Topic: Government and Politics

No Time for Basics

Roger Pilon touches on a crucial aspect of the most recent terrorist incident to strike the nation. Federal policymakers spend the vast majority of their time mucking around in properly state, local, and private activities, leaving them little time to spend on core federal issues such as defense and security.

There is little hard data to illustrate the point, but it needs much more public discussion. Do we want the president of the United States spending his time with briefings on Wall Street salaries and the advantages of windmill power, or on the growing Iranian nuclear threat?  

For members of Congress, each new federal program has stretched thinner their ability to deal with truly national problems because their attention is diverted trying to grab a share of spending from thousands of federal programs for their districts.

Federal expansion has created an “overload” on federal decision making capability. Before 9/11, most federal policymakers ignored the increasing threat of terrorism. Even after 9/11, investigations have revealed that most members of the House and Senate intelligence committees do not bother, or do not have time, to read crucial intelligence reports. Recent expansions in federal control over health care, energy, education, and financial industries will make these problems worse.

In 1925, President Calvin Coolidge argued that the growing system of federal subsidies needed to be cut because it was “encumbering the national government beyond its wisdom to comprehend, or its ability to administer” its proper roles.  Unfortunately, the problem has got much, much worse since then.

Market Liberalism at the Washington Post

Three years ago a Washington Post editorial conceded: “Sometimes libertarians deserve to win an argument.”

“Gee, thanks,” I wrote at the time. ”I’m glad libertarian arguments against over-regulation made sense to the editorial writer in this case. But I’m disappointed in the suggestion that this is a rare occasion.” After all, libertarians and Post editorial writers no doubt agree on a lot of basic principles – private property, markets, the rule of law, limited constitutional government, religious toleration, equality under the law, a society based on merit and contract not status, free speech, free trade, individual rights, peace – though of course we disagree a lot over just how closely public policy should adhere to such principles.

And indeed, the three editorials in Sunday’s Post demonstrate some of the market-liberal values that libertarians and Post editorial writers share. A strikingly good lead editorial, “Redefining human rights,” raps Secretary of State Hillary Clinton for saying that the Obama administration would “see human rights in a broad context,” in which “oppression of want – want of food, want of health, want of education, and want of equality in law and in fact” – would be addressed alongside the oppression of tyranny and torture. “That is why,” Ms. Clinton said, “the cornerstones of our 21st-century human rights agenda” would be “supporting democracy” and “fostering development.” The Post sternly warns:

This is indeed an important change in U.S. human rights policy – but the idea behind it is pure 20th century. Ms. Clinton’s lumping of economic and social “rights” with political and personal freedom was a standard doctrine of the Soviet Bloc, which used to argue at every East-West conference that human rights in Czechoslovakia were superior to those in the United States, because one provided government health care that the other lacked. In fact, as U.S. diplomats used to tirelessly respond, rights of liberty – for free expression and religion, for example – are unique in that they are both natural and universal; they will exist so long as governments do not suppress them. Health care, shelter and education are desirable social services, but they depend on resources that governments may or may not possess. These are fundamentally different goods, and one cannot substitute for another.

Precisely (though we probably disagree about whether it is desirable for such services to be provided by government)! A second editorial deplores flaws in the criminal justice system that continue to send innocent people to jail, including two men who were released this month after spending more than 25 years in prison. It’s a topic that Cato media fellow Radley Balko has been covering regularly. And finally, an editorial on the Federal Trade Commission’s antitrust case against chipmaker Intel. The Post is by no means as critical of antitrust law as libertarians often are, but it does warn that “the agency’s actions are aggressive and potentially worrisome.” And it concludes, more cautiously than I would, but still by noting that consumers have been prospering during this alleged anti-consumer behavior:

The chip market is highly concentrated, and Intel has long been the dominant force. Yet year after year, consumers have benefited from more powerful and cheaper computers. The FTC is right to keep a close eye on the industry and on Intel, in particular, but it must use its power wisely and with restraint. 

As David Kirby and I wrote in “The Libertarian Vote,” the United States is “a country fundamentally shaped by libertarian values and attitudes.” Despite all the assaults on liberty of the past decade, that’s a point that politicians and pundits should keep in mind. And editorials like these remind us that the ideas of individual rights, the rule of law, and competitive markets are still widely held.

Blank-Check Bailout for Fannie and Freddie Means Taxpayers Get a Lump of Coal from Obama

Even though politicians already have flushed $400 billion down the rathole, the Obama Administration has announced that it will now give unlimited amounts of our money to prop up Fannie Mae and Freddie Mac, the two government-created mortgage companies. While President Obama should be castigated for this decision, let’s not forget that this latest boondoggle is only possible because President Bush did not do the right thing and liquidate Fannie and Freddie when they collapsed last year. And, to add insult to injury, Obama’s pay czar played Santa Claus and announced that that a dozen top “executives” could divvy up $42 million of bonuses financed by you and me. Not a bad deal for a group of people that more properly should be classified as government bureaucrats. Here’s an excerpt from the Washington Post about the Administration’s latest punch in the gut for taxpayers:

The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress. The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama’s current term. But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009. The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac’s chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.

Merry Christmas from the IRS

Here are a few stories to bring holiday cheer for taxpayers. First, we have an Associated Press report that several hundred thousand federal bureaucrats have serious tax delinquencies. The Department of Housing and Urban Development always ranks high on the list of government entities that should be abolished, so it’s interesting to see that HUD bureaucrats are most likely to be dodging their taxes:

More than 276,000 federal employees and retirees owed back income taxes as of Sept. 30, 2008, according to data from the Internal Revenue Service. The $3.04 billion owed was up from $2.7 billion owed by federal employees and retirees in 2007. Among cabinet agencies, the Department of Housing and Urban Development had the highest delinquency rate, at just over 4 percent.

This rampant nonpayment is especially outrageous since federal bureaucrats “earn” twice as much compensation, on average, as those of us laboring in the productive sector of the economy. One might think they would go out of their way to comply since their bloated salaries come from tax collections. Speaking of outrage, the internal watchdogs at the Treasury have just published a report showing that it is almost impossible to verify eligibility for the special interest tax breaks in the so-called stimulus. As Investor’s Business Daily opines, this is an invitation to fraud:

A new report from the Treasury Department’s Inspector General for Tax Administration counts 56 tax provisions in the bill having a potential cost of $325 billion. Of those, 20 are tax breaks for individuals and 36 are for businesses. The problem, the Inspector General says, is the IRS can’t verify taxpayer eligibility “for the majority of Recovery Act tax benefits and credits.” For individual taxpayers, 13 of the 20 benefits and credits can’t be verified; for businesses, it’s 26 of 36. …To suggest, as Treasury does, that the biggest chunk of the $325 billion in stimulus package tax breaks can’t be adequately followed violates the pledges of openness and fairness made when the stimulus was passed last February. As the government-stimulus-oversight Web site, recovery.gov, notes, last year’s package “requires that taxpayer dollars spent under the Act be subject to unprecedented accountability.” We wouldn’t call being unable to verify upwards of two-thirds of the $325 billion handed out as “unprecedented accountability.” Sounds more like an invitation to fraud, all at the expense of the taxpayers.

To be fair, even a competent government agency might have trouble making a bad law work, and the $787 boondoggle was rushed through the legislative process with very little – if any – attention paid to anything other than funneling other people’s money to special interest groups. That being said, the IRS has trouble even with routine tasks. According to another IG report, the agency has a staggering 70 percent error rate in its processing of taxpayer identification numbers for individual taxpayers:

The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its review of the IRS’s processing of applications for Individual Taxpayer Identification Numbers (ITINs). TIGTA reviewed a sample of ITIN applications and found that almost 70% contained significant errors and/or raised concerns that should have prevented the issuance of an ITIN. The IRS estimates that it has issued more than 14 million ITINs as of December 2008. ITINs are intended to provide tax identification numbers to resident and nonresident alien individuals who may have U.S. tax reporting or filing obligations but do not qualify for Social Security Numbers, which generally are only issued to U.S. citizens and individuals legally admitted to the U.S. …”The number of individual income tax returns filed using ITINs and reporting wage income has increased by 247 percent from 2001 to 2008,” commented J. Russell George, the Treasury Inspector General for Tax Administration. “If the IRS continues to issue ITINs without proper verification, the risk of fraudulently filed returns – along with fraudulently claimed refunds – will continue to rise,” added Inspector General George.

Just think how much fun it will be when the IRS is in charge of determining those of us who should get fined or jailed for noncompliance with government-run healthcare! No wonder so many taxpayers put a flat tax or national sales tax on their Christmas lists.

Filibuster Flip-Flops — Again

Today’s question at “Politico Arena”:

“Is the filibuster good or bad for America?”

My response:

The United States is a republic, not a majoritarian democracy. The Founders were rightly afraid of majoritarian tyranny, and they wrote a Constitution designed to thwart it. Everything about the Constitution – enumerated powers, separation of powers, two bodies of Congress elected in different ways, the electoral college, the Bill of Rights – is designed to protect liberty by restraining majorities. Furthermore, the Senate was intended to be slower and more deliberative. Washington said to Jefferson, “We put legislation in the senatorial saucer to cool it.” The Founders didn’t invent the filibuster, but it is a longstanding procedure that protects the minority from majority rule. It shouldn’t be too easy to pass laws, and there’s a good case for requiring more than 51 percent in any vote.

During the Bush years, when Republicans controlled the Senate, Democrats used the filibuster especially to block judicial nominations. Many conservatives and Republicans denounced the use of the filibuster. They complained about “tyranny by the minority” and said “all we are asking for is an up or down vote.” I warned conservatives in 2005, “But those conservatives are being ahistorical, short-sighted, and unconservative. Judicial nominations are important, but so are our basic constitutional and governmental structures. Conservatives aren’t simple majoritarians. They don’t think a ‘democratic vote’ should trump every other consideration….Conservatives may believe that they can serve their partisan interests by ending filibusters for judicial nominations without affecting legislative filibusters. But it is naïve to think that having opened that door, they won’t walk through it again when a much-wanted policy change is being blocked by a filibuster.”

In another column that year, I noted, “Republicans who once extolled the virtues of divided power and the Senate’s role in slowing down the rush to judgment now demand an end to delays in approving President Bush’s judicial nominees. President Bush says the Democrats’ ‘obstructionist tactics are unprecedented, unfair, and unfaithful to the Senate’s constitutional responsibility to vote on judicial nominees.’ Democrats who now wax eloquent about a ‘rubber stamp of dictatorship’ replacing ‘the rights to dissent, to unlimited debate and to freedom of speech’ in the Senate not too long ago sought to eliminate the filibuster altogether.”

I noted various liberal politicos and journalists who appeared to have flip-flopped on the legitimacy of the filibuster, from Sen. Hillary Clinton to the New York Times editorial page. And my old friend E. J. Dionne, who “groused about the ‘anti-majoritarian filibuster rules’ that were preventing needed action in 1998 but warned in 2005 that ending the filibuster would be ‘a radical departure’ that ‘would be disastrous for minority rights.’” Now, I regret to note, the Democrats are back where they belong, in control of the Senate, the Republicans are once again the obstructionist minority, and E. J. is again denouncing the filibuster: “In a normal democracy, such majorities would work their will, a law would pass, and champagne corks would pop.”

In a democracy, maybe. But not in a constitutional republic. As I wrote back in 2005, “American constitutional government means neither majoritarianism in Congress nor acquiescence to the executive.” And of course, there’s a question about what ought to happen if we were indeed a “normal democracy.” A majority of the Senate wants to pass this bill. But a majority of the public opposes it. Is it “democratic” for representatives to defy the majority of their constituents?

If the filibuster allows the public to find out more about a proposed bill and to make its views known, then it is serving a useful purpose. If it sometimes blocks a bill, then it is also serving a useful purpose. But there aren’t many people in Washington who stick to the same position no matter which party is in power. That’s a good reason to have constitutional and procedural rules that last longer than temporary majorities.

Boom Time on K Street

Advocates of health care reform and other big government programs, this is the business you have chosen:

Main Street has had a tough year, losing jobs and seeing little evidence of the economic revival that experts say has already begun.

But K Street is raking it in.

Washington’s influence industry is on track to shatter last year’s record $3.3 billion spent to lobby Congress and the rest of the federal government — and that’s with a down economy and about 1,500 fewer registered lobbyists in town, according to data collected by the Center for Responsive Politics….

Plenty of sectors have scaled back their K Street spending, including traditional big spenders like real estate and telecommunications. But Obama’s push for legislation on health reform, financial reform and climate change has compensated for the grim economic times.

And that’s after Obama kicked off the year with a massive economic stimulus package — and every major business sector tried to get a piece of the action. …

“If lobbying the federal government did not work, people wouldn’t spend money doing it,” [Dave Levinthal, a spokesman for CRP] said.

Lay out a picnic, you get ants. Hand out more wealth through government, you get lobbyists. As Craig Holman of the Ralph Nader-founded Public Citizen says: “the amount spent on lobbying … is related entirely to how much the federal government intervenes in the private economy.”

More on the lobbying bonanza in President Obama’s Washington here. Back in 2001 David Laband and George McClintock tried to estimate the total costs to society of efforts to effect forced transfers of wealth in their book The Transfer Society.

Death Panels? Sarah Palin Was Right

PolitiFact.com gave Sarah Palin their “Lie of the Year” award for warning on August 7 that the Democrat’s idea of “cost containment” implied rationing by “death panels.”

The self-described fact-checking web site of the St. Petersburg Times claimed Palin was criticizing a provision in the House bill under which “Medicare would pay for doctors’ appointments for patients to discuss living wills, health care directives and other end-of-life issues.”

The claim that Governor Palin confused one-on-one counseling between doctors and patients with any sort of “panel” was always ridiculous on its face.  Indeed, that claim should itself have been a leading candidate for “Lie of the Year.” Yet Palin’s critics kept on equating death panels with counseling throughout the year, as though they could not even begin to understand plain English.

In a column called “Reporting the Lies,” Washington Post blogger Ezra Klein wrote, “Before Sarah Palin talked about death panels, no one knew about Sen. Johnny Isakson’s quiet crusade to persuade Medicare beneficiaries to adopt living wills.”

Adopting a living will requires a lawyer, not a doctor, so there must have been more to the crusade than just that. There is some reason to wonder if the crusaders intended to promote penny-pinching advice like President Obama’s famous suggestion that perhaps grandma should skip the expensive operation and take a cheap pain pill instead (generic, of course).

In any case, no single physician’s advice involves any panel, deathly or otherwise. Palin was clearly worried about rationing by some government-appointed group, panel or board of experts – such the (currently) powerless panel that recently suggested fewer and later breast exams, or the Senate bill’s potentially more lethal Independent Payment Advisory Board

The shameless hoax that Palin had confused individual consulting with rationing by a panel was repeated endlessly.  By November, the Washington Post was treating this obvious canard as a established fact:  “Proposed health-care reform legislation includes a provision that allows Medicare to pay for “end-of-life” counseling for seniors and their families who request it. The provision – which Sarah Palin erroneously described as “death panels” for seniors – nearly derailed President Obama’s health-care initiative.”

What Palin wrote about death panels clearly had nothing to do with counseling or with any other specifics in seminal House bill. What she wrote was: “Government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course.”

How could anyone believe Palin’s sensible comment about rationing was, in reality, a senseless fear of counseling? To say so was no mistake; it was an oft-repeated big lie.

Rather than even mentioning the House bill, Palin linked to an interesting speech by “Rep. Michele Bachmann [which] highlighted the Orwellian thinking of the president’s health care advisor, Dr. Ezekiel Emanuel, the brother of the White House chief of staff.”

Dr. Emmanuel’s varied and murky remarks about using panels of experts (like himself) to ration health care are less clear or less candid than those of another bioethicist, Peter Singer of Princeton. Singer’s article, “Why We Must Ration Health Care,” was a cover feature in The New York Times Magazine on July 15 – shortly before Palin took the opposing side of this issue.

Singer’s argument (about an expensive anti-cancer drug) is that, “If there is any point at which you say, ‘No, an extra six months [of life] isn’t worth that much,’ then you think that health care should be rationed.” But the question itself is rhetorical trickery, sophistry. Even if there was certain knowledge about life expectancy with or without some treatment (which is never true), Singer has no right to any opinion about how much an extra six months of my life is worth (and vice-versa) unless he’s paying the bills.

But that, of course, is what makes the proposed expansion of  insurance subsidies and Medicaid so ominous.  Just as federal politicians imagine that a small minority stake in some bank entitles them to override all other stockholders when it comes to executive pay, federal politicians would surely claim that even small subsidies for anyone’s health insurance entitle them to, as Singer put it, set “limits on which treatments should be paid for.” And those politicians would surely appoint panels of experts as cover when some life-saving procedure, device or drug was ruled-out for those with insufficient quality-adjusted years left to live.

Singer wrote, quite correctly, that in “Medicare, Medicaid and hospital emergency rooms, health care is rationed by long waits… [and] low payments to doctors that discourage some from serving public patients.” [emphasis added]

Pending health care bills would make such government-mandated scarcity of health care much worse.  There would be massive shifting of money away from Medicare toward Medicaid.  But the extra Medicaid money would be spread around more thinly.  States would cut benefits to the poor in order to accommodate millions of new, less-poor people lured into Medicaid, at least half of whom (7 or 8  million by my estimate) currently have employer-provided health insurance.

The Senate health bill supposedly intends to slash Medicare payment rates for physicians by 21% next year and more in future years, with permanent reductions in payments to other medical services too.  It would also establish an Independent Payment Advisory Board which would be empowered to make deeper cuts which Congress could reject only with considerable difficulty.   If that’s not quite a “death panel” it would surely not be pro-life in its impact.

The Congressional Budget Office says, “It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would …  reduce access to care or diminish the quality of care.”

Actually, it’s clear enough that the proposed Medicare cuts won’t be achieved, but that efforts in that direction will nonetheless reduce access to care and diminish its quality.  The government can’t boost demand and cut prices without creating excess demand.  And that, in turn, means rationing by longer waiting lines and by panels (rationing boards) making life-or death decisions for other people.

As Sarah Palin predicted, “Government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course.”