Matt Glassman

Congress as board of directors

Here's Senator Tillis yesterday, discussing the frayed Senate-administration relations amid the endless blindsiding Hill Republicans are getting from the White House these days:

“At some point, we’ve got to return ourselves to being a board of directors versus like a manufacturing facility that just creates whatever product the White House wants.”

I have long thought that this analogy—Congress as a board of directors—is one of the best ways to think about the legislature, writ large, within our separation of powers system. Both for Senators thinking about their job and citizens assessing the government.

Start from a simple principle: Congress doesn't do anything. At least not in the sense that a six-year-old would understand. The executive branch? Those people do things. A park ranger at Yellowstone will give you a tour. A scientist at NIH is putting things in test tubes and trying to cure cancer. An FBI agent is cuffing a suspected criminal. Those are all things people do that a child can wrap their had around.

Congress doesn't do anything like. that And so if we think of the U.S. government as a corporation, the executive branch is the actual company making the widgets. And the head of the corporation? That's the CEO. In this analogy, it's the president. The CEO doesn't tell the line workers what to do every day, but they do set the general direction for the company over the next few quarters and next few years.

Congress, in this corporate analogy, is the board of directors, overseeing the corporation and the CEO, on behalf of the shareholders. Which in this analogy is the voters.

I love this analogy, because it properly and clearly separates legislative direction and executive implementation. Congress doesn't solve problems directly; the board of directors has neither the on-the-ground expertise nor the time. Instead, it provides direction and resources to the CEO and the corporate employees who are tasked with the day-to-day running of the company.

It also very quickly exposes some of the high-level politics that shape the government and the legislature. First: anonymity. You can probably rattle off the names of a dozen CEOs in America. Like the tech bros: Bezos, Musk, Zuckerberg, Altman, and so on. But can you name three people on the board of directors of Google? Of course not. That's ridiculous. Surely, there's some clown in Silicon Valley who can rattle them off, but no one normal can.

Same thing in government. Literally everyone knows Trump is president. But you get 15 miles outside of weirdo DC, and no one can name you 20 Members of the House. Congress is a big black box in peoples' heads, just like the board of directors of Google is a big black box in yours.

Second, when a company does well or poorly, the CEO is going to get the credit or the blame. If revenue is up, share price is up, CEO is getting the public credit. Simple as that. No one normal would ever say "that board of directors of Facebook? Bang up job!" Again, that's insane. Maybe some clown on Sand Hill road. But no one normal. Same with government. For better or worse, right or wrong, Trump is getting the credit if there's peace and prosperity. And the blame if there's not. Congress' approval rating really doesn't fluctuate on those dimensions.

Finally, if a corporation and its CEO are really floundering, what happens? The CEO gets fired. By who? The board of directors. And this sort of exposes the big lie we were all told as kids and many people repeat today: that there are three co-equal branches of government. Nonsense. The Constitution doesn't say it. The Founders never said it. And, in fact, the Federalist Papers essentially say the exact opposite. Congress is the center of the system.

It has to be. At an existential level, Congress is in control. It can destroy an agency or a lower court, and it can remove officials in the executive and judicial branches. No one can remove a Member of Congress, except Congress itself, or the voters. In the end, the shareholders and the board of directors will always exist. The rest of it? That's all contingent.

Of course, the Constitution gives the board less control over the CEO than most corporations, or most modern democracies. It does not select the CEO, nor is it able to easily remove one.

So what does a board of directors do? Here's what Congress does:

That's what Congress does. Remember, the executive branch doesn't exist in the Constitution. The president and vice-president are in there. But nothing else. "Treasury" and "War" are mentioned, but those departments don't exist until Congress creates them. Every job in the executive branch aside from POTUS and VPOTUS exists because, once upon a time, Congress either created it or authorized someone else to create it, and Congress has been funding it ever since. Congress built and maintains the corporate structure.

The analogy I always used teaching this to young staffers on the Hill was that of a teenager looking for something to do on a Saturday afternoon. You're 16. You go find your dad and tell him you are looking for something entertaining to do. Maybe you could go see a movie. He asks you about it, and you tell him it's this matinee downtown, you're going to walk there with your friends. And he's says you can see the movie.

That's an authorization. You can go see the movie.

Then it gets awkward. You and your father are staring at each other. What are you missing? The money. So you say "hey dad, you just said I could go see a movie. Can I have $30?"

And he chuckles and says, "Son, we live in the Anglo-American system. We separate authorizations and appropriations. You have to go see your mother." And he walks away laughing.

And so you go find your mother. And when you do, do you just say, "Hey mom, quick, give me $30, dad said I could see a movie." Does that work? Not in any house I've ever lived in. So your mom starts asking you about the price of popcorn and how many movies you saw last month, and you haggle with her and eventually she gives you $23 and tells you not to buy sugar soda. That's an appropriation.

And you head downtown and later on in the evening when you get home, your parents are sitting around the dinner table. You sit down. There are exactly two questions they are going to ask you:

That's oversight. Don't complicate it. That's all it is. How was the movie and where's my change.

And this is the point at which you have to explain to your parents the difference between talking about doing things on paper, and then actually doing stuff in the real world. So you say, "Well, we got downtown and there was a long line for the movie and Bill's sister had already seen it and she said it wasn't that good...so we just went to the candy store and the arcade instead. Which is ok, because the authorization you gave us was for entertainment and not specifically for a movie, right?

And of course your parents are going to lose it, and now you are fighting out executive-legislative relations at the dinner table. And indeed, almost all of the basic principal-agent problems that exist between corporate boards and companies/CEOs also exist between Congress and the executive branch. But that's a different post.