Halbig v. Burwell: House Oversight Committee Subpoenas IRS

This was a long time coming.

Those who follow Halbig v. Burwell and similar cases know the IRS stands accused of taxing, borrowing, and spending billions of dollars contrary to the clear language of federal law. The agency is quite literally subjecting more than 50 million individuals and employers to taxation without representation.

Congressional investigators have been trying to figure out how the IRS could write a rule that so clearly contradicts the plain language of the Patient Protection and Affordable Care Act. Unfortunately, the agency has been largely stonewalling their efforts to obtain documents relating the the development of the regulation challenged in the Halbig cases.

Fortunately, finally, last week the House Committe on Oversight and Government Reform used its subpoena power to demand the IRS turn over the documents that show what whent into the agency’s decision.

We’ll see if the IRS complies, or if another of the agency’s hard drives conveniently crashes.

I’ve got a fuller write-up over at Darwin’s Fool.

Democrats and Their Mansions, Again

Two articles in today’s Washington Post Real Estate section remind me of how off-target a Post political article was a couple of months ago. The House of the Week is Paul and Bunny Mellon’s Upperville, Va., estate, which features a 10,000-square-foot main house on 2,000 acres and is being offered for $70 million. The Mellons often entertained their friends John F. and Jacqueline Kennedy there. Bunny Mellon, the daughter of the man who cofounded the Warner-Lambert drug company, married the heir to the Mellon Bank fortune. Sadly, she made headlines late in her long life for her multi-million-dollar support of Sen. John Edwards’s presidential campaign, including money to cover up his extramarital affair.

Norton Manor

Meanwhile, the feature article in the Real Estate section looks at “an American palace,” a 40,000-square-foot house (and you thought the Mellons were extravagant at 10,000 square feet!) in Potomac, Md., built by a businessman who started a company with a federal grant, built it on government contracts, and then sold it for hundreds of millions of dollars. Frank Islam says that “‘to whom much is given, much is expected.’ It’s our responsibility to give back and share.” And share he does, with the kind of people who made all that government largesse possible:

Since moving into their 14-bedroom, 23-bathroom estate in 2013, the homeowners have regularly staged events for the Democratic Party. They held a June dinner attended by Vice President Biden and a fundraiser for Sen. Al Franken (D-Minn.) this month. 

Islam and Driesman have hosted nearly all the region’s Democrats, including Maryland Gov. Martin O’Malley and Lt. Gov. Anthony Brown; Sens. Timothy M. Kaine of Virginia and Benjamin L. Cardin of Maryland; and Montgomery County Executive Isiah Leggett.

All of which reminded me of another Post story by a longtime reporter back in May, which turns out to have been about the very same mansion:

The Potomac estate of IT entrepreneur and philanthropist Frank Islam seemed more fitting for a Republican soiree than a Democratic fundraiser, some of Maryland’s top elected officials said Wednesday….

“There are not too many people who own homes like this who are great Democrats,” Sen. Benjamin L. Cardin (D-Md.) told the audience of about 400.

As I said at the time, “Democrats don’t have much trouble finding billionaires and mansions for fundraising events. Reporters shouldn’t act like it’s an unusual event.”  

A month after that Sen. Harry Reid declared in one of his tirades about billionaires in politics that the Democratic party “doesn’t have many billionaires.” (Or maybe he said “any billionaires”; the audio is unclear.) Politifact found plenty of billionaire donors to both parties. Whatever you think of many politics, reporters should stop recycling Democratic spin that big money is found on one side of the aisle.

 

Who Needs to Be More Flexible in the TPP talks? Hint: It’s Not Japan.

According to news reports, the United States and Japan have again failed to reach a bilateral agreement on lowering import barriers, a necessary prerequisite to completion of the 12-member Trans-Pacific Partnership (TPP) trade agreement. U.S. negotiators and business interests are quick to blame Japan for being reluctant to eliminate tariffs on a handful of highly traded agricultural products. In truth, though, the Japanese government has shown much greater commitment to the TPP and more willingness to take political risk than the United States. If the TPP falls apart, the blame will not lie with the Japanese.

The tariffs in question are what trade negotiators refer to as “sensitivities.” For every country in any trade negotiation, there are some trade barriers that are very difficult to lower because of the domestic political power of the businesses and industries that benefit from them. In Japan’s case these are agricultural tariffs (on rice, wheat, sugar, meat, and dairy) that are the bread and butter of Japan’s politically powerful farmers. Getting rid of sensitive barriers can be done, but it requires greater political will from both local and foreign leaders. Politicians take great risks when they oppose the interests of a powerful lobby.

I’ve noted before that criticisms of Japan’s stance are inappropriately antagonistic in light of how beneficial tariff elimination would be to Japan itself. The Japanese government know this, too. Earlier this week, Japanese Prime Minister Shinzo Abe spoke about how eager his government is to use the TPP talks as a way to enact broad agricultural reforms:

I consider it is indispensable for the future of Japanese agriculture to promote the domestic and international reforms in an integrated way.

To be honest with you, it is indeed an enormous task to suppress the resistance from the people who have been protected by vested interest. However, there is no future for them if they are not exposed to competition.

Rather than sympathize with their Japanese counterparts, however, the U.S. Trade Representative’s office continues to accuse Japan of expecting special treatment when all other TPP members are committed to more ambitious liberalization.

Reagan and the Air Traffic Controllers

An obituary in the Washington Post for Robert Poli provides a chance to look back at a decisive moment in Ronald Reagan’s presidency. Poli was the head of the militant Professional Air Traffic Controllers Organization (PATCO), which launched an illegal strike in 1981. The Post describes the significance of the action:

The strike by PATCO, Reagan’s subsequent breaking of the union and the hiring of replacement workers were among the most significant job actions of their time, said Joseph A. McCartin, a professor at Georgetown University and a specialist on labor and social history. They “helped to define labor relations for the rest of the century and even into the 21st century,” he said, turning public sentiment away from striking as a legitimate labor tactic and further emboldening employers in the private sector to permanently replace striking workers.

Reagan’s hard line with the PATCO strikers six months into his presidency helped establish an image of him at home and overseas as a strong leader who would not be pushed around.

Here is the sequence of events: 

The PATCO work stoppage began Aug. 3, 1981, when at least 12,000 of the nation’s 17,000 air traffic controllers defied federal law and walked off their jobs, seeking higher pay, shorter hours, better equipment and improved working conditions in a long-simmering labor dispute.

There were widespread flight cancellations and delays, and 22 of the nation’s busiest airports were directed to reduce their scheduled flights by 50 percent.

That morning in the White House Rose Garden, Reagan declared, “I must tell those who failed to report for duty this morning they are in violation of the law, and if they don’t report for work within 48 hours, they have forfeited their jobs and will be terminated.”

Two days after the walkout began, Transportation Secretary Drew L. Lewis announced that at least 12,000 striking air traffic controllers had been terminated and would not be rehired “as long as the Reagan administration is in office.”

The Reagan administration stuck to its guns. The strikers were replaced by nonstriking controllers, air traffic supervisors, and military controllers until new controllers were trained.

The episode was a very gutsy move by Reagan, with beneficial consequences. But as I note here, the 1981 strike and response did not come out of nowhere—PATCO had been causing problems for years. In 1969, for example, about 500 members of PATCO called in “sick” in a protest, which caused major air service interruptions. And in 1970, about 3,000 members of PATCO took part in another “sickout,” or illegal strike, that caused chaos for the nation’s air traffic. Those sorts of union troubles continued during the 1970s, which set the stage for the Reagan showdown.

Today, the government’s air controllers have a different union organization, NATCA. Rather than illegal striking, these folks do what a growing number of groups in society are doing to advance their agendas: they lobby

Land Use and Local Government: The Facts On the Ground Are Libertarian

Prof. Kenneth Stahl, who directs the Environmental Land Use and Real Estate Law Program at Chapman University School of Law, has a post at Concurring Opinions asking why libertarians aren’t more numerous among academic specialists in local government and land use law. Stahl describes his own views as siding with “leftists rather than libertarians,” that is to say, those who “have some confidence in the ability of government to solve social problems”: 

Nevertheless, were you to pick up a randomly selected piece of left-leaning land use or local government scholarship (including my own) you would likely witness a searing indictment of the way local governments operate. You would read that the land use decisionmaking process is usually a conflict between deep-pocketed developers who use campaign contributions to elect pro-growth politicians and affluent homeowners who use their ample resources to resist change that might negatively affect their property values. Land use “planning”—never a great success to begin with—has largely been displaced by the “fiscalization” of land use, in which land use decisions are based primarily on a proposed land use’s anticipated contribution to (or drain upon) a municipality’s revenues. Public schools in suburban areas have essentially been privatized due to exclusionary zoning practices, and thus placed off limits to the urban poor, whereas public schools in cities have been plundered by ravenous teachers’ unions.

… It hardly paints a pretty picture of local government. Yet, most leftists’ prescription is more government. 

To put it differently, libertarian analysis better explains what actually goes on in local government than does the standard progressive faith in the competence of government to correct supposed market failure. The post (read it in full!) goes on to discuss specifics such as annexation, incorporation, and economic stratification-by-jurisdiction; the relative success of lightly governed Houston in achieving low housing costs and attracting newcomers and economic growth; and the transference of progressives’ unmet hopes to regionalization, so memorably summed up by Jane Jacobs years ago: “A region is an area safely larger than the last one to whose problem we found no solution.”

Stahl: 

So why would left-leaning scholars, who have seen so clearly the failures of local government, place so much faith in a largely untested restructuring of governmental institutions, rather than looking to less government as the solution?

Great question.

The World Needs More Energy, Not Less

This week, a few major media outlets covered my take on the effectiveness and judiciousness of President Obama’s call, at the U.N. Climate Summit, for all countries of the world to make pledges of how and how much they are going to reduce their national carbon dioxide emissions. It should be no surprise that I think such actions would be ineffective and imprudent.

My biggest criticism is that not all countries of the world are at the same stage of energy development. While the developed nations may have all the energy supplies they want and need, most developing countries do not. So, while developing countries pursue  “luxuries” like indoor lighting and clean cooking facilities (not to mention improved sanitation), developed countries are awash in the luxury of debating whether to alter the relative components of their fuel mix in hopes that it may (or may not) alter the future course of the climate.

Since historically (and today) there is an extremely tight coupling between energy production and carbon dioxide emissions (since fossil fuels are used to produce the overwhelming bulk of our energy), calls like those from President Obama to restrict carbon dioxide emissions are akin to calls to restrict energy usage and expansion.

Imposing carbon restrictions on developing nations would have large-scale negative implications, not only to those directly affected, but to the world as a whole, as a large expanse of human ingenuity–arguably humanity’s greatest resource–would remain constrained by basic survival efforts and 50-year life expectancies.

Basically, no one is going to go along with this. So despite promises, when adhering to plans to reduce carbon dioxide emissions (whether informal or formalized in a treaty) comes up against economic expansion and human welfare improvements, the latter are going to win out every time (or so we would hope).

Eric Holder’s Tenure

Eric Holder’s tenure marked one of the most divisive and partisan eras of the Justice Department.  From his involvement in the bizarre guns-to-gangs operation (“Fast & Furious”), for which he has been cited for contempt by the House and referred to a federal prosecutor (which referral went nowhere due to invocations of executive privilege), to his refusal to recognize the separation of powers—enabling President Obama’s executive abuses—he politicized an already overly political Justice Department.

 One thing that differentiates Holder from other notorious attorneys general, like John Mitchell under Richard Nixon, is that Holder hasn’t gone to jail (yet; the DOJ Inspector General better lock down computer systems lest Holder’s electronic files “disappear”).

Holder’s damage to race relations may be even worse than his contempt for Congress, however, as his management of the Justice Department and use of its powers betray a desire to use the law to advance a dubious view of social justice. For example, he sued fire and police departments to enforce hiring quotas and inflamed social tensions with his pronouncements on Stand Your Ground laws. He blamed banks for not lending enough to members of racial minority groups and other banks for “predatory lending” that led to disproportionate bankruptcies among those same groups. Ironically, he’s even challenged school choice programs, which overwhelmingly help poor black kids acquire better educations.

Still, it must be said that Holder was a “uniter not a divider” on one front: under his reign, the Justice Department has suffered a record number of unanimous losses at the Supreme Court. In the last three terms alone, the  government has suffered 13 such defeats – a rate double President Clinton’s and triple President Bush’s – in areas of law ranging from criminal procedure to property rights to securities regulation to religious freedom. By not just pushing but breaking through the envelope of plausible legal argument, Attorney General Holder has done his all to expand federal (especially executive) power and contract individual liberty beyond any constitutional recognition.

Eric Holder will not be missed by those who support the rule of law.