Keeping Their Promises

In blogs over the last several months, I have revisited the fiscal records of the eight Republican presidential candidates who have gubernatorial experience. As the 2016 race heats up, the candidates will begin making many promises on tax and spending issues, but will we be able to believe them?

The records show that some governors worked hard to limit the size and scope of government. Others grew government with more spending and higher taxes. The candidates fit into three categories: the “A’s,” the falling grades, and the consistent “B’s”.

Three of the former governors earned at least one “A” during their tenure: George Pataki of New York, Jeb Bush of Florida, and Bobby Jindal of Louisiana. Pataki earned high marks for slashing state spending by $2 billion and cutting the personal income tax. Bush passed a billion dollar property tax cut coupled with a large business tax cut. Jindal dramatically cut spending. Spending is down 9 percent in Louisiana since fiscal year 2009.

No Markets, Then No Water. California’s Avoidable Crisis

This is what happens in a world without markets for water, as Eli Saslow reports in the Washington Post:

Their two peach trees had turned brittle in the heat, their neighborhood pond had vanished into cracked dirt and now their stainless-steel faucet was spitting out hot air. “That’s it. We’re dry,” Miguel Gamboa said during the second week of July, and so he went off to look for water….

For a few days now, they had been without running water in the fifth year of a California drought that had finally come to them. First it had devastated the orchards where Gamboa and his wife had once picked grapes. Then it drained the rivers where they had fished and the shallow wells in rural migrant communities. All the while, Gamboa and his wife had donated a little of their hourly earnings to relief efforts in the San Joaquin Valley and offered to share their own water supply with friends who had run out, not imagining the worst consequences of a drought could reach them here, down the road from a Starbucks, in a remodeled house surrounded by gurgling birdbaths and towering oaks.

The article reads like science fiction. And it’s so tragic, because markets could go a long way toward allocating California’s water to its highest-valued uses, as Peter Van Doren and Gary Libecap discussed recently. More Cato studies on water markets here.

Kasich’s Fiscal Record

John Kasich, the Governor of Ohio, makes his presidential announcement today. He becomes the 16th person to join the Republican field and the 8th current or former governor.

Kasich is a fiscal policy expert. He has made a federal Balanced Budget Amendment a key talking point in his speeches and appearances so far, and was known for being a budget cutter while in Congress. His record in Ohio tells a very different story. Spending has risen rapidly  during Kasich’s tenure in Columbus.

Data from the National Association of State Budget Officers illustrates the rapid growth general fund spending. From fiscal year 2012, Kasich’s first full fiscal year, to fiscal year 2015, general fund spending increased in Ohio by 18 percent. Nationally, state general fund spending increased by 12 percent during that period. Kasich’s proposed budget for fiscal year 2016 increased spending further. It included a year-over-year increase of 11 percent. The average governor proposed a spending increase of 3 percent from fiscal year 2015 to fiscal year 2016.

Finding Rights in the Constitution

Last month, when Justice Anthony Kennedy found that same-sex marriage was a “fundamental right,” did he and the four other justices for whom he wrote find a “new” constitutional right? Or is it rather, as some of us have long argued, that the Constitution protected that right for nearly a century and a half, like the right to same-sex sodomy (Lawrence v. Texas), to sell and use contraceptives (Griswold v. Connecticut), to educate one’s child in a parochial school (Pierce v. Society of Sisters), and, dare I say, to freedom of contract in employment (Lochner v. New York)?

I address those questions in a piece in today’s National Law Journal, defending Kennedy’s conclusion in Obergefell v. Hodges but taking exception to his reasoning. The fundamental right to same-sex marriage rests mainly, he argued, on the liberty interest that is protected under the Fourteenth Amendment’s Due Process Clause. Not so, said Justice Clarence Thomas in his dissent. Drawing extensively on John Locke’s state-of-nature approach to political legitimacy, which the Founders and Framers drew on as well, Thomas argued that the Obergefell plaintiffs were not denied the right to marry. They were perfectly free to go to any willing clergyman who would marry them—and the state would not have interfered with their liberty to do so. What they wanted, he saw, was a state license, the state’s positive recognition of the marriage, and the legal benefits that go with the state’s recognition.

Kennedy’s conclusion as against the state, therefore, belongs properly not under the Fourteenth Amendment’s Due Process but under its Equal Protection Clause. The state denied same-sex couples the same benefits it granted opposite-sex couples and thus discriminated against them. Thus, the right to marry someone of the same sex may be a natural right that anyone would enjoy in the state of nature; but once we leave that state, if an actual state we’re in grants the privileges of marriage, that right is entailed by and derived from the Fourteenth Amendment’s Privileges or Immunities Clause; and its denial is properly litigated against the state under the Equal Protection Clause. Unfortunately, Thomas never developed those points—nor could he have without coming out for same-sex marriage—nor did Kennedy’s brief and gauzy discussion of equal protection get to the heart of the matter either.

Funding Highways: States Can Do It

Congress faces a deadline at the end of July to extend federal highway funding. Policymakers are likely to cobble together a short-term fix for the funding gap in the Highway Trust Fund (HTF), rather than enacting a permanent solution.

Annual HTF spending is projected to be $53 billion and rising in coming years, while HTF revenues will be $40 billion. That leaves an annual funding gap of at least $13 billion. A good permanent fix would be to cut federal spending by $13 billion to match the revenues. State governments could fill the gap with their own funding, efficiency improvements, or privatization.

That straightforward decentralization solution is not popular with highway lobby groups, and it is usually not mentioned as an option by reporters. A recent Washington Post Wonkblog column is typical. It examined road quality and potholes in the states, and then concluded that more federal money was needed.

The Post published my letter in response to Wonkblog on Saturday:

The article noted that some states (such as California) have many car-damaging potholes, while others (such as Florida) have very few. It said that “we haven’t been putting enough money into the Highway Trust Fund.”

Actually, the data reveal that California ought to be learning lessons from Florida on how to spend existing funds more efficiently. The fact that some states have much better highways than others shows that states can solve their own highway problems — without the top-down federal actions suggested in the article.

Here are some of the details from the original Wonkblog story:

… 28 percent of the nation’s major roadways—interstates, freeways, and major arterial roadways in urban areas—are in “poor” condition.

[Other than D.C.] … the worst roads are in California where 51 percent of the highways are rated poor. Rhode Island, New Jersey and Michigan all have “poor” ratings of 40 percent or more. Dang.

And while everybody loves to make fun of Florida, the Sunshine State actually has the smallest percentage of bad roads in the nation—only 7 percent. Nevada, Missouri, Minnesota and Arkansas round out the top 5.

Note that Florida is a warm and sunny, while Minnesota is cold and snowy, yet they both have very good roads. Meanwhile, California is warm and sunny, while Michigan is cold and snowy, yet they both have very poor roads. Wonkblog correctly notes, “I might have expected weather and latitude to play a big role in road quality, but that doesn’t seem to be the case here.”

So far so good, but then Wonkblog jumps to his predetermined solution, and completely ignores the implication of the data he had just presented. He says, “One main reason why our roads are in such bad shape is that we haven’t been putting enough money into the Highway Trust Fund to keep up with infrastructure needs.”

According to Wonkblog’s own chart, only 10 percent of the roads in Minnesota are in “poor” condition, while 51 percent in California are poor. Thus, bad roads are clearly a state-level failing. Wonkblog immediately grabs for the magic wand of more federal funding, but he might have asked what it is that states like Minnesota are doing right with the existing funding.  

The other weird thing about Wonkblog’s conclusion is that he says, “we haven’t been putting enough money into” the HTF. But, of course, it is spending that might affect road quality, not the revenues “into” the fund. If you look at HTF spending, it has remained high in recent years because Congress has filled it with general fund revenues, as I chart here.

In sum, there are apparently dramatic differences in road quality between the states. That may stem from differences in state funding, state efficiency, and state competence, but seemingly not climate conditions. All the states have the ability by themselves to have high quality roads, but some states it appears have important road-investment lessons to learn from the others.

A Favorable Trend in Driver Licensing

Twelve states, as well as the District of Columbia and Puerto Rico, currently grant (or will soon grant) drivers’ licenses to unauthorized immigrants. An additional two—Arizona and Nebraska—explicitly grant licenses to immigrants brought to the United States as small children (“Dreamers”). This is a favorable trend, both for public safety and for liberty.

If you want an illustration of the public safety benefits from using drivers’ licenses solely for driving administration, give a read to this Voice of America article which illustrates clearly that illegal immigrants drive even when licensing is unavailable to them. Now that licensing is available, a California applicant who is not legally in this country must first prove residence. “He must also take an eye test to show he can see well, and a written test on driving rules. He must also take a driving test to show he can operate a motor vehicle.” Bringing all drivers up to such minimum standards undoubtedly improves safety outcomes.

For liberty, though, the shift back toward using driver licensing for driving is especially welcome. In 2005, amid a wave of anti-immigrant sentiment stoked by terror fears, Congress passed the REAL ID Act, which requires states to get proof of legal presence if their licenses and IDs are to be accepted by federal agencies. It appeared for a time as though states kowtowing to the federal government would help turn their driver’s licenses into an all-purpose federal tracking and control instrument, a national ID.

It has become increasingly clear that the Department of Homeland Security’s Transportation Security Administration will never follow through on the feds’ threat to turn away air travelers from states that don’t comply with REAL ID (though many are still taken in by DHS talking points). Some states are declining to implement REAL ID at all. Others are producing easy-to-acquire licenses that are labeled “not for federal purposes,” which REAL ID permits.

The states giving licenses to unauthorized immigrants today run the gamut from “liberal” to “conservative”: California, Colorado, Connecticut, Delaware (effective December 2015), Hawaii (effective January 2016), Illinois, Maryland, New Mexico, Nevada, Utah, Vermont, and Washington. For varying reasons—and with varying levels of controversy—they’re re-asserting state authority over a state prerogative: driver licensing policy.

That’s good federalism. It’s good for road safety. And it’s especially good for keeping motor vehicle bureaucrats from being TSA agents and vice versa.

Survey: 58% of Americans Favor Iran Nuclear Agreement, but Worry about Its Efficacy

A new Cato Institute/YouGov poll finds a solid majority—58%—of Americans supports the main components of the Iran nuclear deal, in which the United States and other countries would ease oil and economic sanctions on Iran for 10-15 years in return for Iran agreeing to stop its nuclear program over that period. Forty percent (40%) oppose such a deal.

Americans also prefer Congress to allow such a deal to go forward (53%) rather than block the agreement (46%). Support declines slightly when the deal is described as an agreement between the “Obama administration and Iran.”

Full poll results found here

Despite support for the deal, Americans remain skeptical it will stop Iran’s nuclear program. Fifty-two percent (52%) of Americans say the agreement is “unlikely” to “stop Iran from developing nuclear weapons,” including 32% who say it’s “extremely unlikely.” Conversely, 46% believe the deal is likely to achieve its primary goal.

However, Americans are more optimistic the deal will delay Iran from developing nuclear weapons. The poll found 51% of Americans think the deal will likely “delay” Iran’s nuclear development while 47% disagree.

The survey also offered Americans an opportunity to select which one of several policy options would be “most effective” in reducing the likelihood Iran develops nuclear weapons. Doing so found a plurality –40%— think the Iran nuclear agreement would be more effective than taking military action against Iran’s nuclear facilities (23%), imposing new economic sanctions against Iran (23%) or continuing existing sanctions against Iran (12%).

Ultimately, 63% of Americans say it would be a “disaster” if Iran developed nuclear capabilities while 32% say the problem could be managed and 5% say it wouldn’t be a problem. Nevertheless, Americans tend to have confidence that the Iran nuclear agreement may be the next best step toward reducing that possibility.