Archives: 06/2013

Farm Bill Fails for First Time in 40 Years (or Ever?)

It what some characterize as a triumph (and others as a sad indictment on the state of U.S. parliamentary politics), the U.S. House of Representatives failed to pass the farm bill yesterday (roll call here, 62 Republicans and 172 Democrats voting “no”). According to Charles Abbott of Reuters, it was the first time in 40 years (or possibly in history) that the House has failed to pass a farm bill.

It seems that many GOPers voted against it because the food stamp cuts were not big enough, and most Dems who voted no did so because the food stamp cuts were too big. Good luck trying to square that circle.

The Hill and Politico have more on the political fallout, none of which I particularly care about. Whoever is to “blame” (personally, I’d like to bestow Presidential Medals of Freedom on the culprits), it is clear that the old urban-rural alliance, and the idea that you can build coalitions by loading a bill with “something for everyone,” is fraying.

For too long, American taxpayers and consumers have been burdened by the scourge of special interest politics that sees farm bills passed more-or-less intact time after time. And the reason, quite frankly, is that things could be even worse if the farm bills fail to pass. One of the ag lobby’s best friends in Congress, Rep. Collin Petersen (D-MN), exposed the extortion threat behind this quinquennial circus in part of his remarks Wednesday:

Mr. PETERSON….When I was chairman and did the last farm bill, we maintained the permanent law, and we did it for a reason, which is that it is very hard to get these farm bills done, and sometimes you need some motivation to get people to move. That’s the main reason we left it there. [From the Congressional Record, pH3860. HT: Scott Lincicome, emphasis added]

That’s the key to ending the role of the federal government in agriculture once and for all: getting that “permanent” 1949 law off the books. It would be a hard legislative slog, for sure. A narrower (but still worthy) amendment by Rep. Paul Broun (R-GA), striking only the dairy price support part of the 1949 Act, failed 309-112. (On the other hand, an amendment stripping out the supply management aspect of the proposed new dairy policy passed 291-135.) But so long as this law is part of the national legislative fabric, we’ll have a dairy cliff (or some other commodity-themed cliff) every five years.

Where to go from here? Maybe the House will pass another extention of the current farm bill (itself an extension of the 2008 farm bill, which was supposed to expire in 2012), trying to buy time. Or maybe they will try to cut food stamps even more in an attempt to pass the bill with Republican support more or less alone (though that would presumably be vetoed by President Obama). Or, possibly, the House will not pass a bill at all and go straight to conference with the Senate. (The Washington Post’s Brad Plumer goes into more detail on that possibility.) I don’t know. What I do know is that Congress will more or less be tinkering at the edges unless and until that permanent law is repealed once and for all.

No Obamacare Exchange in 36 Mississippi Counties?

The Associated Press:

People in 36 of Mississippi’s 82 counties may not be able to buy health insurance through the new federal online marketplace when it starts enrolling customers in October. Insurance Commissioner Mike Chaney says two insurers have announced offerings so far, planning to serve 46 counties.

Unless more companies sign up or the existing companies expand their plans, consumers in the remaining counties won’t be able to buy health insurance through the online exchange. Coverage under those policies begins Jan. 1. 

“I don’t know what to tell you about the other 36 counties,” Chaney told The Associated Press in a phone interview this week. “You’re just out of luck.”

That means they won’t be able to use federal tax credits offered to consumers with incomes of between 133 percent and 400 percent of the federal poverty level. That’s up to about $46,000 for an individual and about $94,000 for a family of four, with those at the top end getting little or no subsidy.

People who don’t buy insurance are required to pay a $95-a-year penalty starting in 2014. A spokeswoman for the U.S. Treasury Department couldn’t immediately say Thursday whether people would be penalized in counties without offerings.

My reading of the statute is that this should have little effect on the penalties that Mississippians face under Obamacare, since the state’s refusal to establish an exchange has already exempted 128,000 residents from penalties under the individual mandate, and all Mississippi employers from penalties under the employer mandate. 

But assuming the IRS gets away with illegally offering Obamacare’s penalty-triggering “premium assistance tax credits” in states that have refused to establish exchanges, Mississippi employers cannot be penalized for failure to provide “affordable” health insurance to residents of those 36 counties because without any exchange at all, those residents will not be able to receive the tax credits. But employers could be penalized for failing to provide those residents “minimum value” coverage–if a firm employs even a single person in one of the other 46 counties that do receive such a tax credit.

Individuals would still seem to be subject to the individual mandate as they otherwise would. But without an exchange, fewer of them would qualify for the unaffordability exemption from the individual mandate, because there would be no “annual premium for the lowest cost bronze plan available in the individual market through the Exchange” with which to calculate whether they are eligible for that exemption. Of course, the federal Department of Health and Human Services could just throw residents of those counties a hardship exemption.

Averting Disasters

In his Berlin speech on Wednesday, President Obama touched on the topic of human-caused climate change and promised “we will do more” to address the issue—presumably by reducing our carbon dioxide emissions at a pace faster than we already are.

What he hopes to achieve by this is unclear, as I have shown that the pace of U.S. emissions reduction has virtually no impact on the future rate of global warming.

President Obama, too, seems to realize a broader effort would be required, as he said “[w]ith a global middle class consuming more energy every day, this must now be an effort of all nations, not just some.”

Without such action, the president asserts that we will face a “grim alternative”—“more severe storms, more famine and floods, new waves of refugees, coastlines that vanish, oceans that rise.”

But even with global action, it is far from scientifically clear that the result of reducing climate change will be a net positive.

I can hardly blame the president for not realizing this, or for not being overly aware of the benefits of global warming.  And I am not talking about the well-known boost to the planet’s plant life (including food crops), but potential direct effects on weather and climate.

Obama to NBA: I’m Not Done Raising Your Taxes, Now Help Me Sell ObamaCare

President Obama has a lot of nerve asking the National Basketball Association to help him sell ObamaCare to their fans.

It’s not just that President Obama is asking the NBA to lend its credibility to the least popular thing this side of Tim Donaghy. Obama has spent his political career trying to take more money from high-income earners like NBA players, executives, and owners. ObamaCare is one of his great successes in that effort. Another is the recent fiscal-cliff-avoidance deal. Yet Obama isn’t satisfied; he wants to take even more of their money. 

NBA players, owners, and executives are extremely talented and productive people. They create lots of jobs. They earn lots of money because they make other people happy. For this crime, they already pay more in taxes than almost anyone, and pay more than they receive from the government in benefits.

Yet President Obama seems to spend every waking moment trying to figure out how to take even more from them. And then he turns around and asks them to help him sell his train wreck of a health care law. Chutzpah.

Before the NBA casts its lot with ObamaCare, every NBA player, executive, and owner should ask their accountant exactly how much this president has cost them. I’m looking at you, Lebron.

Watch On The Rinds: The FDA’s Mimolette Ban

Mimolette is a beloved French cheese produced for hundreds of years around the city of Lille. It looks somewhat like a ripe cantaloupe and tastes not unlike classic Dutch Gouda, to which it is related. Its distinctively pitted rind and hard-to-pin-down taste both arise from the action of microscopic cheese mites that are deliberately introduced to its surface as part of its production. Mimolette has been imported to specialty cheese shops in the United States for many years without incident, but now it’s come to the attention of the federal Food and Drug Administration (FDA), which is afraid that someone might have an allergic reaction to lingering remnants of the insect helpers (which are mostly removed in processing before final shipment). Now a large quantity of the expensive cheese is sitting in a warehouse in New Jersey, legally frozen, while its American fanciers prepare to go without. 

Jill Erber, who with her husband runs two cheese shops in the Virginia suburbs of Washington, D.C., has organized a consumer protest and talks to Cato’s Caleb Brown in this new video. ”You mess with people’s food, they don’t like that,” she says. “They like to be able to make their own choices.”

After watching the video, you may wonder: could this be the most useless allocation of FDA resources yet? It just mite.

SCOTUS: Yes, You Can Waive Class-Action Handling of Future Disputes

Today’s Supreme Court decision in American Express Company v. Italian Colors Restaurant is a victory for freedom of contract, a boost for arbitration as an alternative to litigation, and a step forward in the Court’s ongoing recognition that the class action is just one legal vehicle among many, not some priority express train to be favored over other traffic. The restaurant had agreed with American Express to settle disputes by way of arbitration, and to waive any rights to have future disputes handled through class actions. When a potential antitrust claim arose, it nonetheless sought to slip out of its contractual agreement and invalidate the waiver. Split along familiar ideological lines with Justice Sotomayor not participating, the court ruled 5-3 that the Second Circuit erred in striking down the waiver as inconsistent with the Federal Arbitration Act. While the Court has previously held that arbitration agreements must be construed to provide “effective vindication” of statutory claims, the class action format – which did not even exist for these purposes until decades after the Sherman Act’s passage – was not so crucial to the restaurant’s legal rights as to be unwaivable. 

For years, organized trial lawyers have been publicly campaigning against arbitration – which keeps money out of their pockets by diverting disputes from knock-down litigation – claiming that it is unfair and one-sided. But many studies support the view that disputants’ overall satisfaction in arbitration compares very favorably to that in litigation, in part because it is a speedier and less acrimonious process. And consumers and small businesses by millions sign away their class action rights not because they are all hoodwinked or coerced, but because at some level they have rational grounds to recognize that those class-action rights are very unlikely to pay off for them in durable future benefits (as opposed to benefits for participants in the litigation industry). Congress will be asked to overturn Supreme Court decisions like Amex v. Italian Colors and the earlier, related AT&T Mobility v. Concepcion.  It should resist.

Supreme Court: Government Can’t Force Federal Contractors to Waive Their Rights

Despite its awkward name and somewhat technical details, AID v. AOSI provided the Supreme Court with an opportunity to make a very simple point: The federal government can’t force its contractors – whether they’re corporations (as in this case) or individuals – to promote policies that are unrelated to the program for which they receive federal funds. The Court correctly ruled that executing a program to combat HIV/AIDS is unrelated to advocating for or against the legalization of prostitution. One can imagine other instances: Treating drug abuse has little to do with one’s views on drug legalization. Running an adoption agency can be done whether one is pro-choice or pro-life. Missiles can be built regardless of whether the contractor favors a particular foreign policy stance.

As Cato argued in its amicus brief, such “policy requirements” significantly burden political speech, the constitutional protection of which lies at the very heart of the First Amendment. Had the government’s position been accepted, it would eviscerate the “unconstitutional conditions” doctrine, which the Supreme Court has long recognized to prevent the conditioning of generally available federal benefits on the waiver of fundamental rights. The Court has never given Congress carte blanche to give contractors Hobson’s Choices, whether relating to the freedom of speech or other constitutional rights. Today it thus strengthened the principle that Congress’s power to condition funding is limited to ensuring that its funds are used to properly implement the program that Congress wishes to fund, not to compel private organizations to adopt express “policies” that don’t relate to the use of those federal funds.

For more on AID v. AOSI, see my recent op-ed.