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Cato Daily Dispatch for November 16, 2004

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Pension Guarantor's Deficit Doubles
McCain 'Disappointed' by Bush Stance on Global Warming
Violence Persists in Sudan

Pension Guarantor's Deficit Doubles

"Struggling under a cascade of bankruptcy filings in the airline and steel industries, the government's pension insurance agency said yesterday that its deficit has more than doubled in the past year -- to $23.3 billion," according to the Washington Post.

"The figure is so large that an overhaul of the way traditional pensions are funded and insured has become essential, several experts said. Pensions of about 44 million workers and retirees are insured by the Pension Benefit Guaranty Corp. If it cannot meet its obligations, taxpayers could be called on to pay the bill, they said."

In "How to Reduce the Cost of Federal Pension Insurance," Richard A. Ippolito, former chief economist at the PBGC, warns that the agency is poised for a taxpayer bailout similar to the 1980s savings and loan crisis. He recommends transforming the PBGC into a private insurance program that sets premiums according to the amount of risk plan sponsors add to the program.

"Once taxpayers were removed as ultimate guarantors of the insurance, the plans themselves (and most notably the better funded plans) would have an incentive to align premiums with exposure, and plan sponsors would have to face up to the problems that their own underfunding creates," Ippolito writes.

McCain 'Disappointed' by Bush Stance on Global Warming

"Wasting no time distancing himself from President Bush on an issue that has long divided them, Sen. John McCain (R-Ariz.) yesterday called the White House stance on climate change 'terribly disappointing' and said inaction in the face of mounting scientific data was unjustified," the New York Times reports.

In "McCain's Failed Planetary Care Package," Cato senior fellow Patrick J. Michaels, writes: "For some reason, McCain has long had a bee in his bonnet about global warming."

In the Cato book Meltdown: The Predictable Distortion of Global Warming by Scientists, Politicians, and the Media, Michaels explains why all the news we hear about global warming is bad. He argues that when issues compete with each other for monopoly funding by the federal government, a culture of exaggeration is created and the political community then takes credit for having saved us from certain doom.

"Theory predicts and observations confirm that human-induced warming takes place primarily in winter, lengthening the growing season," Michaels writes in "Is Global Warming Always Bad?"

"Satellite measurements now show that the planet is greener than it was before it warmed. There are literally thousands of experiments reported in the scientific literature demonstrating that higher atmospheric carbon dioxide concentrations -- caused by human activity -- dramatically increase food production."

Violence Persists in Sudan

"The Bush administration has called it genocide. Other governments have labeled it ethnic cleansing and the world's worst humanitarian crisis. There have been calls for collective action and promises of relief. There have been somber reminders of the slaughter in tiny Rwanda a decade ago and solemn vows not to let such a thing happen here, in Africa's largest country," the Washington Post reports.

"But months later, the displaced inhabitants of Darfur, in western Sudan, find themselves consoled by little more than words. No Western country has been willing to commit troops to a small peacekeeping mission mounted by the African Union, while aid donors have been distracted by the conflict in Iraq, and U.N. sanctions have been frozen by diplomatic disputes."

In "A Regional Solution for Darfur," Christopher Preble, Cato's director of foreign policy studies, writes: "Sudan's neighbors have both the motive and the means to stop the slaughter in Darfur. Accordingly, the United States should publicly approach Egypt, Chad, Kenya, and Libya through diplomatic channels to encourage them to craft a strategy for ending the violence there. Whether these states are able to work through diplomatic pressure on Sudan's President Omar Hassan al-Bashir, or whether it takes limited military action on their part, the United States should support a responsible regional strategy. At the same time, the United States should urge the United Nations to endorse a regional solution. A regional solution should not include American troops. Our armed forces have enough on their plate without undertaking peacemaking operations in East Africa."

Wyatt DuBois, editor, wdubois@cato.org