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Individual Liberty, Free Markets, and Peace
Updated: 13 min 53 sec ago

Where's the Annual Social Security Report?

Mon, 07/07/2014 - 12:13

Jagadeesh Gokhale

House Speaker John Boehner (R-Ohio) has announced his intention to sue President Obama for “failure to faithfully follow the nation’s laws” by taking extra-legal executive actions in some areas and failing to execute the laws in other areas such as immigration, judicial appointments, health care, foreign affairs, and so on.

One area where he’s failing to execute the law is Social Security. For instance, the President and his leadership have repeatedly failed to publish on time the Annual Report of the Social Security Trustees, the yearly description of the program’s finances and future outlook. The legal deadline for its publication is April 1. We’re now more than three months past that deadline and there’s no indication that it will appear soon.

Social Security’s trustees include the secretaries of the Treasury, Labor, and Health and Human Services, and the (currently acting) commissioner of the program. There are also two public trustees, nominated by the President and confirmed by the Senate. (Of those last two, at least one must be from the opposing political party.)

It’s well known that Social Security benefits comprise the largest share of income for a majority of the program’s beneficiaries—incomes that they could not do without. So the Trustees’ Report is a crucial document. The information it contains is important to millions of stakeholders—retirees, disability beneficiaries and applicants, financial planners, workers nearing retirement, and others.

Policymakers need to know this information so they can make timely decisions intended to ensure that the program remains on a sound financial footing. For example, the 2013 Report (which didn’t appear until the end of May) estimated that the Disability Insurance (DI) Trust Fund will be exhausted and the program will be unable to pay full benefits at some point in 2016. Not much time remains for lawmakers to consider and enact sensible reforms to DI—and the clock is ticking.

No doubt, there could be valid reasons for publication delays. New information about the program’s financial status may not become available in a timely manner, and the development of new estimates using updated technical methods may take longer than anticipated. However, there are professional cadres of actuaries and economists dedicated to completing this task. They should, more often than not, anticipate such issues, and instances of publication delay should be the exception rather than the rule.

The table below notes the report’s publication dates during the Bill Clinton, George W. Bush, and Obama (to date) presidencies. It shows that the Obama administration has always been consistently and exceptionally late in issuing the report. In only one of the last six instances has Obama’s designees managed to get the report out within one month after the statutory deadline. In contrast, George W. Bush’s administration released five of its eight annual reports on time and always released the report within a month of the deadline; Bill Clinton released three of his eight reports on time and usually managed to issue the report within a month of the deadline. President Obama’s consistently tardy publication record is difficult to attribute to extenuating circumstances.

Annual Report of the Social Security Trustees:  Publication Date History Year Publication: Day and Date Timely/Late President 2014 ? Late Barack Obama 2013 Friday, May 31, 2013 Late Barack Obama 2012 Monday, April 23, 2012 Late* Barack Obama 2011 Friday, May 13, 2011 Late Barack Obama 2010 Thursday, August 05, 2010 Late Barack Obama 2009 Tuesday, May 12, 2009 Late Barack Obama 2008 Tuesday, March 25, 2008 Timely George W. Bush 2007 Monday, April 23, 2007 Late* George W. Bush 2006 Monday, May 01, 2006 Late* George W. Bush 2005 Wednesday, March 23, 2005 Timely George W. Bush 2004 Tuesday, March 23, 2004 Timely George W. Bush 2003 Monday, March 17, 2003 Timely George W. Bush 2002 Tuesday, April 09, 2002 Late* George W. Bush 2001 Monday, March 19, 2001 Timely George W. Bush 2000 Thursday, March 30, 2000 Timely Bill Clinton 1999 Tuesday, March 30, 1999 Timely Bill Clinton 1998 Tuesday, April 28, 1998 Late* Bill Clinton 1997 Thursday, April 24, 1997 Late* Bill Clinton 1996 Wednesday, June 05, 1996 Late Bill Clinton 1995 Monday, April 03, 1995** Timely Bill Clinton 1994 Monday, April 11, 1994 Late* Bill Clinton 1993 Wednesday, April 06, 1993 Late* Bill Clinton * Report published within 1 month after the legal deadline of   April 1st.  **April 1st was a Saturday.

There are other instances of slippage by the Social Security Administration in executing the program’s laws faithfully. For instance, two members of the House Subcommittee on Energy Policy, Health Care and Entitlements—Reps. James Lankford (R-Okla.) and Jackie Spier (D-Calif.)—recently issued a stern letter to Social Security’s acting commissioner, Caroline Colvin, charging the agency with consistently failing to “confront the problems of rapidly rising disability rolls” and “abdicating its responsibility to protect the truly disabled and taxpayers from out-of-control ALJs (Administrative Law Judges) who refuse to follow the law.”

Such failures are symptomatic of a failing presidency. Multiply the likelihood of poor compliance with the law across all government departments—you be the judge on whether that’s happening—and President Obama’s historic low poll ratings (currently in the low 40s) seem surprisingly high. It brings to mind an important sound-bite from the 2008 presidential campaign: Hillary Clinton’s question about who would be more competent to answer a 3 AM phone call on a policy emergency. The White House phones must be ringing constantly, like church-bells.

Categories: Policy Institutes

Tax Notes Praises Law-Review Article that Got Halbig Cases Rolling

Mon, 07/07/2014 - 12:09

Michael F. Cannon

A panel of the U.S. Court of Appeals for the D.C. Circuit, which is often referred to as the second-highest court in the land, is expected to rule any day now on Halbig v. Burwell, a legal challenge that “may actually crush,” “kill,” and “wreck” the Patient Protection and Affordable Care Act, a.k.a. Obamacare.

The tax-law journal Tax Notes has chosen the law-journal article that got Halbig and similar cases rolling – Jonathan H. Adler and Michael F. Cannon, Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA, Health Matrix: Journal of Law-Medicine 23, No. 1 (2013): 119-195 – as one of “the 10 law most noteworthy law review articles on employee benefits and executive compensation issues published in 2013 that a broad audience of employee benefits professionals would find relevant and worthy of attention.” Tax Notes calls the Adler-Cannon article “innovative and thought provoking” and one that “practitioners should have read” in 2013.

To read the Adler-Cannon Health Matrix article, click here. For more on the Halbig cases, click here.

Categories: Policy Institutes

Subsidies for the Seacoast

Mon, 07/07/2014 - 09:52

Chris Edwards

A June 24 article in the Washington Post looked at sea level rise in North Carolina. Unfortunately, the article followed a common template of portraying a battle of science vs. conservative politics and environmentalism vs. capitalism. But as I noted here about water and drought in the West, liberals and libertarians can agree on the benefits of cutting anti-environmental subsidies.

My Washington Post letter on Friday pointed to the newspaper’s omission of the government subsidy angle:

There is disagreement about rising sea levels on the North Carolina coast, but there is one reform that all policymakers should support: ending subsidies that promote building in high-risk places. For decades, the National Flood Insurance Program has allowed people on the sea coasts to buy insurance with premiums less than half the market level, and the program does not cut off people even after multiple floods. Meanwhile, the Army Corps of Engineers continually rebuilds beaches, thus encouraging development in areas that nature is trying to reclaim. Ending this wave of subsidies would be sound fiscal and environmental policy.

Categories: Policy Institutes

America’s Relationship with Poland: Military Alliance or Social Club?

Mon, 07/07/2014 - 09:03

Doug Bandow

Polish Ambassador Ryszard Schnepf has a tough job: making nice with American officials after his boss in Warsaw, Foreign Minister Radoslaw Sikorski, indiscreetly denounced Poland’s alliance with America as “worthless.”  The ambassador responded to my earlier article and made a convincing case that Poles and Americans are friends.  He had less success in explaining why Washington should extend a security guarantee to Warsaw, putting U.S. citizens at risk in any the war that might result.

NATO is a military alliance.  But as I point out in my latest article in National Interest online, “in the aftermath of the Cold War American policymakers treated the organization like a venerable social club.  When a bunch of old friends showed up after the Iron Curtain collapsed, the decent course seemed to be to invite them to join.”

Notably absent from the discussion at the time was consideration of the most important characteristic of military alliances:  a willingness to go to war.  In the euphoria of the moment that possibility was simply assumed away. 

However, Vladimir Putin’s Crimean adventure set off fevered demands from NATO’s newer members for the alliance to return to its old purpose.  Polish officials, including Minister Sikorski, have been particularly insistent that the U.S. put its full military faith and credit on the line for Poland. 

The advantage of this approach for Poland is obvious.  But the benefits for America are not.  “Friendship and mutual trust,” cited by Ambassador Schnepf, are not the same as strategic interest. 

There’s a wonderful history, of course, with such celebrated figures as “Kosciuszko and Pulaski who aided Washington in the American Revolution,” noted the ambassador.  But the memory is no justification for Washington going head-to-head with a nuclear power, if necessary, more than two centuries later. 

More recently Polish personnel have served “responding to the challenges faced by the global community, such as humanitarian disasters or terrorist threats.”  Presumably Warsaw took those stands to serve the “global community,” and not as a pay-off for an American defense guarantee. 

If Poland did act for more self-interested reasons, the U.S. got by far the worse deal.  Warsaw provided marginal aid in wars that America should not have fought.  In exchange Washington is supposed to prepare for global war with Russia. 

Yet the Polish government seems to assume a sense of entitlement.  Minister Sikorski and his colleagues insist on concrete “reassurance.”  At the same time, Poland won’t sacrifice to build up its own military. 

Ambassador Schnepf proudly announced that “Polish authorities pledged to spend 2% of GDP on defense expenditures, thus being one of very few Alliance members to reach this NATO benchmark.”  That’s not much of a standard, however.

Despite enjoying rapid economic growth, Warsaw has made no extra effort to improve its defenses as a “front-line state.”  Instead of doing more, Poles want America to do the job for them, by establishing a military tripwire at their border.

Which leaves the ambassador to argue, who cares about strategic importance?  Washington should guarantee Poland’s security because the Poles are nice people.  Of course, it’s always easier to be generous with other people’s lives and money, especially on your own people’s behalf.

Moreover, there are lots of nice people in the world.  But that’s no reason to turn Washington into the guardian for them all.  The U.S. should maintain alliances only when doing so makes Americans safer.  Backing Poland against Russia does not. 

There is much to appreciate about Polish-American ties over the years, even centuries.  So, too, should Americans sympathize with the fact that Poland is located in a bad neighborhood.

However, neither point is an argument for defending Poland.  The promise to go to war should be limited to cases where the American people have fundamental, even vital interests at stake.

Categories: Policy Institutes

The End of Forced Union Dues?

Mon, 07/07/2014 - 09:01

Jason Bedrick

Defenders of the status quo in education have long used lawsuits to protect themselves from competition and force state legislatures to increase funding. Lately, rather than merely play legal defense, some education reformers have turned to the courts to push reform. In some cases, the long-term prospects of positive reform through litigation are slim, even when the court’s ruling is favorable.

However, one lawsuit currently making its way through the court system has the potential to remove a major obstacle to reform: compulsory union dues. In 19 states, would-be government school teachers are forced either to join the teachers union or to remain a non-member but pays dues anyway—sometimes more than $1,000 per year.

The unions contend that these compulsory dues are necessary to overcome the free rider problem (non-union members may benefit from the collectively-bargained wages and benefits without contributing to the union), but plaintiffs in Friedrichs v. California Teachers Association point out that numerous organizations engage in activities (e.g. – lobbying) that benefit members and non-members alike without giving such organizations the right to coerce non-members to pay. That’s especially true when the individuals who supposedly benefit actually disagree with the position of the organization. Indeed, the plaintiffs argue that the compulsory dues violate their First Amendment rights because collective bargaining is inherently political:

Current federal law allows union workers to opt out of the political portion of union dues — for California teachers that usually amounts to between 30 and 40 percent of the total dues automatically taken from their salaries each year — but in closed-shop states such as California, workers cannot opt out of the rest of the dues, predominantly designated for collective bargaining. However, the plaintiffs argue that collective bargaining is inherently political, involving such debated issues as school vouchers and teacher tenure.

“Since my first years of teaching, I’ve been bothered by the fact that a large portion of my mandatory dues goes to pay for political endeavors of a union whose political positions have nothing to do with my job and have nothing to do with improving education for me, for my students, or for their parents,” Friedrichs tells me. “In fact, often these policies have negative effects.” 

The legal justification for compulsory union dues rests primarily on a 1977 U.S. Supreme Court decision, Abood v. Detroit Board of Education. But as Andy Smarick noted last week, the recent majority opinion in Harris v. Quinn displayed a willingness to revisit and perhaps overturn Abood:

The Abood Court’s analysis is questionable on several grounds. Some of these were noted or apparent at or before the time of the decision, but several have become more evident and troubling in the years since then. 

For example:

Abood failed to appreciate the difference between the core union speech involuntarily subsidized by dissenting public-sector employees and the core union speech involuntarily funded by their counterparts in the private sector. In the public sector, core issues such as wages, pensions, and benefits are important political issues, but that is generally not so in the private sector. 

Justice Alito also wrote that “preventing nonmembers from freeriding on the union’s efforts” is a rationale “generally insufficient to overcome First Amendment objections.”

The Friedrichs case, resting as it does on a First Amendment objection based on the premise the collective bargaining in the public sector is inherently political, appears to match perfectly the majority’s objections to Abood in Harris. It very well may spell the end of compulsory public sector union dues.

Categories: Policy Institutes

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