ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Friday, October 11, 2013

Contracts and the Government Shut Down

Since I favor national health insurance, I have a hard time understanding the passionate opposition to the Affordable Care Act (ACA).  But as a contracts professor, I also have a hard time understanding the Congressional Republicans' negotiating position.  What consideration are they offering in return for passing a funding measure?  As I understand it, their positions have been variously:

  • We won't pass a funding measure unless the President agrees to defund the ACA;
  • We won't pass a funding measure unless the President agrees to postpone the launch of the ACA for one year; and 
  • We will give the President an additional six weeks to postpone the launch of the ACA or we will refuse to raise the debt ceiling.

These positions take the rhetorical form of concessions.  The Congressional Republicans seem to be offering compromise positions to the administration.  But they are not in fact concessions because (by analogy to contracts doctrine), they are seeking a modification of an agreement without offering any new consideration.  Funding the government is one of Congress's constitutional duties.  Shutting down the governement and throwing (or threatening to throw) the economy over a cliff because one party opposes one piece of legislation is a reckless and irresponsible derogation of that duty.  Moreover, all of these concessions are merely delays.  Many Congressional Republicans have made clear that they intend to continue their strategy of threats to harm the country unless the administration concedes seriatim to an agenda driven by the GOP's most conservative members.

US Capitol

It is not as if there are not issues on which Congressional Republicans could give some ground -- and some of these issues would not even be costly.  Are they offering real concessions on assault weapons? On environmental protection? On increasing taxaction on the wealthy or doing something to address the growing gap between rich and poor in this country?  Is there any significant legislative realm in which the congressaional republicans are willing to make real concessions in return for an agreement that the ACA will be changed in some way or postponed? 

Until the Republicans come forward with some serious consideration offered in return for  a compromise on the ACA, I would be disappointed if the Senate or the administration gave any ground, just as I generally would not counsel a client to make concessions in a business context without negotiating some meaningful new consideration (absent unforeseen material changes in circumstances that have not occurred here).  Modifications without consideration make sense in a relational context in which the parties value their on-going ability to continue engaging in mutually beneficial transactions more than the anticipated profits from any single contract.  But that is not how I would characterize the relationship between Republicans and Democrats.  These two entities have adopted mutual enmity as their raisons d'ĂȘtre, and they've been thrown together because members of each group are purportedly committed to the common good.  

Well, it's time to show some evidence of allegiance to that purpose.

[JT]

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Comments

"But they are not in fact concessions because (by analogy to contracts doctrine), they are seeking a modification of an agreement without offering any new consideration."
Is contracts doctrine really a good analogy to use here? How does one address the issue that mny of these House members (on both sides of the aisle) were not parties to the ACA as originally drafted?

Posted by: JB | Oct 11, 2013 9:00:57 AM

JB,

The analogy is imperfect, but not because the members of the House were not parties to the ACA as drafted. I am not saying they are in breach of their duty to implement the ACA. I'm saying they are in breach of their duties as members of Congress, which I am arguing includes a duty to fund the government.

They are now saying, we won't perform that obligation unless you give us additional consideration, and to the extent that the analogy works, they may not do so.

Posted by: Jeremy Telman | Oct 11, 2013 10:38:45 AM

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