Connect with us

Economics

State attorneys-general are shaping national policy

Published

on

Listen to this story.
Enjoy more audio and podcasts on iOS or Android.

Your browser does not support the <audio> element.

To foreigners looking in, it is unusual enough that America elects most of its top prosecutors. More shocking is the amount of money going into political campaigns. Now the two have come together in a way that would make even the least wonky American curious. Between 2008 and 2022 the cost of state attorney-general races rose from $17m to $222m. Over that period governors’ contests became only eight—rather than 12—times pricier and those of state senators merely doubled.

The cashflow reflects something much bigger: the role of state attorney-general has been recast. The job used to be about defending state laws and prosecuting cheats, fraudsters and corporate bullies. Today attorneys-general shape nationwide politics and policy by pushing strategic lawsuits through their favourite courts. Their quiet rise to power has made the states’ top lawyers some of America’s most unchecked partisan players.

Two attorneys-general, one a Republican and one a Democrat, exemplify the new breed. First there is Ken Paxton of Texas. Between 2021 and 2023 he refused to represent state agencies in court at least 75 times, according to ProPublica and the Texas Tribune, both news outlets—often seemingly for ideological reasons. He has dropped child-sexual-assault cases after losing track of the plaintiffs, let payments to crime victims lapse and taken decreasing interest in catching Medicaid cheats. Instead he chose to energise his Trumpian base by relentlessly suing the Biden administration. Mr Paxton has blocked vaccine mandates and banned abortion when it was still protected under the federal constitution. Most recently he brought the country’s attention to a bitter row over whether Texas can enforce its own immigration regime at the southern border.

“I am sickened by his disregard for the safety of Americans,” Letitia James wrote after one such case. Though Ms James is Mr Paxton’s ideological opposite, as New York’s attorney-general she goes about her job in rather similar fashion. An Empire State judge will soon decide whether to side with her and strip Donald Trump of his property business for lying to lenders about his finances. Her case alleging that the bosses of the National Rifle Association, a gun lobby, schemed to enrich themselves is on trial in Manhattan. These charges may have more legal merit than some of Mr Paxton’s. But they have also given progressives reason to swoon over her. When asked last summer to represent the state’s more centrist Democratic governor—in theory her primary client—on immigration issues she recused herself, telling Politico, a news website, that this was due to “a philosophical difference”.

New York and Texas are not isolated examples. How did the attorney-general’s office come to be held by partisans who pursue flashy lawsuits rather than defending the laws of their states? The story dates back to a Supreme Court case on environmentalism. In the early 2000s non-profit groups, cities and states teamed up against the Bush administration for not regulating greenhouse gases. They argued that pollutants were a health risk and that the Clean Air Act required the feds to do something. The plaintiffs’ argument was strong; the question was who had standing to sue. The Supreme Court ruled that due to the threat of rising sea-levels the Massachusetts attorney-general could lead the charge.

Massachusetts v EPA set the precedent for a single state to challenge the federal government in court. That drastically expanded the reach of attorneys-general—Republicans soon raced to sue Barack Obama when he took office. Over time attorneys-general realised that if they banded together with like-minded colleagues across the country, they could handpick the district with the most sympathetic judges in which to bring their case. One federal judge’s injunction in their favour, and against Washington, could shut down a policy for the whole country until a higher court ruled on its appeal. “Not only can they play on their home-turf, they can now choose the referee,” says Steve Vladeck of the University of Texas at Austin.

The strategy took off when Mr Trump became president. Democratic attorneys-general sued the federal government more times in four years than they had in the previous 16, says Paul Nolette, a political scientist. Republicans took it a step further under Joe Biden, aiming their litigation not just at Democratic policies but at the administrative state itself. Today these lawsuits are masterfully co-ordinated to maximise partisan wins, says James Tierney, a former attorney-general of Maine who teaches at Harvard University. With that in mind it is less surprising that Mr Trump’s Muslim travel ban was halted by a judge in Honolulu and mifepristone, an abortion pill, was temporarily outlawed by a judge in the Texas Panhandle.

Follow the money

Dark-money groups caught on to the fact that attorneys-general had sway and that their races were cheaper to influence than congressional ones. The Concord Fund, a conservative one, has pumped at least $9.5m into the contests since 2020. That cash no doubt helped unseat moderates: a five-term Republican attorney-general of Idaho who refused to be a political activist was booted out in 2022. The left is no more tolerant of impartiality. The Democratic Attorneys General Association, which funds candidates, announced in 2019 that it would no longer back Democrats who were not explicitly pro-choice. For aspiring attorneys-general the calculus has become clear: get more political, get elected.

To those who fear too much power is concentrated in the executive, activist attorneys-general are perhaps a good check. Yet according to a YouGov/Economist poll, most Americans would prefer their attorney-general to stick to bread-and-butter law enforcement. Voters elect lawmakers, not litigators, to craft national policy.

Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important electoral stories, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.

Economics

Donald Trump sacks America’s top military brass

Published

on

THE FIRST shot against America’s senior military leaders was fired within hours of Donald Trump’s inauguration on January 20th: General Mark Milley’s portrait was removed from the wall on the E-ring, where it had hung with paintings of other former chairmen of the joint chiefs of staff. A day later the commandant of the coast guard, Admiral Linda Fagan, was thrown overboard. On February 21st it was the most senior serving officer, General Charles “CQ” Brown, a former F-16 pilot, who was ejected from the Pentagon. At least he was spared a Trumpian farewell insult. “He is a fine gentleman and an outstanding leader,” Mr Trump declared.

Continue Reading

Economics

Checks and Balance newsletter: The journalist’s dilemma of covering Trump

Published

on

Checks and Balance newsletter: The journalist’s dilemma of covering Trump

Continue Reading

Economics

Germany’s election will usher in new leadership — but might not change its economy

Published

on

Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

Germany is 'lacking ambition,' investor says

Continue Reading

Trending