Archives: 09/2008

Senate Showdown on Earmarks

Senate leaders invoked cloture on the defense authorization bill Tuesday afternoon, setting up a showdown Wednesday on whether earmarks in the bill should be in the legislative text or in a committee report attached to the bill.

This battle is an arcane fight over legislative procedure, but it has consequences for how the Senate handles earmarks in the future. This is the first major challenge to an executive order issued by President Bush in January, which allows executive agencies to ignore earmarks in report language. Earmarks included in report language cannot be amended or challenged on the Senate floor and are not included in the bill when presented to the president for his signature.

Committee reports currently do not have the force of law, but legislators use implicit and explicit threats to executive agencies that ensure most, if not all, projects are funded according to their guidelines. Earmark defenders note that this allows agencies to reprogram funds for projects of greater urgency or to divert money from failed projects (although that rarely happens).

Sen. Carl Levin (D-Mich.) circumvented the executive order by inserting a provision in the bill (Section 1002) that incorporates the report language into the bill by reference — essentially giving the earmarks the force of law even though they’re absent from the statutory language.

Majority Leader Harry Reid (D-Nev.) used a parliamentary procedure called “filling the tree” to limit the amendments offered in order to thwart an amendment by Sen. Jim DeMint (R-S.C.) to strike the section of the bill that incorporates the earmarks. DeMint’s staff is hopeful he can offer the amendment Wednesday on the Senate floor.

Earmark critics like DeMint, Sen. Tom Coburn (R-Okla.) and Russ Feingold (D-Wis.) charge that this end run foils earmark transparency because earmarks included in the report language rather than the bill text are not subject to debate, amendment or other Senate points of order.

Advocacy group Citizens Against Government Waste blasted Levin in a release today:

This provision continues a practice of using committee reports to hide earmarks and make them difficult to eliminate by offering amendments to authorization and appropriations bills.  It certainly does not qualify as “reform” of the earmarking process.  It would prevent open debate and votes on earmarks and reduce transparency and accountability.  The “incorporation” language sets a precedent for other fiscal year 2009 legislation.  If it is not removed from the bill, it would demonstrate that the Democratic leadership of Congress has no intent of ever getting earmarks under control.

Sen. John Warner (R-Va.) also tried to offer an amendment that would shift the earmark language to the bill’s text, rather than the committee report. In a stunning display of hubris, Levin has told staffers that the Government Printing Office does not have the software to incorporate the earmark tables into the bill, according to Senate Republican staffers. Levin also told CongressDailyPM today ($) that adding the earmarks to the bill would take too long and would prevent the bill from sailing through Congress:

Levin said today that the process of adding the tables to the printed bill would take four days and could ultimately jeopardize efforts to quickly reach a conference agreement with the House and pass a final bill by the end of the month.

Cutting and pasting takes four days?

Last week, the White House issued a veto threat to the bill if the provision remains intact. The White House also expressed concerns about several other sections in the bill.

The legislation is S. 3001, the National Defense Authorization Act for Fiscal Year 2009. The earmarks in the bill total $5.9 billion. If Levin gets his way, it will set a terrible precedent for future authorization and appropriations bills. If that happens, defense funding will likely continue to be doled out based on seniority, geography of important members and lobbying clout instead of a merit-based test of what’s best for national priorities.

Bow Down Before the One You Serve

Last week, I wrote about the presidential candidates’ September 11 confab on state-subsidized “service.” Today, in the Wall Street Journal, Shika Dahlmia makes the case that even though both candidates hector us ceaselessly about national service, Obama has more detailed, and more troubling, plans:

Mr. Obama would create several new corps of his own: a Classroom Corps to help teachers and students in underperforming schools; a Health Corps for underserved areas; a Clean Energy Corps to weatherize homes and promote energy independence. The last is separate from his Global Energy Corps, to promote low-carbon energy solutions in developing countries.

Mr. Obama calls all this his “Plan for Universal and Voluntary Citizen Service.” It might live up to its “universal” billing, given that it would prod Americans of all age groups – from preteens to retirees – to sign up. But as to its voluntariness, the plan will make generous use of Uncle Sam’s money – and muscle.

By Mr. Obama’s account, he will make federal education aid conditional on schools requiring that high-school and even middle-school students perform 50 hours of service each year. He will also offer college students $4,000 every year for doing 100 hours of public service. That works out to $40 an hour – a deal that only the very wealthy could refuse. (The Obama campaign puts the price tag for this alone at $10 billion.) He promises to provide older Americans who perform civic service with “additional income security, including assistance with retirement and family-related costs, and continuation of health-care coverage.” But a government that links benefits to service can take away benefits for nonservice.

Neither candidate explicitly endorses mandatory national service. But of course, if you can’t graduate high school without a stint in Obama’s Power Rangers, that’s hardly voluntary.

U.S. Slips in Economic Freedom Rankings

Economic freedom around the world remains on the rise but it has declined notably in the U.S. since the year 2000, according to the Economic Freedom of the World: 2008 Annual Report, released by the Cato Institute in conjunction with the Fraser Institute of Canada. In 2000 the U.S. was ranked the second-freest economy, but has fallen to 8th place this year. “The rule of law, government spending, and regulation are the areas where the United States saw the most troubling declines in its ratings this decade,” comments Cato scholar Ian Vasquez.

Be Afraid — Be Very Afraid

Light rail is on the ballot this November in Kansas City and Seattle. Commuter rail is on the ballot in Sonoma and Marin counties, California. BART heavy rail is on the ballot in San Jose.

These rail plans will cost billions of dollars each (hundreds of millions in the case of Sonoma-Marin), yet take few to no cars off the roads. The energy, pollution, and greenhouse gases generated during construction will vastly outweigh any operational savings, which in some cases will be nil. The plans are supported by a baptists-and-bootleggers combination of rail nuts and companies, like Parsons Brinckerhoff, that expect to make millions during construction.

But the real ballot measure to fear is California’s proposition 1A, which would authorize the sale of nearly $10 billion in general obligation bonds to build a high-speed rail network from Sacramento and San Francisco to Anaheim and San Diego. This $10 billion, combined with $10 billion from the feds and $5 billion in private money, was supposed to pay for the $25 billion system. The plan was to turn the system over to the private investors, who would operate it and keep 100 percent of the profits.

The first problem is that even the California High Speed Rail Authority admits that the real cost will be at least $43 billion. Considering the history of similar megaprojects – and this would be the largest state-sponsored megaproject in history – the final cost will probably be at least $60 billion.

The second problem is that the Authority has probably overestimated demand. It projects the system will carry 3 to 6 times as many passengers as Amtrak carries on its Northeast Corridor trains, which serve a higher population.

If the costs are high, the benefits are minuscule even if rail attracts the projected number of riders. The environmental impact statement for the project projects that it will take, at most, 3.8% of cars off the road, reduce air pollution by about 1%, and reduce transport-related greenhouse gases by 1.4%.

Considering the underestimated costs and overestimated ridership, it seems unlikely that private investors will put up $5 billion, much less a 20 percent share of whatever the final cost turns out to be. The danger for California taxpayers is that the Rail Authority will spend its $10 billion building as far as it can and then ask for more money. How far will $10 billion go? Not much further than San Francisco to San Jose.

Nor is there any guarantee that Congress will match the state’s money. But the danger for non-California taxpayers is that it does match the money – which will lead to demands for high-speed rail support from the rest of the country. Ten other high-speed corridors have received official recognition from the Federal Railroad Administration. Then there are various ad hoc proposals, such as Albuquerque to Casper and even Fargo to Missoula.

The likely cost of a national high-speed rail network will be in the hundreds of billions of dollars. Except to the contractors that build it, the benefits will be largely imaginary. We can see that by looking at high-speed rail elsewhere.

Japan’s bullet trains were a feather in that country’s technological cap, but they sent the formerly profitable Japanese National Railways (JNR) into virtual bankruptcy. The government was forced to absorb $200 billion in high-speed debt. Meanwhile, far from attracting people out of their cars, high-speed rail accelerated the growth in driving as JNR raised fares to cope with its losses.

Europe’s record with high-speed rail hasn’t been much better. Though nations in the European Union spend an estimated $100 billion per year subsidizing intercity rail, rail has slowly but steadily lost market share since Italy opened the continent’s first high-speed line in 1978. Today, less than 6 percent of passenger travel goes by rail.

We car-crazy Americans drive for 85 percent of our travel. Europeans drive for 79 percent. Spending several hundred billion dollars to get, at best, 5 or 6 percent of people out of their cars is not worthwhile. The real impact of high-speed rail is that it replaces private air service with heavily subsidized rail service.

Rail is not just a waste of money, it is an intrusion on personal freedom. That’s because it is inevitably accompanied by restrictions on people’s property rights. Buses and airlines can follow demand by changing routes. Rails cannot, so rail agencies conspire with land-use planners to reshape society and make it more “rail friendly.” That means upzoning areas near rail stations to higher-than-marketable densities while downzoning other areas to keep developers from building the kind of low-density housing most Americans prefer.

For more information about high-speed rail, see the Antiplanner, which is blogging about it in a series of nine posts.

Polling Presidential Power

There’s a new poll out from the Associated Press and the National Constitution Center that shows “Americans strongly oppose giving the president more power at the expense of Congress or the courts, even to enhance national security or the economy.” Which is certainly good news, but it doesn’t mean there’s deep public support for de-imperializing the presidency. As the survey itself shows, only a minority of Americans thinks our current, gargantuan presidency is “too powerful.”

Which is one reason why there’s been very little debate over presidential power in campaign over the last few months (I know, because I’ve been looking fruitlessly for op-ed news hooks). Even after the Bush years, presidential power is not a pressing electoral issue.

Last December, Charlie Savage did the electorate a service by getting all the presidential candidates to go on the record with their views on executive power. (Here are McCain, Obama, and Biden’s answers.) But the voters don’t punish candidates who break these promises like they do presidents who break a “no new taxes” pledge. If the voters did, the candidates would have worried more about flip-flopping on the wiretapping question, but both McCain and Obama felt they could do it with little difficulty.

So sure, around 2/3s of the respondents to the AP/National Constitution Center poll oppose further expansions of executive power. But how people answer broad, abstract questions about governance is one thing; what they actually demand from potential presidents is another thing entirely. If the rhetoric of this presidential campaign is any indication, voters continue to respond to the idea of the president as a combination miracle-worker-cum-national parent.

Barack Obama has, among other things, promised to hold back the oceans’ rise, “end the age of oil in our time,” and “create a Kingdom right here on Earth.”

In his acceptance speech, John McCain professed humility, only moments after a video montage that suggested God rescued him from a carrier-deck fire so he could be president someday. And, judging by Rudy Giuliani’s keynote address, McCain will bridge the Mommy Party/Daddy Party divide, becoming a all-purpose national parent: “And we can trust him to deal with anything, anything that nature throws our way, anything that terrorists do to us…. and we will be safe in his hands, and our children will be safe in his hands.” He’s got the whole world in his hands.

This expansive vision of presidential responsibility is incompatible with limited government. And so long as it prevails, we can’t take much comfort in the fact that Americans tell pollsters they’d like limits on presidential power.

More bad news here.

School Choice Pioneer Rooney Dies

J. Patrick Rooney, a pioneer of the modern school choice movement, has died. Rooney, who was 80, founded a trend-setting private scholarship fund in 1991. The Educational CHOICE Charitable Trust provides financial assistance to low income families in Indianapolis who want to send their children to private schools. The year after it was created, similar programs began to crop up all over the country, from San Antonio to Milwaukee.

This model, in which donors give money to a k-12 scholarship organization, which then distributes it to the families who need it, became the framework for some of the school choice movement’s greatest successes. Today, school choice programs in six states offer tax credits to businesses or individuals who donate to such scholarship organizations (Arizona, Florida, Georgia, Iowa, Pennsylvania, and Rhode Island).

For every dollar donated, the donor’s tax bill is reduced by anywhere from 80 cents to a full dollar. Scholarship donation tax credit programs have grown faster than other kinds of private school choice programs, and have garnered more bi-partisan support. In Florida, the newly appointed director of the state’s largest scholarship program is a former public school teacher and union leader. A recent expansion of that state’s education tax credit program garnered the support of half of the black Democratic caucus. Two leading advocates of creating such a program in New Jersey are Newark Mayor Corey Booker and state senator Ray Lesniak, both Democrats.

Milton Friedman laid the theoretical groundwork for the modern school choice movement, and J. Patrick Rooney was one of the leading social entrepreneurs who helped bring that theory to life. His contribution will continue to be felt by many future generations of children.

Space Privatization—from Cato to the BBC

In the premier issue of BBC Knowledge, the Cambridge University astrophysicist Martin Rees makes several provocative arguments about manned space flight. They are:

  • The completion of the International Space Station (ISS) comes with a price tag of $50 billion, with the only profit being the cooperation with foreign partners.
  • There is no scientific, commercial, or military value in sending people to space.
  • Future expeditions to the Moon and beyond will only be politically and financially feasible if they are cut-price ventures.

He concludes that fostering good relations with other countries is insufficient justification for the expenditures, and that NASA should move aside and allow the private sector to play a role in manned space flight. The cost of these activities must lessen if they are to continue, and that will only happen with a decrease or removal of government involvement. Rees observes that only NASA deals with science, planetary exploration, and astronauts, while the private sector is allowed to exploit space commercially for things such as telecommunications. However, there is no shortage of interest in space entrepreneurship: wealthy people with a track record of commercial achievement are yearning to get involved. Rees sees space probes plastered with commercial logos in the future, just as Formula One racers are now.

Those ideas may sound radical, but not if you’ve been following the work of the Cato Institute. As long ago as 1986, Alan Pell Crawford wrote hopefully that “space commercialization … is a reality,” and looked forward to the country making progress toward a free market in space. The elimination of NASA was a recommendation in the Cato Handbook for Congress in 1999.

Edward L. Hudgins, former editor of Regulation magazine, wrote a great deal about private options in space. In 1995, he testified before the House Committee on Appropriations that the government should move out of non-defense related space activities, noting the high costs and wastefulness incurred by NASA. In 2001, Hudgins wrote “A Plea for Private Cosmonauts,” in which he  urged the United States to follow the Russians (!) in rediscovering the benefits of free markets after NASA refused to honor Dennis Tito’s request for a trip to the ISS. Hudgins testified again before the House in 2001, this time before the Subcommittee on Space and Aeronautics. He noted that since the beginning of the Space Age, NASA has actively discouraged and barred many private space endeavors. This effectively works against the advancement and expansion of technology, while pushing out talent to foreign countries who court American scientists and researches to launch from their less-regulated facilities. In “Move Aside NASA,” Hudgins reported that neither the station nor the shuttle does much important science. This makes the price tag of $100 billion for the ISS, far above its original projected cost, unjustifiable.

Michael Gough in 1997 argued that the space “shuttle is a bust scientifically and commercially” and that both successful and unsuccessful NASA programs have crowded out private explorers, eliminating the possibility of lessening those problems. Molly K. Macauley of Resources for the Future argued in the Summer 2003 issue of Regulation that legislators and regulators had failed to take into account “the ills of price regulation, government competition, or command-and-control management” in making laws for space exploration.

We welcome the BBC and the Astronomer Royal to the cause of private, entrepreneurial exploration of the cosmos.

Hat tip to Michael Gough and Diana Lopez.