Archives: October, 2013

Four Ways To Actually Defund ObamaCare

In a new blog post over at Forbes, I encourage opponents to save the knives for Obamacare and focus on four strategies for defunding the law:

  1. Stop Medicaid expansion in the states.
  2. Get states, employers, and citizens to challenge the IRS’s illegal ObamaCare taxes.
  3. Educate states about how to block the IRS’s illegal taxes legislatively.
  4. Urge House investigators to subpoena all materials related to the IRS’s illegal taxes.

Read the whole thing.

Back to Spending as Usual?

The real loss for fiscal conservatives this week was not that Obamacare wasn’t defunded or that there were no entitlement cuts in the deal that reopened the government. Fiscal conservatives in Congress face entrenched opposition on those issues, and so to make gains they will need to launch repeated forays. Those goals are a work in progress.

Instead, the bigger concern is that the Republicans caved in on renegotiating the discretionary spending levels set by the 2011 Budget Control Act and sequester. Everyone is hailing a “return to normal order” in Congress, but that means a return to the normal process of hiking discretionary spending every year.

The deal to reopen the government called for a conference committee to iron out differences in the House and Senate budget plans. The usual starting point for such committees is to split the difference on spending levels down the middle. The Senate budget puts 2014 discretionary spending at $1.058 trillion, while the House budget puts it at $967 billion, which is the sequester level.

Republican leaders have already indicated that they want to bust the sequester by at least $20 billion this year to make way for more defense spending. But with this deal, the Republicans are opening themselves up to spending perhaps $1.013 trillion in 2014, which is halfway between the House and Senate levels.

So the difference between sticking to the sequester—which is current law—and scraping current law with a new deal could be, say, $46 billion just this year. That higher spending level would raise the base for every future year, thus possibly costing taxpayers another half a trillion dollars over the next decade.

The Chicago Tribune says with this week’s deal is good news because “Washington’s focus now is on our national debt.” That may be wishful thinking. I fear that the focus of leaders in both parties has now turned to how much more spending they can get away with by junking the budget limits set in current law.

The World Is Entering a Devastating Chocolate Crisis: The Government Must Act to Save Us

Attention in Washington remains focused on the government shutdown.  But a far more important issue confronts America: rising chocolate prices. When will the government address this terrifying global crisis?

Cocoa trees have been cultivated for thousands of years. The early Mesoamericans, including the Aztecs and Mayans, turned the beans into cocoa solids, liquid, and butter. These peoples offered cocoa beans as gifts for the gods and using cocoa drinks in sacred ceremonies.

The Europeans became acquainted with chocolate after the Spanish conquistadors came and conquered. The Europeans sent cocoa beans and added sugar and milk. 

Hard chocolate finally arrived in the 18th century, apparently first in Italy. But it was the Industrial Revolution that delivered chocolate to the rest of us. A German company created the first chocolate bar in 1839. Is there another invention that benefited mankind so greatly?

But perhaps the most important innovation was yet to come. In 1867 a Swiss chocolatier, recently removed from candle-making added milk. And then America’s Milton Hershey created a mass market with cheap chocolate bars. 

For all of the genius of Thomas Jefferson, he failed to capture this aspect of humanity. What is “life, liberty, and the pursuit of happiness” without chocolate?

Truly access to chocolate is a vital national, even global interest.

Even Little Platoons Have First Amendment Rights

Nathan Worley and three friends hold a weekly political discussion group in their hometown of Sarasota, Florida. In 2010, a ballot initiative for a proposed amendment to the Florida constitution prompted the group to pull together $600 and exercise their First Amendment rights. They soon found, however, that doing so wasn’t going to be quite so easy.

Under Florida’s campaign finance law, it’s illegal for two or more people to join together and spend more than $500 supporting or opposing a state ballot issue. Instead, the state forces even small groups like Worley’s to register and speak through a political committee, which is then subject to a vast catalog of vague, inscrutable regulations that are enforced by thousands of dollars in fines. To speak publicly about the ballot issue, Worley’s informal coterie would have to hire a specialized lawyer and accountant and include “disclosures” in their planned radio ads that would take up about 20 percent of the airtime.

Instead of remaining silent like most small groups do when faced with this type of prohibitive regime, the Worley crew joined with the Institute for Justice to challenge Florida’s laws and vindicate their right to free political speech in federal court. Despite the obvious speech-chilling effect of the regulations, however, the lower courts failed to rigorously scrutinize Florida’s laws. The U.S. Court of Appeals for the Eleventh Circuit in particular abdicated its judicial role in two ways.

First, instead of applying “strict scrutiny,” the court chose the more deferential “exacting” scrutiny, based on the notion that so-called “disclosure” requirements like Florida’s don’t prevent people from speaking. Second, the court hardly even applied the “exacting” standard — deciding, on its own, to all but ignore the facts of the case by analyzing it as a challenge to the entire campaign-finance regime rather than simply as-applied to small groups like Worley’s.

In light of the Eleventh Circuit’s refusal to meaningfully scrutinize Florida’s speech-restrictive laws, Worley and IJ have petitioned the Supreme Court to hear their case. Cato and the Center for Competitive Politics have filed a brief supporting that petition because rulings like the lower courts’ here demonstrate a clear need for the Supreme Court to clarify the correct standards to apply when evaluating campaign finance regimes like Florida’s.

Courts shouldn’t be able to get by without judging just because a state calls its speech regulation “disclosure,” or because the courts decide on their own to recharecterize the case as a “facial” challenge. A Supreme Court hearing would put needed pressure on the federal judiciary to actually scrutinize these types of speech regulations and hopefully prevent them from continuing to silence small groups with little funding — because even little platoons of politically interested citizens have First Amendment rights.

The Supreme Court will decide later this fall whether to hear Worley v. Florida Secretary of State.

This blogpost was co-authored by Cato legal associate Julio Colomba.

Kludgeocracy’s Lessons for Libertarians

My friend Steve Teles, a political scientist at Johns Hopkins, has an interesting new article in National Affairs entitled “Kludgeocracy in America.” His subject is the American political system’s unfortunate tendency in recent years to generate public policies marred by bewildering, dysfunctional complexity. Statutory page counts serve to illustrate the point: consider the Godzilla and Megalon of recent policy kludges, the Affordable Care Act (906 pages) and Dodd-Frank (849 pages).

Steve identifies many institutional factors that lead to Rube-Goldbergism – in particular, the multiplicity of veto points created by our basic constitutional design (presidential system, bicameral legislature, federalism) and augmented by more recent innovations (increasing use of multiple committee referrals and the Senate filibuster). “Every veto point functions more like a toll booth,” he writes, “with the toll-taker able to extract a price in exchange for his willingness to allow legislation to keep moving.”

But Steve also points the finger at American political culture. Specifically, the ambivalence of public opinion about the proper size and scope of government – captured by the oft-repeated and well-documented adage that Americans are ideological conservatives and operational liberals – drives policymaking in circuitous directions. “The easiest way to satisfy both halves of the American political mind,” according to Steve, “is to create programs that hide the hand of government, whether it is through tax preferences, regulation, or litigation, rather than operating through the more transparent means of direct taxing and spending.”

Steve argues that the rise of “kludgeocracy” is a blight that both progressives and libertarians have a shared interest in resisting. “We have arrived at a form of government,” he contends, “with no ideological justification whatsoever.”

Clean Coal Subsidies

The federal government has been subsidizing so-called clean coal for decades, and the hand-outs have resulted in one bipartisan boondoggle after another. 

Under Presidents Jimmy Carter and Ronald Reagan, for example, the government pumped $2 billion into the Synthetic Fuels Corporation, which supported efforts to convert coal into a gas fuel. The SFC collapsed in the mid-1980s in a spasm of gross mismanagement, conflicts of interest, and changing market conditions. 

Unfortunately, the government never seems to learn any lessons from the silliness of its energy subsidies. The latest installment of the long-running clean coal scam was highlighted by the Wall Street Journal yesterday: 

For decades, the federal government has touted a bright future for nonpolluting power plants fueled by coal. But in this rural corner of eastern Mississippi, the reality of so-called clean coal isn’t pretty. 

Mississippi Power Co.’s Kemper County plant here, meant to showcase technology for generating clean electricity from low-quality coal, ranks as one of the most expensive U.S. fossil-fuel projects ever—at $4.7 billion and rising. Mississippi Power’s 186,000 customers, who live in one of the poorest regions of the country, are reeling at double-digit rate increases. And even Mississippi Power’s parent, Atlanta-based Southern Co., has said Kemper shouldn’t be used as a nationwide model. 

One of just three clean-coal plants moving ahead in the U.S., Kemper has been such a calamity for Southern that the power industry and Wall Street analysts say other utilities aren’t likely to take on similar projects, even though the federal government plans to offer financial incentives.

Southern recently took $990 million in charges for cost overruns approaching $2 billion.

*** 

Through various subsidies, the federal government had committed nearly $700 million for the Mississippi Power plant, though part of that was the $133 million that the utility will forfeit because of delays.

***

Kemper’s cost, previously projected at around $2.9 billion, soon began to soar. Southern recently estimated the price tag at $4.7 billion.

For more on clean coal and energy subsidies, see Downsizing Government.

When “Zero Tolerance” Means Zero Logic

Schools work very hard to curb drunk driving, so when a sober student offers to drive an inebriated friend home from a party rather than let her attempt to drive home herself, no doubt any school would hold her up as worthy of emulation, right? Wrong, sadly, at least at North Andover High School in Massachusetts:

Two weeks ago, Erin [Cox] received a call from a friend at a party who was too drunk to drive. Erin drove to Boxford after work to pick up her friend. Moments after she arrived, the cops arrived too and busted several kids for underage possession of alcohol.

A North Andover High School honor student, Erin was cleared by police, who agreed she had not been drinking and was not in possession of alcohol. But Andover High told Erin she was in violation of the district’s zero tolerance policy against alcohol and drug use. In the middle of her senior year, Erin was demoted from captain of the volleyball team and told she would be suspended from playing for five games.

One of the central purposes of education is to teach students to consider the consequences of their actions. In this sense, Cox and her friend demonstrated greater wisdom than school officials. While the students clearly considered the potentially lethal consequences of attempting to drive drunk, school officials apparently haven’t considered how their “zero tolerance” policy might discourage sobers students from aiding inebriated colleagues in the future. As Alexander Abad-Santos notes at the Atlantic, “Cox did not break any laws; she did not drink, did not party — yet was still punished by the school. By reprimanding Cox, North Andover High is likely sending out a confusing and contradictory message to teens about drinking, designated drivers, and asking for help.” The Cox family lawyer agrees: