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The Supreme Court Hangs in the Balance

FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
October 23, 2012

IN THIS ISSUE:

1.  Why the Supreme Court Matters

2.  Aging Supremes & Implications For the Election

3.  How Presidential Elections Affect the High Court

4.  Why Control of the Senate Matters

5.  Why This Presidential Election is So Critical

Overview

The airwaves are overflowing with intense discussions about President Obama’s and Governor Romney’s positions on a variety of issues. What we don’t hear much talk about is the likelihood that our next president will get to appoint at least a couple of justices to the Supreme Court. Depending on the outcome of the election, the balance in the High Court could shift significantly. With that in mind, let’s focus today on what’s at stake for the highest Court in the land, and therefore all of us.

Why the Supreme Court Matters

When it comes to presidential elections, we should all keep in mind just how important the Supreme Court is to our democracy. The Supreme Court consists of the Chief Justice and eight Associate Justices. The power to nominate the justices is vested in the President of the United States, and appointments are confirmed with the advice and consent of the Senate.

Like all Federal judges, Supreme Court Justices serve lifetime appointments on the Court. As of the end of 2010, Associate Justices earn just under $214,000 a year plus benefits, whereas the Chief Justice earns $223,500 plus benefits. If the justices serve 10 years on the Court, they receive a full government pension for life.

Below are the current members of the Supreme Court, along with their ages, the president who appointed them and their ideological persuasions:

Chief Justice:
  JOHN G. ROBERTS, JR. – 57 (Bush 43) As yet uncertain
 
Associate Justices:
  ANTONIN SCALIA – 76 (Reagan) Right-leaning
  CLARENCE THOMAS – 64 (Bush 41) Right-leaning
  SAMUEL A. ALITO, JR. – 62 (Bush 43) Right-leaning
  RUTH BADER GINSBURG – 79 (Clinton) Left-leaning
  STEPHEN G. BREYER – 74 (Clinton) Left-leaning
  SONIA SOTOMAYOR – 58 (Obama) Left-leaning
  ELENA KAGAN – 52 (Obama) Left-leaning
  ANTHONY M. KENNEDY – 76 (Reagan) Swing-vote

When Chief Justice John Roberts was appointed by President George W. Bush in 2005, he was considered a conservative. He replaced former Chief Justice William Rehnquist who was also a conservative. However, conservatives were stunned when Chief Justice Roberts voted to uphold the constitutionality of ObamaCare on the basis that it is a “tax.” Thus it remains to be seen how Justice Roberts will vote over the remainder of his career.

When Chief Justice Roberts was appointed, observers on both sides of the political divide assumed that the High Court would remain pretty much equally divided, with four right-leaning judges (Roberts, Scalia, Thomas and Alito), and four left-leaning judges (Ginsburg, Breyer, Sotomayor and Kagan).

Justice Anthony Kennedy, while thought to be a conservative when Reagan appointed him in 1988, has proven himself to be a “swing voter.” Over the years, he has voted with both the conservatives and liberals on the High Court, depending on the issue. His liberal votes have greatly disappointed conservatives as you might expect.

Others contend that Justice Kennedy’s flexibility to lean conservative or liberal makes for a good balance on the Court. When it came down to voting on the constitutionality of ObamaCare, everyone expected that Justice Kennedy would cast the deciding vote. Kennedy voted to strike it down. It was Chief Justice Roberts who cast the deciding vote in favor.

Aging Supremes & Implications For the Election

What should jump out most from the Supreme Court roster above is the fact that several current justices may be looking to retire. While they can serve as long as they wish (lifetime appointments), it is possible that one or two justices may be looking to retire in the next four years. With four of the nine justices in their 70s, anything can happen.

Justice Ginsburg is now 79 years old. She was diagnosed with a small pancreatic cancer tumor in early 2009. It was removed and she has reportedly been in good health since then. Nevertheless, it would surprise no one if she decided to retire at any time, perhaps before the end of this year, depending on the outcome of the presidential election. She will surely want to be replaced by a Democrat president.

Justice Breyer at age 74 has given no indication that he has plans to retire soon. The status of his health is unknown (such information is kept very private), but there is no indication that he is ready to retire. But here again, it is a guess what he may do if President Obama is not re-elected to a second term.

If Justice Breyer also wants to be replaced by a Democrat president, it is uncertain as to whether he will bet on his continued good health and sign on to another potentially eight years (when he will be 82) should Governor Romney win the White House. In that case, it could be possible that Justice Breyer could step down before the end of this year – just a possibility.

And finally, there is Justice Anthony Kennedy. Like most others on the Supreme Court, we know little about Justice Kennedy’s personal health. All we know is that he is 76 years old. As noted above, Justice Kennedy was thought to be a conservative when he joined the High Court in 1988. But he quickly proved he could vote with the conservatives, or the liberals, on the Court.

What we do know in recent years is that Justice Kennedy has indicated, despite his swing votes on various rulings, that he would like to remain on the Supreme Court until such time that a Republican president could appoint his successor. While that remains to be seen, it does seem that Justice Kennedy is ready to retire sometime in the next several years, especially if Romney wins the election.

How Presidential Elections Affect the High Court

There are always key moving pieces in the Supreme Court. Older Justices retire; younger ones are appointed, regardless of who is in the White House. The decisions on who sits on the High Court can affect major decisions for a generation or longer. This is a big deal that many voters rarely consider.

Some have suggested that if President Obama is defeated on November 6, there is a possibility that we could see one or more Supreme Court Justices decide to retire so that Obama can choose their replacements before the end of this year. I don’t think that will happen, especially with all of the critical issues facing Congress after the election and before year-end (ie – the fiscal cliff, etc.).

Even if one of the justices announced his/her retirement, and Obama tried to appoint a replacement before the end of the year, the Republicans in the Senate would almost certainly filibuster the appointment and he or she would not be confirmed. Again, I do not think this will happen.

Now let’s assume: 1) that Romney is elected president; and 2) no Supreme Court Justices retire before the end of this year. That will be very interesting. If we assume that Justice Ginsburg or Justice Breyer or Justice Kennedy decides to retire in the next four years, Romney could have the potential to appoint one or two new Supreme Court Justices. That could shift the balance in the High Court from 5-4 to 6-3 in favor of the conservatives. That’s a big deal!

On the other hand, if President Obama is re-elected for another four years, he could also appoint one or more Supreme Court Justices in the next four years. That could also shift the High Court from 5-4 to 6-3 in favor of the liberals. That is also a big deal!

Why Control of the Senate Matters

As noted above, the Senate must confirm all presidential appointments to the Supreme Court. A simple majority vote is the requirement. Judges who are selected for appointment to the High Court are required to testify before the Senate and are grilled with questions from both sides. Then a final vote is taken unless there is a filibuster, which rarely happens.

Control of the Senate has a big impact on who gets selected for appointment to the Supreme Court. Let’s say that the president is a Republican but the Democrats control the Senate. In that arrangement, the president would most likely have to nominate a more moderate judge in order to get him/her confirmed by the Senate. The same would hold true if the president was a Democrat and Republicans controlled the Senate.

If the Senate is controlled by the same party as the president, then it is easier to get more partisan judges confirmed. This was the case with President Obama’s nominations of Sonia Sotomayor in 2009 and Elena Kagan in 2010. Both were easily confirmed with votes in favor of 68 and 63, respectively.

The point is, each president has to weigh carefully who he nominates for the Supreme Court. If his own party does not control the Senate, then he has to make a choice that is moderate enough to garner enough votes from the other side to win confirmation. The last nominee that was rejected by the Senate was Judge Robert Bork in 1987, who was rejected 42-58.

Now let’s bring this issue of who controls the Senate to our current situation. Earlier this year, it looked like the Republicans would take control of the Senate in 2013 following the November 6 elections. However, more recent polls suggest that the Democrats will most likely remain in control of the Senate after the election (more on this below).

Why This Presidential Election is So Critical

As noted above, since Supreme Court Justices have lifetime appointments, they can affect judicial decisions for a generation or more. In recent years, the trend has been to nominate younger and younger judges for the High Court.

For example, when Chief Justice Roberts was confirmed to the High Court, he was only 50 years old. When Justice Sotomayor was confirmed, she was only 55 years old. Justice Kagan was only 50 years old. Each of these justices could easily serve another 20-25 years, or even longer.       

It is impossible to know when any Supreme Court Justice will decide to retire. Likewise, it is impossible to know when any Justice may be unable to continue to serve due to illness. Yet because of the ages of several current justices, the odds are more likely that one or more will retire and/or be unable to serve due to illness over the next four years.

Some argue correctly that if Justice Ginsburg retires, President Obama would surely replace her with another left-leaning judge. That does not change the balance of the Court (liberal replacing liberal). The same would be true if Justice Breyer has to be replaced, assuming that Obama wins a second term.

Yet the key issue is that Justice Scalia and Justice Kennedy are both 76 years old. If for any reason one or both of them decided to or had to retire, that would be very troubling if Obama is re-elected. If either or both of them had to be replaced by President Obama, the Court would shift dramatically to 6-3 or even 7-2 to the liberal side. Again, keep in mind that such a shift could last for a generation. That is why this election is so critical!

Now you might argue that the Supreme Court could shift just as much to the conservative side if Romney wins the election. And you might be correct, IF the Republicans win control of the Senate in two weeks. However, as noted earlier the latest polls suggest that the GOP will fall at least 2-3 seats short of regaining control of the Senate.

So should Governor Romney win the White House, and should he have the opportunity to nominate one or more judges to the Supreme Court, he will be constrained due to the fact that whoever he nominates must survive the scrutiny of the Democrats in the Senate. It would be difficult for Romney to nominate a serious conservative, knowing that the Dems in the Senate would probably vote him or her down.

In that case, Romney might have to select more moderate judges to place on the High Court. To that, I say we don’t need any more John Roberts on the Court. As discussed earlier, it was Chief Justice Roberts who cast the deciding vote in favor of ObamaCare. It is widely believed that Roberts chose to vote in favor of the wildly unpopular healthcare law because he was concerned about the legacy of the “Roberts’ Court” if it struck it down.

Some will say that it is too early to be so critical of Justice Roberts. I happen to disagree. Roberts single-handedly turned control of 18% of our economy over to the government. I’d say that qualifies as more than enough to discredit him! Furthermore, that leaves us all to wonder how Justice Roberts will vote in the future. What’s to say he is not David Souter 2.0?

Conclusions

We often hear the warning that this is “the most important presidential election in our lifetimes.” While that has been said about elections in the past, I really think it is true this time around. Obama is the most liberal president in a very long time. His agenda is not in the best interest of the country (and I think he knows it).

I purposely titled today’s letter “The Supreme Court Hangs in the Balance” because it really does. If President Obama is re-elected, it is almost certain that the High Court will shift significantly to the liberal side over the next four years. And it could stay that way for a generation or more. We just can’t let that happen!

Fortunately, Governor Romney has pulled ahead in the polls, beyond the margin of error in the Gallup poll of likely voters (51-45), and up to 50-46 in the latest Rasmussen poll today. Of course, this doesn’t guarantee that he will win. However, according to Gallup, no presidential candidate that has reached 50 at this late date has ever gone on to lose the election. That’s the good news!

Be Sure to Check My BLOG Tomorrow

There are only two of my Wednesday “Election Special” blogs left to go. Every Wednesday, Spencer Wright and I summarize the various polls and handicap the race, including some insights that you may not see in the mainstream media. We will discontinue this Wednesday service after the election, unless there is something controversial about the election results. In that case, we might have a final blog on Wednesday, November 7, and then we’ll discontinue. Click here to join the conversation.

After the election, my Friday blog will be shifting to Thursdays. I will continue to write about whatever I find most interesting in the Thursday blogs going forward. Click here to be a part of it.

Very best election season regards,

 

Gary D. Halbert

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Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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