Yesterday, the Senate Rules & Administration Committee held a hearing to discuss reforming the Electoral Count Act, with most of the discussion focused on the draft Electoral Count Reform Act from the bipartisan working group led by Sen. Susan Collins (R‑ME) and Sen. Joe Manchin (D‑WV).



As the committee’s chair Sen. Amy Klobuchar (D‑MN) and ranking member Sen. Roy Blunt (R‑MO) both noted, the hearing was remarkable in its bipartisan agreement on both the importance and the substantive details of ECA reform. In addition to statements from Collins and Manchin, the committee heard from an impressive group of witnesses from across the political spectrum. There was very little disagreement among them, and all of the witnesses agreed with the urgency of passing ECA reform this year, before the 2024 election cycle gets underway.



Most of the discussion focused on technical fixes and improvements to the Collins-Manchin draft, which was also the focus of the statement submitted by Thomas Berry and myself and read into the record by Klobuchar, as well as in our previous writings on the ECRA draft. Cato’s work on this front was also cited by witnesses Norm Eisen, a former ambassador currently at Brookings, and Janai Nelson, president of the NAACP Legal Defense Fund.



With little need to defend the bill as a whole, given the lack of substantive opposition from either the left or the right, attention turned to getting the details right. These points for improvement mostly involve providing tighter definitions of key terms and procedural clarity for the proposal’s mechanics.



As we have recommended and several of the witnesses also suggested, these fixes include a narrower definition for when members of Congress may object to electoral votes as not “regularly given,” and tightening the so-called failed elections provision which covers allowing states to handle “extraordinary and catastrophic” events disrupting Election Day. There are also some concerns about the precise drafting and timeline for the expedited judicial review procedure, intended to handle the risk of rogue actors obstructing certification of electors. On the latter point, one possible fix would involve moving the date of the Electoral College meeting later in the calendar, to provide more time for the courts to resolve disputes.



Aside from fleshing out these details, the only pushback against the big-picture premise of ECA reform came from Sen. Ted Cruz (R‑TX), the only senator participating in the hearing who had voted against counting electoral votes in the 2020 election. As he did then, Cruz revived the idea of using the 1876 Hayes-Tilden election dispute as a model. In particular, Cruz has advocated that Congress should revive the ad hoc “Electoral Commission” used to decide that year’s election. This is an unusual outlier position, to put it mildly.



The 1876 fiasco is generally regarded as the most infamous example of what not to do. It nearly reignited the Civil War, almost failed to resolve the dispute in time for Inauguration Day, and paved the way for Jim Crow under a corrupt bargain to end Reconstruction. More than any other incident, it was this crisis that prompted Congress to realize better procedures must be codified ahead of time in an Electoral Count Act.



As one of the expert witnesses, Derek T. Muller of the University of Iowa, pointed out to Cruz, even the notorious Electoral Commission rejected what Cruz wants from his revived version: a broad power to sit in judgment of how each state conducted its popular election. Far from a conservative or an originalist argument, this position amounts to flagrantly usurping the proper role of the states and the courts, wrecking the Framers’ design for a president independently elected by the Electoral College rather than chosen by Congress. The widespread rejection of Cruz’s position can best be summed up by Klobuchar’s deadpan response: “I’m not a fan of the 1876 election.” Indeed. 



On the topic of constitutional housekeeping, ranking member Blunt also made a noteworthy aside in his opening statement, expressing agreement with longstanding complaints that the Presidential Succession Act (also contained in Title 3, alongside the ECA) should not include congressional leaders. Currently, the speaker of the House and the Senate president pro tempore are next in line after the vice president, a very dubious policy on both constitutional and practical grounds.



It’s not as urgent as fixing the Electoral Count Act, since we have a presidential election every four years but have never faced a scenario where both the president and the vice president are out of commission. But the two laws fit a similar pattern: scholarly warnings have long been ignored by Congress as academic and unimportant. James Madison himself once raised the objection, only to be brushed aside. But as happened with the ECA, one day it could suddenly become very important, threatening the American people with a catastrophic dispute over who is the rightful president. Fixing this flaw in the Presidential Succession Act would be relatively simple and is also worth doing.


But presidential succession is a discussion for another day. As the ECRA draft moves forward, with a committee markup likely in September when Congress returns from recess, yesterday’s hearing shows that reform advocates have every reason to be optimistic.
 

Throughout the pandemic, people have poured into states in the south and intermountain west, including states like Idaho, Arizona, and Utah. According to Census Bureau estimates, areas including Boise, Idaho and Salt Lake City, Utah sustained some of the highest net migration increases during the 2020–2021 period.

Figure 1. U.S. regional migration, 2020–2021, numbers in thousands

Source note: Net internal migration encompasses migration to/​from U.S. states. Net migration includes migration from abroad. California has some of the highest outbound migration of any state; this depresses net migration estimates for the West. Table A‑2: Annual Inmigration, Outmigration, Net Migration, and Movers from Abroad for Regions: 1981–2021

Following increasing in-migration, cities in these once-affordable states rapidly encountered housing affordability issues. For example, at the end of June 2022, Phoenix, Arizona and Salt Lake City, Utah had monthly mortgage payments that were up over 70 percent, year-over-year. Observed rents were up 15 percent year-over-year in the same areas (having fallen from their peak of 20–25 percent).

Various factors—including changing consumer needs, supply chain issues, labor shortages, and the like—combined with rising demand to produce rising prices. In addition, policies including restrictive zoning became newly salient in western states with burgeoning population growth.

However, there is another less-recognized policy issue affecting housing supply that is specific to western states: a substantial portion of the land is owned by the federal government and not developable.

For example, in Nevada, Utah, and Idaho, the federal government owns more than 80 percent, 63 percent, and 60 percent of the land.^[1] In other states like Arizona, Colorado, Wyoming, California, and Montana, the federal government owns more than one-third to one-half of available land.

Contrary to public perception, the vast majority of federal lands are not national parks, monuments, or Bureau of Indian Affairs land. Instead, a majority of federal western land is managed by the Bureau of Land Management (BLM) and U.S. Forest Service (USFS).

BLM land was once described as “land that nobody wanted” owing to the fact that homesteaders had passed over it. Today, BLM and USFS land is used for a variety of uses, including grazing, mining, recreation, and energy transmission and production.

This land is not so far from urban development that it is of no practical use, and a significant portion of lands are within city or county boundaries: previous estimates indicate that there are 217,000 acres of BLM and USFS land within Utah city boundaries, and 650,000 acres of USFS and BLM lands within one mile of Utah city borders.

Presented with a similar set of facts in the 1990s—Las Vegas, Nevada was the fastest growing metropolitan area at the time and landlocked by federal lands punctuating private property—federal legislators passed a bill that allowed local governments in the Clark County, Nevada area to nominate federal land for competitive market auction.

Figure 3. Example of typical federal land sold to private parties in the Las Vegas metro area

Source: SNPLMA: A Model for Success, Department of the Interior

The sale of federal land in the Clark County area subsequently resulted in hundreds of millions of dollars being allocated to Nevada public schools and more than a billion dollars allocated to Nevada’s trails, parks, and natural areas, creating an unusual win-win for Nevada developers, conservationists, and residents alike.

Earlier this year, Senator Lee and cosponsors introduced the HOUSES Act, a bill with similar objectives but more specific focus on housing development than the Southern Nevada Public Land Management Act (SNPLMA) of the ‘90s. The proposed HOUSES Act would allow local governments to nominate and purchase federal land and then develop the land for housing projects that meet certain density minimums and other criteria.^[2]

Similar to SNPLMA, proceeds from HOUSES would be made available for environmental initiatives including improvements to existing National Parks, wildfire prevention programs, public water infrastructure projects, and restoration initiatives.^[3]

But in spite of legislative efforts, the question remains: how much good could federal lands reform really do for housing affordability? This week, the U.S. Congress Joint Economic Committee (JEC) made a serious attempt to answer this question in a new report.

The JEC study first martials new figures and visuals indicating that federal land is, indeed, adjacent to many existing developed areas in western states. For example, one visual (Figure 4) highlights existing developed areas (white) and existing federal lands (both dark and light red). JEC finds that population per square mile significantly declines in many counties after accounting for federal land—what you would expect to find in places where development is constrained.

Figure 4: “Western States’ Population Centers at Night and Federal Land, 2021”

Source: The Houses Act: Addressing the National Housing Shortage by Building on Federal Land 

The authors then evaluate the effect of federal land reform on housing. They estimate buildable federal land by limiting land to BLM-managed land and remove all remaining land parcels containing water, marshland, or a slope greater than 15 degrees that would make development challenging. Then, using various assumptions based on the HOUSES Act, the report models how many homes could be built on eligible buildable parcels before A) the available buildable land runs out or B) the so-called housing “shortage” is eliminated.^[4]

JEC concludes that the HOUSES Act could significantly influence housing supply in western states. Specifically, the study finds that HOUSES reforms could lead to the construction of approximately 2.7 million homes, including 430,000 homes in San Diego County, California; 350,000 homes in Maricopa County, Arizona; 109,000 homes in Clark County, Nevada; and 55,000 new homes in Utah County, Utah alone.

As a result of this new development, the authors find that an additional 8 percent of the population in twelve western states would be able to afford an average home (a 24 percent increase from the baseline). Crucially, this increase in housing development would be possible with the conversion of just 0.1 percent of existing federal land holdings.

As the report acknowledges, federal land reform is in no way a substitute for zoning reform at the state and local government level. Moreover, the study’s estimates hinge on the implicated counties’ interest in, and use of, the proposed program: counties with strong environmental impulses may be less inclined to make use of the program.

Still, this study provides evidence that federal land reform could be a promising federal tool to improve housing supply and thereby housing affordability. This will likely come as welcome news to many western municipalities with housing markets under pressure from growth.

^[1] These figures “understate federal lands in each state and the total in the United States” as “they include only land of the five largest land-managing agencies: BLM, FS, FWS, NPS, and DOD lands.” See CRS report.

^[2] Purchase is subject to approval. Details about how local governments will disburse said lands to private actors, or otherwise initiate housing development, are not prescribed by the Act.

^[3] Despite the positive effects of the SNPLMA on increasing developable land, Clark County, Nevada remains landlocked by federal lands.

^[4] The authors acknowledge that “shortage” is an economically imprecise description, as homes can generally be purchased at the market-clearing price. Nonetheless, in this and another paper, the authors admit the term is still of practical use due to its prevalence in the national debate. Defining “shortage” as the number of homes that would be built absent supply constraints, they find that previous estimates understate housing supply problems because they take existing historical development trends as a given.

Inflation stems from too much money chasing too few goods. U.S. consumer inflation is running at 9 percent as too much government-spawned money creation is coinciding with restrictions on the supply side of the economy.

The “Inflation Reduction Act” in front of the Senate is supposed to address inflation by reducing budget deficits with a combination of tax hikes and green subsidies. But despite its name, the Senate bill would not reduce inflation because it would damage the supply side and hardly affect deficits.

The budget modelers at Penn-Wharton estimate that the Senate bill would reduce the deficit by $86 billion in 2031, at most. That would be just 4 percent of the projected deficit that year and just 0.2 percent of U.S. GDP. So the bill’s impact on inflation through reducing deficits and demand would be close to zero.

Tax Foundation calculates that the Senate bill would reduce deficits by $178 billion over 10 years, which is just 1 percent of expected deficits over the period. Both Tax Foundation and Penn-Wharton find that the Senate bill would actually increase deficits the first few years, and thus have the opposite effect on inflation as the “reduction” promised by the bill’s title.

The figure below illustrates the Senate bill’s tiny impact even if it delivers what the sponsors promise. The reality is that the bill would likely increase deficits as new subsidies would beget more subsidies. Corporate lobbyists would push for subsidy expansion and other industries would demand similar handouts down the road.

And then there is the economy’s supply side. Raising taxes on corporations would reduce incentives to invest, and thus shrink production. The complexity of the proposed new minimum tax would exacerbate unproductive battles between the IRS and corporations. The Joint Committee on Taxation finds that half of the Senate tax hike would land on manufacturers. Money would be chasing fewer goods produced.

At the same time, the expansion of IRS enforcement unleashed by the Senate bill would cause huge headaches for small businesses and distract them from the marketplace. The IRS is a beast and jacking up its powers would be costly in terms of lost civil liberties.

Even if higher revenues generated by the Senate bill were devoted to deficit reduction, any benefits would not be worth the private-sector damage. But most of the revenues would be gobbled up by new subsidies, and given DC’s political dynamics the subsidies would keep on growing and wipe out any budget benefits over time.

This week the California State legislature passed and sent to the Governor’s desk SB57, introduced by Senator Scott Wiener, which authorizes the County and City of San Francisco, the County and City of Los Angeles, and the City of Oakland to approve safe consumption sites, dubbed “Overdose Prevention Programs” (OPPs). The authorization remains in effect until January 1, 2028. Any jurisdiction that establishes an OPP must contract with an independent third party, using private funds, to conduct a peer-reviewed study on the impacts of the program and submit results to the Governor’s office no later than January 15, 2027.

This bill was passed almost exactly one year after Rhode Island’s Governor signed similar legislation. Last November, the City of New York authorized two safe consumption sites. A privately-funded organization in Philadelphia, authorized by the City Council, has been attempting to establish a site called Safehouse since 2018, but the organization’s efforts have thus far been thwarted by the U.S. Department of Justice (DOJ).

California’s action is the latest attempt to apply a proven harm reduction tool used by much of the developed world (a total of 40 are now approved in Canada), though federally banned in the U.S. by a law called the “Crack House Statute” (21 U.S.C Sec. 856), which prohibits people from renting, leasing, using, or maintaining a place for the purpose of consuming controlled substances. Thus far the Biden DOJ has not acted against Rhode Island or New York City.

As drug overdose deaths multiply, more state and local governments are flouting federal law to save lives. Hopefully these efforts will culminate in Congress repealing the Crack House Statute and getting the federal government out of the way of people trying to save lives and prevent the spread of disease in their communities.

With the execution by drone of al-Qaeda chief, Ayman al-Zawahiri, the terrorist group is back in the news. However, beyond issuing a set of attention-getting videos filled with dire and unfulfilled threats, al-Qaeda’s record of accomplishment since 9/11 has been meager.

It has served as something of an inspiration to some Islamic extremists around the world who have wanted to glory in the success of 9/11 and to wear the al-Qaeda label. But it has exerted little control over them, and they mostly have maintained a local perspective rather than the global one al-Qaeda prefers.

For the most part, al-Qaeda tends to resemble Lee Harvey Oswald, the assassin of John F. Kennedy: a fundamentally trivial entity that got horribly lucky once.

Yet, to defend against an enemy, or monster, that scarcely existed, the United States has waged wars in the Middle East that have cost trillions of dollars and led to the deaths of hundreds of thousands while erecting a massive security apparatus at home.

For further commentary on this issue, see: How a cottage terrorism industry made a lion out of an al-Qaeda mouse (Responsible Statecraft)

Last week’s reports that the Securities and Exchange Commission (SEC) is probing whether one of the world’s largest cryptocurrency exchanges is listing unregistered securities once again highlights the unsettled state of crypto regulation in the U.S. It’s high time that policymakers provide clear, practical answers to the perennial questions of whether cryptocurrencies are securities and, if so, what to do about it. In the briefing paper, “Practical Legislation to Support Cryptocurrency Innovation,” released today, Jennifer Schulp and I propose legislative amendments for doing just that. Our framework provides (1) a clear test for whether crypto tokens are securities and (2) a common-sense registration option for those that are but whose projects are on the path to decentralization.

Crypto rules should be tailored to the specific risks of cryptocurrencies: fraud, deception, and manipulation by developers, sellers, or promoters who remain active managers of a crypto project. Our test for whether a crypto token is a security therefore is based on whether the token’s developers, sellers, or promoters will be exercising managerial control over the project. This test is consistent with longstanding precedents (including the oft-cited Howey test) and the goals of securities laws, which seek to protect against risks that managers have information that investors do not and act against investors’ best interests.

We propose that Congress clarify that securities laws do not apply to decentralized crypto tokens. This means that securities laws would not apply to tokens where the developer, seller, or promoter does not promise to undertake efforts necessary to deliver the token and its benefits, i.e., act like a manager. For example, such efforts could include building software or promoting its adoption by users or merchants. Where developers promise to do these things, the crypto project is centralized, and it’s appropriate to apply securities safeguards. However, if the project can work as intended without managers’ efforts, it’s decentralized, and securities laws would not apply to sales of its tokens.

Cryptocurrencies aspire to move beyond the need for centralized bodies that securities laws were designed to regulate, in effect mitigating managerial risks with technology. However, as SEC Commissioner Hester Peirce has put it, the current regime has “created a regulatory Catch 22”: startup crypto projects may be insufficiently decentralized to avoid securities laws, but compliance with those laws makes it difficult for such projects to sell their tokens to raise the money and build the user networks they need in order to decentralize over time. Our framework seeks to avoid this dilemma by proposing a tailored registration option for decentralizing projects to provide relevant information to crypto token purchasers.

Importantly, projects must be on the path to decentralization to be eligible for the tailored disclosure option. This means they must be developing a system with technical attributes that support decentralized operations: an open-source, permissionless, publicly readable, and cryptographically secure distributed ledger capable of validating stores or transfers of tokens without intermediaries. Eligible projects can register by posting to a public website information that would be useful to token purchasers, including:

• who the developers, sellers, and promoters are;
• how many tokens the developers, sellers, and promoters hold;
• relevant technical documents (such as white papers and yellow papers) and marketing materials;
• a link to the project’s public code repository, as well as a block explorer (a tool for searching the project’s transaction history);
• information on how the project will achieve decentralization;
• the protocols for recording and validating transactions and the applicable consensus mechanism;
• the governance mechanism for updating the project’s code;
• any promised benefits of the token; and
• the known or reasonably foreseeable risks of holding the token, including a concise risk statement to be provided during public token sales.

Eligible projects would remain subject to securities law protections against fraud, untrue statements, and material omissions, which would cover misleading disclosures and undisclosed managerial efforts. Moreover, under our proposal, where developers make additional promises beyond those contemplated in their registration, they would lose eligibility for this streamlined framework, as those subsequent promises create additional risks and fail the framework’s securities test anew.

Cryptocurrencies’ fundamental innovation is the capacity to mitigate risks through decentralized technology. When they do, they should not be subject to superfluous compliance steps. To incentivize projects that realize this potential, Congress should provide a practical test for whether projects are decentralized, along with a tailored disclosure pathway for projects on the way there.

At 1 a.m. they left us at the bridge in Juárez. I asked them why they would throw us to the streets at night with children, and an agent said, ‘That’s your problem, that is not my problem.’

-35-year-old man from Honduras (interviewed by Physicians for Human Rights)

In the dead of night, Customs and Border Protection (CBP) is expelling thousands of immigrant infants and toddlers into Mexican border cities that the U.S. State Department says are too dangerous for American tourists. New statistics obtained via a Cato Freedom of Information Act request show that as of May 31, CBP had used its Title 42 “health” authority to expel 30,806 children ages 3 and under—with about 41 percent of these expulsions occurring at midnight or later.

According to CBP’s agreements on repatriation with the Mexican government, no deportations should occur between 10pm and 5am, and anyone with special needs should not be deported between 8pm and 7am. But under Title 42, these restrictions are not being followed. CBP is expelling even very young children to Mexico in the middle of the night. The Biden Administration is actually expelling more children at night than even the Trump Administration did.

The results have been horrific. Many expelled children are then kidnapped by cartels, while others are sent back across to the United States by their parents with family members or smugglers as “unaccompanied” kids. Figure 1 shows the number of toddlers and infants that CBP has expelled for each month since Title 42 started under Trump in March 2020. Two-thirds of the expulsions have been of immigrant toddlers from Honduras and Guatemala, though several countries are represented.

Figure 2 shows the number of expulsions by time of the day for each month from March 2020 to May 2022. The most noticeable jump in nighttime expulsions occurred from August 2021 to September 2021 when the share of infants and toddlers expelled to Mexico increased from 16 percent to 40 percent (of expulsions that listed the time). Note that the percentage increased far more than the absolute number of expulsions between those two months, implying perhaps that a policy change was responsible for the increase. Although the absolute number of expulsions has declined since then, the share being expelled has consistently remained above 50 percent.

The reason to focus on toddlers is that they are the most vulnerable people coming to the border, but older children are also being expelled. CBP expelled 125,907 juveniles under age 18 from March 2020 to May 2022—about 29 percent of those expulsions occurred after midnight. It is not entirely clear why toddlers are more likely to be expelled after midnight than older children, but it could be because Mexican immigration officials aren’t around at those times to object to expulsions of very young children.

Journalist Ryan Devereaux is one of the few reporters to have investigated this phenomenon of late-night expulsions. In April last year, he reported:

As Animal Político, a Mexican news outlet, noted in an investigation published in February, nighttime removals have been happening in some the “most remote and dangerous” locations for migrants on the border for more than a year now. Williams added that KBI is “regularly seeing” expulsions at 2 in the morning. “It’s uniquely frustrating to us as an organization because we fought for years to restrict the hours of repatriation here,” she said. “They’re supposed to be from 5 a.m. to 10 p.m., and now it’s any time.” When people are expelled in the middle of the night, there are no Mexican immigration officials to receive them, Williams explained. While on paper there are populations that the Mexican government will not accept, “when they’re sending them back at 2 in the morning, there’s not a Mexican official on the south side to object to it.”

Human Rights First has listed dozens of known instances of crimes being committed against families sent back to Mexico. Here are some:

Those kidnapped include a Honduran asylum seeker and her three-year-old child who were kidnapped and held for a month after DHS transported them from McAllen and expelled them to Nuevo Laredo, a Guatemalan asylum seeker and his four-year-old son abducted and held for ransom after being expelled by DHS to Nuevo Laredo, a five-year-old Honduran girl kidnapped with her mother in Nuevo Laredo, and a one-year-old Honduran girl and her parents kidnapped the same day they were expelled to Nuevo Laredo in April 2021.

America would benefit from more people of all ages. The United States should be exhausting every legal way to let people into the country legally and let people stay legally. This would keep children from harm and uphold U.S. asylum law, and it would reduce illegal immigration and illegal residence. The United States has never needed people like it needs them now. Birth rates and labor market participation are down, and job openings have never been higher, yet the U.S. government policy toward immigrants has not adjusted.