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Obama's Pressuring of Business Is Profoundly Illegal

Harold Furchtgott-Roth

President Obama has long bemoaned the lack of congressional support for initiatives ranging from immigration reform to a higher minimum wage, and announced his intention to proceed through executive orders. This week, we have learned how President Obama advances at least one of his programs without legislation, congressional funding, or even executive orders: he enlists “volunteers” from corporate America.

The program at issue is the President’s ConnectED. Launched last year, it is an ambitious goal of networking together America’s schools and libraries with ever faster broadband connections. Everyone is for better technology, particularly in education. The challenge is how to pay for it.

The administration may have little to offer Congress, but it has much to offer businesses in highly competitive and overly regulated industries. As President Obama declared: “So we picked up the phone and we started asking some outstanding business leaders to help bring our schools and libraries into the 21st century. Today, thanks to the leadership of some of these companies, we’ve got some big announcements to make.”

The President goes on to extol the “commitments” of certain high tech companies that have “decided to join the effort.” How could a business leader say “No” when the president of the United States calls to ask for a $100 million donation to his favorite program? CEOs do not want to risk being shamed as “fat cats,” as the president called bankers in 2009.

It is of course grossly improper, if not profoundly illegal, for government officials to ask favors of those who are affected by their decisions. But business executives are rewarded based on realism, not inflexible ethics. The reality is that those business executives who answered the president’s call are publicly praised by him as “outstanding business leaders.” It does not take much imagination to determine the description of those who declined the president’s offer. Nor does it take much imagination to understand that government officials are a little less receptive to those who refuse to contribute to a presidential initiative.

To add to the miracle of the administration’s newfound source of funding for its initiative, Tom Wheeler, the chairman of the Federal Communications Commission, announced that the FCC will designate $2 billion over the next two years to the ConnectED program. The money apparently comes from greater efficiencies the FCC’s Universal Service Fund program. All of this new spending comes without public notice and comment, much less a formal rulemaking, much less congressional authorization. No doubt, somewhere in America, someone might have suggested a different use for the $2 billion curiously found by the FCC in a program that is constantly and desperately strapped for cash.

According to the Bureau of Economic Analysis, the United States spent more than $3.1 trillion on all forms of education in 2012. Much of that sum comes from federal, state, and local governments. These are the same governments, representing the same taxpayers, that are running deficits. The federal Department of Education already spends more than $70 billion annually. There is little that the Obama Administration could offer Congress in return for funding ConnectED. It is not surprising that Congress has thus far taken a pass on authorizing, much less funding, President Obama’s ConnectED. But congressional inaction does not justify an end run around the law.

The last time I checked, the FCC is a federal agency bound by federal laws, including administrative laws that require it to notify the public of its pending actions, and to take new and novel actions only as the result of formal rulemakings. It is wonderful that the FCC has found $2 billion. It does not follow that the chairman of the FCC can unilaterally decide how to spend it without a rulemaking or a vote from the other four commissioners. Nor does it follow that the chairman should spend it on a program not mentioned, much less required, by law. It seems that in 2014 a $2 billion designation falls short of the threshold for public notice, comment, and rulemaking.

Perhaps as a result of the administration’s announcements this week, some schools will get better broadband connections and better education tools for their students. But in the pursuit of technological excellence, we are shortchanging our students of an important lesson: the ends do not justify the means. All of the technology in the world is of little value if used unwisely.

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