In Case You Missed It: We’re Still Heading Towards a Debt Crisis

These past few weeks have seen their share of crisis and controversy in the nation’s capital. But, yesterday’s news from the CBO is significant and should not be missed. It will play a major role in the debt ceiling and budget debates that will highlight the next two months.

Yesterday, the non-partisan Congressional Budget Office (CBO) released its annual report on the long-term budget projections for the federal government. Their conclusion: despite the sequestration cuts and tax hikes on the rich from last year, the United States is still on a path towards a debt crisis because we have not reigned in our spending on entitlements.

According to the CBO, “[t]he $2.1 trillion in spending cuts passed by Congress in 2011 won’t curb the growth of entitlements that poses a fiscal-crisis risk in the next 25 years.” (Bloomberg). Consequently, by 2038, the public debt will be equal to the total output of the U.S. economy. And as The New York Times described it, “lawmakers have been cutting the wrong kind of federal spending as they try to avoid the unsustainable buildup of debt that is projected in the coming decades.”

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The Class Action Fairness Act: History, Uses, and Differences from Traditional Diversity Jurisdiction

In 2005, Congress passed the Class Action Fairness Act (“CAFA”) in order to grant class action litigants in diversity cases easier access to the federal courts. The re-formulated sections under 28 U.S.C. § 1332 created a lower threshold to gain access into the federal courts for both the plaintiff class members, and the perspective defendants wishing to remove to federal court. Congress passed these new provisions in order to “restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction.” In its deliberations over the bill, Congress specifically found that certain litigants used the previous jurisdictional regime to create many situations whereby certain cases with national importance did not qualify for federal jurisdiction based upon diversity. Additionally, Congress sought to address the age old concern of discrimination against out-of-state litigants.

Congress also mentions in its findings and purposes prelude to CAFA that over the previous decade (1995 – 2005), abusive practices of the class action device caused numerous harms, thus justifying this remake of the class action jurisdictional regime. But why in 2005? Perhaps because Congress wished to respond to the vast amount of litigation against insurers stemming from Hurricane Katrina, which made landfall in August of 2005. Perhaps because in 2005, Republicans held a majority in both the House and the Senate (and held the presidency), and as a general matter, the Republican Party, rightly or wrongly, is viewed as anti-plaintiff. In this view, Republicans wanted to allow insurance companies greater opportunities to remove to federal court (which is also seen, rightly or wrongly, as somewhat less pro-plaintiff than many state courts). Whatever the true reasoning, Congress did pass CAFA, and some of CAFA’s provisions are worth noting.

CAFA grants federal jurisdiction (through diversity) to class action cases where: (1) the amount in controversy, in the aggregate of all of the class members, exceeds $5,000,000 and (2) in a controversy in which ANY member of the class of plaintiffs is diverse from the defendant. CAFA then defines class members as those persons, named or unnamed, who fall within the definition of the proposed or certified class in a class action. Based on these threshold rules, a defendant could rather easily assert diversity from one of the unnamed or proposed class members. The removing party need not identify the diverse class member, but merely show by a preponderance of the evidence, using the face of the complaint or summary judgment type evidence, that it is reasonable to believe at least one class member maintains diversity from the defendant. Hardly a high hurdle to clear. However, several important subsections to CAFA help to qualify these basic underlying tenets, and may impose at least some further obstacles to navigate as a removing party.

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Is It Time to Expand the Size of Congress?

Seal of US House of RepresentativesOn August 8, 1911, President William Howard Taft signed a bill authorizing an increase in the size of the House of Representatives from 391 members to 433. A provision in the bill also provided that two additional members would be added in 1912, following the scheduled admission of New Mexico and Arizona as the 47th and 48th states, and thereby raising the size of the House to 435, which is still the size of the House.

This means that since the admission of Arizona as the 48th state on Valentine’s Day, 1912, the size of the House of Representatives has remained unchanged for the 101.5 years. (The admission of Alaska and Hawaii in 1959 increased the size of the United States Senate from 96 members to 100, but a decision was made at that time to keep the size of the House at 435.)

The 1910 Census reported the population of the United States as slightly more than 92 million people. In comparison, the figure for 2010 was slightly less than 309 million, an increase of more than 330%. This means that every Congressman today represents more than three times as many people as his or her counterpart of a century ago.

The original idea regarding representation was that congressional districts should be small enough that citizens would have confidence that their elected representative would be able to represent their immediate interests. However, the average congressional district of today has more than 700,000 constituents and is larger than 16 of the 46 states in 1910.

If we go back further into our constitutional past, the disparity is even greater. In the Congressional Resolution passed on September 25, 1789, endorsing a Bill of Rights for the Constitution and submitting the proposed amendments to the states, the original First Amendment required the creation of a minimum of one congressional district for every 50,000 people.

As it turned out, this was the only one of these “original” amendments that did not become part of the Constitution. Had the original first amendment been adopted, Congress today would be made up of approximately 6,180 members, which all but the most fervent admirers of the Founding Fathers and advocates of constitutional localism would likely agree is too large.

Under the relevant provisions of the Constitution (Article I, sec. 2, cl. 3, and Sec. 2 of the Fourteenth Amendment) the size of the House of Representatives is left entirely to the Congress to determine, with the restriction that unless the population of a state is under that number, every Congressional District must have a population of at least 30,000 citizens. This would currently rule out the possibility of a 10,300 seat House (or anything larger).

But to say that 6,000 (or 10,000) members is too many does not mean that 435 is not too few. Had the ratios embraced by the 1911 bill remained the norm, there would currently be 1,436 members in the House of Representatives. While most observers would react by saying that 1400 would also be too large, would that actually be the case? Or is that reaction just a predictable response to the unfamiliarity of the idea. (We are conditioned by experience to assume that 435 is the proper size of the House of Representatives. To remember a House that did not have 435 members, a person would have to be at least 110 years old, which is pretty much the equivalent of remembering the Chicago Cubs winning the World Series.)

It does seem possible that the House of Representatives in its current form is too small and that representatives are too far removed from their constituents, at least by traditional norms. Perhaps an influx of additional new members could help improve the image of Congress, which appears to be at an historic low. One thing is clearly true, dealing with a 6,000-member House of Representatives would change the way that lobbyists do business.

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