June - July 1997

"THIS JUST IN"

July 24, 1997

Telecommunications deregulation should extend to radio
Corporation for Public Broadcasting subsidies do more harm than good

"If taxpayer funding for the Corporation for Public Broadcasting were eliminated, community radio would not only survive, it would thrive," writes Jesse Walker in a study released today by the Cato Institute.

In "With Friends Like These: Why Community Radio Does Not Need the Corporation for Public Broadcasting," Walker, a Seattle-based journalist, notes that although Congress created the CPB to fund and promote community-oriented programming as an alternative to mainstream commercial television and radio, community stations’ goals have been subverted by bureaucratic meddling. "Federal funds inevitably eradicate local diversity and character," he writes.

CPB subsidies have forced many small, noncommercial radio stations to abandon the volunteer bases and eclectic programming that once made them unique. "However well-intentioned, CPB rules pressure community radio stations to replace volunteers with paid staff and to abandon diverse, experimental local programming for more bland fare," Walker writes.

Walker proposes that telecommunications deregulation should be extended to community radio. He also criticizes legal barriers to new low-budget community radio stations, such as the Federal Communication Commission’s refusal to license stations operating at less than 100 watts. Revising the expensive and delay-ridden licensing process would "facilitate a renaissance in alternative radio."

Policy Analysis no. 277 (http://www.cato.org/pubs/pas/pa-277es.html)

July 22, 1997

Objections to Social Security privatization don’t withstand scrutiny

"The most common criticisms of a market-based retirement system are unfounded," says William Shipman in a paper released today by the Cato Institute. At a Cato Policy Forum on Capitol Hill, Shipman addressed the eight most common objections he’s heard in the course of giving more than 100 speeches and interviews about Social Security privatization over the past year.

In "Common Objections to a Market-Based Social Security System: A Response," Shipman and coauthor Melissa Hieger discuss common criticisms of privatization, including questions of market risk, potential difficulties for unsophisticated investors in the system and the plight of survivors of deceased workers. "None of those objections survives a careful examination of the evidence," say the authors. "In fact, most represent a misunderstanding of financial markets and how a privatized Social Security system would work."

Some critics of privatization claim that private markets are risky and that only knowledgeable investors can successfully handle such risks. "In reality," Hieger and Shipman write, "long-term investment in private capital markets is less risky than the current Social Security system and can be handled by even inexperienced investors."

Social Security privatization will not hurt low-wage workers, according to Hieger and Shipman. They note that, because of its much higher returns, a market-based Social Security system would benefit individuals across all income, age and education levels and offer more security than does the current pay-as-you-go system. Hieger and Shipman argue that benefits from a privatized Social Security system will greatly outweigh any fees and administrative costs and that survivors’ benefits would be better than under the current system.

"The privatization of Social Security is an idea whose time has come," say the authors. "Common criticisms of a market-based retirement system are unfounded and should not stand in the way of providing a better and more secure retirement program for today’s workers."

William Shipman is a principal with State Street Global Advisors, and Melissa Hieger is a vice president with the firm. Shipman is also co-chairman of the Cato Project on Social Security Privatization and coauthor of the book, "Promises to Keep: Saving Social Security’s Dream."

Social Security Paper no. 10 (http://www.cato.org/pubs/ssps/ssp10es.html)

July 17, 1997

Ex-Im Bank is corporate welfare, scholar says
Bank harms U.S. prosperity, rewards countries failing to adopt free-market policies

The Export-Import Bank is an agency "with no relevance in a liberal global economy," according to Ian Vásquez, director of the Cato Institute's Project on Global Economic Liberty.

Vásquez testified today before the International Finance Subcommittee of the Senate Banking, Housing and Urban Affairs Committee. He told senators on the panel that the bank’s charter should not be renewed by Congress and that its activities are a prime example of corporate welfare. The Ex-Im Bank "benefits a small number of private businesses at the expense of other businesses and taxpaying citizens," he said.

Vásquez told senators that Ex-Im Bank activities often work to delay, rather than promote, market reforms. The bank’s activities, such as its $5.6 billion loan to the Mexican state-owned oil monopoly, have done that "by directly supporting government-owned and quasi-government enterprises abroad." Far from "correcting" for so-called market failure, Vásquez said "the Ex-Im Bank’s subsidized lending and guarantees relieve host governments of the need to adopt an investment environment that would genuinely attract foreign capital."

Vásquez also criticized the argument that Ex-Im Bank subsidies "level the playing field" for U.S. businesses competing with foreign subsidized enterprises. European countries that subsidize their exports have an average unemployment rate more than twice as high as in the United States, and are experiencing structural problems related to their regulatory and welfare regimes. "The fact that foreign countries are harming themselves with an array of wrong-headed policies, which include export-finance programs, does not justify the United States' doing the same."

In fact, the Ex-Im Bank has not aided U.S. prosperity and affects such a small percentage of U.S. exports that the "playing field" already seems to favor U.S. businesses, Vásquez testified. While that is reason enough for Congress to end its support of the bank, "the most important reason that the Export-Import Bank’s charter should not be reauthorized is that it is neither morally correct nor constitutional for the federal government to use general taxpayer money to promote the economic welfare of specific groups."

July 16, 1997

‘Warning: tobacco settlement is dangerous to your liberty’
Cato scholar tells Senate committee that tobacco deal attacks fundamental rights

The proposed tobacco settlement is "a shameful document, extorted by public officials who have perverted the rule of law to tap the deep pockets of a feckless and friendless industry," according to Robert A. Levy, senior fellow in constitutional studies at the Cato Institute. "While the agreement may serve the political interests of 39 attorneys general and pad the wallets of private contingency fee lawyers, it is destructive of the health of a free nation."

Testifying today before the Senate Judiciary Committee opposite constitutional scholar Lawrence Tribe, Levy told lawmakers, "It is difficult to imagine that legislation could transgress as many fundamental constitutional principles as the proposed tobacco settlement does." Among those principles are commercial speech rights; litigants’ Seventh Amendment rights; due process guarantees; federalism; and the doctrine of delegated, enumerated and, therefore, limited powers.

Levy called the proposed restrictions on tobacco advertising "draconian," adding, "We treat flag burning and KKK orations as protected speech¾ correctly in my view. Yet if Tiger Woods shows up wearing a sports jacket emblazoned with Joe Camel, our new speech guardians will see to it that the executives of R. J. Reynolds are held accountable." Moreover, the restrictions aren’t even likely to have the desired effect: "Six European countries that have banned all tobacco ads have since seen overall consumption increase¾ probably because health risks are no longer documented in the banned ads."

When it comes to children, politicians focusing on the impact of tobacco advertising appear blissfully unaware of what’s actually been happening, Levy says. "Over the 1985-95 decade, during the heyday of Joe Camel, the percentage of kids aged 12-17 who smoked dropped from 29 percent to 20 percent. The percentage of minority youngsters who regularly smoke has plummeted over the past 10 years. Although some ads may have succeeded in gaining brand share, they have been singularly unsuccessful in expanding the overall market, especially among children."

Levy assailed the settlement provision requiring tobacco companies to finance health care for uninsured children. "Selling tobacco to children is illegal; those laws should be vigorously enforced," he said. "But no one has shown that the tobacco companies have broken the law. To hold a single industry financially liable is no more than a bald transfer of wealth from a disfavored to a favored group."

Proposed FDA regulation of nicotine is "intolerable," according to Levy. "When decisions about the products we choose to consume are entrusted to a bureaucracy, the loss of personal freedom is inescapable." He also warned that tobacco is "merely the first and easiest victim. Right around the corner could be similar restrictions on alcohol, coffee, chocolate, diet drinks, dairy products, red meat, fast food, sugar, sporting equipment, cars¾ you name it."

The settlement attacks the fundamental right of any American to have his or her own day in court. "Because of a bargain to which they were not even a party, future claimants may not litigate as a class, sue for punitive damages covering past acts, or collect compensatory damages in excess of an agreed upon cap¾ they lose common law rights they have long enjoyed under the Seventh Amendment," Levy explained. If it codifies the settlement, "Congress will be interceding in product liability cases that have long been the prerogative of state and local jurisdictions," going beyond its constitutional authority and "flouting our federal system of dual sovereignty."

"The correct disposition of the proposed settlement is to kill it," said Levy. "To secure the liberty of all citizens, we must resolutely defend and protect our least popular citizens, including the tobacco companies. Our courts, not our legislatures, are constituted for the resolution of private disputes. They can do justice only if the rule of law¾ objective and evenhanded¾ is scrupulously applied."

"Global Tobacco Settlement" statement of Robert A. Levy before the Committee on the Judiciary, U. S. Senate (http://www.cato.org/testimony/ct-rl071697.html)

July 9, 1997

Compulsory union dues violate freedom of association, Cato scholar says

Rules forcing employees to pay union dues as a condition of employment violate the freedom of association that is "our birthright as Americans," said Roger Pilon, director of the Cato Institute’s Center for Constitutional Studies. Pilon said today that new legislation is needed to restore liberty to the workplace.

Pilon testified before the House Committee on Education and the Workforce, telling lawmakers that H.R. 1625, the Workers Paycheck Fairness Act, will address some, but not all, of the restraints on freedom of association imposed by the National Labor Relations Act. He testified that one positive aspect of the bill is a provision requiring unions to obtain affirmative authorization from employees before dues can be used for non-collective-bargaining purposes, including political activity. That provision will help enforce the 1988 Beck decision invalidating the use of compulsory dues for non-workplace-related activities. Beck has been poorly enforced by the National Labor Relations Board, Pilon said. "This bill should provide a marginal gain for workers who today have limited and difficult recourse against labor union abuses of the power to exact compulsory dues."

According to Pilon, H.R. 1625 should be regarded as a first step toward restoring freedom of association in the workplace. Today, employees in 21 states can assert their rights under state right-to-work laws. Pilon testified that, "it would be a tragic result if this bill were to be used to take pressure off the movement now in Congress to enact a national right-to-work law, which would go much further, absent abolition of the NLRA itself, toward the heart of the matter."

"The Worker Paycheck Fairness Act," statement of Roger Pilon before the Committee on Education and the Workforce, U. S. House of Representatives (www.cato.org/testimony/ct-rp070997.html)

July 9, 1997

NATO enlargement is a foolish and dangerous U.S. commitment, scholar says
The following is a statement by Ted Galen Carpenter, vice president for defense and foreign policy studies at the Cato Institute, on plans for NATO enlargement following the Madrid summit.

Supporters of NATO act as though enlargement is a way for everyone to gather in the center of Europe for a group hug. It is instead a set of foolish and potentially dangerous commitments. The Senate should reject the proposal.

Despite the propaganda that came out of the NATO summit in Madrid, the real question is whether NATO enlargement will prove to be a farce or a tragedy.  It is most likely a farce--a grandiose bluff consisting of paper security guarantees to the new members of the alliance. The fact that U.S. officials insist that enlargement can take place "on the cheap" suggests that there is little intention of honoring the commitments if they are ever put to the test. Making the guarantees credible would require major expenditures as well the deployment of U.S. and West European forces in the new front-line states.

If, on the other hand, the United States is serious about expanded security commitments, the enlargement process could end in tragedy. NATO’s revised frontiers will include the border between Poland and Belarus and the border between Hungary and Serbia. At the very least, enlargement could produce more Bosnia-style quagmires. Even worse, if a second stage of enlargement that incorporates the Baltic republics takes place, there is grave risk of a military collision with Russia.

July 4, 1997

‘Campaign reform’ bills violate the First Amendment, authors say
American citizens do not need permission to speak out against government officials

Constitutionally protected issue advocacy is threatened by the McCain-Feingold bill and other pending campaign finance legislation, according to a Cato Institute briefing paper released today. The paper was written by activists Douglas Johnson and Mike Beard, who occupy opposite sides of the political spectrum but agree strongly on the nature of the threat posed by the "reform" measure.

In "’Campaign Reform’: Let’s Not Give Politicians the Power to Decide What We Can Say about Them," Johnson and Beard call the proposals "an open-ended ‘hunting license’ for government policing of speech." They assert that the real question for supporters of such legislation is: "Where in the world do you think you get the authority to regulate the political speech of American citizens?"

The authors charge that the McCain-Feingold bill and its cousins, the Shays-Meehan and Farr-Gephardt bills, would place "severe and unprecedented restrictions" on the right of issue groups and labor unions to communicate with the public about the positions of elected officials and candidates. The bills were prompted by recent advertising campaigns by groups like the AFL-CIO and the League of Conservative Voters, which have targeted specific members of Congress and their voting records.

The authors contend that the McCain-Feingold bill and others like it are unconstitutional attempts by legislators to muzzle advocacy groups. "Those proposals violate the First Amendment, which the Supreme Court has repeatedly held to provide the highest degree of protections for issue advocacy," write Johnson and Beard. "It is understandable that, in sheer self-interest, some incumbents would like to prevent or impede the dissemination of their voting records to constituents who are likely to disapprove of their votes on given issues . . . . but it is also constitutionally impermissible."

Johnson, legislative director of the National Right to Life Committee, and Beard, head of the Coalition to Stop Gun Violence and president of the Free Speech Coalition, also note the chilling effect such bills would have on grassroots groups, which are less equipped than professional issue-activists to master complex regulatory requirements. "Rather than risk violating federal law, they will simply refrain from commenting on the actions of federal officeholders—which is precisely the politicians’ intent," predict Johnson and Beard.

Briefing Paper no. 31 (http://www.cato.org/pubs/briefs/bp-031es.html)

July 3, 1997

Get politics out of land management, author says
Public land trusts—not federal-state transfer—should replace federal land management

A study released today by the Cato Institute questions the wisdom of transferring federal lands to the states—an idea popular among conservatives. In "Should Congress Transfer Federal Lands to the States?" Cato adjunct scholar Randal O’Toole proposes instead a trust arrangement as an immediate step toward better management of public lands. His is the first study to systematically examine state land use practices and indict them on both efficiency and ideological grounds.

O’Toole’s examination of state land management policies suggests that state governments are no better managers than are federal bureaucrats. "They are just as economically inefficient, ecologically short-sighted, and politically driven as their federal counterparts," says O’Toole.

The problem, O’Toole writes, "is, not federal incompetence, but the political allocation of natural resources to favored constituencies, which subsidizes some at the expense of others and inflicts harm on both the ecological system and the economy as a whole. Transferring land to the states will only change the venue of those political manipulations."

Each of the four major federal resource agencies manages assets worth tens of millions of dollars. Because of a bizarre system of incentives, the land management programs of each of those agencies not only fail to earn money for the U.S. Treasury but actually cost taxpayers from $0.6 billion to $2.0 billion per year. According to the study, there is little evidence that state governments are able to manage land any more efficiently.

The creation of federal land trusts, suggests O’Toole, would promote both fiscal and environmental responsibility. Properly designed trusts have proven resistant to political interference on the state level. "Carefully designed federal land trusts could provide all user and interest groups with ways to protect the resources they care about," O’Toole declared.

Policy Analysis no. 276 (http://www.cato.org/pubs/pas/pa-276es.html)

June 26, 1997

Chilean ‘powerful idea’ can save Social Security
Former Chilean labor and social security minister testifies on success of private retirement program

"Since Chile switched from an American-style pay-as-you-go social security system to a system of privately owned pension savings accounts, the result for Chilean workers has been phenomenal," says José Piñera, former minister of labor and social security in Chile and current co-chairman of the Cato Project on Social Security Privatization. "Chile now has a savings rate of almost 27 percent of gross domestic product, and Chileans’ return on their retirement dollars far exceeds that received under the old government-run system. Moreover, it has proven to be a very safe system."

In testimony today before the Securities Subcommittee of the Senate Banking Committee, Piñera told members that reforming the U.S. Social Security system along the lines of the Chilean pension model "would mean a massive redistribution of power from the state to individuals. That would enhance personal freedom, promote faster economic growth, and alleviate poverty, especially in old age."

Piñera described the remarkable success of the 16-year-old Chilean system, which allows workers to contribute retirement funds to personally owned privately managed accounts, similar to individual retirement accounts. "The results of the Chilean private pension system speak for themselves," said Piñera. "By improving the functioning of both the capital and the labor markets, pension privatization has been on one of the key initiatives that, in conjunction with other free-market-oriented structural reforms, has pushed economic growth from 3 percent to 7 percent a year, on average, during the last 12 years."

"Individual preferences about old age differ as much as any other preferences," he said. "A pay-as-you-go system, like that in the United States, does not permit the satisfaction of such preferences, except through collective pressure from powerful political constituencies. It is a one-size-fits-all scheme that exacts a price in human happiness."

"For Chileans, pension savings accounts represent real and visible property rights. After 16 years, in fact, the typical Chilean worker’s main asset is, not his used car or even his small house, but the capital in his pension savings account. Private pension accounts are a powerful idea, rooted in fundamental American values, that can save Social Security in the United States."

Congressional Testimony (http://www.cato.org/testimony/ct-jp062597.html)

June 26, 1997

Cato scholars praise Supreme Court decision protecting Internet liberty

"The First Amendment does not discriminate between bits and ink," said Tom W. Bell, director of telecommunications and technology studies at the Cato Institute. Bell praised the Supreme Court’s decision today striking down the Communications Decency Act as unconstitutional. "Today the Supreme Court has confirmed that speech on the Internet deserves no less protection than speech on paper."

According to Bell, "Today’s decision protects not only free speech, but also free markets. The Internet industry thrives because politicians have largely refrained from meddling with entrepreneurs. Consumers have enjoyed constantly improving access, increasingly rich content and continually decreasing costs. The CDA threatened to end all that growth and innovation."

Solveig Bernstein, Cato’s associate director of telecommunications and technology studies and author of "Beyond the Communications Decency Act: Constitutional Lessons of the Internet" (Cato Policy Analysis no. 262), explained that Congress will not be able to "fix" the CDA. "Because legislators cannot define ‘indecent’ clearly and coherently, no regulation of computer network indecency, however carefully tailored, can pass constitutional scrutiny."

Some lawmakers, Bernstein noted, have proposed a "harmful to minors" standard to regulate Internet content. "Such a vague standard would unconstitutionally chill Internet speech—especially the sort of spontaneous and casual speech that the Internet facilitates between unsophisticated and noncommercial speakers," she explained.

Moreover, observed Bernstein, we don’t need a political fix to prevent children from accessing adult information on the Internet. "The private sector has already demonstrated that it can solve the perceived problem with such devices as software filters that screen out offensive material and Internet service providers that provide access only to child-safe materials."

Bell said that responsibility for Internet monitoring must rest with parents. "Responsible parents would let their kids wander alone through the Internet no sooner than they would let them wander alone through Los Angeles."

June 25, 1997

Cato publishes speeches and essays of Czech prime minister Klaus
An indispensable volume for those concerned with substituting a free society for state power

As nations around the world, including the United States, struggle with expanding government power and declining civil and economic liberty, the Cato Institute has brought the experiences of Czech prime minister Václav Klaus to the English-speaking world. Cato has published 29 of Klaus’s English-language speeches and essays in a volume titled Renaissance: The Rebirth of Liberty in the Heart of Europe.

"The Cato Institute is proud to be associated with this important book," said Cato president Edward Crane. "Václav Klaus is the most successful leader of a postcommunist nation in Europe. His leadership and vision have transformed one of the most Stalinist states of the Warsaw bloc into the most vibrant and open society in the region."

The speeches and essays, collected for the first time in this volume, examine the 1989 "Velvet Revolution" that brought the collapse of communism in what was then Czechoslovakia. Klaus addresses the process of transformation and the Czech Republic’s place in Europe and the world. Chapter titles include "Transforming toward a Free Society"; "The Ten Commandments of Systemic Reform"; "The Quality of Life, the Environment, and Systemic Change"; and "Margaret Thatcher and the Czech Republic."

In an essay titled "The University of Chicago and I," Klaus writes, "We have definitely crossed the Rubicon and entered the post-transformation stage with a privatized, liberalized, deregulated economy; with a balanced budget, low unemployment and inflation; and with other favorable macroeconomic results. I have had no dreams about so-called third ways, about perestroika, about the reformability of communism."

Klaus’s experience in the Czech Republic has much to teach Americans, according to Crane. "This volume should provide inspiration for citizens in contemporary welfare states¾ also faced with a task held by some to be hopeless¾ for undoing the disaster of welfare statism. Happily, the moral vision and the scientific understanding that Václav Klaus brings to bear on seemingly intractable problems are now available to the English-speaking world."

To order copies of the book ($9.95 paper, $18.95 cloth), call 800-767-1241

June 24, 1997

Asset forfeiture bill "began as Mr. Hyde but wound up Dr. Jeckyl"
Scholar says expanded bill is worse than no bill at all

The House Judiciary Committee last Friday "approved an asset forfeiture bill that began as Mr. Hyde but wound up Dr. Jeckyl," according to Roger Pilon, director of the Cato Institute’s Center for Constitutional Studies.

On June 11, Pilon testified before the House Judiciary Committee, giving qualified support to H.R. 1835, a 15-page forfeiture bill introduced by Chairman Henry Hyde. But by the time the Judiciary Committee voted to approve the bill on June 20, it had become a very different measure, running some 66 pages and incorporating a Justice Department wish list of forfeiture "reforms."

"Rather than reining in the government’s forfeiture powers," Pilon said, "the revised bill actually expands them. It turns the original bill almost on its head and now does little if anything for the very people whose tragic stories Chairman Hyde himself so eloquently described in Forfeiting Our Property Rights, a book published by the Cato Institute in 1995."

News reports quoted Hyde as suggesting that the Cato Institute supported the revised bill, now known as H.R. 1965. But Pilon pointed out that the Cato Institute neither supports nor opposes any legislative proposals, even if Cato scholars are free to state their personal views.

The revised legislation was the product of consultations between Hyde’s staff and the Department of Justice. "This new bill is not reform. It is now worse than no bill at all," Pilon concluded.

June 20, 1997

Tobacco Medicaid suits abrogate the rule of law
Cato scholar assails settlement talks, says principles must not yield to politics

"Important legal principles are under siege by opportunistic politicians willing to deny due process to a single industry selected for its deep pockets and public image rather than its legal culpability," says Robert A. Levy, senior fellow in constitutional studies at the Cato Institute.

In a new Cato Policy Analysis, "Tobacco Medicaid Litigation: Snuffing Out the Rule of Law," Levy argues that state suits against tobacco companies would deny the companies fundamental legal rights. "The rule of law must be steadfastly upheld today, or none of us will be secure tomorrow," he writes.

Thirty-nine states are currently suing the tobacco industry to recover Medicaid outlays for smoking-related illnesses. Levy examines a new Florida statute that strips tobacco companies of their traditional rights and puts in their place a simple rule of law: the state needs money; the industry has money; so the industry shall give and the state shall take.

"Juries have repeatedly concluded that smokers are responsible for their own behavior," Levy says. "Yet under the new regimen, if a smoker happens to be a Medicaid recipient, individual responsibility is out the window. By legislative fiat, liability hinges on a smoker’s Medicaid status, a fortuity totally unrelated to any misdeeds of the industry."

The study addresses numerous constitutional issues raised by the tobacco Medicaid litigation, including due process and free speech, and tort issues, including causation and assumption of risk. Levy notes, for example, that the state is not required to show that a particular party was harmed by using tobacco—as is required under traditional tort principles. Instead, causation may be proven by statistics alone. "One would think that the industry could at least investigate whether patients suffering from ‘smoking-related illnesses’ ever smoked. Wrong," he writes. "Incredibly, the industry will be allowed to depose only 25 of 400,000 Medicaid claimants."

Levy also assails settlement negotiations between tobacco companies, state attorneys general and their contingency-fee lawyers. He argues that settlement will deny private citizens access to the courts, violate the federal system of dual sovereignty and reward states that have abrogated the rule of law.

"It is not the durability of an industry that matters most," Levy concludes. "Far more weighty is the sustenance of a legal system that maximizes freedom while demanding accountability. This study is not a defense of the tobacco industry. It is a defense of the rule of law."

Policy Analysis no. 275 (http://www.cato.org/pubs/pas/pa-275es.html)

June 19, 1997

Money does not ‘buy’ elections
Proposed campaign reforms threaten free speech, address wrong issue, analyst says

"Money does not buy elections," writes former Washington Times deputy national editor Major Garrett in a Cato Institute briefing paper released today. "Candidates with strong messages can defeat better funded candidates." Successful candidates include Sen. Russell Feingold (D-Wis.), coauthor of a leading campaign finance reform bill. In 1992, Feingold defeated two better funded primary opponents and then defeated an incumbent who spent three times as much money.

Garrett shows that in 6 of the 15 competitive Senate elections in 1996, the candidate who spent less money won. He also shows that, contrary to the rhetoric of campaign finance reformers, elections are not getting more expensive. Adjusted for inflation, campaign spending has been relatively stable since 1980.

Garrett agrees with members of Congress who complain that raising money takes too much time. But he argues that this is a direct result of $1,000 per person contribution limits enacted by post-Watergate "reformers" who wrote the Federal Election Campaign Act of 1974.

"Any ‘reform’ movement worthy of its name should seek to diminish the power of special-interest PACs, increase the flow of information to voters about those contributing to candidates, and capitalize on the enormous desire of individuals to participate in the political process," Garrett writes. The way to achieve those goals, he concludes, is to abolish limits on individual contributions and provide instant public disclosure. Unlike current reform schemes, that change would give voters information about candidates’ funding before an election and would not encroach on fundamental First Amendment rights.

Garrett criticizes 38 senators who voted "yes" on a proposed amendment to the Constitution that would have allowed Congress and state legislatures to regulate campaign spending. "It is disconcerting to discover that 38 members of the U.S. Senate would like to write an exception to the First Amendment—an exception, it should be noted, that would have denied First Amendment protection, not to flag burning or pornography, but to political speech, the very basis of a democratic political system."

Briefing Paper no. 30 (http://www.cato.org/pubs/briefs/bp-030es.html)

June 11, 1997

Civil asset forfeiture law a "disgrace"
Cato scholar urges abandonment of "fundamentally unsound" body of law

"Forfeiture law today is a disgrace," says Roger Pilon, senior fellow and director of the Center for Constitutional Studies at the Cato Institute. "A body of law that enables law enforcement personnel to stop motorists and seize their cash on the spot; to seize and sometimes destroy boats, cars, homes, airplanes and businesses in often fruitless drug searches; and even to kill and maim in the course of seizure operations is out of control." Testifying before the House Judiciary Committee today on the Civil Asset Forfeiture Act of 1997, Pilon urged lawmakers to abandon, not merely reform, American forfeiture law.

Pilon characterized the current law as "fundamentally unsound" because it is based on the "personification doctrine," which allows the government to bring quasi-criminal cases against property that "facilitates" crime. "The idea that property can be ‘guilty’ is simply too fantastic to be taken seriously. Only people commit crimes," Pilon said.

Armed with this law, Pilon says, "officials today can seize a person’s property, without notice or hearing, upon an ex parte showing of mere probable cause to believe the property has somehow been ‘involved’ in a crime." The owner then has to prove the innocence of his property if he wants to get it back—and his own innocence if an innocent-owner defense is permitted.

"When property is forfeited because it ‘facilitates’ a crime, there is no obvious connection between the remedy and the wrong to be remedied," Pilon said. "The facilitation doctrine is boundless in practice because it is groundless in principle. This substantive foundation of our civil forfeiture law, the handmaiden of the personification doctrine, must be torn out by the roots."

Congressional Testimony (http://www.cato.org/testimony/ct-rp061197.html)

June 4, 1997

Cato scholar to participate in Wichita Social Security forum

Michael Tanner, director of health and welfare studies at the Cato Institute and director of the Cato Project on Social Security Privatization, will be one of four panelists at a community forum Saturday at Wichita State University.

"Saturday’s forum will be an outstanding opportunity for Kansans to learn about the major crisis in the Social Security system," says Tanner. "Many Americans do not realize that in 2012, only 15 years from now, Social Security will begin spending more money than it takes in. Today’s young workers can actually expect a negative return on their Social Security taxes. We must reform the system fundamentally and quickly."

The forum will be moderated by Sen. Sam Brownback (R-Kans.). It is intended to foster an educational and spirited discussion of the viability of the Social Security trust fund and the major options that have been proposed to ensure the retirement security of future generations.

Peter Pintz, president and publisher of the Wichita Eagle, will facilitate the discussion. The other panelists are Evelyn Morton of the American Association of Retired Persons, Bob Bixby of the Concord Coalition and Professor Nancy McCarthy Snyder of Wichita State University.

The forum, which is open to the public, will take place from 1:30 to 3:00 p.m. in the 3rd floor ballroom of the Wichita State University Campus Activities Center.

Last week, the Cato Institute unveiled a new World Wide Web site devoted to Social Security reform. The site, which includes an interactive benefits calculator that allows users to determine their future earnings from Social Security and compare them with earnings on investments in privately owned accounts, can be accessed at www.socialsecurity.org.