Topic: Government and Politics

Deck the Halls with Health Care Taxes

As Congress heads toward Christmas, debating an increasingly unpopular bill that will raise federal spending and taxes, Senate leaders are beating up on anyone — like Joe Lieberman — who seems to threaten quick passage of the bill. Next week, when senators want to get home for Christmas, the pressure on recalcitrant members to give in and vote will become even stronger.

And so, kids, gather around for a Christmas story from the olden days. Back in the last century, in the year 1982, the Washington establishment decided that the gasoline tax should be raised by a nickel a gallon. Ronald Reagan, Tip O’Neill, Bob Michel, Howard Baker, Bob Dole, Dan Rostenkowski — they all wanted it. But Senators Jesse Helms, Don Nickles, and Gordon Humphrey stood in the way. They filibustered right up to the night of December 23. Finally the Senate worked its will, and the tax increase passed.  Helms in particular was the subject of calumny from across the Washington establishment, politicians and media alike, both for opposing a much-needed tax increase and for cruelly delaying Christmas for the senators (while trying to preserve it for the taxpayers).

And how did the voters respond to “Senator No”? In a front-page article in the Washington Post of January 2, 1983, describing Helms’s drive home on December 23 after the grueling Senate debate, David Maraniss told the story:

Hours after his fortnight battle against the gasoline tax increase was over and lost, he was bone-tired and bleary-eyed as he drove down Interstate 95, and a few times during the five-hour trip his car lurched precariously toward the shoulder of the highway. Finally, when he reached the exit for South Hill, Va., he decided to pull over and make a pit stop at Hardee’s.

No sooner had the senior senator from North Carolina approached the counter of the fast-food establishment than a truck driver recognized his unforgettable mug. “Hey, there’s Jesse Helms,” said the trucker. Heads turned, mutters of awareness filled the room, and suddenly, spontaneously, some 15 or 20 fellow travelers were on their feet applauding.

“That,” Helms would say later, “was the first time I ever got a standing ovation at Hardee’s.” In fact, it was one of the few times he had received a warm reception anywhere during December.

He had left Washington with a few more nicknames attached to him by his enemies, and even some friends, who had been frustrated by his long, and in the end unsuccessful, attempt to talk the gasoline tax increase to death. “Scrooge,” they had called him, and the “Grinch Who Almost Stole Christmas.”

Where are the senators who will suffer the obloquy of the Washington establishment this Christmas to protect the taxpayers and earn a standing ovation outside the Beltway?

Vague Laws Defy the Rule of Law

Following Enron’s downfall, the federal government charged company CEO Jeffrey Skilling with “honest services fraud” connected to the alleged manipulation of Enron’s market value (and other securities irregularities).  This charge — also at issue in two other cases before the Court this term — is based on a statute which says, in its entirety: “For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”

Skilling was convicted, and his conviction was upheld by the Fifth Circuit.  The Supreme Court agreed to review the application of the “honest services fraud” statute to Skilling (as well as the issue of potential jury bias stemming from pretrial publicity in Houston).  Cato, joined by the Pacific Legal Foundation, filed an amicus brief supporting neither party, arguing simply that vague statutes such as the one at issue here offend due process.

We take no position on whether Skilling committed a crime, or even the crime at issue here (whatever that may be).  Instead, we argue that the Court should clarify that the constitutional prohibition on vague laws protects sophisticated and unsophisticated defendants alike in the realm of economic regulation, as well as in criminal law.  The due process requirements of fair warning and definiteness apply equally in the contexts of white collar business crimes, business torts, and civil regulations.

Vague laws involve three basic dangers:  First, they may harm the innocent by failing to warn of the offense.  Second, they encourage arbitrary and discriminatory enforcement because vague laws delegate enforcement and statutory interpretation to individual government officials.  Third, because citizens will take extra precautions to avoid violating the law, vague laws inhibit our individual freedom.

For more on this issue, see Tim Lynch’s posts here and here, Gene Healy’s op-ed, or the related policy forum and podcast.

More Sightings of Libertarian Voters

Michael Petrilli created a stir with his Wall Street Journal op-ed, “Whole Foods Republicans,” on Monday. He noted that the American electorate includes more college graduates every year, and in 2008 the Republican nominee for president lost the college-educated vote for the first time since the 1970s. Republicans need to stop sneering at the “arugula vote” and start appealing to educated, progressive voters:

What’s needed is a full-fledged effort to cultivate “Whole Foods Republicans”—independent-minded voters who embrace a progressive lifestyle but not progressive politics….

What makes these voters potential Republicans is that, lifestyle choices aside, they view big government with great suspicion. There’s no law that someone who enjoys organic food, rides his bike to work, or wants a diverse school for his kids must also believe that the federal government should take over the health-care system or waste money on thousands of social programs with no evidence of effectiveness….

Even more important is the party’s message on divisive social issues. When some Republicans use homophobic language, express thinly disguised contempt toward immigrants, or ridicule heartfelt concerns for the environment, they affront the values of the educated class. And they lose votes they otherwise ought to win.

These voters are part of the “libertarian vote” that David Kirby and I have been exploring. Libertarian voters tend to be more educated than average (see “The Libertarian Vote,” table 11, page 17), and they can be described as “fiscally conservative and socially liberal.” It’s good to know other people are noticing them, and we hope that soon candidates and consultants will take note. For those who are still dubious, the day after the Wall Street Journal column, the Washington Post published this letter:

When I read House Minority Leader John Boehner’s Washington Forum commentary about the GOP’s thoughts on economic policy and job creation – as compared with that of the Obama administration [“A better plan for jobs,” Dec. 11] – I wanted to cheer. I am concerned about America’s increase in debt and think that the health reform plan is interventionist and has no hope of reforming health care.

But I can’t cheer. Because I apparently can’t be a Republican – limited government, fiscal conservative – unless I am also willing to vote for “pure conservative” candidates a la the purity test being proposed to the Republican National Committee: pro-life, anti-gay marriage, draconian immigration policies [“A party both united and divided,” front page, Nov. 30]. These are policies I refuse to support.

So, whom do I vote for next year?

Kathy Rondon, Falls Church

I don’t know if Ms. Rondon shops at Whole Foods, but she’s definitely a part of the “libertarian vote.” Republicans wondering why they lost in 2006 and 2008, and Democrats worrying about slipping poll numbers during 2009, should take a look at the libertarian slice of the electorate.

Our System of Government Exists to Prevent This Kind of Thing

The Hill’s Congress Blog asks, “Will the Senate pass a health care reform bill before it adjourns for the year?”

I answer:

It’s not looking good – nor should it.

The Reid bill becomes less popular with each passing day.  (So too does President Obama’s handling of health care.)

CBS News is reporting that Reid wants to hold a vote before Christmas because he doesn’t want senators to go home and hear from their constituents.

Reid has been systematically suppressing a complete cost estimate of his bill.

Reid’s manager’s amendment will make unknown, countless, and dramatic changes to that 2,074-page bill – and Reid wants to vote on it before anyone knows what those changes are.

Even Max Baucus admits that not a single senator understands the Reid bill.

Our federalist system, the separation of powers, our bicameral national legislature, six-year terms for Senators, staggered Senate elections, and the Senate’s procedural rules all exist precisely to prevent what Reid is trying to do: ram a sweeping piece of legislation through Congress without due consideration.

The Art of Foreign Policy Punditry

Foreign Policy magazine performs an important public service, publishing a compendium of the “top 10 worst predictions for 2009.” My favorite?

If we do nothing, I can guarantee you that within a decade, a communist Chinese regime that hates democracy and sees America as its primary enemy will dominate the tiny country of Panama, and thus dominate the Panama Canal, one of the worlds most important strategic points.

Rep. Dana Rohrabacher (R-Calif.), Dec. 7, 1999

Rohrabacher made this alarming prediction during a debate on the U.S. handover of the Panama Canal. His fellow hawk, retired Adm. Thomas Moorer, even warned that China could sneak missiles into Panama and use the country as a staging ground for an attack on the United States. Well, Rohrabacher’s decade ran out this December, and all remains quiet on the Panamanian front. As for China, the United States is now its largest trading partner.

Flowers and Chocolates?Flowers and Chocolates?

The point here isn’t to poke fun at Rohrabacher, or any of the other predictors featured on the FP list.  Rather, it’s to point out that predicting the future is really hard.  And as Ben Friedman and I have harped on, you just can’t aspire to any predictive competence without sound theory to guide you.  In order to judge that if we do (or don’t do) X, Y will happen, you need a theory connecting X to Y.  So looking back at our predictions, and comparing them to the results of our policies, is a useful way to test the theories on which we based our policies in the first place.

Putting falsifiable predictions out there is a collective action problem, though: If I start offering nothing but precise point-predictions about what will or won’t happen if we start a war with Iran, or how big the defense budget will get, or anything else, I’m going to get a lot of things wrong.  And if everyone else keeps offering vapid, non-falsifiable rhetoric, I stand to look like a real jackass while everyone can hide behind the fog of common-use language.  As I wrote in the National Interest a while back:

Foreign-policy analysts have an incredibly difficult task: to make predictions about the future based on particular policy choices in Washington. These difficulties extend into the world of intelligence, as well. The CIA issues reports with impossibly ambitious titles like “Mapping the Global Future”, as if anyone could actually do that. The father of American strategic analysis, Sherman Kent, grappled with these difficulties in his days at OSS and CIA. When Kent finally grew tired of the vapid language used for making predictions, such as “good chance of”, “real likelihood that” and the like, he ordered his analysts to start putting odds on their assessments. When a colleague complained that Kent was “turning us into the biggest bookie shop in town”, Kent replied that he’d “rather be a bookie than a [expletive] poet.”

Actually, though, it’s worse than this.  As I wrote in the American Conservative, there’s basically no endogenous mechanism to hold irresponsible predictors accountable:

In 1992, the Los Angeles Times ran an article outlining the dynamics of the “predictions” segment of the popular “McLaughlin Group” TV program.  Michael Kinsley, who had been a panelist on the program, admitted

“When I was doing the show, I was much more interested in coming up with an interesting prediction than in coming up with one that was true.  There’s no penalty for being wrong, but there is a penalty for being boring.  …Prognosticators have known for centuries that people only remember what you got right.  They don’t remember what you got wrong.”

Foreign-policy analysis works in much the same way.  Errant predictions are quickly forgotten.  It is the interesting predictions that the media want, and unfortunately interesting predictions in the context of foreign policy often mean predictions of unprovoked foreign attacks, geopolitical chaos, and a long queue of bogeymen waiting to threaten us.  (By contrast, after a given policy is enacted, its proponents have to spin it in a positive light, as in Iraq.)  Meanwhile, it is the person with the quickest wit and the pithiest one-liner–not the deepest understanding–who winds up with the responsibility of informing the American electorate about foreign-policy decisions.

So it’s very good to see that Foreign Policy has interest in holding everyone’s feet to the fire.  John Mueller does a similar service in The Atomic Obsession, pointing out the many predictions of doom, apocalypse and general disaster that have characterized both the hawkish establishment and the leftish arms-control clique.

If this sort of exercise becomes common, though, watch for foreign-policy commentators not to develop a growing sense of modesty about their predictive power, but rather to take greater care in avoiding falsifiable statements altogether.

Strange Bedfellows?

Jon Walker at FireDogLake says I’ve got the wrong smoking gun:

The smoking gun was a manual put out by the CBO in May…It spelled out exactly how much regulation was “too much” regulation. It explained what was the magical threshold that would cause [CBO director] Doug Elmendorf to declare some private market part of the government budget. Now, I’m angry about this for different reasons than the Cato Institute. I think it is insane that there could be any level of regulation that would make the private market part of the federal budget. Either the money is going through the federal treasury or it is not. I don’t think the the CBO director should have the power to see gray areas on this issue…There is no real logic to it, he simply decided what he thought was enough regulation to make something part of the budget.

To be sure, Walker and I have different ideas when it comes to (1) health care reform.  (Not that you asked, but here are my ideas.)  We likewise disagree that (2) the CBO’s May 27 paper was the smoking gun.  That paper laid out the CBO’s (vague) criteria for including “private” financial transactions in the federal budget (and I duly linked to it in my ‘smoking gun’ post).  But the December 13 memo is the first documented instance of Democrats gaming those criteria.  And I disagree that (3) this was all Elmendorf’s decision, (4) the federal budget should reflect only money that passes through the Treasury (instead of all the money that the feds control), and (5) there’s no logic behind the CBO’s criteria.

All that said, there are a couple of areas where Walker and I agree.  For one, he writes:

More importantly, I don’t think something as important as regulation should be written to trick the CBO. It should be written to produce the best heath care system possible, not the best looking CBO score possible.

Hear, hear.  Yet congressional Democrats have been doing just that, gaming the CBO’s rules to hide the implicit subsidies their legislation would provide to large private insurance companies.

For another, he and I both agree that that legislation is little more than a bailout of large private insurance companies and would be worse than doing nothing.

My question for Walker, and for Howard Dean, and for Markos Moulitsas is: will they join me in calling for the Senate to obtain a CBO cost estimate of the off-budget part of the insurance-industry bailout (i.e., the individual and employer mandates)?  Do they think Senate Majority Leader Harry Reid should at least be up front with his base about what he’s asking them to swallow?  Do they think that We, the People deserve to know the whole truth about this bill?