Eliminating Sentencing Guidelines Would Make Penalties More Equal

By a 5-4 margin, the Supreme Court effectively put the U.S. Sentencing Commission Guidelines out of their misery in January. The Guidelines were originally set up in 1987 to ensure fairness and rational organization in criminal sentencing. But they have failed, instead increasing disparities and making an illogical hodgepodge of rules.

Critics of the Guidelines have focused on its many eccentricities. For instance, penalties for drug violations are based upon the weight rather than the purity of the drugs (note to would be criminals: to minimize jail, make sure the cocaine is pure and not diluted with baking soda or sugar).

Yet, a more basic problem exists. The Guidelines have created more sentencing disparity because they focus solely on just one of the penalties that criminals face: imprisonment. There are many other penalties imposed on criminals, including lost professional and business licenses, the inability to join some unions or work for the government, lost retirement funds as well as fines and restitution. Prior to the Guidelines going into effect, judges usually imposed lower prison sentences on criminals who faced large other additional penalties.

Martha Stewart’s recent case is a good example of the inequities created by the guidelines. She was sentenced to 10 months confinement, but she also suffered millions of dollars in lost salary, lower stock market value of her company, and fines. A common criminal who was similarly convicted of misleading authorities would only face the prison term. In the absence of the guidelines, Martha Stewart’s prison sentence would have been shorter and her case become one of those "disparities" that people used to complain about twenty years ago.

True sentencing disparities for the same crime that motivated the Guidelines were actually rare. A false impression usually arising simply from a failure to recognize that most judges prior to the Guidelines were balancing all the penalties born by the criminals.

For many first time criminals, these additional penalties are more important than the imprisonment itself. To illustrate their importance, in the mid-1980s, the average insider trader made $365,000 per year in legitimate earnings prior to conviction, but only $14,000 per year during the last year on probation or parole. Only a few percent of these people faced prison and those terms were just a couple of months long. While this example is extreme, not just white-collar criminals face substantial cuts in income. Even the typical larcenist, who faced about 4 months in jail, faced a reduction from $15,000 prior to conviction down to $10,000.

The dissents by Justices Anthony Scalia and Clarence Thomas were right in that all the Guidelines don’t have to be thrown out just because a small section of the Guidelines that applied to some trials violated Constitutional rights to a jury trial. Yet, the jabs Scalia pokes at the majority’s seeming inability to grasp the inconsistency between making the Guidelines voluntary and saving the guidelines’ mission to reduce sentencing disparity missed a crucial point. The critique only makes sense if the Guidelines actually reduced disparity.

In part, Scalia’s assumptions about how the Guidelines work arise because, according to him, “the Guidelines took pre-existing sentencing practices into account.” But, unfortunately, as people who worked there like myself know, only a small part of the Guidelines had anything to do with past practice and even that was quickly done away with. Many crimes, such as insider trading, faced explicit prohibitions within the commission against collecting any data on past sentences.

For bank larceny (the only category where Guidelines were originally based on past practice), the revised 1989 guidelines, issued just two years after the initial ones, eliminated any real link to past practice. In order to increase penalties half the data sample was dropped – the cases with the lowest prison terms. For other crimes the sentences were based at best on guesses of what constituted past practice.

With a new battle to reform sentencing brewing in congress after the court’s decision, hopefully congress will heed an earlier description by Scalia of the commission as “a sort of junior-varsity Congress,” that contained all the political weaknesses with out the constraints. Indeed, as the news media has focused on new stories over the years, the Guidelines have responded and become an ever more complicated patchwork quilt of often-inconsistent rules.

The Guidelines overturned many sensible patterns of imposing legal penalties, patterns that had arisen over decades. For example, in the past, secretly dumping a small amount of oil illegally into water received a much higher penalty relative to the damage done compared to a major oil tanker running a ground. From an economic point of view, this makes perfect sense, as crimes that are difficult to detect must be punished more severely. The Guidelines reversed these and other long time patterns.

The court’s decision unfortunately may only provide a temporary respite. Hopefully though, instead of merely keep on repeating the need for fair sentencing, the new legislative push will actually adopt a system that doesn’t again do the opposite.

*Lott, a resident scholar at the American Enterprise Institute, was the chief economist at the U.S. Sentencing Commission during 1988 and 1989.