Contemporary U.S. Policymaking

This paper presents a model with a legislature, courts, and an executive that can take unilateral action. The legislature is polarized, and when government is divided, parties or factions bargain over legislation, understanding that failure can result in executive action. The theory characterizes legislative bargains, identifies which party factions bargain, and presents comparative statics. Executive action represents a threat to the opposition party, and policies are more favorable to the executive the stronger is the threat. The opposition can attempt to block the executive action in the courts, and the higher the probability of success the weaker the threat is. The theory predicts that bargains are stuck, but during the divided government years of the Obama and Trump administrations no major legislation was enacted. Bargaining failure is explained in the theory by ideological hatred resulting from increased polarization in Congress and by party competition for the electoral prize of unified government. Failure results in rejection of legislative proposals or immediate executive action. The theory is applied to the cases of nationwide injunctions, Obamacare, DACA, and WOTUS (Waters of the United States), that are either currently or likely to be before the Supreme Court.