Most major legislation is bad and should not become law. Founding Father James Madison, who had served in the Virginia legislature, realized that most laws passed by legislatures were bad, and sought to curb bad legislation through checks and balances — not just the horizontal checks and balances that made it into our Constitution (like requiring bills to pass two separate houses of Congress, and letting the President kill bills that are supported by less than two-thirds of Congress by vetoing it), but also vertical checks and balances that didn’t make it into our Constitution (for example, Madison unsuccessfully sought to require Congressional assent to state laws, so that factions that controlled a state government could have their schemes thwarted by a national government they didn’t control (as is chronicled in Michael Greve’s article, Compacts, Cartels, and Congressional Consent (2003)).
Yet bad legislation routinely becomes law, because Congress and the President tend to be of the same party, meaning that the President won’t veto bad legislation, because it is passed by his own party. The volume of bad legislation is particularly large when Democrats control Congress and the Presidency, because they pass a much larger number of laws than Republicans, of which an even higher fraction is bad than under Republican rule. Democrats generate far more burdensome and time-consuming red tape, than Republicans do, when they control the legislative and executive branches. Since 2021, under a Democratic President, the burden of government red tape has radically surged, according to the Washington Examiner, especially when Democrats controlled both the Presidency and both houses of Congress.
The Founding Fathers put the veto into the constitution because many bad bills could become law if simple majority support is enough for an bill to become law. As Founding Father Alexander Hamilton noted in the The Federalist No. 73, a presidential veto will kill “a few good laws” but that “will be amply compensated by the advantage of preventing a [larger] number of bad ones.”
When the Founding Fathers designed our system of government, political parties had not yet formed, and they did not anticipate the national government being under the control of a single political party, which makes the use of the veto far less likely, and results in bad laws being passed to reward a political party’s ideological allies and the special interest groups they favor.
But the Founding Fathers’ intuition that legislation supported by a bare majority of a legislative house will be worse is confirmed by a recent study, Virginia Law and Economics Research Paper No. 2024-23. It notes that a certain amount of gridlock is good and reduces the volume of legislation while increasing the quality of what is passed, resulted in such legislation being more “modest” and consistent with “voter welfare” and the values of “the median voter”:
We examine the design of lawmaking institutions when advocates have agenda setting power and there is randomness in the status quo. The institutional designer maximizes voter welfare. We find that the optimal arrangement consists of two lawmaking institutions that must agree to enact any reforms. The institutions do not share preferences with one another or with the median voter. As a result, gridlock arises: the institutions reject some reforms that the median voter favors. However, when reform succeeds, it tends to be modest in scope and to more closely track what the median voter prefers. The optimal design trades off the cost of failing to change law due to gridlock against the benefit of forcing advocates to moderate their proposals and offer more centrist reforms. Surprisingly, voters are best served by a pair of polarized and unrepresentative institutions.
The real world provides many examples of how gridlock can be good. The late 1990s was the last time America had a budget surplus. Why? Prolonged political gridlock. Economic growth generated a surplus, as a Democratic president blocked the possibility of tax cuts, while a Republican Congress kept spending from growing as rapidly as Democrats wanted. America was the winner from this gridlock, as its national debt shrank. Of course, that was under a fiscally-responsible, moderate Democratic president, who didn’t try to rule by decree. By contrast, Joe Biden is fiscally irresponsible, and has illegally given away tens of billions of dollars in student loan bailouts never authorized by Congress. After the Supreme Court blocked his attempt to give away $500 billion through student loan bailouts, finding it illegal, he issued new, seemingly-illegal bailouts, many — but not all — of which have been blocked by subsequent appeals court rulings as also being illegal. A Republican Congress can’t act as a meaningful check and balance on a Democratic president if he just circumvents their fiscal blueprints by illegally handing out money or debt forgiveness.
On social media, liberal “reformers” call for ending “gridlock.” But it is gridlock that prevents costly new spending programs that increase the deficit, such as the Affordable Care Act (Obamacare) enacted under Obama. Obamacare was supposed to cut the budget deficit through its federal takeover of student loans, but it actually increased the budget deficit even more through that very takeover — which ended up producing a loss for taxpayers — even before President Biden increased the loss from student loans by forgiving billions of dollars in student loans at taxpayer expense. Obamacare backers falsely claimed that by “nationalizing the student lending industry…Obamacare would raise $58 billion in revenue over a decade,” notes the Washington Examiner. But it didn’t. Student loans had become a money-loser for the federal government, even before Biden forgave billions of dollars in student loans at taxpayer expense, magnifying the loss. As Ben Johnson of the Acton Institute notes, a “Government Accountability Office (GAO) report released in July [2022] found the Department of Education predicted that student loans would generate $114 billion for the federal government; they instead lost $197 billion — a $311 billion error, mostly due to incorrect analysis.”
Legislation that passes by bare partisan majorities — like Obamacare, which passed with virtually no Republican votes — often fails to do what its sponsors claim, and thus, turns out to be at odds with voter welfare or the preferences of the median voter. Obamacare was supported to improve Americans’ health, but it didn’t — there is no evidence it improved the health of the median American. U.S. life expectancy is now 77.5 years, compared to 78.84 years back in 2014, when the core elements of Obamacare went into effect. Americans’ health declined even as the provisions of Obama’s healthcare law — the Affordable Care Act — were supposed to have been helping. Life expectancy shrank in 2015, for the first time in many years. As ABC News warned then, “A decades-long trend of rising life expectancy in the U.S. could be ending: It declined last year and it is no better than it was four years ago.” The Economic Policy Journal predicted in 2012 that “life expectancy will decline under Obamacare.” In 2009, the dean of Harvard Medical School, Jeffrey Flier, said Obamacare would cost lives by harming life-saving medical innovation. In 2013, two physicians explained in The Wall Street Journal that Obamacare would be “bad for your health.”
Joe Biden’s student loan bailouts, which have zero bipartisan support and could cost taxpayers up to $1.4 trillion (according to the Committee for a Responsible Federal Budget), also are likely to be harmful to the economy. Canceling student loans is a bad idea. It encourages colleges to jack up tuition, by making it more attractive to take out big loans to cover college tuition. When students are willing to borrow more to go to college, colleges respond by raising tuition. The Daily Caller notes that “each additional dollar in government financial aid translated to a tuition hike of about 65 cents,” according to the Federal Reserve Bank of New York.
Even Democratic economists say Biden’s student loan bailouts are a bad idea. Canceling student loan debt is “regressive and unfair,” says Katherine Abraham, a former adviser to Obama who served as Commissioner of the Bureau of Labor Statistics during the Clinton administration. As Greg Price points out, “Only 37% of Americans have a 4-yr college degree, only 13% have graduate degrees, and a full 56% of student loan debt is held by people who went to grad school. Biden’s plan to cancel it would be like taking money from a plumber to pay the debt of a lawyer.” Even the liberal Washington Post called Biden’s student-loan bailout “a regressive, expensive mistake.”
Student loan forgiveness also is inflationary. Jason Furman, chairman of President Obama’s Council of Economic Advisers, called Biden’s plan to cancel student loans “reckless.” Furman said, “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” Biden’s student loan forgiveness will increase inflation, inequality, tuition, and the national debt.
Biden’s student loan bailouts are part of a larger pattern of profligate federal spending. As Obama advisor Steven Rattner noted in the New York Times, the Biden administration has spent “an unprecedented amount” of taxpayer money, which resulted in inflation due to “too much money chasing too few goods.” President Biden’s big-spending ways caused inflation, according to even Democratic economists like Harvard’s Larry Summers, who was Treasury Secretary under President Clinton.
