Hey Buddy, Can You Spare $86 Trillion?

That’s how much Congress would have to put in an interest-bearing account today to cover the gap between the Social Security and Medicare benefits it has promised, and its ability to actually keep those promises.

The trustees of the Medicare and Social Security programs released their annual reports at 3pm today.

A brief rundown:

  • The unfunded liability of the Social Security program grew by 20 percent (from $12.8 trillion to $15.3 trillion) while Congress dithered over reform proposals.
  • But the Social Security gap is still smaller than the unfunded liability of just the Medicare prescription drug program, which weighs in at a robust $16.2 trillion.
  • The total unfunded liability of Medicare topped $70 trillion (It’s actually $70.8 trillion. Round up or down to suit your taste.)
  • The trustees’ estimate of the unfunded liability of the Medicare drug program actually shrank 11 percent from their 2005 estimate of $18.2 trillion. But that reduction was more than offset by a 2 percent increase in the unfunded liability of the physician insurance part of Medicare (from $25.8 trillion to $26.2 trillion) and a 16 percent surge in the unfunded liability of the hospital part of Medicare (from $24.4 trillion to $28.4 trillion).
  • All told, Medicare’s problems are over four times the size of Social Security’s.

    New at Cato Unbound: Can Republicans Stop Thinking Big?

    Former Bush speechwriter and bestselling author David Frum kicks off this month’s edition of Cato Unbound, The GOP and Limited Government: Do They Have a Future Together?,” with a provocative essay considering whether the window of political opportunity has forever closed for the small-government heirs of Goldwater, Reagan, and Gingrich. He is not optimistic:

    [T]he day in which we could look to the GOP to have an affirmative small-government vision of its own has I think definitively passed.

    Over the course of this week Cato Unbound will unveil response essays by Bruce Bartlett, author of Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy; fresh-faced political commentators Ross Douthat and Reihan Salam, authors of a forthcoming book on “Sam’s Club Republicans”; and Cato’s own esteemed executive vice-president, David Boaz. Come for the finely crafted essays this week, but stay for the informal blog chat next week and watch our panelists lock horns (or sagely agree with one another) in real time, blog-style.

    Bush Ignores Hundreds of Laws

    The Boston Globe ran an interesting article yesterday about how President Bush has been aggressively asserting the unconstitutionality of laws enacted by the Congress.
    A few quick points:

    First, there is nothing wrong, per se, with the president expressing the view that an act of Congress is unconstitutional. Congress is not a club of all-knowing philosopher kings. Congress has overstepped the boundaries of its authority quite a bit over the years. We don’t want a president who just passively “goes along to get along” with the politicos on Capitol Hill.

    On the other hand, there would be a real danger were a president to blithely assert the unconstitutionality of a law simply because it puts a check on his power. The Globe lead–that Bush ignores 750 laws–doesn’t do much to inform us as to which is the case with Bush. Is he thwarting the overreaching of the Congress, or is he usurping legislative powers that the Constitution assigned to the Congress? To answer that question, we’d need to look at the laws he’s ignoring on a case-by-case basis.

    I think it’s safe to say that we should worried about the legal and constitutional advice that President Bush has been acting upon since he arrived in Washington.

    Bush and his lawyers certainly pay close attention to matters of executive power – that much is clear. But they don’t seem terribly interested in the rest of the Constitution. What about the Bill of Rights, the provisions that protect the people from both executive and legislative power? There is no indication from the Boston Globe story that Bush has ever chosen to ignore a law because it violates free speech, due process, or the constitutional principle of federalism. That’s a troubling sign. And the fact that Bush hasn’t used his veto a single time to stop the unconstitutional excesses of Congress is inexcusable.

    For a more detailed examination of Bush’s constitutional record, go here.

    McCain: Speaking Freely

    The people who want to impose more restrictions on money in politics often say they are not against free speech.

    No, they say, they simply want to bring about a better balance between free speech and other important values like preventing corruption of government or participation in our democracy. Justice Stephen Breyer of the U.S. Supreme Court is the most well-known advocate of this argument.

    It all sounds so moderate, balanced, and reasonable.

    As it turns out, the most notable and politically powerful advocate of campaign finance restrictions would strike a different balance with free speech – one that is neither moderate, nor reasonable, nor constitutional.

    Sen. John McCain said recently on Imus in the Morning:

    “He [talk show host Michael Graham] also mentioned my abridgement of First Amendment rights, i.e. talking about campaign finance reform….I know that money corrupts….I would rather have a clean government than one where quote First Amendment rights are being respected, that has become corrupt. If I had my choice, I’d rather have the clean government.”

    For McCain, clean government is an absolute value. When it comes to money, laws that prevent corruption of the government thus take priority over all else, including freedom of speech. After all, money is the root of all corruption, and “clean government” is worth any cost, especially if it’s paying for political speech someone like McCain doesn’t want to hear in the first place. Thus the McCain-Feingold law shuts down the speech of businesses, labor unions, and other groups with the tendency to attack incumbents during election season.

    Once again, John McCain reminds us why the U.S. Constitution states rather clearly that the government “shall make no law…abridging freedom of speech.”

    ONDCP’s Lipsticked Pig

    Last February, the Weekly Standard’s Jonathan Last wrote an unfortunate (if familiar) defense of drug prohibition, dubiously titled “Winning the Drug War: America may be doing it quietly, but it’s happening nonetheless.”

    The article reads like dozens of drug war cheerleader articles from the last thirty-five years, claiming that “victory” over illicit drugs is just off the horizon – we need just a little more funding, a little more commitment, and perhaps a bit more wiggle room when it comes to those niggling civil liberties.

    Much of Last’s piece seems to have come straight from Office of National Drug Control Policy and DEA press releases, both of which have a history of presenting a rather distorted view of reality (consider ONDCP’s attempt to link recreational drug use to terrorism, for example, of that the DEA to this day claims on its website that alcohol prohibition “worked”).

    In any case, to see one example of just how fleeting drug war “victories” can be, consider Last’s claims about decreases in world coca supply, allegedly due to ONDCP’s efforts to spray the Colombian countryside with herbicide:

    Earlier this month, a U.S.-government sponsored survey found that contrary to claims from U.S. Drug Czar John Walters, coca production in Colombia is much more widespread and diversified than previously believed (note that in the article, Walters says Colombia’s civil war is “funded by cocaine profits,” ignoring the fact that it’s cocaine’s prohibition in the western world that makes it such a lucrative crop in the first place). Not only that, but coca production is spreading to Bolivia and Peru, too.

    After that survey, federal government agencies dealing with Latin America piled on, accusing the ONDCP of “cherry picking” data and generally ignoring reality in its attempt to win support for its drug interdiction efforts. Last week, Walters was taken to the woodshed by Sen. Charles Grassley, hardly a proponent for reforming the drug laws, for his statistical fudging. Grassley’s criticism led to this wonderful lead from Reuters:

    The U.S. drug czar has been challenged to explain disputed statistics underlying a string of rosy reports on progress in cutting the flow of cocaine from South America, one of which prompted an expert to liken the official numbers to “lipstick on a pig.”

    Criticism of Walters, ONDCP, and U.S. overseas drug policy didn’t end there:

    Neither aerial spraying nor stepped-up efforts to intercept cocaine shipped to the U.S. by land or sea have made a dent on the drug’s easy availability in the U.S.. And apart from temporary spikes, its price has declined steadily since 1979, according to several studies of the illicit market.


    “How does ONDCP reconcile the apparent disparity in the information being reported about cultivation and cocaine price/purity with the trends in cocaine consumption as reported in the National Survey on Drug Use and Health?” the letter asked.

    According to that survey, cocaine is so easily available that, on average, 2,700 Americans are trying it for the first time every day.

    Survey data show that the number of first-time users has run at around one million a year from 2000 to 2004. Figures for 2005, due to be released later this year, are not expected to show a significant change.

    Experts say that statistics on any illegal drug’s first time use are important to track trends - and the trend shows no significant change.

    That survey comes just a couple of years after a Rand Corporation study in Latin America that drew the same conclusions. The Rand study was actually originally commissioned by ONDCP, though Walters’ office then did it all it could to downplay the results when they came back unfavorable to U.S. policy. The UPI obtained a leaked copy of the report in December 2004, and noted:

    Over the last 25 years U.S. policy has tried to attack the war on drugs from a supply-side perspective.


    However, the attempted siphoning of the supply side has lowered street prices and increased the number of incarcerated drug offenders, driving up government spending, without significantly reducing the amount of drug flow, the study’s findings show.

    Data compiled by WOLA show that since 1981 the retail price for 2 grams of cocaine went from $544.59 to $106.54 in 2003. Retail heroin prices mirrored the decline in cocaine prices, falling from $1,974.49 to $361.95 during the period.


    The number of incarcerated drug offenders rose from 45,272 to 480,519 from 1981 to 2002, and government spending on overseas supply control rose from $373.9 million to $3.6 billion from 1981 to 2004.

    Overall, government spending on supply control and the price of cocaine and heroin have had negatively correlated trends, with the price of cocaine decreasing by 32 percent and spending rising by almost 10 percent.

    In other words, the drug war is worse than just an affront to civil liberties and the Bill of Rights, an enormous waste of money, a needless antagonist in our relations with Latin America, and a drain on our criminal justice system – as if all of that weren’t bad enough.

    It’s not working, either.

    Two Very Restrained Cheers for Mexico’s New Drug Law

    Mexico’s Congress has just passed legislation that would decriminalize the possession of small quantities of illegal drugs. If President Vicente Fox signs the legislation (and it appears that he will), Mexico will join the ranks of the Netherlands and several other countries that have abandoned the “zero tolerance” model embraced by the United States. Under the new law, possession of up to 25 milligrams of heroin, 5 grams of marijuana (about four joints) or 0.5 grams of cocaine (about 4 “lines”), for personal use would no longer be a criminal offense.

    That legislation is a step in the right direction. One of more odious features of the war on drugs is the practice of filling the jails with small-time (often recreational) users. But Mexico’s proposed decriminalization measure does not get to the root of the growing problems of drug-related corruption and violence in that society. As I have documented in my book Bad Neighbor Policy: Washington’s Futile War on Drugs in Latin America and more recently in a Foreign Policy Briefing, Mexico Is Becoming the Next Colombia, most of those problems are caused by the enormous black market premium in the illicit drug trade. Unfortunately, Mexican leaders show no willingness to legalize the manufacture or sale of marijuana, cocaine, and other drugs. Indeed, they have argued that the new law will enable law enforcement agencies to devote more resources to supressing trafficking. That means the huge potential profit in the drug trade will persist—and so will the corruption and violence that is tearing Mexico’s society apart.

    The new law is a small step in the right direction. But Mexico (and other countries) need to abandon the entire prohibition model to produce truly meaningful benefits.

    Education and the Constitution

    Does the Wall Street Journal think the Constitution is suspended on the weekends? Two weeks ago on Saturday, April 15, the Journal claimed on its front page that “the Constitution guarantees a public-school K-12 education for every child in the U.S.” Then this past Saturday, April 29, the Journal’s usually reliable editorial page deplored the “states’ rampant noncompliance with the 2002 No Child Left Behind Act” and the “lax enforcement of NCLB” by Education Secretary Margaret Spellings.

    In both cases the Journal seems to have forgotten that the U.S. Constitution grants no authority over education to the federal government. Education is not mentioned in the Constitution of the United States, and for good reason. The Founders wanted most aspects of life managed by those who were closest to them, either by state or local government or by families, businesses, and other elements of civil society. Certainly, they saw no role for the federal government in education.

    Once upon a time, not so very many years ago, Congress understood that. The History of the Formation of the Union under the Constitution, published by the United States Constitution Sesquicentennial Commission, under the direction of the president, the vice president, and the Speaker of the House in 1943, contained this exchange in a section titled “Questions and Answers Pertaining to the Constitution”:

    Q. Where, in the Constitution, is there mention of education?

    A. There is none; education is a matter reserved for the states.

    Not only is the Constitution absolutely silent on the subject of education, but the U.S. Supreme Court has also refused to recognize any right to a taxpayer-funded education. As Timothy Sandefur, author of Cato’s forthcoming book Cornerstone of Liberty: Property Rights in 21st-Century America, points out, in San Antonio Independent School Distict v. Rodriguez (1973), the Court specifically declared that education, though important, “is not among the rights afforded explicit protection under our Federal Constitution. Nor do we find any basis for saying it is implicitly so protected.” Nine years later, in Plyler v. Doe, the Court held that if a state chooses to give such an education to citizens, it must also offer it to the children of illegal aliens. But it has consistently recognized that taxpayer-funded education is a privilege, and not a right.

    And as I wrote in the Cato Handbook for Congress a few years ago, the argument against federal involvement in education

    is not based simply on a commitment to the original Constitution, as important as that is. It also reflects an understanding of why the Founders were right to reserve most subjects to state, local, or private endeavor. The Founders feared the concentration of power. They believed that the best way to protect individual freedom and civil society was to limit and divide power. Thus it was much better to have decisions made independently by 13–or 50–states, each able to innovate and to observe and copy successful innovations in other states, than to have one decision made for the entire country. As the country gets bigger and more complex, and especially as government amasses more power, the advantages of decentralization and divided power become even greater.

    And that’s why it was a mistake to further centralize the control of our local schools in the No Child Left Behind Act. And why our friends at the Wall Street Journal, who are usually committed to the virtues of federalism and decentralization, should be applauding the several states’ resistance to federal intrusion, not calling for a crackdown.