July 29, 2020 1:44PM

Why Not More Private School Closures? Increasing Evidence Suggests They’re Offering In‐​Person Education Many Families Want

Last week I contemplated why we weren’t seeing more permanent private school closures due to COVID-19. Since I wrote that we have seen no more COVID‐​connected closures—the last one was announced on July 14—and the count on our tracker remains at 107 schools. Reports from around the country are increasingly pointing to one possible reason for the relative dearth of closures: As more school districts declare that they will open with online‐​only or just partially in‐​person delivery, private schools are gaining families who want face‐​to‐​face schooling.

Permanent Private School COVID Closures by Date

Here’s a quick reminder of the four possible reasons I came up with last week for unexpectedly low closure numbers. Read the original post for longer explanations of each one:

  1. Too Early: Maybe schools haven’t made final decisions yet and many more closures are coming
  2. Gaining Students: Maybe revenue hits from donations lost to closed church services, and families suffering economic hardships and having to withdraw, have been offset by new families looking for in‐​person, and maybe smaller, schooling
  3. Off the Radar: Our tracker may be missing closures, especially of smaller, more independent schools
  4. Paycheck Protection Program: This federal program may have helped to stave off insolvency for many schools

It is possibility number 2 for which we are seeing increasing support. As I linked to last week, we have seen reports from Nevada, California, and Minnesota of parents turning to private schools in search of in‐​person education. Since then we have seen reports from New York, Texas, and the Washington, DC area. This is all anecdotal – we don’t have nationally representative data – but it is consistent with the relatively low closure numbers we have been seeing.

Not that COVID-19 hasn’t inflicted damage on private schooling. We have only been able to find long‐​term tracking on annual private‐​school closures for Catholic schools, but it suggests that this is going to be a tough year, at least for that subset of private schools. The US Conference of Catholic Bishops is predicting that up to 150 Catholic schools could close this year, which would be the highest total since 2012. Our tracker shows 90 Catholic schools closing at least in part due to experienced or anticipated COVID-19 financial problems. Assuming many of those schools would have remained in business absent COVID-19, the virus does appear to be taking a toll on private schools.

COVID-19 is hurting private schools. But perhaps due to new families moving to them, it increasingly appears that the toll will be less punishing than I originally feared.

July 29, 2020 1:23PM

House Democrats Drop DHS Funding From Omnibus Appropriations Bill

Late yesterday afternoon, the House Rules Committee published the rule for debate on the omnibus spending bill (HR 7617) to be considered this week. Significantly, and almost certainly in direct response to events in Portland and elsewhere, the rule strikes Division E (the DHS funding section) from the bill. My Cato colleague (and fellow House staff veteran) Jeff Vanderslice noted that it was the Manager’s amendment offered by outgoing House Appropriations Committee Chairwoman Nita Lowey (D-NY) that was the vehicle for the change.

In my own review of the 340 amendments to the bill, I noticed that Amendment #106 to Division B (Commerce, Justice, Science and Related Agencies), offered by Representatives Ted Lieu (D-CA), Emanuel Cleaver (D-MO), Alexandria Ocasio‐​Cortez (D-NY), Rashida Tlaib (D-MI), and Debra Haaland (D-NM) would ban the use of funds for the Department of Justice’s Operations Legend and Relentless Pursuit–two alleged crime‐​fighting initiatives that some believe are simply political stunts and potential cover for anti‐​protester operations.

It’s unlikely House Democrats will elect to not pass any DHS appropriations bill this year, even though such a move is long overdue–as events in Portland and elsewhere have underscored. But putting further DHS money on ice can at least create leverage for potential major legislative changes…assuming the House Democratic leadership is actually serious about stopping constitutional rights violations by DHS personnel.

July 29, 2020 1:21PM

How Many Americans Get Subsidies?

This year is an extraordinary one for government subsidies. More than 150 million people received $1,200 stimulus checks. More than 25 million people have been receiving the $600 a week boost in unemployment benefits. Almost five million businesses and nonprofits have received aid through the PPP program. All this and other recession‐​related spending is imposing trillions of dollars of debt—and ultimately taxes—on younger working Americans.

Even during normal times, many Americans are hooked on federal payments of one type or another. The chart below shows the number of recipients of some major subsidy and benefit programs. As a point of reference, there are about 129 million households in the nation.

The data comes from Table 21–3 in the federal budget here. Some of the items are contractual obligations (such as employee pensions and payments to veterans), but most of the items are subsidies that can be, and should be, cut or repealed to fix our massive federal debt problem.

Aside from these programs, there are 2,000 or more other federal subsidy programs for state and local governments, businesses, nonprofits, and individuals. (These are described in a 3,709-page pdf available here). Over the decades, both the size and scope of federal subsidies has expanded, attaching ever more individuals and organizations to the government’s teats. Each program undermines the private economy, generates a bureaucracy, and spawns a web of regulations that micromanage society and reduce freedom.

There is concern about declining free speech in America, and government handouts add to the problem. Individuals and organizations that get hooked on subsidies essentially become tools of the state. They lose their independence and may shy away from criticizing the government and its many failures.

When the economy recovers from the current crisis, policymakers should turn their attention to cutting subsidies and freeing the nation from top‐​down cash and controls from Washington.


The figure for Medicare is for HI benefits.

Cato intern Camila Goris assisted with this post.

July 28, 2020 5:40PM

DHS’s Latest DACA Memo Doesn’t Make Sense

The Department of Homeland Security (DHS) released a new memo to curtail the Deferred Action for Childhood Arrivals (DACA) program. This program has allowed (previously) unauthorized immigrants who grew up in the United States since at least 2007 to stay and receive work authorization. The memo responds to the Supreme Court’s decision last month to block the government’s September 2017 attempt to wind down the program. Here are important facts to understand about this latest memo.

Same as 2017 rescission: As a practical matter, this memo accomplishes many of the same aspects of the September 2017 memo: stop new enrollees, stop travel authorization, and provide for a limited renewal. In September 2017, DACA enrollees had one month to apply to renew for up to 2 years (as has been the case throughout the program). This time, they may only apply for 1‐​year renewals, but there is no explicit cutoff for when the renewals will stop being considered. A cynic might expect a determination about November 4, 2020, which would mean that current participants would be granted a much shorter “wind‐​down” than the last time.

New messaging: While it’s functionally the same, the new DHS memo does not describe itself as a rescission. It says it’s enacting “changes to the DACA policy” while (possibly temporarily) suspending certain aspects of it (new enrollees/​travel authorization). During this time, the government states that it will consider whether to permanently end the program. Again, a reasonable person would expect that the government will conclude this new evaluation sometime in November 2020.

New justifications: The September 2017 memo focused entirely on legal concerns with the policy. The “concerns” raised in this new memo are entirely policy focused. In other words, it’s claiming that DACA might just be a bad idea, even if it’s not illegal. This is a profound shift from the original DACA memo.

New position toward DACA: The government is now unsure whether it wants to end DACA. The government states that “fully rescinding the policy would be a significant administration decision that warrants additional careful consideration.” This is surprising to say the least. Since September 2017, the government has argued that it desperately wanted to end DACA to abide by the law, avoid litigation, and (later on) to further certain policy goals. Will courts accept this sudden reversal or will they conclude that the government is again trying to hide its real reasons for changing DACA?

New treatment of pending new applicants: In the September 2017 memo, the government stated that it would process all pending initial DACA applications (meaning for people who have never had DACA before). In this latest memo, the government will deny all such applications. This is incredibly unfair, particularly since these applicants will mainly be from immigrants who came at the youngest ages (including as young as one‐​year‐​old) because applicants needed to be at least 15‐​years‐​old in order to apply, so only the youngest applicants had no chance to apply before September 2017.

Ignoring the Supreme Court: On June 18, the Supreme Court had explicitly affirmed lower court decisions that stated that the government had to accept new DACA enrollees and travel authorizations, which it hadn’t done since September 2017. A Maryland district court then issued a ruling on July 17 requiring the government to abide by the Supreme Court’s decision. Yet the memo admits, “Since the issuance of the Supreme Court’s decision, DHS has, on an interim basis, generally held properly submitted initial requests for DACA in anticipation of potential policy changes.”

The same Maryland district court recently found that in fact, DHS was denying properly submitted new applications and was asserting erroneously on its website that such applications could not be accepted. In other words, it refused to issue DACA to these applicants, despite the Supreme Court and the district court orders. It now says that it will deny all these initial applications, which it claims are based on “the fortuity of when DHS received the request within a short period of uncertainty” (i.e. after the Supreme Court ruled in favor of those applicants). Will courts accept this? We will find out soon.

Considering but not deciding the issue: The government says it is “considering anew the DACA policy” as suggested by the Supreme Court. Yet it hasn’t actually fully considered the question or come to any actual conclusions about it, yet it is still making decisions to curtail or wind down the program. Will courts accept changes where the agency itself is saying it hasn’t fully considered the questions at issue? We will find out.

Suspect concerns: The policy “concerns” for suspending DACA are suspect. To begin with, DHS claims that DACA could cause more illegal immigration, particularly by children. But it provides no evidence for that because there isn’t any evidence. Indeed, as I have written before, the theory that DACA spurred a rush migrants to the border fails to explain any of the facts. DACA applicants are mainly from Mexico. The children came from Central America. DACA started in June 2012. The rush of children started in January 2012.

The memo asserts that DACA “may tilt the scales in deciding which aliens should receive deferred action.” Yet DACA doesn’t discriminate against non‐​DACA applicants for deferred action. It doesn’t undermine their applications in any way. This explanation is basically like saying that DHS objects to the DACA policy because it doesn’t want Dreamers to receive deferred action. It’s incoherent. Will courts accept a memo based on an incoherent claim?

DHS asserts against all common sense that “rescinding DACA entirely may well create a more pressing need for Congress to decide whether it wants to address this issue.” Not only do we now have ample evidence that ending DACA won’t force Congress to act, DHS’s memo—by laying out policy, not legal arguments against DACA—makes it less likely that Congress will act. This is because DACA opponents in Congress will now have more ammunition to make their case against action.

July 28, 2020 1:58PM

Last Century’s Transportation Ten Years from Now

With a presidential candidate known as Amtrak Joe, a House Transportation & Infrastructure Committee proposal to triple funding for intercity passenger trains, and a proposal before Congress to spend $205 billion on high‐​speed trains, it is likely that increased subsidies to Amtrak and faster trains will be promoted in the near future. That makes it worthwhile to look at how the last major push to spend money on passenger trains worked out.

In 2009 and 2010, President Obama persuaded Congress to spend $10.1 billion on “high‐​speed intercity passenger rail” projects. Obama used other federal funds to bring this up to $11.5 billion, all of which was partially matched by at least $7 billion in state and local funding. After ten years, at least some of those projects must be working, right?

Of course not. I recently reviewed the ten major projects that were funded with this money, ranging from $116 million spent in Maine to $4 billion in federal money and a total of at least $10.5 billion from all sources spent on California high‐​speed rail. The results are even worse than I expected.

A comparison of Amtrak’s 2009 timetables with the timetables for 2019 shows that all of this money produced almost no results. In one corridor, trains were speeded up from 40.7 to 45.0 miles per hour. In another corridor, frequencies were increased from two to four trains per day. Finally, new train service was provided to two towns in Maine whose combined population is under 30,000 people.

That’s it. Average speeds in the Maine corridor actually declined, as they did in two other corridors. The California high‐​speed rail project, of course, will probably never be completed. Amtrak spent $1.6 billion on the money pit known as the Northeast Corridor, which has a $52 billion maintenance backlog, so the money didn’t lead to any real improvements.

One of the more tragic results was in the state of Washington, which accepted $800 million to speed up and increase the frequencies of trains between Seattle and Portland. The speed‐​up wasn’t going to result from faster trains but from a new, shorter route. Although Congress had passed a law requiring the installation of positive train control, the state didn’t bother. On the first day of running trains on the new route, the engineer, unfamiliar with the route, missed a speed limit sign and crashed the train, killing three people. Today, trains in the corridor are no faster or more frequent than they were in 2009.

Personally, I love passenger trains, but the fact is that they are obsolete. They are expensive, requiring large amounts of infrastructure which must be precisely maintained at great expense. They are inflexible, so if travel patterns change they are left in the dust. They take years to plan and build, and no one really knows what transportation will be needed a year from now much less a decade from now. Unlike highways and airports, high‐​speed trains could never be expected to pay for themselves. Whether high‐​speed or conventional‐​speed, passenger trains are a technology we can live without.

In the end, it is pretty clear that this $18 billion was completely wasted, at least as far as improving passenger trains goes. That won’t be surprising to critics of megaprojects, but it should give pause to those who think that spending billions or trillions on an obsolete form of travel will improve the quality of life in America. For a complete review of all ten corridors, see my policy brief.

July 28, 2020 1:45PM

The New Deal and Recovery, Part 6: The National Bank Holiday

"The public plainly showed that it recovered from the fear and hysteria which characterized the last few days before the banking holiday was proclaimed." (The New York Times, March 14th, 1933.)

During the opening days of March, 1933, the U.S. economy resembled a stricken body slowly bleeding out, its organs failing one by one. The Federal Reserve System was hemorrhaging gold, and entire state banking systems were shutting down one after another. If the economy was to survive and recover, FDR had first to staunch the bleeding, and then to arrange for a transfusion. Here I explain how he managed the first of these steps.

Read the rest of this post »
July 27, 2020 10:12AM

PACT Act Does More Harm than Good

The bipartisan, process oriented “Platform Accountability and Consumer Transparency Act” joins a recent parade of Section 230 reform proposals. Sponsored by Sens. Brian Schatz (D-HI) and John Thune (R-SD), the PACT Act proposes a collection of new requirements intended to optimize social media platforms’ governance of user speech. These government mandated practices for handling both illegal speech and that which merely violates platform community standards would upset delicate, platform specific balances between free expression and safety. While more carefully constructed than competing proposals, with provisions actually tailored to the ends of accountability and transparency, the bill threatens to encumber platforms’ moderation efforts while encouraging them to remove more lawful speech.

The PACT Act would establish a process for removing illegal speech, giving platforms 24 hours to remove content that deemed illegal by a court. A company that fails to act would lose Section 230’s protections against liability. Such protections are generally thought essential to these companies. Leaving decisions of legality to the courts is important, it preserves democratic accountability and prevents platforms from laundering takedown demands that wouldn’t otherwise pass legal muster. Under Germany’s NetzDG law platforms must remove “manifestly unlawful” content within 24 hours or risk steep fines, a set of incentives that have encouraged the removal of legal speech on the margins.

The bill’s proposed process for removal would be improved by the addition of a counter‐​notice system, more specific illegal content identification requirements, and a longer takedown window to allow for either user or platform appeal. Still, it is a broadly reasonable approach to handling speech unprotected by the First Amendment.

The breadth of covered illegal content is somewhat limited, including only speech “determined by a Federal or State court to violate Federal criminal or civil law or State defamation law.” This would exclude, for instance, New Jersey’s constitutionally dubious prohibition on the publication of printable firearms schematics.

While the legal takedown mechanism requires a court order, the bill’s requirement that platforms investigate all reports of community standards violations is ripe for abuse. Upon receiving notice of “potentially policy‐​violating content,” platforms would be required to review the reported speech within 14 days. Like law enforcement, content moderators have limited resources to police the endless flow of user speech and must prioritize particularly egregious or time sensitive policy violations. Platform‐​provided user reporting mechanisms are already abused in attempts to vindictively direct moderators’ focus. Requiring review (with a deadline) upon receipt of a complaint would make abusive flagging more effective by limiting moderators’ ability to ignore bad‐​faith reports. Compulsory review will be weaponized by political adversaries to dedicate limited platform enforcement capacity to the investigation of their rivals. Community standards can often be interpreted broadly; under sustained and critically directed scrutiny even broadly compliant speakers may be found in breach of platform rules. Moderators, not the loudest or most frequent complainants, should determine platform enforcement priorities. While the bill also mandates an appeals process, this amounts to a simple re‐​review rather than an escalation and will at best invite an ongoing tug of war over contentious content.

Some of the bill’s components are constructive. Its transparency reporting requirements would bring standardization and specificity to platform enforcement reports, particularly around the use of moderation tools like demonetization and algorithmic deprioritization. This measure would formalize platforms’ hitherto voluntary enforcement reporting, allowing for better cross‐​platform comparisons and evaluations of disparate impact claims. Beneficent intentions and effects aside, as requirements these reporting standards would likely raise compelled speech concerns.

However, other aspects of the bill are sheer fantasy in the face of platform scale. PACT would require platforms to maintain “a live company representative to take user complaints through a toll‐​free telephone number,” during regular business hours. If in a given day even a hundredth of a percent of Facebook’s 2.3 billion users decided to make use of such an option, they would generate tens of thousands of calls. In the early days of Xbox Live, Microsoft maintained a forum to answer user moderation complaints. The forum was so inundated with unreasonable and inane questions that the project was later abandoned. While Microsoft may have incidentally provided some valuable civic education, other platforms should not be required to replicate its Sisyphean efforts.

xbox screenshot

Provisions drafted without regard for the demands of scale will fall hardest on small firms trying to scale, hindering competition. Parler is a conservative alternative to twitter with 30 employees and 1.5 million users as of June. It’s large enough to lose the bill’s small business exemption (applying to services with less than a million monthly users or visitors) but not large enough to dedicate employees to call‐​center duty or review all reports of policy violations within 14 days.

There is a real danger that the bill may be treated as a solution to perceived problems with Section 230 simply because it is less radical or more thoughtfully drafted than competing proposals for reform. The PACT Act may be better than other proposed modifications, but that doesn’t make it, on net, an improvement on the status quo. While bill would increase the transparency of moderation, its impositions on policy enforcement and appeals processes will create more problems than they solve. In heaping new demands on complex moderation systems without regard for platform constraints, the PACT Act places a thumb on the scale in favor of removal while creating new avenues for abuse of the moderation process.