Topic: Government and Politics

A Chance to Rethink How We Regulate Political Speech

At the March 24 argument in Citizens United v. Federal Election Commission, the U.S. government argued that Section 203 of the Bipartisan Campaign Reform Act of 2002 (otherwise known as McCain-Feingold) permits the FEC to ban corporations, including ideological nonprofits like Citizens United, from making independent expenditures on films, books, or even “a sign held up in Lafayette Park.”  The jurisprudential justification for this extraordinary and shockingly expansive view of the government’s power to suppress political speech traces to the Supreme Court’s 1990 decision in Austin v. Michigan Chamber of Commerce.  In Austin, the Court held that Michigan had a compelling state interest in banning political speech funded with wealth accumulated using the corporate form.  Though the Court contended that such speech, because it bears little correlation to public support for the political ideas expressed, constituted a “different type of corruption,” in reality it upheld Michigan’s statute as a “counterbalance” to the “distorting” and “unfair” influence corporate funds could have on the outcome of elections.

This relative-equality rationale—suppressing disfavored speakers to enhance the voice of other government-favored speakers—is antithetical to core First Amendment protections and elsewhere has been expressly rejected by the Court (in Buckley v. Valeo and, more recently, in Davis v. FEC).  Accordingly, to decide Citizens United’s appeal, the Court ordered rebriefing and reargument on Austin’s continuing validity.

On Friday, Cato filed its brief, the second we’ve filed in the case. We argue that Austin, and the part of McConnell v. FEC that upheld Section 203’s facial validity, are not entitled to stare decisis deference and should thus be overturned.  These relatively recent decisions are poorly reasoned, have engendered no reliance interests (no one relies on less freedom of speech), and have spawned an unworkable and irrational campaign finance system in which the government rations different levels of permissible political speech to otherwise equally situated speakers.

The case will be reargued September 9, in a special session about a month before the official start of the Court’s new term.

Here’s a Cato Institute video detailing some elements of the original Citizens United oral argument:

Administration’s Fiscal Muddle

Recent comments by Treasury Secretary Tim Geithner and National Economic Council Director Larry Summers illustrate the incoherence of the administration’s fiscal policy. Previously, they were against raising taxes in the short-run because that would damage the economic recovery. Now they are hinting or suggesting that recovery depends on raising taxes to reduce the deficit.

Previously, they supported rising levels of spending and deficits to supposedly grow the economy, but now they are saying that deficits need to be cut for the economy to grow. Geithner and Summers seem to be repeatedly changing their message depending on the political requirements of the news cycle, rather than providing a consistent program based on economic theory.

The reality is that rising taxes and spending suck resources out of the private sector economy, which damages growth whether we are in an expansion or a contraction. That’s because governments in America already consume more than one-third of everything produced in the nation, and so further resources added to the government sector produce very little or negative returns.

Geithner and Summers ought to stop trying to manipulate the short-term macroeconomy, and instead focus on economic reforms to remove obstacles to private sector growth over the long-term.

Another Dumb “Stimulus” Idea at Taxpayer Expense

Sigh.  Will the error never end?  If you listen to Washington, you would think that taking money from taxpayers, who otherwise would buy cars, homes, computers, and any number of other items, and giving it the same taxpayers to get them to buy cars is a great way to stimulate the economy.

Of course, the Keynesian hope is that Americans will spend rather than save, as if the best way to resolve a crisis  resulting from too much spending and borrowing is to encourage more people to spend and borrow more.  Alas, Washington has never met an expensive new program that it didn’t like.

In fact, the “Cash for Clunkers” program is an even dumber idea than most “stimulus” proposals.  Cato’s Alan Reynolds notes how easily the program can be manipulated to frustrate the objective of improving auto gas mileage.

Moreover, the initiative probably doesn’t increase auto sales.  Rather, it primarily rewards people who would have bought a new car anyway.  Explains Jeremy Anwyl in the Wall Street Journal:

Nearly everyone now seems to be praising “cash for clunkers”—the federal program recently launched that will credit you up to $4,500 to trade in your old car for a more fuel-efficient vehicle. President Barack Obama says the program “has succeeded well beyond our expectations and all expectations.” Transportation Secretary Ray LaHood claims “this is the stimulus program that has worked better than any other stimulus program that was conceived.”

But cash for clunkers is also a program in limbo, having quickly run out of the $1 billion budgeted for it. Congress must now decide whether to let it die or whether to pump more money into it. So it’s time to ask if this program is really a good idea.

It is true that Internet car shopping activity, showroom traffic, and sales are all up, which is why the auto industry wants to keep the program going.

I love a good sales surge as much as anyone. But it’s not that simple. First, it’s not clear that cash for clunkers actually increased sales. Edmunds.com noted recently that over 100,000 buyers put their purchases on hold waiting for the program to launch. Once consumers could start cashing in on July 24, showrooms were flooded and government servers were overwhelmed as the backlog of buyers finalized their purchases.

Secondly, on July 27, Edmunds.com published an analysis showing that in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place. The 200,000-plus deals the government was originally prepared to fund through the program’s Nov. 1 end date were about the “natural” clunker trade-in rate.

Let’s hope we can be saved from additional “stimulus” proposals which do far more to waste money than spur the economy.

Transparency: Read the Bill? See the Earmarks!

Via MLive.com, here’s House Judiciary Committee chairman John Conyers (D-MI) pooh-poohing the idea that members of Congress should read legislation before they vote on it.

He is under attack for it – attacks he can deflect because they’re partisan and because he’s from a quintissential safe district. So instead of gulping the too-potent elixir of outrage, let’s sip a while on substance.

Members of Congress don’t read bills. Instead, they efficiently (for them) place trust in staff and other politicians to know enough of what’s in a bill, and enough of the politics, to get by.

I agree with the ReadtheBill campaign, which wants Congress to post all legislation online for at least 72 hours before it is considered. It’s complementary to President Obama’s 38-times-broken promise to post bills online for five days before he signs them.

The point, of course, is not having 535 people sit down and thumb through every single page of the legislation coming before them. It’s having the 535 members of the House and Senate know what’s in the bills they vote on. But even more than that, it’s about letting the public know what is in the bills before Congress votes.

“What good is reading the bill if it’s 1,000 pages and you don’t have two days and two lawyers to find what it means after you read the bill?” says Conyers. Give us two days – no, make it three – and Americans, including lawyers, will let you know.

The thirst for transparency is not speculative. WashingtonWatch.com (a site I run) recently asked the public to gather data about congressional earmarks, which have long been shrouded in secrecy. In under two weeks, ordinary Americans have put more than 8,000 earmarks into the database to create a ”United States Earmarks Map.” (It loads a little slowly because of all that data.)

Through this project, a relatively small group of people will help expose how the Washington spending machine works, and by exposing it, change it.

You can review Chairman Conyers’s earmarks by selecting “Michigan” in the drop-down menu below the map, then selecting “Rep. John Conyers.”  And if the earmarks your member of Congress requested are not in the database yet, you can enter them here.

Will the Blue Dogs Ever Bite?

We’ve written more than once about the Democratic “Blue Dogs” and the lack of any actual evidence for their supposed fiscal conservatism.

Now Merrill Mathews in The Wall Street Journal tells the sad story of the Blue Dogs in the Obama era. They call in the journalists, and they moan and complain about their concerns over the deficit and rising federal spending. And when the rubber meets the road, what happens?

• The State Children’s Health Insurance Program (SCHIP). One of the first things the Democratic leadership wanted the newly inaugurated President Obama to sign was a huge expansion of SCHIP. Democrats have been trying to pass the expansion for over a year, with some bipartisan support. President George W. Bush vetoed the legislation twice, and Congress sustained his veto both times by a hair.

SCHIP was created for low-income uninsured children not eligible for Medicaid. Under the old bill, children whose family incomes were 200% of the federal poverty level were covered. With the new bill, Democrats increased funding to cover children whose family incomes are up to 300% of the federal poverty level—or $66,000 a year for a family of four. The Bush administration and most conservatives thought it should remain at 200%. Did the Blue Dogs agree? Only two voted against the expansion.

• The $787 billion stimulus. The next major spending package was Mr. Obama’s stimulus bill. Not one House Republican voted for the bill. The Blue Dogs? Only 10 of 52 voted against it.

• President Obama’s 2010 federal budget. In April, Congress took a vote on the president’s $3.5 trillion budget for 2010—by far the biggest spending package in history. Again, not one House Republican voted for the bill, but only 14 Blue Dogs joined them in opposition.

Matthews says the health care bill is the Blue Dogs’ last chance to show that they actually do care whether the federal government spends us into bankruptcy.

Using ‘Cash For Clunkers’ Money to Buy a Muscle Car

chevelleABC News reports that the “Cash for Clunkers” scheme, a government program that offers a rebate to people who trade in vehicles with low gas mileage for more fuel efficient cars, is  gaining popularity:

The program is off to a fast start. In less than a week, 8,000 cars have been traded in for new ones – deals that might not have happened if Washington were not offering people $3,500 to $4,500 to get their aging gas guzzlers off the road.

In June, Cato senior fellow Alan Reynolds explained  how you can use that money to buy the muscle car or truck you always wanted:

Consider how easy it would be to game this giveaway program by using that $4,500 voucher to buy a big SUV or V-8 muscle car.

First of  all, with Chrysler and GM dealerships folding, it should be easy to buy a mediocre Chevy Cobalt or Dodge Caliber for about $10,000 more than the voucher.

What you do next is sell that boring econobox, even if you end up with $1,000 less than you paid — that still leaves you with $3,500 of free money, courtesy of taxpayers.

As this  process unfolds, the flood of resold small cars will make it even  harder for GM, Chrysler and Ford dealers to get a decent price for small cars, because of added competition from new cars being resold as used.

That’s their problem, not yours.

So, take the $9,000 net from reselling the crummy little car plus the $4,500 from Uncle Sam.  Then use that $13,500 to make a big down payment on a used Cadillac Escalade,  Toyota Tundra pickup or Corvette.

File this under “unintended consequences” (my own file is running out of space).

More Evidence on the Turning Tide

america-store_2065_6501360I wrote recently about the anti-Obama T-shirts on display at Washington’s Dulles Airport. This week I can report that at the Baltimore/Washington International Thurgood Marshall Airport, there are big cut-outs of Barack and Michelle Obama. But they’re standing by a display of shirts reading “Don’t Blame Me, I Voted for McCain and Palin” and another reading “NOPE (with the Obama campaign logo) – keep the change.” The times they are a-changin’.

In the interest of full disclosure, I should note that out in the real America, the airports of Albuquerque and San Diego, there are no T-shirts on display for or against any politician. It’s like they don’t think Americans care about politicians.