Archives: 10/2014

Top Ten Reasons You Should Attend Cato’s Conference on the Halbig Cases This Thursday

Here are ten reasons everyone should attend this Thursday’s Cato Institute conference, “Pruitt, Halbig, King & Indiana: Is Obamacare Once Again Headed to the Supreme Court?

  1. The very next day – October 31 – the Supreme Court could grant certiorari in King v. Burwell. Reporters who attend will be able to write their stories in advance.
  2. Our luncheon keynote speaker, Oklahoma attorney general Scott Pruitt, filed the first Halbig-style challenge in September 2012. (Does that mean I should call them “Pruitt-style challenges”?) Last month, a federal district court sided with Pruitt against the federal government. Our morning keynote speaker, Indiana attorney general Greg Zoeller, filed the fourth such challenge, Indiana v. IRS. A ruling is expected at any time. Pruitt and Zoeller will discuss why they have asked the Supreme Court to grant cert in King.
  3. We’ve already been King-ed! The Center for American Progress and Families USA were so impressed (or worried) about our conference that they scheduled a conference call with reporters to piggyback on (or drown out) any coverage of our conference. Their teleconference is on Wednesday, October 29, at 10am ET. Dial in: 888-576-4398. Confirmation code: 1635383.
  4. Case-Western Reserve University law professor Jonathan Adler, an intellectual father of the Halbig cases, will discuss recent and future court rulings. So will law professor Jim Blumstein, intellectual father of the Supreme Court’s Medicaid ruling in NFIB v. Sebelius, who also played a seminal role in the Halbig cases.  
  5. Len Nichols, who advised the Senate on state-run vs. federal Exchanges will explain why all this is nonsense.
  6. Health-insurance industry expert Bob Laszewski will explore the possible impact of Halbig.
  7. University of Washington law professor David Ziff will discuss how Halbig critics could improve their arguments.
  8. The Constitutional Accountability Center’s Brianne Gorod, who wrote the amicus briefs filed by the members of Congress who wrote Obamacare, will explain what Congress really intended.
  9. AEI’s Tom Miller, who helped launch the Halbig cases, will explore how states might respond to a Halbig win.

And finally, the number-one reason you should attend this conference…

  1. Obamacare architect Jonathan Gruber will explain his flip-flop on Halbig. Ha! Just kidding. The real number-one reason is: these lawsuits have more of a shot than you thought, and you need to get up to speed.

Register now.

Brazil: A Divided House

There were no surprises in Brazil’s runoff election: just as the polls had predicted in the days leading to the vote, President Dilma Rousseff beat Senator Aécio Neves by over 3 percentage points (51.6% to 48.6%). Despite high inflation, widespread corruption charges, and threats of a recession, the incumbent Workers’ Party (PT) won an unprecedented fourth term in power. Now what?

Brazil’s electoral map shows a divided country: the poor north and northeast states voted for Rousseff while most of the rich south and south-eastern states went for Neves. This divide has become more pronounced during the years of PT rule, as the incumbent party increases welfare spending every election cycle and warns voters about how the opposition would get rid of these programs if elected.

President Rousseff gave a conciliatory speech where she talked about bringing together Brazilians, being a better president than the previous four years, and the need for economic reform. Can she do it? The acrimonious tone of her campaign will make it hard for Rousseff to win over the half of the electorate that voted for Neves. Her appeal to voters wasn’t based on promises of a better future but on scaremongering of what a Neves victory would represent to Brazil’s poor. Moreover, new revelations on the growing corruption scandal at Petrobras that seem to show that Rousseff and her predecessor Lula da Silva were aware of the shenanigans at the state-owned oil giant threaten to taint her second term.

As for the economy, during the campaign Rousseff said that she would replace her Finance Minister, Guido Mantega, who is blamed for Brazil’s lackluster economic performance. Still, the stock market took a beating today and the real fell by 3%. Two reasons the bad shape of the economy didn’t play a decisive role in the election is that unemployment is low —which has a lot to do with many younger Brazilians going to university instead of looking for a job— and the fact that the government held back on the publication of bad statistics until after the election.

Can Rousseff deliver reform? Doubtful. As Mary O’Grady points out today in the Wall Street Journal, “Ms. Rousseff ran as the anti-market, welfare-state candidate.” With an economy not even growing by 1% and a stubbornly high inflation rate, the question Brazilians are asking themselves is whether Rousseff will reform or instead double-down on interventionist policies. One area to pay particular attention to is freedom of the press. What we’ve seen in a number of other Latin American countries ruled by left-wing governments is that, as the economy sours and corruption scandals mushroom, the authorities push for more regulations on the media. Will Brazil follow this pattern?

There are good reasons not to be optimistic about Brazil in the next four years.

Report Concludes that Yucca Mountain Is Safe

For decades, the federal government has struggled with the issue of storing waste from commercial nuclear reactors and defense-related nuclear activities. The government has spent billions of dollars planning for nuclear waste disposal, but the creation of a permanent storage site is years behind schedule due to federal mismanagement and safety concerns. A new report confirms that the current proposed site, Yucca Mountain in Nevada, is safe for use.

The United States has more than 65,000 metric tons of spent nuclear fuel with the volume expected to double by 2055. The Nuclear Waste Policy Act of 1982 aimed to create a permanent disposal site for radioactive waste by 1998. After many studies, Yucca Mountain was chosen as the single national disposal site in 1987, and engineers and construction crews went to work. Between 2001 and 2007 the project’s total life-cycle cost estimate increased from $77 billion to $106 billion, measured in constant 2012 dollars.

To fund the project, the 1982 Act created a fee or tax on all nuclear electric utilities charged on the basis of kilowatt hours generated. The fee generated $750 million annually for the Nuclear Waste Fund, which accumulated a balance on paper of more than $25 billion.

In 2010, the Obama administration, with strong urging from Senate Majority Leader Harry Reid, a Democrat from Nevada, decided to close down the Yucca Mountain site. The Government Accountability Office (GAO) said that the administration did not cite any “technical or safety issues” for the closure. The administration also did not include other options for storage, but instead set up a committee to study the issue. Apparently, Reid did not want the site in his state under any circumstances, regardless of any previous agreements between the nuclear industry and the government.  

The abrupt closure created a bizarre situation; electric utilities and their customers were paying $750 million annual tax to store nuclear waste at Yucca, but those storage plans were halted. In November 2013 an appeals court ordered the Department of Energy to stop collecting the Nuclear Waste Fund fee and resume planning for the site. Energy Secretary Moniz suspended the fee in 2014.

The appeals court also ordered the Nuclear Regulatory Commission to resume the site’s licensing process. Now, the long-awaited safety report confirms that the Yucca Mountain site meets project requirements. The New York Times summarized the report saying that it “concluded that the design had the required multiple barriers, to assure long-term isolation of radioactive materials.” Storage is expected to be safe within the site for one million years.

The administration must now decide how to proceed. It can ignore the report and try to push the issue of nuclear storage onto the next administration, or it can reopen the permitting process and ignore the wishes of Majority Leader Reid.

The issue of nuclear waste is complex, but federal mismanagement and the actions of the Obama administration have delayed a long-term solution.

Preliminary Results in Ukraine

Yesterday, Ukrainian voters went to the polls to elect a new parliament, replacing the deputies elected prior to the Euromaidan protests of early 2014. In a piece at Al-Jazeera America published on Sunday, I highlighted a few ways in which the election results could impact Ukraine’s future relations with Europe, Russia, and the resolution of the ongoing crisis in Eastern Ukraine. Prior to the vote, a high level of uncertainty about the likely makeup of the Rada - especially the election of far right (ie, Svoboda or Right Sector) or populist parties (ie, Oleh Lyashko’s Radical Party) – was a major concern, as was the uncertainty over whether they might be represented in government. A new governing coalition will be instrumental in the resolution of the conflict, shaping how aggressively Ukraine pursues the rebels in the Donbas region.

Fortunately, initial exit polls today indicate reasonably positive results. The three mainstream pro-Western parties did well, with the Poroshenko bloc polling around 22.2%, the Popular Front at 21.8%, and surprise contender Samopomich, a Lviv-based moderate party, polling at 14%. These results are excellent news, as a governing coalition with no far right or populist elements should be possible. The far right party Svoboda will be represented in parliament, as will the populist Radical Party, but the latter did worse than expected, taking home only around 6% of the vote. Rounding out the major parties, Yulia Timoshenko’s Fatherland party also did worse than expected, taking just over 5% of the vote. The main surprise is the success of the Opposition Bloc, a successor to Yanokovich’s Party of Regions, which was not expected to obtain seats, but instead took around 7% of the vote.

These results are extremely preliminary, and as with pre-election polling, only give a broad national figure for how people voted. Thus, they predict the 225 seats which are allotted by proportional representation from them, but the remaining 225 seats are elected in each individual district, for which we have no exit polling data. The parties associated with Petro Poroshenko are expected to do well, but these are also likely to yield high numbers of independent candidates.  Full results are expected by Thursday morning.

Until we know the final makeup of the new Rada, as well as which parties ultimately will form the coalition government, it’s difficult to assess how the results will impact the ongoing crisis. Many citizens in Crimea and the Donbas were indeed unable to vote, disenfranchising as much as 19% of the population. The overwhelmingly pro-Western nature of the parties elected may be a double-edged sword: it will be popular with Western politicians, but it is in part a reflection of the disenfranchisement of Eastern Ukraine, and will not be truly representative. Despite this, Russian leaders appear to have accepted the results, signaling, hopefully, a willingness to work with Kiev in the future. Whether any government will be able to tackle Ukraine’s myriad problems is unclear. But while full electoral results will give us a better idea of what to expect from a new Ukrainian government, for now, the indications are reasonably positive. 

It Was Fifty Years Ago Today

Fifty years ago today, the actor Ronald Reagan gave a nationally televised speech on behalf of the Republican presidential nominee, Senator Barry Goldwater. It came to be known to Reagan fans as “The Speech” and launched his own, more successful political career.

And a very libertarian speech it was: 

This idea that government was beholden to the people, that it had no other source of power is still the newest, most unique idea in all the long history of man’s relation to man. This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down. Up to man’s age-old dream – the maximum of individual freedom consistent with order – or down to the ant heap of totalitarianism. Regardless of their sincerity, their humanitarian motives, those who would sacrifice freedom for security have embarked on this downward path. Plutarch warned, “The real destroyer of the liberties of the people is he who spreads among them bounties, donations and benefits.”

The Founding Fathers knew a government can’t control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose.

Video versions of the speech here.

For libertarians, Reagan had his faults. But he was an eloquent spokesman for a traditional American philosophy of individualism, self-reliance, and free enterprise at home and abroad, and words matter. They change the climate of opinion, and they inspire people trapped in illiberal societies. And these days, when people claiming the Reagan mantle push for wars or military involvement in Iraq, Iran, Syria, and other danger spots, we remember that Reagan challenged the Soviet Union mostly in the realm of ideas; he used military force only sparingly. George W. Bush, whom some call “Reagan’s true political heir,” increased federal spending by more than a trillion dollars even before the financial crisis. We watch the antigay crusading of today’s conservative Republicans and remember that Reagan publicly opposed the early antigay Briggs Initiative of 1978 (featured in the movie Milk).

And in those moments libertarians are tempted to paraphrase the theme song of All in the Family and say, “Mister, we could use a man like Ronald Reagan again.”

Would that the current assault on economic freedom would turn up another presidential candidate with Reagan’s values and talents. More on Reagan here and here. 

Federalism Doesn’t Mean That States Can Do Whatever They Want

Cato and the Constitutional Accountability Center have filed another amicus brief in a marriage case, this one challenging Louisiana’s restriction of marriage licenses to opposite-sex couples and its non-recognition of out-of-state same-sex marriages. Filed in the U.S. Court of Appeals for the Fifth Circuit—where last month we filed in a case out of Texas—this is an appeal from the only ruling to uphold a state marriage law since the Supreme Court’s decision in United States v. Windsor struck down part of the Defense of Marriage Act. (A federal judge in Puerto Rico also recently upheld that commonwealth’s law.)

Our previous briefs, including in that Texas case and also regarding the marriage laws of Oklahoma, Utah, Virginia, Michigan, Tennessee, Kentucky, Indiana, and Wisconsin in the TenthFourth, Sixth, and Seventh Circuits, respectively, focused on the original public meaning of the Fourteenth Amendment’s Equal Protection Clause and its guarantee of “equality under law” for all. Here, however, we focus on federalism, democracy, and why states shouldn’t automatically get judicial deference when they pass legislation.

That is, the Fourteenth Amendment significantly reworked the constitutional order such that the U.S. Constitution now protects individual liberty against state infringement (which wasn’t the case before the Civil War). When the district court held that Louisiana was free to deny loving, committed same-sex couples the freedom to marry because the state “has a legitimate interest … for addressing the meaning of marriage through the democratic process,” it empowered the people of the states to use the democratic process to oppress disfavored minorities and thus overturned the constitutional order we’ve had since 1868.

Government Gold-Plating

Sen. Tom Coburn (R-OK) released his annual Wastebook this past week. It contains a laundry list of doozies. The U.S. government’s gold-plating operations included $190,000 to study compost digested by worms, $297 million for the purchase of an unused mega blimp, and $1 million on a Virginia bus stop where only 15 people can huddle under a half-baked roof. These questionable (read: absurd) expenditures only represent the tip of the iceberg.

Just consider the following: the Speaker of the House currently receives an annual salary of $223,500, and will receive a payment of roughly that amount, depending on the years of service, for life. An annual payment of this magnitude amounts to about five times the average annual wage in the United States. But that’s not all. For those who have had different positions in Congress, their retirements can be augmented. For example, Nancy Pelosi will not receive $223,500 for life, but roughly double that. Why? Because she is a member of Congress, currently the House of Representatives’ Minority Leader, and a retired Speaker of the House. For purposes of computing retirement pay, Congress adds and accumulates. They do not net.

In addition to supporting members of Congress and civil servants, U.S. taxpayers support welfare recipients. And they support them lavishly, too. Hawaii, Massachusetts, and D.C. residents receive sizeable welfare payments (read: salaries). Indeed, the magnitude of these payments exceeds the average salary of an American teacher, as well as a soldier deployed in Afghanistan, by at least $10,000 per year.

The public can forget all the clap-trap they are hearing about austerity. Indeed, a fairly dull knife could cut billions of dollars from the U.S. government’s largess.