Topic: Government and Politics

Time to End the Farmers’ Dole

By
Doug Bandow

Last week Washington enjoyed a miracle. Legislators failed in a high profile attempt to mulct the public.

Legislators were debating the Farm Bill, which mixes Food Stamps and agricultural price supports. Even though Washington is drowning in red ink, Republicans and Democrats wanted to approve a measure to spend nearly a trillion dollars over the next decade. 

The Democrats and Republicans disagreed only over details. The Democratic Senate approved $955 billion. The House Republican leadership wanted $940 billion. The president took no position other than to support more spending. 

However, last Thursday the House leadership miscalculated and lost support from Democrats as well as conservative Republicans, leading to the bill’s surprise defeat.

Of course, Washington was filled with recriminations. But the collapse of the legislation is very good news. As I pointed out in my latest Forbes column, the politicians’ failure creates a rare opportunity for real change. 

Indeed, both parts of the Farm Bill require transformation.

As I wrote:

The first step would be to separate Food Stamps from price supports. Debate the former in the context of the scores of overlapping and expensive welfare programs. Indeed, the Carleson Center for Public Policy recently counted an astounding 157 means-tested federal programs. Total government spending on general welfare runs about $1 trillion a year. It’s time Congress rethought and revamped the entire welfare industry.

As for the farmers’ dole, abolition is the only sensible policy. New Zealand successfully took this approach in 1984. 

Farmers are practiced businessmen who employ sophisticated scientific techniques to produce food and sophisticated financial tools to manage risk. Farmers are enjoying boom economic times. Wealthier on average than other Americans, farmer don’t need their own special welfare program.  Indeed, many operators already make a profit with little or no federal support. 

It is rare to stop the two major parties when they combine for a raid on the taxpayers. The task now is to make their defeat permanent. In recent years Americans have deregulated communications, finance, and transportation. Agriculture should be next.

Read the rest here.

Topics: 
General, Government and Politics, Tax and Budget Policy

American Jurisprudence as Sausage-Making: Who Interprets the Constitution?

By
Doug Bandow

The Supreme Court is finishing up its latest term, saving its most controversial decisions for last. Americans venerate the Constitution, but judges determine its meaning.

Unfortunately, the result of the judicial process vindicates German Chancellor Otto von Bismarck, who famously said that no one should see his sausages or his laws being made. As I point out in my latest Forbes online column, much of the Constitution is treated like an antique wall decoration: although the federal government is supposed to have only limited, enumerated powers, today it pretty much does whatever it wants.

Unfortunately, there may be no way to avoid judicial rulemaking. Louis Fisher of the Library of Congress argued: “Being ‘ultimate interpreter,’ however, is not the same as being exclusive interpreter.” 

It seems obvious that if you take an oath to support the Constitution, you shouldn’t act in ways that violate the law. Former congressman and judge Abner Mikva argued that a failure by Congress to consider constitutionality “is both an abdication of its role as a constitutional guardian and an abnegation of its duty of responsible lawmaker.”

Still, the judiciary long has had the final say. But that actually is supposed to limit government and protect liberty. As I wrote on Forbes online:

The final say logically goes to the judiciary, since the legislative and executive branches pass and approve/execute laws, respectively, making them the institutions in most need of constraint. Alexander Hamilton argued in Federalist 78 that limitations on government power “can be preserved in practice no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing.”

In this way, the judiciary was supposed to protect individual liberty. In introducing the Bill of Rights, James Madison told Congress: “If they are incorporated into the Constitution, independent tribunals of justice will consider themselves in a peculiar manner the guardians of those rights; they will be an impenetrable bulwark against every assumption of power in the Legislature or Executive; they will be naturally led to resist every encroachment upon rights expressly stipulated for in the Constitution by the declaration of rights.” (Tragically, this is no longer the case.)

Unfortunately, too many judges no longer really “interpret” the Constitution. That is why Madison’s “few and defined” powers for the national government have become “everything and unlimited. Basically, legislative and executive branch officials act however they like, subject only to judges, who decide however they like. It is government by zeitgeist—if it feels good, do it.

That means the rest of us need to work extra hard to “defend and support” the Constitution. It ain’t much of a bulwark for liberty these days, but it really is about all we have.

Topics: 
Foreign Policy and National Security, Government and Politics, Law and Civil Liberties

No Obamacare Exchange in 36 Mississippi Counties?

By
Michael F. Cannon

The Associated Press:

People in 36 of Mississippi’s 82 counties may not be able to buy health insurance through the new federal online marketplace when it starts enrolling customers in October. Insurance Commissioner Mike Chaney says two insurers have announced offerings so far, planning to serve 46 counties.

Unless more companies sign up or the existing companies expand their plans, consumers in the remaining counties won’t be able to buy health insurance through the online exchange. Coverage under those policies begins Jan. 1. 

“I don’t know what to tell you about the other 36 counties,” Chaney told The Associated Press in a phone interview this week. “You’re just out of luck.”

That means they won’t be able to use federal tax credits offered to consumers with incomes of between 133 percent and 400 percent of the federal poverty level. That’s up to about $46,000 for an individual and about $94,000 for a family of four, with those at the top end getting little or no subsidy.

People who don’t buy insurance are required to pay a $95-a-year penalty starting in 2014. A spokeswoman for the U.S. Treasury Department couldn’t immediately say Thursday whether people would be penalized in counties without offerings.

My reading of the statute is that this should have little effect on the penalties that Mississippians face under Obamacare, since the state’s refusal to establish an exchange has already exempted 128,000 residents from penalties under the individual mandate, and all Mississippi employers from penalties under the employer mandate. 

But assuming the IRS gets away with illegally offering Obamacare’s penalty-triggering “premium assistance tax credits” in states that have refused to establish exchanges, Mississippi employers cannot be penalized for failure to provide “affordable” health insurance to residents of those 36 counties because without any exchange at all, those residents will not be able to receive the tax credits. But employers could be penalized for failing to provide those residents “minimum value” coverage–if a firm employs even a single person in one of the other 46 counties that do receive such a tax credit.

Individuals would still seem to be subject to the individual mandate as they otherwise would. But without an exchange, fewer of them would qualify for the unaffordability exemption from the individual mandate, because there would be no “annual premium for the lowest cost bronze plan available in the individual market through the Exchange” with which to calculate whether they are eligible for that exemption. Of course, the federal Department of Health and Human Services could just throw residents of those counties a hardship exemption.

Topics: 
Government and Politics, Health Care

Obama to NBA: I’m Not Done Raising Your Taxes, Now Help Me Sell ObamaCare

By
Michael F. Cannon

President Obama has a lot of nerve asking the National Basketball Association to help him sell ObamaCare to their fans.

It’s not just that President Obama is asking the NBA to lend its credibility to the least popular thing this side of Tim Donaghy. Obama has spent his political career trying to take more money from high-income earners like NBA players, executives, and owners. ObamaCare is one of his great successes in that effort. Another is the recent fiscal-cliff-avoidance deal. Yet Obama isn’t satisfied; he wants to take even more of their money. 

NBA players, owners, and executives are extremely talented and productive people. They create lots of jobs. They earn lots of money because they make other people happy. For this crime, they already pay more in taxes than almost anyone, and pay more than they receive from the government in benefits.

Yet President Obama seems to spend every waking moment trying to figure out how to take even more from them. And then he turns around and asks them to help him sell his train wreck of a health care law. Chutzpah.

Before the NBA casts its lot with ObamaCare, every NBA player, executive, and owner should ask their accountant exactly how much this president has cost them. I’m looking at you, Lebron.

Topics: 
General, Government and Politics, Health Care

Supreme Court: Government Can’t Force Federal Contractors to Waive Their Rights

By
Ilya Shapiro

Despite its awkward name and somewhat technical details, AID v. AOSI provided the Supreme Court with an opportunity to make a very simple point: The federal government can’t force its contractors – whether they’re corporations (as in this case) or individuals – to promote policies that are unrelated to the program for which they receive federal funds. The Court correctly ruled that executing a program to combat HIV/AIDS is unrelated to advocating for or against the legalization of prostitution. One can imagine other instances: Treating drug abuse has little to do with one’s views on drug legalization. Running an adoption agency can be done whether one is pro-choice or pro-life. Missiles can be built regardless of whether the contractor favors a particular foreign policy stance.

As Cato argued in its amicus brief, such “policy requirements” significantly burden political speech, the constitutional protection of which lies at the very heart of the First Amendment. Had the government’s position been accepted, it would eviscerate the “unconstitutional conditions” doctrine, which the Supreme Court has long recognized to prevent the conditioning of generally available federal benefits on the waiver of fundamental rights. The Court has never given Congress carte blanche to give contractors Hobson’s Choices, whether relating to the freedom of speech or other constitutional rights. Today it thus strengthened the principle that Congress’s power to condition funding is limited to ensuring that its funds are used to properly implement the program that Congress wishes to fund, not to compel private organizations to adopt express “policies” that don’t relate to the use of those federal funds.

For more on AID v. AOSI, see my recent op-ed.

Topics: 
Government and Politics, Law and Civil Liberties

ObamaCare, Democracy, and Jonathan Cohn

By
Michael F. Cannon

At The New Republic’s blog, Jonathan Cohn grumbles about the insolence of ObamaCare opponents:

Across the country, Republican state officials vilify the law…In Washington, Republican members of Congress are trying to undermine the law by denying funding for outreach and implementation. According to a report by Elise Viebeck  in The Hill, a few Republicans have suggested they won’t help constituents having trouble enrolling in the new insurance options. And, as Anne Kim and Ed Kilgore from the Washington Monthly recently reported, they’re even refusing to work with churches on crafting a bipartisan fix to what looks like a predictable, if inevitable, glitch in the law’s drafting.

Nobody expects Republicans to praise Obamacare or to give up efforts at repeal, assuming they feel strongly about it. But, as long as Obamacare remains on the books, don’t even its critics have some obligation to enforce the law in good faith? Shouldn’t they be helping constituents without insurance to take advantage of the law’s new options?

Let’s first examine the absurdity of Cohn complaining that “Republican members of Congress are trying to undermine the law by denying funding for outreach and implementation.” Wait, you mean ObamaCare didn’t include enough funding for its own implementation? How does the fault for that lie with congressional Republicans (who opposed this law), rather than congressional Democrats (who enacted it with inadequate funding)? Doesn’t the need for additional funding mean ObamaCare will cost more than supporters claimed when they enacted it? And wasn’t that an accusation they denied? Shouldn’t Cohn be criticizing Democrats for that, too? Does Cohn really mean to say that legislators have a duty to vote to fund a law they want to repeal? Does he also believe legislators have a duty to fund “outreach and implementation” for anti-sodomy laws? What about voter-ID laws? Marijuana prohibition is horribly under-funded; think of all the users who don’t go to jail. Do legislators have a duty to ensure those laws are fully funded and implemented? Do they have a duty to fix any glitches in those laws?

As for Cohn’s question, “as long as Obamacare remains on the books, don’t even its critics have some obligation to enforce the law in good faith?” Any middle-school civics student could tell him the answer is “no.” In our system of government, the executive branch enforces the law, not the legislature, and not the citizenry. So with respect to the federal government, that means there are exactly zero ObamaCare opponents who have a duty to enforce this law. The Supreme Court has clarified that nobody at the state level has a duty to enforce it, either. Given that many opponents (including me) believe ObamaCare to be an unjust law, we could go farther and say critics have a moral duty to resist or disobey it. Finally, it’s hard to take Cohn seriously when Jonathan Adler and I are trying to get the Obama administration to enforce the law in good faith, yet Cohn is trying to stop us.

Topics: 
Government and Politics, Health Care

The Stopped Clock at the IMF Tells Us that It Is Time to Reduce Bureaucratic Excess

By
Daniel J. Mitchell

I’ve repeatedly explained that Keynesian economics doesn’t work because any money the government spends must first be diverted from the productive sector of the economy, which means either higher taxes or more red ink. So unless one actually thinks that politicians spend money with high levels of effectiveness and efficiency, this certainly suggests that growth will be stronger when the burden of government spending is modest (and if spending is concentrated on “public goods,” which can have a positive “rate of return” for the economy).

I’ve also complained (to the point of being a nuisance!) that there are too many government bureaucrats and they cost too much.

But I never would have thought that there were people at the IMF who would be publicly willing to express the same beliefs. Yet that’s exactly what two economists found in a new study. Here are some key passages from the abstract:

We quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries… Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates.

So even an international bureaucracy now acknowledges that bureaucrats “incur substantial fiscal costs” and “have a large negative impact on private employment.”

Well knock me over with a feather!

Next thing you know, one of these bureaucracies will tell us that government spending, in general, undermines prosperity. Hold on, the European Central Bank and World Bank already have produced such research. And the Organization for Economic Cooperation and Development has even explained how welfare spending hurts growth by reducing work incentives.

To be sure, these are the results of research by staff economists, whom the political appointees at these bureaucracies routinely ignore. Nonetheless, it’s good to know that there’s powerful evidence for smaller government, just in case we ever find some politicians who actually want to do the right thing.

Topics: 
Government and Politics, International Economics and Development, Tax and Budget Policy

Pages