May 21, 2002
2002 Spring Term: YLS Faculty Testify before Congress
Over the 2002 spring term, YLS faculty members shared their expertise on everything from tax law to the rule of law in China by testifying before congressional committees.
John H. Langbein, Sterling Professor of Law at YLS, presented testimony before the U.S. Senate Committee on Governmental Affairs chaired by Joseph I. Lieberman '67 on January 24. The committee was investigating the collapse of Enron in a session entitled "The Fall of Enron: How Could It Have Happened?" and Langbein was invited to testify about the pension investment aspects of the bankruptcy.
His testimony pointed out that the concentration of employee benefits in Enron stock that proved so disastrous when the company's stock lost nearly all of its value was not illegal under the Employee Retirement Income Security Act (ERISA). However, Langbein maintains that the practice was foolish. "ERISA invited this mess, and unless you change ERISA, I can predict to you with utter certainty that such cases will happen again, as they have repeatedly in the past." Langbein recommended placing diversification requirements on the type of pension account that Enron used.
Jonathan Hecht, the deputy director of Yale Law School's China Law Center and a senior research scholar at YLS, testified in front of the Congressional-Executive Commission on China on April 11, considering the topic: "Taming the Dragon: Can Legal Reform Foster Human Rights in China?"
Hecht told the commission, "I believe that sustained targeted support for legal reform can play a useful, indeed, crucial role in promoting human rights in China." Hecht explained how, increasingly, legal reform in China is focusing on the practical application of laws through institutions and procedures. He urged the government commission to consider the issues of police powers in China and to support reformers working in this area.
Ruth Wedgwood, professor of law, testified before the Senate Committee on the Judiciary, Subcommittee on the Constitution, on the question of "Applying the War Powers Resolution to the War on Terrorism," on April 17. She spoke about "the mutual powers of the President and the Congress in the support of our nation abroad and in its defense against our adversaries."
Wedgwood pointed out that the Constitution's assignment to Congress of the power to "declare" war, rather than to "make" war, entails uses of military force by the executive branch short of full-scale war. And she argued that military maneuvers and deployment, as well as the use of force, are often "interwoven with the very conduct of American diplomacy and statecraft." She also described how the Congressional resolution passed on September 18, 2001, authorizes continuing military activity against al Quaeda, in whatever country it operates.
Michael J. Graetz, the Justus S. Hotchkiss Professor of Law, was invited to testify before the U.S. House Committee on Ways and Means, Subcommittee on Select Revenue Measures, on May 9, and called for nothing less than an overhaul of the U.S. tax system. The hearing was on the "Extraterritorial Income Regime," and Graetz delivered a statement on the "issue of fundamental reform of the U.S. tax system and how it might improve the economic well-being of Americans."
Proceeding from the assumption that the nation's tax system should be transparent and simple, should enhance productivity and distribute its burdens equitably, Graetz went on to outline a specific program that could accomplish all of these things. First, he suggested replacing most of the income tax with a consumption tax, maintaining the income tax as only "a low-rate tax on a relatively thin slice of higher income Americans." This would prevent an unfair shift of the tax burden to low-income Americans, while producing revenue in a way that would be vastly simpler for most Americans. "This is a practical and workable plan," Graetz says.