ACLU on the REAL ID Revival Bill

The REAL ID Act should be repealed, not “fixed,” says the American Civil Liberties Union:

While offering some important privacy protections, this legislation could ultimately resurrect the discredited Real ID Act and become the basis for a National ID. “Four years after becoming law, the Real ID Act is essentially dead,” said Chris Calabrese, Counsel of the ACLU Technology and Liberty Program. “Senator Akaka is right in his efforts to eliminate a substantial number of the more problematic aspects of Real ID, including the creation of a national database of driver information and misuse of license information by the private sector. But while these attempts at improvement are commendable, Real ID cannot be ‘fixed,’ and we oppose anything that would revive it.”

The REAL ID revival bill is S. 1261.

Obama Financial Reform Plan Misses the Mark

The Obama Administration is presenting a misguided, ill-informed remake of our financial regulatory system that will likely increase the frequency and severity of future financial crisis. While our financial system, particularly our mortgage finance system, is broken, the Obama plan ignores the real flaws in our current structure, instead focusing on convenient targets.

Shockingly, the Obama plan makes no mention of those institutions at the very heart of the mortgage market meltdown – Fannie Mae and Freddie Mac. These two entities were the single largest source of liquidity for the subprime market during its height. In all likelihood, their ultimate cost to the taxpayer will exceed that of the TARP, once TARP repayments have begun. Any reform plan that leaves out Fannie and Freddie does not merit being taken seriously.

While the Administration plan recognizes the failure of the credit rating agencies, is appears to misunderstand the source of that failure: the rating agencies government created monopoly. Additional disclosure will not solve that problem. What is needed is an end to the exclusive government privileges that have been granted to the rating agencies. In addition, financial regulators should end the out-sourcing of their own due diligence to the rating agencies.

Instead of addressing our destructive federal policies at extending homeownership to households that cannot sustain it, the Obama plan calls for increased “consumer protections” in the mortgage industry. Sadly, the Administration misses the basic fact that the most important mortgage characteristic that is determinate of mortgage default is the borrower’s equity. However such recognition would also require admitting that the government’s own programs, such as the Federal Housing Administration, have been at the forefront of pushing unsustainable mortgage lending.

The Administration’s inability to admit to the failures of government regulation will only guarantee that the next failures will be even bigger than the current ones.

Education Tax Credits Still on the Table in Indiana

The Chicago Tribune reports today that education tax credits are still being pursued despite huge holes in Indiana state budgets … maybe because school choice saves money?

[Indiana] Republican Gov. Mitch Daniels’ budget proposal includes a scholarship tax credit that supporters say would give poor students the opportunity to attend private schools, but opponents say would open the door to vouchers.

Daniels’ budget proposal includes a 50 percent tax credit for donations to a nonprofit scholarship-granting organization that helps students from low-income families attend their choice of a private school or a public school outside their home district.

A couple of quick points.

I’m not sure how this would “open the door to vouchers,” since credits are an alternative form of school choice and obviate the need for vouchers.

Gov. Daniels should promote a 100% tax credit for donations, not a 50% credit. At the least, he can drop that to 90% like the successful Pennsylvania credit program. But 50% is simply too low to act as an effective catalyst for serious reform. And as we all know, its best to aim high at the start of negotiations so you have somewhere to go. He’s selling himself and his state short on this.

If You Have Health Insurance Today, You Can Keep It (or Not)

During his speech yesterday to the American Medical Association in Chicago, President Obama said not once, but twice that if you have health insurance today and like it, you will be able to keep it under his reform. Shortly afterwards, the congressional budget Office released its initial scoring of the health care bill drafted by Sen. Edward Kennedy (D-MA) and the Senate Committee on Health Education Labor and Pensions (HELP), concluding that it would result in roughly 23 million people losing the insurance they currently have. Oops!

What’s a Trillion Dollars Among Friends?

If you’re Barack Obama, money is no object. The national debt exceeds $11 trillion. We’ve had about $13 trillion worth of bail-outs over the last year. The deficit this year will run nearly $2 trillion. The Congressional Budget Office warns of a cumulative deficit of some $10 trillion over the next decade.

Now Obama-style health care “reform” will add another $1 trillion in increased spending over the same period. And the ultimate cost likely would be higher, perhaps much higher. Reports the Congressional Budget Office:

According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.

These new figures do not represent a formal or complete cost estimate for the draft legislation, for several reasons. The estimates provided do not address the entire bill—only the major provisions related to health insurance coverage. Some details have not been estimated yet, and the draft legislation has not been fully reviewed. Also, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals—which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level—would have both on the federal budget and on the extent of insurance coverage.

Then there is the more than $100 trillion in unfunded Medicare and Social Security benefits.

Just who is going to pay all these bills?

Don’t worry, be happy.

REAL ID Revival Bill Introduced in Senate

Though it’s not yet available, word has it that a bill to revive the REAL ID Act has been introduced in the Senate.

Its sponsors are an unlikely group: Senators Akaka (D-HI), Tester (D-MT), Baucus (D-MT), Carper (D-CT), Leahy (D-VT), and Voinovich (R-OH). REAL ID was dead in the water, but with a name change and a few burrs taken off, these five senators may just give it life once again.

Watch this space for posts as I analyze the bill and the politics. I’ll examine closely the substance of the “PASS ID Act.” I’ll try to figure out how both Senators from Montana - a state that rejected REAL ID flat out - became leaders in the fight to revive it.

More on the politics: As the stars lined up for repealing REAL ID outright, the Senate negotiated a compromise … with nobody. And I’ll look at something everyone is studiously ignoring - whether a national ID (by any name!) would actually do any good for the country!