New in Cato’s Online Growth Forum

Here are the newest essays in the Cato Institute’s online forum on reviving growth:

1. Ramesh Ponnuru offers three ideas – on taxes, patents, and money.

2. William Gale argues for getting our fiscal house in order.

3. Jeff Miron proposes cuts in health insurance subsidies.

4. Adam Thierer calls for a culture of permissionless innovation.

Keystone XL Pipeline: Enough Already!

Enough already!

Why is Congress, the President, or anyone else, still talking about the Keystone XL pipeline?

This project is so small in the grand scheme of anything it boggles the mind anyone outside of those directly involved in building and operating it gives it a second thought.

That a discussion of the pipeline is still consuming government resources some six years after it was originally proposed epitomizes the grand waste of time and money that characterizes the current Administration when it comes to anything it thinks causes dreaded global warming.

In this case, the fault lies squarely with President Obama.

He could have killed the pipeline years ago if he wanted. Or better yet, he could have approved the pipeline years ago and we would now be reaping the benefits of it in whatever form those benefits may have taken (choose your favorites from among the lists that likely includes jobs, tax revenues, lower gas prices, energy security, ally cooperation, etc.).

But he did neither.

Strange Bedfoes against NSA Reform Bill

The push to rein in the authorities of the National Security Agency—covertly expanded by a secret court to permit indiscriminate bulk collection of Americans’ communications  and financial records—has become a truly bipartisan affair. In a way, this is nothing new: Liberals who recall the abuses of the Hoover era have long teamed with conservatives skeptical of government power in efforts to check excessive surveillance.  With a Senate vote looming to move forward with the USA FREEDOM Act, however, a still stranger mix of opponents is seeking to block what has emerged as the primary vehicle for intelligence reform in the post-Snowden era.

First, and least surprising, there’s the “More Catholic than the Pope” contingent—boosters of the intelligence community who seem convinced that the bill will somehow put Americans at risk, despite the insistence of Director of National Intelligence James Clapper that the proposed safeguards would not hinder intelligence operations. This stance is exemplified by a stunningly misleading Wall Street Journal op-ed penned by former Attorney General Michael Mukasey and forrmer NSA head Michael Hayden. Since the terrorist Islamic State group, or ISIS, is currently in the headlines, naturally it is invoked to tar the bill as “a reform that only ISIS could love.”  Never explained: Why, precisely, we should expect an authority to indiscriminately sweep up domestic telephone records to be a critical tool for monitoring a group that seems primarily concerned with consolidating its power overseas, not fielding operatives in the United States.  After all, even when it comes to domestic investigations—where one might have expected the NSA’s mass database to show its value—two independent review groups with full access to classified records have concluded that the program had little or none.  Incoming Senate majority leader Mitch McConnell has described the reforms as “tying our hands behind our back”—but a hand is a useful appendage.  On the public record, “tying our hair back” might a be more apt description—the bulk database has obscured the FBI’s by flooding the Bureau with dead-end “tips,” while any truly pertinent information it provided was invariably duplicative of records that agents had already obtained using traditional, targeted authorities.

Yet the USA FREEDOM framework actually preserves the core capabilities of this ineffective program: It creates a new mechanism for the government to do “connection chaining” by quickly and continuously obtaining, from multiple phone carriers, the records of suspected terror affiliates and their contacts. Mukasey and Hayden falsely decribe the new process as requiring a “warrant”—which it does not, on the consensus legal understanding that a “warrant” is a particularized authority based on the Fourth Amendment’s relatively high evidentiary standard of “probable cause.”  They also, somewhat comically, describe it as requiring the government go “scurrying” to telecomunications providers to “comb through” records, presumably by consulting a card catalogue.  Yet the point of the new framework, with a mandate that carriers provide “technical assistance” to NSA, is precisely to ensure that carriers can rapidly search their files to provide information about numbers once the secret FISA court has signed off (or, indeed, in advance of the court’s approval in an emergency).  Nor, indeed, do Mukasey and Haden so much as mention “National Security Letters,” a separate tool that can be used to obtain certain types of communications records without any judicial involvement. Unfortunately, the USA FREEDOM Act does not implement the recommendation of the President’s Surveillance Review group that these, too, require court authorization. Nor, conspicuously, does their tendentious discussion of the various safeguards currently in place mention the numerous massive and systemic violations of the rules imposed by the FISA court—violations that easily passed undetected for years precisely because NSA itself maintained the database rather than making particularized requests to carriers through the FISA court.

In short, the bill doesn’t really affect the government’s capabilities, only the way they’re implemented.  First, phone numbers to be searched will have to be specifically approved by the FISA Court—as Congress expected would be the case when it approved these authorities, and as has already been required since Februrary under a presidential directive.  Second, NSA will quickly obtain particular records, corresponding to “specific selectors” like phone numbers or other account identifiers, by passing its search queries to the carriers who already maintain those rather than compiling its own massive database, overwhelmingly consisting of irrelevant data about innocent people. This ought to be a pure win: A privacy protective re-architecting that reduces the potential for abuse without meaningfully interfering with the government’s ability to obtain the information in which it has a legitimate interest.   Which, of course, is why current intelligence officials have characterized the reforms as reasonable. Retired officials—the ones who implemented the bulk program and insisted its vast invasiveness was absolutely necessary—may be reluctant to admit they’ve been proven wrong, but their stubbornness does not amount to much of an argument.

Executive Decisions, Eric Holder, and Marijuana Re-Scheduling

Christopher Ingraham at The Washington Post’s Wonkblog has a terrific piece up today on Eric Holder’s refusal to use executive branch authority under the Controlled Substances Act to reclassify marijuana as a less harmful substance. The crucial portion is here:  

The crowning inconsistency of the federal drug control system has always been the classification of marijuana as a Schedule 1 substance under federal law, which makes it among the Worst of the Worst drugs as far as the DEA is concerned – literally as bad as heroin, and worse than cocaine! Drug reform advocates have pushed the DEA to change its position for years, citing decades of research on the relative harmlessness of weed compared to other drugs – including alcohol – but the agency hasn’t budged, even as public opinion has rapidly evolved.

The Controlled Substances Act, which set up the drug schedules in the early 1970s, explicitly places drug scheduling authority in the hands of the attorney general, and even instructs him or her to “remove any drug or other substance from the schedules if he finds that the drug or other substance does not meet the requirements for inclusion in any schedule.”

Much to the chagrin and outright befuddlement of drug law reformers, however, outgoing attorney general Eric Holder has repeatedly stated that any changes to the scheduling status of marijuana should be made by Congress.

Ingraham then explains that

a bipartisan group of congressmen asked the administration to [re-schedule marijuana] … In essence, the Justice Department and Congress are both begging each other to fix federal marijuana laws, but nobody’s doing anything.

As Ingraham writes, “Welcome to Washington in 2014.” 

Federalism Should Trump the Drug War

Americans are angry with their politicians but nuanced in their political opinions.  Voters in Alaska simultaneously ousted their Democratic Senator and legalized the use of marijuana.  Floridians voted to allow the use of medicinal marijuana and reelected Republican Gov. Rick Scott.

In fact, Milton Friedman and William F. Buckley long argued against drug prohibition.  The electorate appears to be moving their way.

Which makes sense.  If you want to limit government and protect individual liberty, it’s impossible to ignore the ill consequences of arresting and imprisoning millions of people for using illicit substances. 

Drug use is bad.  Arresting people for using drugs is worse. 

But conservatives have another reason to abandon the drug war: federalism.

The Drug War has poisoned almost everything it touches.  The rule of law suffers.  Lawyers speak of the drug exception to the Fourth Amendment, since judges often sacrifice Fourth Amendment protections when drugs are involved. 

Constitutional interpretation is malformed.  In Gonzales v. Raich the Supreme Court held that Uncle Sam could regulate someone who grew marijuana for personal consumption under the interstate Commerce Clause.  The reasoning of conservative jurist Antonin Scalia was used by the legal Left to argue that ObamaCare was constitutional.

Federalism is another victim of the Drug War.  Many conservatives complain about the over-criminalization of life, with Washington encroaching on an area that’s traditionally a matter of state authority.

Fraud in the Defense Department

The wars in Iraq and Afghanistan cost more than $1 trillion with billions going to Department of Defense (DoD) contractors. All of that spending has led to a large uptick in waste and fraud.

As much as $60 billion has been wasted on U.S. operations in those two countries, according to analysis from the Commission on Wartime Contracting in Iraq and Afghanistan. The Justice Department has brought more than 235 criminal cases since 2005.

The Associated Press highlights some examples:

In the past few months alone, four retired and one active-duty Army National Guard officials were charged in a complex bribery and kickback scheme involving the awarding of contracts for marketing and promotional material, and a trucking company driver pleaded guilty to bribing military base employees in Georgia to obtain freight shipments — often weapons which required satellite tracking — to transport to the West Coast.

More recently, a former contractor for the Navy’s Military Sealift Command, which provides transportation for the service, was sentenced to prison along with a businessman in a bribery case in which cash, a wine refrigerator and other gifts traded hands in exchange for favorable treatment on telecommunications work. Also, three men, including two retired Marine Corps officers, were charged with cheating on a bid proposal for maintenance work involving a helicopter squadron that serves the White House.

The story continues on with the long list of abuses:

Defense contractor Leonard Francis was arrested in San Diego last year on charges that he offered luxury travel, prostitutes and other bribes to Navy officers in exchange for confidential information, including ship routes. Prosecutors say he used that information to overbill the Navy for port services in Asia in one of the biggest Navy bribery schemes in years. Ethan Posner, a lawyer for Francis, declined comment.

Yet many others involve more mundane cases of contracting or procurement fraud. Consider the trucking company contractor in Afghanistan who bribed an Army serviceman to falsify records to show fuel shipments that were never delivered, or the former Army contractor who demanded bribes before issuing orders for bottled water at a military camp in Kuwait.

According to the story, the Defense Department acknowledges the issue and is working to improve the situation. But if this report is any indication, DoD has a long way to go.

New Essays in Cato Online Forum on Growth

Here are the latest entries in the Cato Institute’s online forum on reviving growth (see here for some more background about the forum):

1. Tyler Cowen contends that foreign policy can have a major impact on long-term growth.

2. Heather Boushey argues that a national program of paid family leave will boost labor supply and therefore growth.

3. Eli Dourado proposes incentive pay for Congress.

4. Peter Van Doren cautions that there are no easy answers.