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A Clear Transgression Yields A Cloud Of Fallout

Sometimes, a Supreme Court decision is too close to call until the moment a ruling comes down. In other cases, however, even an outsider can see the outcome far ahead of time without the benefit of a crystal ball.

The Court unanimously decided last week that three of President Obama’s recess appointments to the National Labor Relations Board were unconstitutional - mainly because the Senate was not in recess when he made them. This decision can hardly have surprised the president, who knew as well as anyone that he overstepped his bounds. It was obvious, even at the time. The appointments were never really meant to stand; they served their political purpose, and can now be discarded.

Obama’s tactic was a gamble, however, because the Court could have stripped presidents of a great deal of their power to make recess appointments at all. In fact, four justices wanted to do just that, narrowing the scope of the recess appointment power to times when Congress is between formal sessions. They also would have preferred to restrict the recess appointment power to vacancies that arise during the break in question, rather than to any post that is already open when Congress goes into recess.

The Court’s four liberal members and Justice Anthony Kennedy, however, decided they did not want to go that far. Instead, the controlling opinion signed by those five justices simply identified the obvious fact that the president had no authority to make recess appointments when the Senate was not technically in recess. Justice Stephen Breyer, who wrote the majority opinion, stressed that the Court was guided by history, as reflected in the fact that, while the ruling rebuked Obama’s behavior, it left the presidential power to make recess appointments more or less alone.

The practical effect at the NLRB will probably be minor. The president’s illegal appointments were subsequently ratified by the Senate after Democrats, who control the chamber, changed the filibuster rules. Since the current NLRB membership has been properly confirmed, the Board could presumably revisit any rulings that were made without a proper quorum. At least some disputes are likely to be reheard. Practically, however, it seems likely the Board will just carry on, so the overall effect is nil. Obama overstepped and he got away with it.

And at the Consumer Financial Protection Bureau, whose director, Richard Cordray, was appointed the same day under the same invalidated logic, no impact is expected from the ruling. After Cordray was formally confirmed by the Senate, roughly six months after Obama appointed him, he took the step of reaffirming and ratifying all his prior actions.

Although Obama was lucky enough to avoid costing himself and his successors the power to make recess appointments, the dust-up is likely to have at least one long-term effect: The Senate is unlikely to return to its old filibuster rules. When Senate Democrats exercised the so-called “nuclear option” last November, they did away with the Republican minority’s power to block nominees who cannot win 60 votes for confirmation. In doing so, they invited Republicans to return the favor once the balance of power shifts.

If there is a Republican Senate majority and a Republican president after 2016, it is highly likely that Republicans will continue to allow presidential nominees to be confirmed with a simple majority. While the current simple-majority threshold only applies to executive branch and trial court nominees, I’d wager that the Republicans will extend that power to federal appellate and Supreme Court jurists as well.

Needless to say, at that point Democrats will be extremely unhappy with their nuclear option fallout.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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