July-October 1996

"THIS JUST IN"

October 30, 1996

Social Security & Baby Boomers
Cato scholar testifies in Congress

Michael Tanner, Director of Health and Welfare Studies at the Cato Institute, testified before the Senate Special Committe on Aging on September 24, 1996.

Congressional Testimony (http://www.cato.org/testimony/ct-mt092496.html)

October 30, 1996

Judicial Taxation
Cato scholar testifies in Congress

Roger Pilon, Director of the Cato Center for Constitutional Studies, testified before the Subcommittee on Administrative oversight and the Courts of the Committee on the Judiciary , United States Senate on September 19, 1996.

Congressional Testimony (http://www.cato.org/testimony/ct-rp091996.html)

October 22, 1996

 Supply-side tax cuts worked
Study compares Reagan economic record to those of Ford, Carter, Bush, Clinton

 "The supply-side policies of Ronald Reagan resulted in better economic performance than in the two administrations before and after his," says Cato Institute chairman William Niskanen.

 Noting that Bob Dole’s proposal for a 15 percent income tax cut has reignited the debate about the economic impact of "Reaganomics," Niskanen and Cato Institute director of fiscal policy studies Stephen Moore today released a detailed analysis of the effects of Reagan’s economic policies.

 In "Supply-side Tax Cuts and the Truth about the Reagan Economic Record," they compare the results of the Reagan economic program from 1981 through 1989 with those of the Ford-Carter years (1974-81) and the Bush-Clinton years (1989-95) based on 10 key economic variables. The study concludes that, by almost every measure, Reagan’s supply-side policies produced superior results. A few examples:

 • Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.

 • Real median family income grew by $4,000 during the Reagan years after experiencing no growth in the Ford-Carter years; it experienced a loss of almost $1,500 in the Bush- Clinton years.

 • Interest rates, inflation and unemployment fell faster under Reagan than they did immediately before or after his presidency.

 The study also exposes 12 fables of Reaganomics including "the rich got richer and the poor got poorer" and "the Reagan tax cuts caused the budget deficit to explode in the 1980s."

Policy Analysis no. 261 (http://www.cato.org/pubs/pas/pa-261es.html)

October 21, 1996

Monitoring Administrative Rulemaking: The Delegation Question
Cato scholar testifies in Congress

Jerry Taylor, Director of Natural Resources Studies at the Cato Institute, testified before the Subcommittee on Commercial and Administrative Law in the United States House of Representatives on September 12, 1996.

Congressional Testimony (http://www.cato.org/testimony/ct-jt091296.html)

October 18, 1996

Monitoring Administrative Rulemaking
Cato scholar testifies in Congress

David Schoenbrod, Cato Institute Adjunct Scholar, testified before the Subcommittee on Commercial and Administrative Law in the United States House of Representatives on September 12, 1996.

Congressional Testimony (http://www.cato.org/testimony/ct-ds091296.html)

October 8, 1996

Charities and volunteers, not government, provide best hope for poor
New Cato book calls liberal and conservative welfare reform approaches flawed

"Government welfare programs have failed to accomplish their goal of alleviating poverty and have undermined the traditional American principle of volunteerism," says Michael Tanner, director of health and welfare studies at the Cato Institute. "The welfare state has been disastrous for the poor."

In a new Cato book, The End of Welfare: Fighting Poverty in the Civil Society, Tanner assails traditional liberal welfare reform proposals. "There is little evidence that job-training, child care, or the earned income tax credit help people to leave the welfare rolls," he says. "Job training may actually move people from work to welfare. Since individuals may be eligible for training programs only if they are on welfare, it becomes a rational decision for low-income working people to quit work and enter the welfare system."

Tanner also assails conservative proposals such as "workfare" and block grants. Workfare does not address the most serious social consequences of welfare—children growing up in single-parent families. Block grants, he says, do little to return power to states and local communities.

In place of government programs, Tanner proposes a two-pronged approach to contend with poverty. First, taxation and regulation must be sharply reduced to allow the economy to grow and provide jobs for those able to work. Second, the United States must "rediscover civil society." Private charities and volunteerism must be reinvigorated to aid those who can’t work or are temporarily between jobs.

The End of Welfare is the first major book to declare that welfare cannot be reformed and that state-supported efforts to cope with poverty should be completely eliminated.

To order copies of the book ($10.95 paper, $19.95 cloth), call: 800-767-1241

October 7 1996

Herbicide Exposure: Link to Disease
Cato scholar testifies in Congress

Michael Gough, Director of Risk and Science Studies at the Cato Institute, testifies before the Committee on Veterans' Affairs in the United States Senate.

Congressional Testimony (http://www.cato.org/testimony/ct-mg091996.html)

September 19, 1996

OPIC, U.S. AID ‘enterprise funds’ should be privatized
Taxpayer-supported funds losing money, displacing private investment, scholar says

"Washington’s new approach to foreign assistance is as much a failure as traditional foreign aid programs," says Cato Institute senior fellow Doug Bandow.

In a new Cato Institute study, "Uncle Sam As Investment Banker: The Failure of Washington’s Overseas Enterprise Funds," Bandow examines the record of enterprise funds—in which private fund managers act as venture capitalists using taxpayer dollars as operating funds and investment capital. He concludes that these funds, established by OPIC and U.S. AID, are a flawed approach to international development, even as the federal government increases spending on them.

Bandow notes that since 1989, U.S. taxpayers have committed $2 billion in grants and guarantees to enterprise funds, and the Clinton administration has increased taxpayer exposure more than
10-fold.

"There is no evidence that enterprise funds have generated additional private investment, helped create better investment environments, or had a positive impact on development in poor countries," Bandow writes. "Congress should recognize that Washington’s attempt to become a venture capitalist has failed and vote to get the government out of that business."


Policy Analysis no. 260 (http://www.cato.org/pubs/pas/pa-260es.html)

September 19, 1996

The Future of the Internet: Regulation or Private Ordering?
Conference cybercast LIVE over the Internet

The Cato Institute cordially invites you to listen to the cybercast of a morning conference on Internet Regulation that will be held on Friday, September 20 from 8:30 a.m. to 12:30 p.m. (EST).

The Internet promises users unprecedented individual control over information. It is at once a tool for universal communication, a new form of media, and a new way of doing business. But it is also a challenge to lawmakers and regulators. Existing laws cannot easily be applied to the Internet and appear doomed to failure. Do we need a new set of laws or will voluntary private action ensure order on the information superhighway?

Cato’s Regulation or Private Ordering? The Future of the Internet conference will bring together leading authorities on law, regulation, and technology to discuss the problems of adapting existing law to the Internet and to explore private alternatives to regulation. Can private ordering consistent with individual freedom forestall a government backlash against perceived Internet chaos?

The conference, cybercast courtesy of AudioNet, Inc. (www.audionet.com), will begin at 8:30 a.m. (EST) on September 20 at http://www.cato.org/internet.html. In addition to the RealAudio link, there will be conference papers, presentation notes, and a live video feed. Members of the Internet audience will be able to submit questions by email.

Cato Internet Conference (http://www.cato.org/events/internet.html)

September 10, 1996

Constitutional Aspects of the Chemical Weapons Convention
Cato scholar testifies in Congress

Roger Pilon, Senior fellow and Director of Cato's Center for Constitutional Studies testifies before the Subcommittee on the Constitution Committee on the Judiciary United States Senate.

Congressional Testimony (http://www.cato.org/testimony/ct-rp091096.html)

September 5, 1996

Term limits movement still has momentum
Cato scholar suggests constitutional convention

Despite virulent opposition from the political establishment, the push for term limits continues to make headway says Cato Institute senior fellow Doug Bandow. “This November, voters in 15 states will be deciding on initiatives designed to overturn last year’s Supreme Court decision voiding voters’ restrictions on the number of terms served by their representatives in Congress.”

In a new Cato paper, “The Political Revolution That Wasn’t: Why Term Limits Are Needed Now More Than Ever,” Bandow argues that the 1994 elections failed to create a major shift toward a citizen legislature. “For years there was greater turnover on the Soviet Communist Party Central Committee and in Britain’s House of Lords than in Congress,” he writes. “That did not change in 1994, when the overall House reelection rate still ran roughly 90 percent.”

Bandow suggests that, to overturn the Supreme Court’s decision, states call for a constitutional convention. If enough states do, Congress will most likely respond to the pressure to pass term limits. If Congress does not respond, a constitutional convention would be an appropriate means to overcome Congress’s self-interested resistance to term limits.

Calls for constitutional conventions in the past have failed because of fears of “runaway conventions” that would try to tackle tangential issues. Bandow says that a convention “could not validly approve other measures. Even if it did, there would be no danger to Americans’ liberties.”

“Thirty-eight of the states would have to approve any constitutional amendment. Only rarely in U.S. history has there been sufficient consensus to amend the Constitution. Term limits has generated such a consensus.”


Policy Analysis no. 259 (http://www.cato.org/pubs/pas/pa-259es.html)

September 4, 1996

Financing International Development Association not in U.S. interest
World Bank public relations campaign misstates facts, Cato study says

“The World Bank is fighting for its life,” according to John G. Thibodeau, director of research at Probe International. “In a misleading public relations campaign aimed at Congress, the World Bank claims that financing the International Development Association is in the economic self-interest of the United States. Such a claim is blatantly false.”

In a new Cato Institute study, “The World Bank’s Procurement Myth,” Thibodeau examines World Bank claims that IDA, the bank’s soft-loan branch, is good for American businesses. He concludes that U.S. firms receive only about 23 cents in contracts for each dollar the United States contributes to IDA. “Instead of being a boon for the American economy, IDA appears to be a black hole into which taxpayers pour billions of dollars for bad projects and pork-barrel contracts for a few American firms.”

The study shows that the United States ranks at or near the bottom of the major donor countries in terms of procurement per dollar committed to IDA, depending on the method of calculation. The return on U.S. contributions to the World Bank as a whole, when contingent liability for risky loans is taken into account, is only 88 cents per dollar.

Thibodeau contends that because of the World Bank’s record of failed projects and risky loan portfolio, “donor countries should refuse to commit tax dollars to IDA in 1997 and beyond.” He says the bank’s appeals for corporate welfare should be rejected for what they are: “pork-barrel politics.”


Foreign Policy Briefing no. 43 (http://www.cato.org/pubs/fpbriefs/fpb-043es.html)

August 15, 1996

Domino theory cannot justify U.S. role in Bosnia
American intervention based on flawed rationale, Cato study says

“Not every parochial conflict in Europe is destined to lead to a massive war that would affect important American security interests,” according to Ted Galen Carpenter, vice president for defense and foreign policy studies at the Cato Institute. “President Clinton's assertion that the U.S.-led NATO mission in Bosnia is essential to prevent a wider European war is a refurbished, and erroneous, domino theory.”

In a new Cato study, “The Domino Theory Reborn: Clinton's Bosnia Intervention and the `Wider War' Thesis,” Carpenter examines four wider war scenarios cited by defenders of the Bosnia mission. He concludes that two—the prospect of Serbia's becoming an expansionist power like Nazi Germany and the prospect that the Bosnian conflict could ignite a continental war as in 1914—are without merit.

The two other wider war scenarios have marginally greater validity, according to the study. Copycat aggressors may pursue expansionist agendas, and a Bosnia-style war could erupt in the southern Balkans. But Carpenter shows that the success or failure of the NATO mission in Bosnia would have little impact on such problems.

“Events in East Asia in the 1970s and Central America in the 1980s showed that conflicts or ideological movements do not automatically spread without limit,” he says. Yet an implicit belief in the domino theory guides U.S. policy not only in Bosnia but elsewhere in the world.

Foreign Policy Briefing no. 42
(http://www.cato.org/pubs/fpbriefs/fpb-042es.html)

July 24, 1996

1996 governors `report card' released
Pataki, Merrill, Symington get top scores

The Cato Institute today released its third biennial rating of governors on spending and tax policy.

“A Fiscal Policy Report Card on America's Governors: 1996,” by Cato director of fiscal policy studies Stephen Moore and fiscal policy analyst Dean Stansel, measures the performance of 46 governors according to a fiscal restraint index with variables that reflect growth in spending, growth in taxes and changes in tax rate structure. The governors are divided into two classesthose elected before 1993 and those elected in 1993 or 1994and given letter grades within their classes based on their fiscal restraint scores.

“Fiscal conservatism is on the rise in the states,” Moore and Stansel conclude. They write that pursuing low tax rates and expenditure controls is “the new governing doctrine in the nation's state capitals.”

Three governors have outstanding records on fiscal restraint and receive “A” grades: George Pataki of New York, Steve Merrill of New Hampshire and Fife Symington of Arizona.

Four governors receive “F” grades: Gaston Caperton of West Virginia, Tom Carper of Delaware, Lawton Chiles of Florida and George Voinovich of Ohio.

While Republicans generally earn higher scores than Democrats, party affiliation is not a major predictor of fiscal restraint. Among the governors elected before 1993, two of the top five are Democrats: Roy Romer of Colorado and Howard Dean of Vermont.

Policy Analysis no. 257
(http://www.cato.org/pubs/pas/pa-257es.html)