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Cato Daily Dispatch for December 8, 2004

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House Approves Intelligence Bill
Bipartisan Social Security Reform Legislation Proposed
Supreme Court Hears Arguments over Interstate Wine Sales

House Approves Intelligence Bill

"The House voted overwhelmingly on Tuesday to approve the sweeping intelligence-overhaul bill sought by President Bush and the independent Sept. 11 commission, rejecting a final appeal by a group of influential House Republicans who last month came close to derailing the measure," the New York Times reports.

"The House vote, 336 to 75, was seen by the bill's sponsors as the last major hurdle to passage of the legislation, which would restructure the nation's intelligence community and create the job of director of national intelligence to oversee the Central Intelligence Agency and the government's 14 other spy agencies. The bill is expected to be approved easily by the Senate in a vote scheduled for today, allowing Bush to sign it into law by week's end."

In "Building Leverage in the Long War: Ensuring Intelligence Community Creativity in the Fight against Terrorism," James W. Harris, a former CIA executive, writes: "In the war ahead, the adaptable nature of the adversary will demand an equally agile U.S. intelligence effort. More resources and better human intelligence will help. But an agile intelligence community will require something else: that the intelligence community at last dispense with the internal barriers that stifle communications and collaboration. Building an agile intelligence capability will require that internal communications improve, that robust and perhaps formal alliances with external centers of expertise be constructed, and that a genuine multidisciplinary analytic effort blossom and achieve a creative flair that is not typical of bureaucratic enterprises.

"Metrics will be needed for measuring progress in the effort. They should include measures of improved communication within the intelligence community, structures that connect the intelligence community to the best and the brightest outside the world of intelligence, and indicators of true analytic innovation. Intelligent risk taking and the ability of individual initiative to overcome bureaucratic caution would be central themes in a successful effort."

Bipartisan Social Security Reform Legislation Proposed

"U.S. lawmakers unveiled a bipartisan attempt to reform Social Security yesterday, with a Democrat backing Republican-drafted legislation that would part-privatize the pensions system," the Financial Times reports.

"Jim Kolbe, an Arizona Republican, said that Allen Boyd, a Florida Democrat, had signed on as a co-sponsor of his Social Security reform bill. The Kolbe-Boyd bill would allow individuals to divert 3 percent of their 12.4 percent payroll tax for the first $10,000 of earnings, and 2 percent up to the current payroll tax threshold of $87,900 into personal accounts."

In "The 6.2 Percent Solution: A Plan for Reforming Social Security," Michael Tanner, director of Cato's Project on Social Security Choice, writes: "Small account proposals will not allow low- and middle-income workers to accumulate real wealth or achieve other objectives of reform. Individual accounts should be as large as feasible. ... Small account proposals may prove politically counterproductive by dissipating the enthusiasm of grassroots activists and others who support reform and failing to engage the attention of young workers."

Supreme Court Hears Arguments over Interstate Wine Sales

"Winemakers who want to ship directly to consumers across state lines got a sympathetic hearing at the Supreme Court yesterday, as the justices considered oral arguments in what could be the most significant test of states' constitutional power to regulate the alcohol trade since Prohibition," the Washington Post reports.

"At issue are New York and Michigan laws that require out-of-state wineries to sell through state-licensed wholesalers, while permitting in-state wineries to deal directly with individuals. The small Virginia winery challenging the New York law and the wine journalists, California winery and wine connoisseurs challenging the Michigan law say that the statutes are discriminatory and violate the Constitution's implicit ban on state trade protectionism."

In "Regulating Wine by Mail," attorney Gina M. Riekhof and University of Missouri-Columbia professor Michael E. Sykuta, write: "Our study suggests economic interests in both the private and public sectors are the principal drivers of restrictions on direct interstate shipping of wine.

"Those results have immediate consequence for the legal battles raging across the country contesting the constitutionality of direct shipment laws. To the extent that public welfare interests are required by courts to justify states' restrictions on interstate commerce, our results cast a shadow of doubt on public interest arguments in the instance of direct shipment of wine. They also raise questions about similar restrictions on direct interstate shipping of other alcohol products, particularly specialty microbrew beers that face similar distribution hurdles."

Jonathan Block, editor, jblock@cato.org