Will SCOTUS Help Trump Tame the Leviathan?

As President Trump and Elon Musk strive, from the Executive branch, to tame the federal leviathan, a case coming up at the Supreme Court offers the judiciary an opportunity to aid the noble cause. The dispute centers on the “Universal Service Fund,” paid for in part by a tax on Americans’ phone bills. On Wednesday, the Nine will hear arguments over whether Congress exceeded its authority by letting federal bureaucrats set the amount of this tax.This morning we carried a wonderful column on this by George Will. He marks that the implications of FCC v. Consumers’ Research soar beyond the fee in the fine print of phone bills. By challenging the idea that Congress can delegate its powers to unelected officials, the suit is taking on one of the core precepts of the administrative state. That, say the watchdogs at the New Civil Liberties Alliance, is a kind of government the framers sought to avoid. “Although Americans still enjoy the shell of their Republic, there has developed within it a different sort of government — a type the Constitution was designed to prevent,” the NCLA, founded by Columbia Law’s Philip Hamburger, says in Consumers’ Research. The delegation of Congress’ constitutionally granted powers has led, say, to such anomalies as the Federal Reserve, while the Framers meant the legislature to hold the power to set monetary policy.Similarly, the Constitution in Article I, Section 8, grants Congress the “Power To lay and collect Taxes, Duties, Imposts and Excises.” Why, then, is the FCC levying a tax on Americans? Worse, the FCC has subdelegated that taxing power to a private company which sets the rate. The FCC seeks to disguise the fact that it is a tax, merely noting that communication firms “must pay a percentage of their interstate end-user revenues to the Universal Service Fund.”The FCC would even like to disclaim responsibility for this charge getting passed on to consumers. True, some customers “may notice a ‘Universal Service’ line item on their telephone bills.” As the FCC describes it, “This line item appears when a company chooses to recover its” Universal Service Fund “contributions directly from its customers by billing them this charge.” Indeed, the FCC avers that it “does not require this charge to be passed on to customers.”Got it? No tax here, folks. Yet this Universal Service fund amounts to billions of dollars a year collected from Americans — whether or not they realize they are being taxed. The fund, designed to help even out the cost of providing communications services between urban and rural areas, could be well-intentioned. Vox’s Ian Millhiser reports that “if telephone and internet providers charged a fair market rate” in rural areas, it “could be prohibitively expensive.”Not even the best of intentions, though, can justify a breach of the Constitution, as the NCLA points out in its friend of the court filing in Consumers’ Research. “Through the Constitution the People consented to Congress, and Congress alone, exercising all legislative power.” This is why the objections to the Universal Service Fund, Judge Andrew Oldham of the Fifth Circuit avers, “implicate bedrock constitutional principles.”Judge Oldham, in the Fifth Circuit’s ruling striking down the Universal Service Fund, finds that “Congress’s instructions are so ambiguous that it is unclear whether Americans should contribute $1.37 billion, $9 billion, or any other sum to pay for universal service.” The convoluted way of setting the tax, he adds, makes it “impossible for an aggrieved citizen to know who bears responsibility for the USF’s serious waste and fraud problems.” Consumers’ Research could potentially echo the high court’s ruling in 1935 in the Schechter case, when FDR’s National Recovery Administration was struck down. Chief Justice Hughes called the NRA’s welter of regulations “an unconstitutional delegation of legislative power.” If the NRA’s rules had stood, Hughes warned of “virtually no limit to the federal power.” Ninety years on, the need to restore constitutional limits on federal power is just as acute.

Will SCOTUS Help Trump Tame the Leviathan?

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