Archives: 05/2017

Jeff Sessions Pulls Back on Bullying Sanctuary Cities

Throughout his presidential campaign Donald Trump pledged to defund so-called “Sanctuary Cities.” Since his election the president and his administration have had to backpedal on this commitment thanks to serious constitutional issues with such a proposal. Recent news that Attorney General Jeff Sessions has narrowed the category of funds that can be withheld from sanctuary cities as well as the definition of sanctuary jurisdictions is good news for constitutionalists and federalists who oppose the federal government bullying cities and states.

Before unpacking Sessions’ recent memo it’s worth taking a look at the Trump administration’s actions against “Sanctuary Cities,” a term that has no legal meaning but is usually used to describe cities and localities where local officials have decided not to assist with federal immigration enforcement.

On January 25, President Trump signed Executive Order 13768: Enhancing Public Safety in the Interior of the United States. Section 9 of this executive order is the “sanctuary” section and reads, in part (emphasis mine):

Sec. 9. Sanctuary Jurisdictions. It is the policy of the executive branch to ensure, to the fullest extent of the law, that a State, or a political subdivision of a State, shall comply with 8 U.S.C. 1373.

(a) In furtherance of this policy, the Attorney General and the Secretary, in their discretion and to the extent consistent with law, shall ensure that jurisdictions that willfully refuse to comply with 8 U.S.C. 1373 (sanctuary jurisdictions) are not eligible to receive Federal grants, except as deemed necessary for law enforcement purposes by the Attorney General or the Secretary. The Secretary has the authority to designate, in his discretion and to the extent consistent with law, a jurisdiction as a sanctuary jurisdiction. The Attorney General shall take appropriate enforcement action against any entity that violates 8 U.S.C. 1373, or which has in effect a statute, policy, or practice that prevents or hinders the enforcement of Federal law.

There is a good argument that 8 U.S.C. 1373 is unconstitutional. 8 U.S.C. 1373 is a prohibition on a prohibition, banning local governments from preventing police departments from sending or receiving immigration status information to or from federal immigration authorities. This law potentially runs afoul of the 10th Amendment’s “anti-commandeering” doctrine, which bans the federal government from compelling local officials into enforcing federal law.

Trump’s Budget Changes Tone On Infrastructure

Conservative and libertarian fears about Donald Trump’s infrastructure rhetoric will be somewhat allayed by today’s budget. In the presidential campaign and early days of the administration, there was much talk of “shovel ready projects” and “creating jobs” with $1 trillion of new investment, which sounded suspiciously like a federal stimulus package and vastly more borrowing. But that language was nowhere to be seen in this new document. In fact, infrastructure as a pressing issue was somewhat downplayed.

Where once it was talked about as the third priority behind healthcare and taxes, President Trump’s opening message did not feel infrastructure important enough to list in the “eight pillars of reform.” Healthcare, tax, immigration, education, welfare, regulation, energy and reductions in federal spending were front and center, but infrastructure appeared in a B-list of “additional priorities” alongside student loan reform and paid parental leave.

Good infrastructure is of course important to an economy’s productive potential. But with the unemployment rate as low as 4.4 percent, construction unemployment lower than in 2007 and interest rates rising, there was little robust argument for an infrastructure stimulus, even if one subscribes to Keynesian economics. In fact, rushing through projects without assessing “bang for the buck” would have allowed a dogs dinner of rent-seeking and undermined long-term productivity through bad project selection, whilst doing nothing to stimulate the economy today.

It’s very welcome then that this budget instead emphasized the need for long-term reform of how infrastructure is “regulated, funded, delivered, and maintained.” In a move that will upset the Senate Democrats, it explicitly repudiated the idea that a huge increase in federal funding is the solution. It recognizes that “underlying incentives, procedures and policies” are more important to allow infrastructure responsive to demand.

10 Reasons to Stop Subsidizing Urban Transit

As the Trump administration debates whether to help fund a $1.75 billion transit project in California that will do almost nothing to increase transit ridership, it is time to reconsider whether transit should be subsidized at all. Here are ten reasons to end those subsidies.

1. It’s the most costly transportation we have

In 2015, the transit industry spent $1.15 to move one person one mile, of which $0.87 was subsidized. No other major form of transportation is so expensive or so heavily subsidized. Auto driving cost about 26 cents per passenger mile of which subsidies were 2 cents. Flying was about 16 cents a passenger mile of which subsidies were also about 2 cents. Intercity buses cost about 12 cents a passenger mile of which subsidies were about 3 cents.

Other than transit, the most expensive passenger transport was Amtrak, which cost about 53 cents per passenger mile in 2015 of which 19 cents was subsidies. Not coincidentally, Amtrak is also government owned, suggesting that government ownership either makes transportation more expensive or government is stuck with the obsolete clunkers in the urban and intercity transport markets.

2. Subsidies haven’t increased ridership

Federal subsidies to transit began in 1965, when transit carried 60 trips per urban resident. Since then, federal, state, and local subsidies have exceeded $1 trillion (in today’s dollars), yet annual ridership has dropped to 40 trips per urban resident. Ridership responds more to changes in gasoline prices than to increased subsidies.

Since federal subsidies began in 1965, transit ridership has declined from 60 annual trips per urban resident to 40.

3. Few use it and fewer need it

In 1960, when most of the nation’s transit was private (and profitable), 7.81 million people took transit to work. By 2015, the nation’s working population had grown by nearly 130 percent, yet the number of people taking transit to work had declined to 7.76 million.

The share of households that owns no vehicles has declined from 22 percent in 1960 to 9 percent today, while the share owning three or more vehicles has grown from 3 percent to 20 percent.

In 1960, 22 percent of American households did not own a car and transit subsidies were partly justified on the social obligation to provide mobility to people who couldn’t afford a car. Since 2000, only 9 percent of American households don’t own a car, so the market of transit-dependent people has dramatically declined.

Half the households with no cars also have no employed workers in the households. Of the 4.5 percent of workers who live in households with no vehicles, well under half–41 percent–take transit to work, meaning transit doesn’t even work for most people who don’t have cars.

The Five Most Important Takeaways from Trump’s Budget

It’s both amusing and frustrating to observe the reaction to President Trump’s budget.

I’m amused that it is generating wild-eyed hysterics from interest groups who want us to believe the world is about to end.

But I’m frustrated because I’m reminded of the terribly dishonest way that budgets are debated and discussed in Washington. Simply stated, almost everyone starts with a “baseline” of big, pre-determined annual spending increases and they whine and wail about “cuts” if spending doesn’t climb as fast as previously assumed.

Here are the three most important things to understand about what the President has proposed.

First, the budget isn’t being cut. Indeed, Trump is proposing that federal spending increase from $4.06 trillion this year to $5.71 trillion in 2027.

 

Paul Krugman on Pump-Priming and Trump

New York Times columnist Paul Krugman recently chided President Trump for imagining he invented the metaphor of “priming the pump” during an Economist interview. Yet Krugman, like Trump, buys into the premise that budget deficits really do “stimulate” total spending or “aggregate demand” which is commonly measured by growth of Nominal GDP (NGDP).

Economic booms and busts clearly have huge effects on budget deficits, but where is the evidence that deficits and surpluses have their own separate (“exogenous”) effect on NGDP? 

To isolate cause and effect, we have to take out the “endogenous” effects that ups and downs in the economy have on taxes and spending. That is why the Congressional Budget Office (CBO)estimates budget deficits or surpluses (divided by GDP) without automatic stabilizers, which has traditionally been called the “cyclically-adjusted” budget. I will label it the “C-A Deficit” for short.  

CA Deficit and NGDP

The red line in the graph shows the CBO’s Cyclically-Adjusted (C-A) deficit or surplus as a share of GDP. The blue line shows the percentage growth in Nominal GDP (NGDP). 

From 1965 to 2016, the C-A Deficit averaged -2.7% of GDP, and growth of nominal GDP averaged 6.6%.

Contrary to 1960s Keynesian orthodoxy, the graph and table reveal no connection between the size of cyclically-adjusted deficits or surpluses and the rate of growth of aggregate demand (NGDP).  From 1991 to 2001, for example, the C-A Budget swings from an average deficit to a sizable surplus with essentially no change in the pace of NGDP growth. 

There is no measurable or even visible connection between larger CA-Deficits and faster NGDP growth in 2009-2012, nor between budget surpluses and slower NGDP growth in 1998-2000.  For more than 50 years, our experience has frequently been the opposite of what demand-side fiscalism predicts. This is not just a short-term phenomenon.

Spending Cuts in President Trump’s 2018 Budget

The Trump administration has released its 2018 budget plan, which includes spending and revenue projections for the 2018 to 2027 period. The plan would increase spending on defense, infrastructure, paid leave, and a few other items, but would reduce overall spending substantially compared to the baseline. The plan would cut numerous programs, and it would eliminate the budget deficit within a decade.

The spending cuts in the Trump plan would be beneficial for numerous reasons:

  • Cuts would reduce federal deficits, which have plagued the government since the turn of the century. The budget’s spending cuts are being called cruel and heartless, but chronic deficits are imposing huge costs on young Americans down the road, which is totally unethical.
  • Cuts would spur economic growth. Reforms to welfare programs, for example, will encourage more people to join the labor force and add to the nation’s output. 
  • Cuts would expand freedom because many federal programs—such as Obamacare—come with top-down rules and regulations that micromanage society.

Here are thoughts on some of Trump’s proposed spending reforms:

  • Overall Spending. The budget would cut spending $4.6 trillion over 10 years, which sounds like a huge cut, but it would be just 9 percent of the $53.5 trillion in projected spending over the period.
  • Medicaid. Spending on this huge health program has soared from $118 billion in 2000 to $389 billion this year. The explosive growth is caused by the program’s poor design—it lacks incentives for cost control and it has open-ended matching for state spending. The budget would shift the program to a more efficient structure of capped payments for states, saving federal taxpayers $610 billion over 10 years. More on the program here.
  • Food Stamps. The cost of the food stamp program has moderated in recent years as the economy has grown, but this $71 billion program has grown from just $18 billion in 2000. The Trump budget would reduce the program’s cost by tightening work requirements and imposing a state government match. The reform would save $193 billion over 10 years. More here.
  • Social Security Disability Insurance. The SSDI has soared in cost from $56 billion in 2000 to $144 this year. It is in desperate need of reform. A key problem is that SSDI discourages disabled Americans who can work and want to work from entering the labor force. The budget would restructure the program to encourage work and save $72 billion over 10 years. More here.
  • Federal Pensions. The CBO found that federal workers receive benefits 47 percent higher, on average, than comparable private-sector workers. One cause of the excess is that federal workers receive both a defined-benefit and defined-contribution pension plan. The Trump budget would scale back the cost of the defined-benefit plan to save $63 billion over a decade. More here.
  • Earned Income Tax Credit. The EITC is mainly a spending program, which has soared in cost from $32 billion in 2000 to about $70 billion today. The program has been plagued for years by an error and fraud rate of more than 20 percent. The budget would trim the waste by about $40 billion over the decade. More here.
  • Farm subsidies. Farm welfare damages the economy, harms the environment, and skews heavily toward wealthy households. In 2015 the average income of farm households was $119,880, which was 51 percent higher than the $79,263 average of all U.S. households. The budget would trim subsidies modestly by $38 billion over the decade. More here.
  • Discretionary Programs. The budget builds on the discretionary cuts proposed in the March mini-budget by reducing nondefense spending $1.8 trillion over 10 years compared to the baseline. Many discretionary programs—such as education subsidies—are properly state and local responsibilities. If state and local governments believe that programs are crucial, they can pony up the funding themselves. There is no magic money tree in Washington, as the $20 trillion federal debt makes clear.

Trump budget chief Mick Mulvaney said “This is, I think, the first time in a long time that an administration has written a budget through the eyes of the people who are actually paying the taxes.” He’s right, and he should be commended for proposing overdue reforms for such a wide range of spending programs.

Many members of Congress are denouncing or dismissing the proposed cuts, but they are in denial of the large reforms that will need to be made eventually because of the nonstop growth in the big entitlement programs. Social Security retirement and Medicare should be cut as well, but the Trump budget provides Congress with many good ideas to start paring back the bloated federal welfare state.

President Obama left office having roughly doubled the gross federal debt from about $10 trillion to $20 trillion. We don’t know yet whether Trump will be any more fiscally responsible than Obama. But he does get credit for giving his budget team room to explore major downsizing options across the vast $4.1 trillion federal government. 

A Tale of Two Disciplines

At the National Police Misconduct Reporting Project, we keep tabs on a wide range of misconduct. Whether the misbehavior is excessive force on duty or a DWI off duty, we catalog the event and track the officer’s case as it goes through the administrative, civil, or criminal justice systems. Part of the reason we do this is to show whether police departments and other responsible government agencies are holding their officers accountable.

Depending on local laws and union contracts, police leadership can be limited in how much punishment they can dole out for a given offense. However, when a crime appears to have been committed and the police simply administer minor officer discipline, it sends a message that officers can act above the law. This message is amplified when officers who exposed that potentially criminal behavior are punished more severely than the offending officer.

This seems to be the case in Fort Worth, Texas. Two senior officers, Assistant Chief Abdul Pridgen and Deputy Chief Vance Keyes, have been demoted for allegedly leaking camera footage of their fellow officer, William Martin, violently attacking a woman who had called police for help after her son was assaulted. The video went viral, and Martin was suspended for ten days.

The attorney for the woman who was attacked and arrested, Jacqueline Craig, had this to say:

“[Officer] Martin amassed a series of felonies on that day from assault, to aggravated assault, to perjury, official corruption, false arrest [and] to each of these he received no criminal investigation, no criminal prosecution. He received a 10-day vacation and he was returned to the force with a scheduled promotion,” [Lee] Merritt said. “It’s a sad day for the city of Fort Worth. The level of blatant racism and unapologetic hypocrisy should no longer be tolerated and so we take this stand together today.”

Such retribution against senior officers who appear to have acted as whistleblowers will almost certainly have a chilling effect on reporting misconduct within the department. Moreover, it tells the people of Fort Worth–especially those in minority communities–that police violence against them is a less serious offense than exposing misconduct by fellow officers.

At least one of the officers reported that he plans to sue over this discipline.

You can read the full news report here.

This is an edited cross-post from PoliceMisconduct.net.