Congress, states and courts must check presidential lawmaking
Executive orders used to "run the country," study says, and that's unconstitutional

Modern presidents have moved well beyond their principal constitutional duty of seeing "that the Laws be faithfully executed," a new Cato Institute study says. In doing so, they have usurped vast lawmaking powers that the Constitution vests in Congress or the states, and the courts have done little about it.

In "Executive Orders and National Emergencies: How Presidents Have Come to 'Run the Country' by Usurping Legislative Power," attorneys William J. Olson and Alan Woll note that during the recent presidential scandals, many called for the investigations to end "so that the president could get back to 'the business of running the country.'" How did we get to a point, they ask, "where so many Americans think of government as embodied in the president and then liken him to a man running a business?"

The answer rests, in part, "with the growth of presidential rule through executive order and national emergency," according to the authors. Although the Constitution assigns the "executive power" to the president, leaving the lawmaking power with the Congress or the states, presidents from the start, but especially in the 20th century, have exercised powers far beyond those authorized by the Constitution. Unfortunately, "Congress has not only failed to check but has actually abetted the expansion of presidential lawmaking," the authors write.

Recent examples of rule by executive order include President Clinton's creation of the 1.7 million acre Grand Staircase-Escalante National Monument, his American Heritage Rivers Initiative, his "don't ask, don't tell" policy for the military, his plan to prohibit federal contractors from hiring permanent striker replacements, his reduction of federally licensed firearms dealerships, and his "new federalism" initiative.

Twice in the past 50 years, however, courts have found a president's lawmaking unconstitutional-most recently in the Clinton strikebreaker case. Moreover, the nation's governors have just forced Clinton to rewrite his federalism executive order. And two bills are now in Congress seeking to limit presidential lawmaking. "These developments offer hope that constitutional limits-and the separation and division of powers, in particular-may eventually be restored," the authors conclude.

"Executive Orders and National Emergencies: How Presidents Have Come to 'Run the Country' by Usurping Legislative Power"

Clinton's Kosovo policy: An illusory "victory"
Administration "stumbled into war and blundered its way to 'victory,'" according to study

The Clinton administration's policy in Kosovo has habitually failed to meet its objectives and will continue to entangle the United States in multi-billion-dollar, open-ended peacekeeping operations, according to a new study released today by the Cato Institute.

In "Faulty Justifications and Ominous Prospects: NATO's 'Victory' in Kosovo," Christopher Layne, visiting scholar at the Center for International Studies at the University of Southern California and MacArthur Foundation Fellow in Global Security, writes that if the result of U.S./NATO action is considered a "victory" by President Clinton's standards, then "we must hope fervently that the United States is spared the consequences of a real defeat."

In his paper, Layne says that President Clinton's definition of victory "rings hollow": NATO's intervention not only killed many innocent civilians in Yugoslavia; it also caused serious economic and social disruptions throughout the Balkans and greatly strengthened the position of the extremist Kosovo Liberation Army.

Layne also charges that the main rationales the president's "spinmeisters" used for NATO intervention were "faulty." "Spin should not be confused with truth," he writes. Layne goes on to debunk those rationales: that genocide was occurring and needed to be stopped (in fact, the humanitarian disaster was caused by NATO's bombs); that U.S. credibility would be lost if America did not intervene (it was not a test of American credibility "until Washington needlessly transformed it into a test of resolve"); and that NATO needed validation of its importance in post-Cold War Europe (the end of the Cold War should have meant the end of NATO, since the common threat to the allies' security disappeared).

The author warns that the war continues to have negative policy repercussions. "The war with Yugoslavia has had important geopolitical effects that reverberate far beyond the Balkans. Clinton's Kosovo policy has had portentous consequences for America's relations with its great-power rivals, Russia and China, and its great-power allies, the West European nations. . . . The war over Kosovo will hasten the formation of countervailing coalitions to rein in what other nations see as a too powerful America."

"Faulty Justifications and Ominous Prospects: NATO's 'Victory' in Kosovo"

Climate Change Technology Initiative Is a Sham
Congress should eliminate funding for $1.4 billion global warming program

The Climate Change Technology Initiative, being pushed by the Clinton administration as a way to combat global warming, is a “sham,” and a “repackaging of failed programs” that do nothing to significantly reduce global temperatures, according to a new study released today by the Cato Institute.

In “Energy Inefficiency: No Silver Bullet for Global Warming,” Jerry Taylor, Cato’s director of natural resource studies, finds that “even if one believes in the importance of taking immediate action to reduce greenhouse gas emissions,” the CCTI “is nothing but an empty and expensive political gesture.” The program—an amalgam of tax credits, research and development, product labeling and awareness programs, demonstration projects, subsidies and regulations to increase energy efficiency and the economic attractiveness of renewable energy—is “built on economic ignorance and political symbolism,” Taylor writes.

For example, the CCTI tax credit provision, which would cost $1.4 billion per year in lost revenue to the government, would only reduce energy consumption and carbon dioxide emissions by a fraction of a percent over the next 10 years—according to the Department of Energy itself. That may be due to the fact that the credits are “too short-lived to affect consumer decisionmaking and too modest to change consumers’ purchasing decisions,” according to Taylor.

Another shortcoming of the CCTI is that expectations for success of R&D expenditures “are like a second marriage, the triumph of hope over experience,” according to Taylor. Other problems with the program include: assertions about its costs/benefits do not pass scrutiny, a focus on market failures that do not exist, performance goals that are not plausible, a dearth of evidence that energy efficiency alone will reduce consumption, and, finally, a lack of measurable effect on climate.

The CCTI, which would be administered by five separate cabinet departments, is “but a repackaging of failed programs that have littered the federal budget for 20 or more years,” writes Taylor. “For every program, President Clinton said we should ask, ‘Is it changing peoples’ lives for the better?’” and whether taking that money away from the taxpayers would be worth it, Taylor writes. In the end, he notes, the effect of the CCTI on temperature (a reduction of 16/1,000ths of a degree Fahrenheit, at best) will not improve taxpayers’ lives, nor will it be worth its steep price.

"Energy Inefficiency: No Silver Bullet for Global Warming"

Postal regulations on private mail boxes "sloppy, capricious and arbitrary"
Postal Service should be subject to checks on its power to prevent abuse

"The sloppy, capricious and arbitrary manner in which the Postal Service has made and implemented the new regulations on commercial mail-receiving agencies (CMRAs) has harmed small businesses and customers of those businesses alike," Edward L. Hudgins, Cato's director of regulatory studies, told a House panel today. "The new regulations on private mail boxes should be repealed immediately."

"These regulations are an example of why the Postal Service, a government monopoly with regulatory powers that it can use against its competitors, should be subject to the same checks on its power to which other government agencies are subject."

If this were the case, according to Hudgins, "the Postal Service would be required to state exactly what goals it seeks to accomplish through its regulations, where it gets the authority to seek such goals, how its policies are meant to obtain such goals, and what evidence it has that those goals are achieved through those regulations."

The Postal Service should have to do a cost/benefit analysis when establishing new regulations. "It should be required to show exactly what the expected benefits of the regulations will be, what the expected costs will be, and how those benefits outweigh the costs. It should be required to show that the regulations it chooses are the least costly compared with other alternatives and are the least burdensome for small business."

Specifically, Hudgins recommends that the U.S. Postal Service be made subject to the Paperwork Reduction Act, Regulatory Flexibility Act, the Results Act and "other federal statutes meant to protect citizens against abuses by government agencies."

What if abiding by these standards is too burdensome? "Other countries have discovered a means to deal with the dilemma," Hudgins explained. "They are privatizing their postal services." Currently New Zealand and Sweden have private postal systems, and the largest mail carrier in Europe, Deutsche Post in Germany, is now under private management.

"Regulating Private Mail Boxes"

Biological Weapons Rules Would Violate Fourth Amendment
A stronger BWC won't stop bioterror but could harm American industry

The protocols proposed for the Biological Toxins and Weapons Convention (BWC) would do little to stop the spread of bioweapons and could compromise valued U.S. secrets and critical data used for defense against biological weapons, according to a new study released today by the Cato Institute. The 1972 convention, which prohibits signatory nations from developing, possessing, employing or transferring biological weapons, does not contain any protocols for enforcement; however, an international effort is currently under way to develop such protocols.

In "Strengthening the Biological Weapons Convention: Illusory Benefits and Nasty Side Effects," Professor Eric R. Taylor of the University of Louisiana at Lafayette writes that the proposed changes to the BWC render inspections "useless" in demonstrating either compliance with or violation of the convention. "The line between research and development for biomedical purposes and for biological weapons is very fine. It reflects a state of mind and intent. A state would be foolish to declare that a known pharmaceutical or biotech facility was performing bioweapons R&D. . . . Rogue states will certainly try to conceal their activities behind rules on confidentiality."

According to Taylor, U.S. pharmaceutical development, which relies heavily on the very technology that is also critical to bioweapons R&D, would be especially hurt by the new protocols. "If anything, commercial applications for biotechnology are even more interwoven with military applications than are applications in the chemical or nuclear industries," he writes. Currently, the U.S. pharmaceutical industry leads the world in R&D spending and bringing new drugs to market. But the proposed protocols would "put at risk the security of commercial secrets that are the life's blood of our economy and our future prosperity."

"The future of the people's right to be secure in their possessions and personal effects is placed in peril by the Biological Toxins and Weapons Convention protocols," he writes. "Although an attack with biological weapons on the United States would be dangerous, an assault on U.S. constitutional rights in an effort to strengthen an international convention has little hope of stopping the spread of those weapons."

"Strengthening the Biological Weapons Convention: Illusory Benefits and Nasty Side Effects"

Cato scholar testifies that dangers of carbon dioxide are exaggerated
Findings lead to inescapable conclusion that CO2 is not a 'pollutant,' and plausibly a net benefit

"Is carbon dioxide a satanic gas? Absolutely not," Patrick J. Michaels, Cato’s senior fellow in environmental studies, told a House panel today at a hearing on whether or not carbon dioxide is a pollutant and whether the Environmental Protection Agency has the power to regulate it. Michaels told the Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs of the House Government Affairs Committee that "negative" and "positive" impacts on climate are value judgments made by human beings.  Summarizing his testimony, Michaels said:

"This testimony demonstrates that the observed climate changes that have accompanied the enhancement of the natural greenhouse effect have been considerably smaller than they were originally forecast to be, and that they are likely to remain similarly small. Further, they are confined overwhelmingly to the winter, rather than the summer, and, during the winter, they are confined to the coldest, deadliest airmasses. There is no overall statistically significant warming in the average temperature of the United States, for which the record is 105 years in length. While the United Nations has stated that during the greenhouse enhancement, ‘the balance of evidence suggests a discernible human influence on global climate,’ I cannot view what has happened as a net negative; some might easily argue that it is a net benefit. Under neither interpretation does this qualify carbon dioxide as a climatic ‘pollutant.’

"In January 1989, over 10 years ago, I first testified on climate change before the House Committee on Commerce. I argued that the computerized climate models from that era were dramatically overpredicting future warming, and that the observed history of climate projected a much more moderate warming, of 1.0°C to 1.5°C, over the next century. I further argued that it would eventually be recognized that this moderate climate change would be expressed mainly in the winter at night, and that overall it was plausible to argue that the change conferred a net benefit upon our world. If I had the perfect vision of knowing what would have happened to the climate in the next 10 years, how the scientific literature evolved—I would have changed not one word.

"Carbon Dioxide: A Satanic Gas?"

The Community Reinvestment Act should be repealed
No indication that qualified borrowers are turned down, Cato paper concludes

The Clinton administration wants a stricter Community Reinvestment Act, but a better case can be made for repealing the law altogether, according to a Policy Analysis released today by the Cato Institute. Originally intended to deal with "redlining" — the alleged refusal of banks to lend to residents of poorer urban areas inhabited by racial minorities — the two-decade-old CRA is an expensive way to deal with a problem that may not exist, the study finds.

In "The Community Reinvestment Act: Looking for Discrimination That Isn't There," George J. Benston, John H. Harland Professor of Finance, Accounting and Economics at the Goizueta Business School of Emory University, writes that the CRA has crippled congressional attempts to enact banking and financial services reform. Benston finds that qualified applicants, regardless of their address, do not suffer unwarranted discrimination in lending. The CRA just adds to the cost of banking, ultimately hurting the very consumers it was intended to protect, according to the author.

"Researchers using the best available data find very little discernible home-mortgage lending discrimination based on area, race, sex, or ethnic origin," Benston writes. "Furthermore, interstate banking; wider branching; and improved technology, which has engendered nationwide — indeed, global — competition, have meant greater availability of mortgage loans. Today, there is no indication that qualified borrowers are turned down."

In fact, in 1993 and 1997, institutions not subject to, as well as those subject to, the CRA made about the same percentage of mortgages to lower-income borrowers as they did to all borrowers. Lenders not subject to the CRA actually made a somewhat higher percentage of the mortgages obtained by minority borrowers and neighborhoods. "It is clear that competition and just good business sense have been effective in encouraging most, if not all, banks to offer loans to creditworthy mortgagors without regard to their race, gender, or other irrelevant personal attributes," Benston concludes.

"The Community Reinvestment Act: Looking for Discrimination That Isn't There"

October 4, 1999

Time to kill the "death tax"
Cato study: biggest problem with federal gift and estate taxes is a moral one

The federal gift and estate tax, better known as the "death tax," is clearly a failure from an economic standpoint, but "the biggest problem with the death tax is a moral one," according to the author of a new Policy Analysis published today by the Cato Institute.

In "Grave Robbers: The Moral Case against the Death Tax," law professor Edward J. McCaffery notes that the tax's economic shortcomings are well-known. It "raises barely over 1 percent of total federal tax revenues," and "for every dollar raised from the tax, roughly another dollar is lost because of avoidance, compliance, administrative and enforcement costs."

But it is the moral impact that is most objectionable, according to McCaffery. It "rewards a 'die-broke' ethic, whereby the wealthy spend down their wealth on lavish consumption, and discourages economically and socially beneficial intergenerational saving."

Although exceptions and exclusions in the death tax statute limit its impact to only 1 to 2 percent of Americans who die each year, it "features the highest rates of any major American tax" and "is one of the highest in the world." Thus, "families within its potential sting take great efforts to avoid it."

McCaffery finds that the death tax rewards those who don't work, don't save, and spend all of their wealth. To illustrate its impact, he uses a hypothetical case of three daughters who at age 21 are given equal amounts by their wealthy parents. One squanders her gift in youth, while the second spends it throughout her lifetime. The third, who invests the sum and lives prudently, turns $1 million into $500 million over the course of her life. But when she dies, only the government reaps the benefits, pocketing $300 million of her savings. The two spendthrift daughters never pay a cent in gift and estate taxes.

Is there a better approach? McCaffery reports that "it turns out that certain appealing and attainable comprehensive tax reform options-moving toward a progressive consumption tax, which would fall consistently on spending, not work or savings-far better serve the goals of tax fairness and common sense." Edward McCaffery is professor of law at the University of Southern California and visiting professor of law and economics at the California Institute of Technology.

"Grave Robbers: The Moral Case against the Death Tax"

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