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Cato Daily Dispatch for December 19, 2001

Jerry Brito, editor, jbrito@cato.org
Stimulus Bill Fight Still Raging in Congress
Trade Deficit Soars in October
New Washington, D.C. Medical Marijuana Suit Heads to Court

Stimulus Bill Fight Still Raging in Congress

House Republicans last night said they would seek to pass a revised economic stimulus bill today, after last-ditch efforts to reach a compromise agreement foundered over fierce differences over subsidizing health insurance for the unemployed, according to The Washington Post.

"We seem to have a continued impasse with the senators," said House Majority Leader Richard Armey (R-Tex.).

Republicans hope the House action will put pressure on the Senate to accept the latest White House plan. But, separately, an intense effort by the White House to round up support among centrist Democrats for its stimulus plan appeared to gain little traction, leaving Republicans with too few votes to overcome procedural hurdles in the closely divided Senate.

Earlier this month, Director of Fiscal Policy Studies Chris Edwards testified before Congress on economic stimulus proposals and called for tax reform. His testimony can be read online.

Trade Deficit Soars in October

America's trade deficit soared to $29.4 billion in October, the biggest one-month jump in more than eight years, according to the Associated Press.

The Commerce Department said today that the trade gap was 54.8 percent higher than a revised deficit of $19 billion in September, which had been the smallest deficit in more than two years.

Unfortunately, the myth persists that trade deficits bode ill for the economy. Daniel Griswold, associate director of the Cato Institute's Center for Trade Policy Studies and author of the new Cato study "America's Record Trade Deficit: A Symbol of Economic Strength," has explained:

"The trade deficit is not a problem to be fixed but a potent symbol of America's economic strength in the world -- a Good Housekeeping seal of approval from global savers. Last year the American economy attracted foreign capital like a powerful magnet, allowing American consumers and businesses to buy $370 billion more than we sell. Expanding trade deficits are almost always a sign of economic expansion and robust investment. Research shows that bigger trade deficits go hand in hand with faster growth, falling unemployment, higher industrial output and declining poverty.

New Washington, D.C. Medical Marijuana Suit Heads to Court

District of Columbia advocates of medical marijuana use filed suit in U.S. District Court yesterday to put the issue back on the ballot in November, four years after an identical initiative set off a confrontation with Congress over home rule, according to The Washington Post.

Two advocacy groups are seeking an injunction against a federal law that effectively blocks the city from putting the issue before voters again. Sixty-nine percent of D.C. residents supported the medical use of marijuana in a 1998 vote.

Voters that year made it clear that they wanted to join those states--eight, so far--that have legalized the cultivation, possession, use and distribution of marijuana for seriously ill patients whose physicians recommend its use. When District residents approved Initiative 59 three years ago, congressional overseers immediately passed legislation that banned the drug's use for medical purposes in the nation's capital. It was more than a year before a federal judge ruled that the ballots could be counted.

In "Punishing the Sick," Senior Fellow Doug Bandow lists the medical evidence that shows marijuana can help those suffering from AIDS, cancer, glaucoma, multiple sclerosis and other ailments. "Morphine is illegal, but is routinely prescribed as a painkiller," he writes. "Not marijuana, however, which remains illegal under federal law for all uses." In testimony before Congress, Executive Vice President David Boaz urged Congress to respect state referenda on medical marijuana.

Earlier this year, the Cato Institute hosted the forum "The Law and Politics of Medical Marijuana" featuring Alan Bock, author of "Waiting to Inhale: The Politics of Medical Marijuana," and Kevin Zeese, president of Common Sense for Drug Policy. Video of the event is available online.