Cato Conference: “Pruitt, Halbig, King & Indiana: Is ObamaCare Once Again Headed to the Supreme Court?”

On October 30, the Cato Institute will host a conference featuring leading experts on four legal challenges that critics understandably yet mistakenly describe as “the most significant existential threat to the Affordable Care Act”:

PruittHalbigKing & Indiana: Is ObamaCare Once Again Headed to the Supreme Court?

Thursday, October 30, 2014, 9:00AM – 1:30PM. 

Luncheon to follow.

Featuring: Oklahoma Attorney General Scott Pruitt; Indiana Attorney General Greg ZoellerRobert BarnesThe Washington PostJonathan Adler, Case Western Reserve University School of Law; David Ziff, University of Washington School of Law; Brianne Gorod, Constitutional Accountability Center; James Blumstein, Vanderbilt University; Michael F. Cannon, Cato Institute; Len Nichols, George Mason University; Tom Miller, American Enterprise Institute; and Robert Laszewski, Health Policy and Strategy Associates, LLC.

In Pruitt v. Burwell and Halbig v. Burwell, federal courts have ruled that the Internal Revenue Service is misinterpreting the Patient Protection and Affordable Care Act, unlawfully paying billions of dollars to private health insurance companies, and unlawfully subjecting more than 50 million individuals and employers to the Act’s individual and employer mandates. In King v. Burwell, another federal court found the IRS’s interpretation is permissible. A fourth lawsuit, Indiana v. IRS, is due a ruling at any time.

While these cases attempt to uphold the ACA by challenging the Obama administration’s interpretation, supporters and critics agree they could have as large an impact on the law as any constitutional challenge. Is the IRS acting within the confines of the law? Is the ACA unworkable as written? Is it inevitable that the Supreme Court will hear one of these cases, or a similar challenge yet to be filed? What is the impact of the IRS’s (mis)interpretation? What impact would a ruling for the plaintiffs have on the health care sector and the ACA? Leading experts, including the attorneys general behind Pruitt v. Burwell and Indiana v. IRS, will discuss these and other dimensions of this litigation.

To register to attend this event, click here and then submit the form on the page that opens, or email events [at] cato [dot] org, or fax (202) 371-0841, or call (202) 789-5229 by 9:00 a.m. on Wednesday, October 29, 2014.

You Ought to Have a Look: The Best of the Science Blogs, with an Emphasis on Climate Change

You Ought to Have a Look is a recurring feature from the Cato’s Center for the Study of Science that briefly highlights a few interesting blog posts from around the web that are comments on subject areas we are currently emphasizing. Climate change issues currently top the list. Here we post a few of the best in recent days, along with our color commentary. This is the first installment of You Ought to Have a Look

We start off with the estimable Judith Curry, former chairwoman of the highly regarded School of Earth and Atmospheric Sciences at Georgia Institute of Technology (aka “Georgia Tech”).  Her musings, published every few days on her blog “Climate Etc.” have a wide following amongst climate geeks (like us), while oftentimes her postings should be of interest to a wider, more general audience. 

Judith scored big last week with an excellent op-ed in the Wall Street Journal. In her subsequent blog post “My WSJ op-ed: Global warming statistical meltdown,” she takes you through the version that appeared in print as well as some of the earlier drafts of it highlighting lessons she learned along the way. The article focuses on her recent blockbuster publication in which she and co-researcher Nic Lewis peg the earth’s climate sensitivity—how much warming will occur as a result of a doubling of the atmospheric concentration of carbon dioxide—at a value about one-half that which is produced by the collection of “state-of-the-art” climate models used by the UN and the Obama Administration to underpin their calls to mitigate carbon dioxide emissions from the production of energy.

And nearly every Friday, she posts her “Week in Review” where she highlights things that have recently caught her eye or events that she was involved in. In the current issue, she describes her recent travels which included a trip to Ohio’s Oberlin College where she “debated” me (PJM).  As she describes it:

The debate went fine, we each had 10 minutes to make opening statements on the science, and then an additional 10 minutes to discuss broader implications. I used my time to discuss the values issues and decision making under deep uncertainties. PJM discussed the increasingly perverse incentives in academia and government funded science, see [link] for some of his recent writing on this topic. He definitely makes some valid points.

Next, you might want to check out the witty Matt Briggs (“Statistician to the Stars”) post on “Don’t Say ‘Hiatus’” in which he takes us (and virtually everyone else) to task for using the terms “pause” and/or “hiatus” to refer to the past 18 years or so of no statistically significant overall change in the earth’s average surface temperature. Briggs’ main point is that since climate change models are so bad (unskillful), there is no reason for a priori expectations of the temperature behavior one way or the other. In other words, a “pause” from what?

Be aware that Briggs is a very twisty writer, often leading the reader down a path that takes a sharp turn further down his somewhat detailed essays. But there is always some gem to find at the end!

California Greening

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

With all of the negative effects predicted to occur in response to the ongoing rise in the air’s carbon dioxide (CO2) concentration—a result of burning fossil fuels to produce energy—it is only natural to want to see what has been happening to our Earth’s many ecosystems as the atmospheric carbon dioxide load has risen. (Its atmospheric concentration has risen from around 280 parts per million to nearly 400 ppm, an increase of about 43 percent).

A new study by the University of California’s Christopher Dolanc and colleagues does just that, for the diverse Sierra Nevada forests of California. 

Dolanc and his colleagues analyzed two periods: historic measurements between 1929 and 1936, and modern data from 2001 through 2010.  And when we said “diverse,” we meant it.  They “classified 4,321 historical plots and 1,000 modern plots into nine broad groups of vegetation types that are widely used by land managers and researchers in the region.” This is what grad students are for!

They compared tree density and composition between the two periods, within and between the nine types of forest. The results shown in Figure 1 below.

 

Figure 1. Percent change in tree density by forest type in the Sierra Nevada Range, USA, as determined from historic (1929-1936) and modern (2001-2010) measurements. Green bars denote a statistically significant change. You might want to call this “California Greening.” Source: Dolanc et al. (2014).

Supreme Court Declines to Review Another Important Case

It’s not just high-profile culture-war issues like same-sex marriage and the right to bear arms that the Supreme Court is avoiding like the plague. On issues ranging from federalism to property rights to criminal law, the justices increasingly decline to hear any case they don’t absolutely have to – no matter how important the issues presented – especially if there’s a threat of an irreconcilable split. Such is the brave new world of John Roberts’s minimalism/unanimity.

The latest such example came yesterday morning, in a criminal procedure case called Jones v. United States, in which Cato filed an amicus brief that I previously blogged about. The issue here is whether, pursuant to the Sixth Amendment, a judge can base a sentence on facts that the jury did not find beyond a reasonable doubt. (The Court ruled in a 2000 case called Apprendi v. New Jersey that judges can’t enhance sentences beyond statutory maximums based on facts, other than prior convictions, not decided by the jury – but in Jones the sentences in question, while seemingly harsh and unreasonable, were still within the sentencing guidelines.)

While normally we don’t know what the justices are thinking when they deny a cert petition, or even how the vote went (four votes are needed to grant), but in the Jones denial, Justice Antonin Scalia wrote a rare dissenting opinion, joined by Justices Clarence Thomas and Ruth Bader Ginsburg. Here’s the salient bit:

The Sixth Amendment, together with the Fifth Amendment’s Due Process Clause, “requires that each element of a crime” be either admitted by the defendant, or “proved to the jury beyond a reasonable doubt.” Any fact that increases the penalty to which a defendant is exposed constitutes an element of a crime, and “must be found by a jury, not a judge.” We have held that a substantively unreasonable penalty is illegal and must be set aside. It unavoidably follows that any fact necessary to prevent a sentence from being substantively unreasonable—thereby exposing the defendant to the longer sentence—is an element that must be either admitted by the defendant or found by the jury. It may not be found by a judge. [emphasis original; internal citations omitted.]

And so the petitioners came one vote short. The three dissenters may seem like an unusual grouping, but actually these justices are often together on issues relating criminal defendants’ jury-trial rights. (It’s sort of the left/right versus the center, or the principled versus the pragmatic.) They were in the Apprendi majority, for example, as well as in the majority for the case that struck down the mandatory nature of the sentencing guidelines, United States v. Booker (2005), and recent cases involving the right to confront witnesses against you. Alas, they were joined in those cases by Justices John Paul Stevens and David Souter, who have since been replaced by Justices Sonia Sotomayor and Elena Kagan, respectively. It’s not a big surprise that Kagan seems to have joined the “prgamatic” bloc for these purposes, but Sotomayor’s vote is disappointing. Some commentators point to her background as a prosecutor to explain such deference, but Justice Sotomayor is one of the most pro-defendant votes on Fourth Amendment and habeas corpus cases.

In any event, whatever the reason for the lack of a crucial fourth vote to grant, this was another opportunity lost by the Court, another responsibility shirked. For more commentary, see here, here, here, and here.

Failing to Track Highway Spending

The problems with federal highway spending are well documented. The program distorts project incentives and distributes money inefficiently. A new report from the Government Accountability Office (GAO) adds to the list of problems, detailing improper fund management within the Federal Highway Administration (FHWA).

In 2014 the highway trust fund collected $39 billion in fuel tax revenues, but spent $53 billion, creating a $14 billion deficit. This was not an isolated event. Since 2008 Congress has provided  $50 billion of general federal revenues to prop up the highway trust fund. The Congressional Budget Office estimates that the highway trust fund will require another $157 billion of general revenues by 2024.

Funds from the highway trust fund are spent by several agencies, with the bulk allocated by FHWA. In fiscal year 2013, FHWA spent $41 billion, or 80 percent, of all highway funds. Of that, $39 billion was sent to states; the majority going to road and bridge construction and improvement.

But GAO found that FHWA is poorly tracking how this money is being spent. According to GAO,  “FHWA tracks and reports aggregate obligations for its “major projects” (projects with a total cost of $500 million or more), it does not collect and report aggregate obligations for other projects, which represented nearly 88 percent of all fiscal year 2013 spending.” GAO’s analysis states that $36 billion in federal highway funding is not being properly tracked by FHWA.

Tracking this information would allow FHWA to provide greater oversight on projects, and to provide Congress and the public greater detail about spending projects and priorities. The agency could track cost growth on projects and perhaps stop cost overruns, which are common on transportation projects.

FWHA already has the technology to make these improvements. GAO notes that FHWA’s computer system already has the capability to track this data, but the agency does not feel inclined to use this capability.

Congress’ current short-term patch to the highway trust fund expires in May. FHWA’s adoption of GAO’s recommendations would allow both Congress and the agency to better control spending and lower the imbalance between spending and revenues.

Department of Homeland Security: Who Needs It?

The Secret Service is scandal prone. It spends excessively on foreign presidential trips, and it has agents who get in trouble with prostitutes and liquor bottles. The recent White House fence-jumping incident was a stunning failure. Despite the Service spending $1.9 billion a year, a guy with a knife jumped the fence, sprinted across the lawn, pushed open the front door, galloped through the Entrance Hall, danced across the East Room, and almost had time to sit down for a cup of tea in the Green Room.

In the wake of the incident, the head of the Secret Service resigned. But the Service is an agency within the Department of Homeland Security (DHS), and the head of DHS, Jeh Johnson, did not resign. Indeed, he said very little about it, presumably to evade responsibility. So what is the purpose of having the DHS bureaucratic superstructure on top of agencies such as the Secret Service? If DHS does not correct problems at agencies when they fester for years, and if DHS leaders do not take responsibility for agency failures, why do we need it?

A new survey of 40,000 DHS employees reported in the Washington Post finds that the department has severe management problems:

The government’s 2014 Federal Employee Viewpoint Survey portrays a Department of Homeland Security still facing debilitating morale problems that have plagued it for years but worsened during the Obama administration — and which have grown more serious since Johnson took over in December.

While the survey shows that the vast majority of DHS employees are hard-working and dedicated to their mission to protect the homeland, many say the department discourages innovation, treats employees in an arbitrary fashion and fails to recruit skilled personnel.

At the DHS Science and Technology Directorate, for example, only 21 percent of employees in this year’s survey held positive views of their leadership’s ability to “generate high levels of motivation and commitment in the workforce,’’ according to results for that division.

Since its inception, the department has been plagued by poor morale and a work environment widely seen as dysfunctional, which has contributed to an exodus of top-level officials in recent years, many of whom have been lured by private security companies.

Only 41.6 percent of DHS employees said they were satisfied with the department, down from 44.4 percent a year earlier.

In 2013, only 29.9 percent of employees department-wide had a positive view of their leaders’ ability to “generate high levels of motivation and commitment in the workforce.’’ That number plunged to 24.9 percent this year.

That’s all pretty pathetic. But this is the most stunning result from the survey: “Asked if their leaders ‘maintain high standards of honesty and integrity,’ just 39.1 percent of employees responded positively.”

The 2002 creation of DHS was a mistake. Congress should revisit its handiwork, and begin unbundling the department and closing it down. Some DHS agencies, such as the Secret Service, should be stand-alone organizations that report directly to the president. Some DHS agencies should be moved to existing departments. And some DHS agencies, including TSA, ought to be abolished.

How The Supreme Court Can Stop Consumers From Getting Ripped Off

Today, the Supreme Court hears a case about whether dentists and other professions should be allowed to use state licensing boards to engage in anti-competitive behavior that would be illegal if not done under the auspices of state governments. The case is North Carolina State Board of Dental Examiners v. FTC, and involves actions taken by that state’s dental board to prevent non-dentists from providing teeth-whitening services.

In the University of Pennsylvania Law Review, Cato Institute adjunct scholars David Hyman and Shirley Svorny explain:

A majority of the courts of appeals gives state licensing boards and similar entities considerable latitude to engage in anticompetitive conduct, even when that conduct would be clearly unlawful were it undertaken individually by the licensed providers that typically dominate these licensing boards…

[T]he North Carolina Board of Dental Examiners (N.C. Board) became concerned that non-dentists were providing teeth whitening services. In North Carolina, teeth-whitening was available from dentists, either in-office or in take-home form; as an over-the-counter product; and from non-dentists in salons, malls, and other locations. The version provided by dentists was more powerful and required fewer treatments, but was significantly more expensive and less convenient. In response to complaints by dentists that non-dentists were providing lower-cost teeth-whitening services, the N.C. Board sent dozens of stern letters to non-dentists, asserting that the recipients were engaged in the unlicensed practice of dentistry, ordering them to cease and desist, and, in some of the letters, raising the prospect of criminal sanctions if they did not do so. The N.C. Board also sent letters to mall owners and operators, urging them not to lease space to non-dentist providers of teeth whitening services.

The Supreme Court will decide whether the North Carolina dental board should be able to claim a “state action” exemption to federal laws against anti-competitive conduct. Hyman and Svorny argue they should not, noting that doctors, lawyers, and other professions have used government licensing to stamp out competition, to the detriment of consumers:

Other occupations provide no shortage of similar examples, whether it is states requiring hair braiders to obtain cosmetology licenses (even though the requisite training has absolutely nothing to do with hair braiding), laws prohibiting anyone other than licensed funeral directors from selling coffins, states prohibiting anyone other than veterinarians from “floating” horse teeth, or ethics rules prohibiting client poaching by music teachers. 

“Antitrust has historically focused on private restraints on competition, but publicly imposed limitations can pose greater peril,” they write, “since they are likely to be both more effective and more durable.”

Hyman and Svorny make three further recommendations for the courts:

First, in reviewing the decisions of licensing boards, courts should presume that states were not actively supervising the boards, absent compelling evidence to the contrary. Second, defendant–licensing boards should be required to present persuasive evidence of actual harm that their proposed licensing restrictions or restraints will prevent and should be required to show that private market and non-regulatory forces (including brand names, private certification, credentialing, and liability) are insufficient to ensure that occupations maintain a requisite level of quality. Finally, we argue that legislators should take steps to roll back existing licensing regimes.

Hyman signed onto an amicus brief filed by antitrust scholars. (Here are two more amicus briefs filed by public-choice economists and the Cato Institute.) Svorny argues for the complete repeal of government licensing of medical professionals, and illustrates how the market for medical-malpractice liability insurance does more to promote health care quality than licensing

(Cross-posted at Darwin’s Fool.)