Archives: 10/2010

GAO: HHS Imposed an “Unusual” Prior Restraint on Speech during ObamaCare Debate

During the debate over ObamaCare, the Centers for Medicare & Medicaid Services took issue with some of the things that some of the insurers participating in the Medicare Advantage program were telling their enrollees about the legislation.  The Government Accountability Office has just released a review of CMS’s conduct in that episode:

Although CMS’s actions generally conformed to its policies and procedures, the September 21, 2009, memorandum instructing all MA organizations to discontinue communications on pending legislation while CMS conducted its investigation was unusual. Officials from the MA organizations and CMS regional offices that we interviewed told us they were unaware of CMS ever directing all MA organizations to immediately stop an activity before CMS had determined whether that activity violated federal laws, regulations, or MA program guidance. When asked about this directive, officials from CMS’s central office stated that, given the degree of potential harm to beneficiaries, the action was appropriate for the circumstances….

HHS expressed concern that our description of the September 21, 2009, memorandum as “unusual” makes it appear as though their suspension of all MA organizations’ communications on pending health reform legislation was inappropriate. It noted that directing an MA organization to immediately stop an activity while the agency determined whether violations had occurred was infrequent but not unprecedented…. We believe that the example provided—wherein CMS put its data collection activities on hold until the agency resolved concerns with interpretation of its own regulations—is not comparable to CMS instructing all MA organizations to stop sending information about health reform proposals to beneficiaries while it investigated potential violations. Moreover, our characterization of CMS’s action as unusual is based on discussions with MA organizations and CMS staff. They told us that they could not recall a previous example where CMS told all plans to stop an activity after a potential violation was discovered and prior to the completion of an agency investigation.

For the record, CMS lacked (and still lacks) a Senate-confirmed administrator.  It’s worth asking whether this prior restraint placed on speech critical of the administration came from Secretary of Health and Human Services Kathleen Sebelius, who is making quite a name for herself as an enemy of free speech.

What War Does to Our Society

The Department of State recently released newly declassified documents covering U.S. policy toward Vietnam, Laos, and Cambodia from January 1973-July 1975. At a State Department conference commemorating the release of these documents, diplomat, strategist, and Nobel laureate Henry Kissinger bemoaned the torment that consumed a generation of Americans as the conflict wore on. The insight Kissinger provides–possibly unintentional–underscores why assessments of war should go beyond critiques of its political and geostrategic ramifications; they should also extend to the various ways that war affects our society and public more generally.

In Kissinger’s somber assessment of America’s involvement in Southeast Asia, he said he regrets that what should have been straightforward disagreements over the U.S. approach to Vietnam became “transmuted into a moral issue – first about the moral adequacy of American foreign policy altogether and then into the moral adequacy of America.”

He goes on to say, “To me, the tragedy of the Vietnam war was not that there were disagreements—that was inevitable, given the complexity of the (conflict)—but that the faith of Americans in each other became destroyed in the process.”

Kissinger called himself “absolutely unreconstructed” on that point.

“I believe that most of what went wrong in Vietnam we did to ourselves,” he said, adding, “I would have preferred another outcome—at least another outcome that was not so intimately related to the way that we tore ourselves apart.”

Disappointingly, much of what Mr. Kissinger said is true.

Certainly, much of the burdens associated with our foreign policies do not affect the average person; they are absorbed by America’s all-volunteer military. Still, wars and debates over wars have the power not only to tear our society apart, but also to destroy our faith in each other in the process. These factors are latent, ignored, and often misunderstood, but are detrimental to our country nonetheless.

In this respect, criticism of war should not end at an aversion to deficit spending. Certainly, increased public debt and diminished civil liberties are enduring, adverse effects of war. As writer Randolph Bourne famously declared during World War I, “War is the health of the state.”

But in addition to expanded government power, wars also become a template for regimentation in other areas of life. As we witnessed in the lead up to the war in Iraq, war can erode what should be the public’s normal propensity to question authority and lead to a herd mentality that demands blind obedience to state authority.

Over time, and through decades of continual foreign intervention, wars can radically alter our national character and transmogrify the spirit and moral temperament of our society. Sadly, such a perilous path could doom our nation to a fate that befell history’s other predominant great powers.

Check out the most recent volume of State Department reports on Vietnam. You won’t be disappointed.

If Only Hawaii’s Government Were as Beautiful as Its Beaches

Throughout history, people have fought over beaches, including in the legal arena. In the latest case in which Cato has filed an amicus brief, a state has once again redefined property rights to take possession of highly-valued beachfront property.

In 2003, Hawaii passed Act 73, which took past and future title to accretions (the slow build-up of sediment on beaches) from landowners and gave it to the State, changing a 120-year-old rule. While waterlines are unpredictable, the original rule — common to most waterfront jurisdictions — helped establish legal consistency. Indeed, without such a rule, beachfront property becomes beachview property in just a few years.

In response to Act 73, homeowners sued the state, claiming that the law violated the Takings Clause of the Fifth Amendment or, in the alternative, the Due Process Clauses of the Fifth and Fourteenth Amendments. The state appellate court held that compensation was owed only for the accretions that had accumulated before Act 73’s enactment because the right to subsequent accretions had not “vested” (the legal term for when an expectation becomes an actual property right). Hawaii’s Supreme Court declined to review that ruling, so the property owners asked the U.S. Supreme Court to do so.

Cato, joined by the Pacific Legal Foundation, filed a brief supporting that petition and argues that the appellate court’s decision was contrary to long-standing definitions of waterfront property rights. Our brief highlights the increasing need for the Court to establish and enforce a judicial takings doctrine.

More and more states are using backdoor tricks — like legislative “guidelines” and judicial creativity — to take property in violation of constitutional rights: This Hawaii case is distressingly similar to last term’s Stop the Beach (in which Cato also filed a brief). In that case, Florida took property by adding sand to the beach and then laying claim to the newly created land — in essence asserting that property that was defined by contact with the water (in technical terms, “littoral” or “riparian”) had no right to contact the water. The Court ruled that while Florida’s actions did not rise to the level of a judicial taking, a large enough departure from established common-law rules could constitute a constitutional violation.

In this latest brief, we highlight both the largeness of Hawaii’s departure from established law and the spate of such actions in recent years — which circumstance calls out for Supreme Court review.  The case is Maunalua Bay Beach Ohana 28 v. Hawaii and the Court will decide later this fall whether to take it up.

A Hidden Cost of ObamaCare

Today at the Cato Institute, Duke University Prof. Chris Conover presented his estimates of the economic losses that will be created by the taxes necessary to fund ObamaCare.  This chart is taken from his presentation:

The Excess Burden of ObamaCare

Here’s Conover’s full presentation (with comments by former Congressional Budget Office director Douglas Holtz-Eakin), as well as his Cato Policy Analysis, and his op-ed.

Merry Christmas, Ivory Tower!

If you ever want to see how federal student aid is used for political gain, look no further than the report on the American Opportunity Tax Credit released today by the U.S. Treasury Department.  The accolade-begging for the President begins right on the cover page:

The President created the American Opportunity Tax Credit (AOTC) as part of the American Recovery and Reinvestment Act, which he signed into law in February 2009. For tax years 2009 and 2010, the new law allows families with tuition expenses to receive a tax credit of up to $2,500 per student, and up to $1,000 per year of this amount is refundable. If the AOTC is made permanent, as proposed in the President’s FY 2011 Budget, a student could receive a credit up to $10,000 over four years. 

The President, of course, doesn’t create these things, the legislative branch does. But the Prez, apparently, wants the credit for the credits. A White House event  scheduled for today suggests why: It appears that the President will be using the report, as well as his proposal to extend the AOTC, to curry favor with college students, a potentially large voting bloc. 

The content of the report, unfortunately, is just as bad as its PR use, going on and on about how much free money the credit offers for college, and breaking down the benefits so every type of filer can see how he or she might benefit. Meanwhile, there’s hardly amention of the AOTC’s cost – something in which you’d think the Treasury Department would be at least a little interested.  But, to be fair, I’m not just talking about the obvious cost to taxpayers who will sooner or later have to foot the bill for this Santa Claus program. Arguably the even bigger cost is that expanding federal aid like this ultimately just enables colleges to raise their prices and capture the money, making it a major, self-defeating source of fuel for rampant tuition inflation.

So the AOTC will do little or nothing to make college more affordable in the long-run. It will, though, make colleges and their employeesbetter off, and create the powerful illusion that Washington politicians – especially, in this case, the President – are doing their best to make college affordable for all.  And that, as pure-PR reports like this one strongly suggest, is likely the primary goal.

Hiding the Cost of Government Leads to Bigger Government

At the Daily Caller, Duke University Prof. Chris Conover writes:

There you are, about to sign the papers, when the car salesman offers to throw in a $1,000 options package. He knows those options will cost you a further $440 by reducing the performance of your new car’s engine, but he doesn’t tell you that.

Sounds sleazy, right? Congress does it every day.

Politicians love to rail against car dealers and mortgage lenders who surprise consumers with hidden costs. Yet Congress hides from voters a huge part of the cost of government: the hidden costs of taxes, which include lost income and jobs. Failing to account for these costs creates a bias in favor of bigger government and a less efficient tax code.

Read the rest of Conover’s oped here, and his Cato study here.

Fear and Stasis

The Obama administration’s attacks on the U.S. Chamber of Commerce look a lot like a three-day story on its final day. The national media had its doubts, and even Democratic operatives decried the gambit.

Why did the administration go after the Chamber? The politics are not hard to figure out. Earlier actions of the Obama administration mobilized the Republican base. At the same time, the President and his party have been losing the support of independents for a year or so. Their only hope of limiting the electoral damage was to rally the Democratic base, who are discouraged and divided.

The Democratic base might agree about what they don’t like and fear: business, money in politics, and foreigners — or at least, foreigners spending money on politics. The attack on the Chamber of Commerce appealed to all three. The administration hoped that fear would engender hatred and hatred would bring people to the polls to vote against business and the GOP.

The most surprising part of the attack was the rather naked appeal to anti-foreign bias (see Bryan Caplan’s discussion of this concept here). Most people think of Democrats as friendly to undocumented foreign workers. But Democrats are first of all egalitarians; for them, the whole point of politics is to help the oppressed and harm the oppressor.  They do not favor undocumented foreigners because they believe people have a right to free exchange, borders notwithstanding. Instead, Democrats see undocumented foreigners as victims of oppression by American businesses. Foreigners who have enough money to spend on elections are oppressors in the egalitarian mind.

Obama promised hope and change. He and his party now want to maintain — so far as possible — the political status quo (that is, their control of Congress).  To do that they are trying to prompt fear and hatred among their most loyal voters. The new motto of the administration appears to be: fear and stasis.

Of course, the administration had no evidence the charges were true and argued that the Chamber should be seen as guilty until proven innocent. All in all, the whole affair suggests desperation and a complete loss of constraint in pursuing a political end. It suggests, I think, conduct that used to be covered by the word “Nixonian.”