and 3) she cares a lot about deferring to the “democratic process.”  While it is still much too early to be making generalizations about how she’ll behave now that she doesn’t answer to a higher Court, these three points suggest that she won’t be a big friend of liberty in the face of government “reform.”

Another (less serious) thing to note: My seat — in the last row of the Supreme Court bar members area — was almost directly in front of Senators John McCain and Russ Feingold (who were seated in the first row of the public gallery).  I didn’t notice this until everyone rose to leave, or I would’ve tried to gauge their reaction to certain parts of the argument.

Finally, you can find the briefs Cato has filed in the case here and here.

‘We Don’t Put Our First Amendment Rights In the Hands of FEC Bureaucrats’ is a post from Cato @ Liberty - Cato Institute Blog

My old friend E. J. Dionne of the Washington Post writes that the Citizens United v. FEC rehearing on Wednesday is “A Test Case for Roberts.” Because, you see, Chief Justice John Roberts said in his confirmation hearings that “it is a jolt to the legal system when you overrule a precedent. Precedent plays an important role in promoting stability and evenhandedness. It is not enough — and the court has emphasized this on several occasions — it is not enough that you may think the prior decision was wrongly decided.”

Dionne says that if Roberts and the Court overturn the precedents that seem to point to banning a movie with a political agenda because it was produced by a nonprofit corporation, “he will unleash havoc in our political system and greatly undermine the legitimacy of the court he leads.”

I disagree with Dionne on the scope of the First Amendment’s protection of free speech. But I sort of admire him for staking out such a strong stand in favor of precedent and “settled expectations.” After all, a firm commitment to precedent can lead to some uncomfortable positions. Given the firmness of Dionne’s reliance on the importance of precedent and “settled expectations” to “the legitimacy of the court,” I assume he has opposed previous cases where the Court overturned settled law and its own precedent. Such as Brown v. Board of Education, which overturned a 58-year-old case, Plessy v. Ferguson. And Lawrence v. Texas, which overturned a 17-year-old precedent that had upheld state sodomy laws.

Or surely he does not mean that only precedents he approves of are deserving of respect and vital to the legitimacy of the court?

Citizens United and Supreme Court Precedent is a post from Cato @ Liberty - Cato Institute Blog

As I mentioned yesterday, the U.S. Supreme Court surprised many people by ordering a reargument in the case of Citizens United v. Federal Election Commission. Specifically, the Court called for the parties to the case to address the question of overruling Austin v. Michigan Chamber of Commerce.

The Court decided Austin v. Michigan Chamber of Commerce in 1989.  The state of Michigan had prohibited corporations from spending money on electoral speech. In the case in question, the Chamber of Commerce wished to pay for an advertisement backing a candidate for the House of Representatives. The Chamber took this action on its own and not in tandem with the candidate or his party.  Paying for the ad was a felony under Michigan law.

A majority of the Court in 1989 said the Michigan law did not violate the First Amendment. However, the majority had a problem. Previous cases permitted limits on funding electoral speech only in pursuit of a compelling state interest: the prevention of quid pro quo corruption or its appearance. The Court had also ruled that independent spending by groups could not corrupt candidates.

So the majority needed a novel rationale for approving Michigan’s suppression of speech. The majority concluded that speech funded by corporations would distort the democratic process and that the state could prohibits such outlays to prevent harms done by “immense wealth.” In other words, the Austin majority tried to redefine “corruption” as “inequality of influence.” That revision had its own set of problems. Buckely v. Valeo, the Ur-decision in campaign finance, had excluded equality as a compelling state interest justifying regulation of campaign finance.

It is easy to see why the Buckley Court had rejected equality of influence as a reason for restricting political speech. Imagine Congress could prohibit speech that had “too much influence.” But how could that be determined? A majority in Congress would be tempted to suppress speech that threatened the power of that majority.  Paradoxically, the equality rationale would strengthen those who already held power while vitiating representative government. The First Amendment tries to prevent that outcome.

In last year’s decision in Davis v. FEC, the Court again rejected the equality rationale for campaign finance laws.  More and more the Austin decision is looking like bad law.

Justices Kennedy and Scalia, both current members of the Court, wrote dissents in Austin. Justice Thomas has called for Austin to be overruled in other contexts.  Neither Justices Roberts nor Alito is likely to vote to uphold Austin (or the relevant parts of McConnell v. FEC for that matter). But it would seem that either or both of them were unwilling to strike down a precedent without a formal hearing. That hearing will come on September 9 with a decision expected by Thanksgiving.

Almost six years after the Court utterly refused to defend free speech in McConnell v. FEC, the Roberts Court may be ready to vindicate the First Amendment against its accusers in Congress and elsewhere.

The Roberts Revolution to Come is a post from Cato @ Liberty - Cato Institute Blog

The U.S. Supreme Court has decided not to decide in its current term the campaign finance case, Citizens United v. Federal Election Commission. Instead, the Court issued an order that the case should be reargued. The parties in the reargument should address the question of whether the Court should overrule two of its earlier decisions. In the Austin v. Michigan Chamber of Commerce, the Court held that state legislatures may prohibit spending by businesses on electoral speech. In McConnell v. Federal Election Commission, the Court validated limitations on electoral speech in McCain-Feingold.

The Court could have decided Citizens United on relatively narrow grounds. Instead, it has explicitly drawn into question two of its precedents upholding limitations on political speech. It seems likely that five members of the Court are prepared to overrule both precedents, but at least one justice was unwilling to do so without a formal argument.

We appear to be on the brink of a significant liberalization of campaign finance law.

For more on this important case, see below:

Citizens United Case to Be Reargued in Supreme Court is a post from Cato @ Liberty - Cato Institute Blog