Cantor Should Be Conflicted Out Of Debt Ceiling Talks
This Supreme Court term has brought a lot of significant decisions and several, such as Wal-Mart v. Dukes have garnered the lion’s share of press attention. But one that went relatively under-reported was a unanimous opinion that upheld ethics laws across the nation that prevent legislators and city councilmen from voting on matters in which they have a conflict of interest.
A Nevada high court decision had ruled that preventing legislators from voting (and giving floor speeches on) matters where they have a conflict violates the First Amendment rights of those legislators. But, writing for the majority, Justice Scalia held that conflict-of-interest rules do not infringe on the free-speech rights of lawmakers. In the past the Court has said that legislators do have constitutional rights so speak freely, but those rights do not allow them to vote on matters if they have a conflict of interest since the right to vote is not personal to the legislator but belongs to the people.
Why is this decision so significant? Consider Eric Cantor’s position on the debt-ceiling increase. Cantor famously walked out of negotiations on raising that limit, bringing the country closer to defaulting on its debt obligations and unable to do such things as issue social security benefits, for example. But now it appears that Cantor is in a position to benefit financially should a default occur.
According to the Wall Street Journal, Cantor has between $1000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. This is a fund that “aggressively shorts” long-term Treasury bonds. That means the fund performs well with the U.S. debt is undesirable.
If the debt ceiling does not get raised investors would start dumping Treasury bonds and Cantor’s investment would spike. That means Cantor has a conflict of interest. That conflict of interest, according to the Supreme Court, should prevent him from any vote on the increase of the debt ceiling — provided an ethics inquiry gets raised.
So the next obvious question is: when will the House bring such an ethics inquiry?
photo courtesy of Medill DC via Flickr