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Gene Healy

Today, six months after President Obama unilaterally launched our latest war in Iraq, five months after he expanded the war to Syria, four months after his administration thought up a name for the war, and three months after he promised to go to Congress for authorization, the president sent congressional leaders a draft “Authorization for the Use of Military Force against the Islamic State of Iraq and the Levant”—along with a message insisting that “existing statutes provide me with the authority I need” to wage war anyway.

Better late than never? Maybe not: as I explain in my “Reclaiming the War Power” chapter in Cato’s new monograph “Policy Priorities for the 114th Congress,” retroactive authorization might be worth it as part of a package deal that sunsets the 2001 AUMF and imposes new barriers to “mission creep” in the war against ISIS. The Obama AUMF does neither.

As drafted, the president’s ISIS AUMF:

1. Does not impose geographic restrictions on the use of military forces (…thus a war that began with the placeholder Pentagon designation “Operations in Iraq and Syria” could easily expand beyond its current two-country theater);

2. Does not include firm limitations on ground combat operations (…unless you think barring “enduring offensive ground combat operations” is a workable and enduring limitation);

3. Does not preclude the war’s expansion to “associates of associates” of ISIS (… in fact, the Obama AUMF’s “associated forces” provision contains a broader delegation than did the 2001 AUMF, which doesn’t contain any such provision…);

4. Does not sunset the 2001 AUMF; and

5. Does not clarify application of the 2001 AUMF to the ISIS fight (…which risks leaving any limits it imposes susceptible to evasion by a president invoking the earlier resolution).

What little congressional debate we’ve seen so far on the president’s new war hardly smacks of “Profiles in Courage.” Still, the draft AUMF approved by the lame-duck Senate Foreign Relations Committee last December, flawed as it was, made for a far better starting point. It imposed a three-year sunset on the 2001 AUMF, applied new transparency requirements, and at least tried to provide limits on ground combat beyond a few flexible adjectives. If Congress is going to retroactively authorize the president’s latest war, they ought to reclaim some of the control they’ve ceded, not blithely delegate still more power. As I argue in greater detail here, “the 114th Congress should pick up where the SFRC left off, and impose additional limits on presidential authority.” Adopting the Obama AUMF as-is would amount to signing another blank check.

Julian Sanchez

A couple weeks ago, I had a brief tour of the Department of Homeland Security’s National Cybersecurity and Communications Integration Center, which probably isn’t quite as snazzy as U.S. Cyber Command’s Star Trek–inspired bridge, but looks more or less like the movies have programmed you to expect: A long wall filled with enormous screens displaying maps with each state’s self-assessed “cyber threat level”; the volume of traffic to various government networks, and even one for NCCIC’s Twitter feed. It’s not clear that this setup serves much functional purpose given that the analysts working there are already using three-monitor workstations, but let’s face it, taking tour groups reared on Hollywood’s version through a non-descript office would be a little anticlimactic.  Which is to say, while the folks there are clearly doing some useful work, there’s an element of theater involved.

So too, it seems to me, with our political approach to cybersecurity more generally. The Washington Post reported Tuesday that the Obama administration plans to create a new Cyber Threat Intelligence Integration Center (CTIIC) within the Office of the Director of National Intelligence, which will join NCCIC and USCYBERCOM, as well as an array of private ISACs (Information Sharing and Analysis Centers) and CERTs (Computer Emergency Response Teams) on the digital front lines.  If firewalls made of acronyms could keep malware out, we’d be in fantastic shape.

The immediate reaction from both policy and security experts could best be described as “puzzled.”  After all, for several years we’ve been told that the Department of Homeland Security plays the lead role in coordinating the government’s cybersecurity efforts, and isn’t information sharing and integration pretty much what the NCCIC is supposed to be doing? That’s what it says on the tin, at any rate.  What, exactly, is supposed to be the advantage of spinning up an entirely new agency from scratch to share that mission?  Why would you house it in ODNI if your primary goal is to coax more information out of a wary and skeptical private sector?  Is there even good evidence that inadequate information “integration” is significantly to blame for the poor state of American cybersecurity? Our intelligence agencies, to be sure, could be doing a better job of sharing threat information with the private sector—but their own notorious culture of secrecy seems to be the limiting factor there. Even the White House’s own former cybersecurity coordinator, Melissa Hathaway, told the Post that “creating more organizations and bureaucracy” was unlikely to do much good.

My slightly cynical suspicion: Cybersecurity is just fundamentally hard, and given that it depends on the complex practices of many thousands of private network owners, there’s just not a whole lot the government can do to drastically improve matters—beyond, of course, being more willing to share their own intel and hardening the government’s own networks, which they don’t seem to be terribly good at. But cybersecurity is a Serious Problem about which Something Must Be Done, and so like the drunk in the old joke—who lost his keys in the dark, but is searching for them under a streetlamp because the light’s better there—we make a great show of doing the things government is able to do. And since internal tweaks designed to make existing agencies do those things more effectively won’t make headlines, thereby assuring the public that someone is on top of the problem, we get another spoonful of alphabet soup and another Hollywood command center to do the same thing with even bigger and more impressive wall monitors.  But as Amie Stepanovich of Access aptly told The Hill: “You don’t necessarily get your house in order by building new houses.”

David Boaz

The Libertarian Mind may be out of stock at Amazon, but the Kindle is selling pretty well (numbers change constantly, of course):

It’s also available at other online retailers, brick-and-mortar stores (walk down the block, why don’tcha), and the Cato Institute. There are links to some of those outlets here.

Alan Reynolds

What “prompted many Greek manufacturers to relocate to neighboring Bulgaria” is not just less-capricious regulation, as The Wall Street Journal suggests, but also the much lower cost of government.

Bulgaria has a 10% flat tax on corporate and personal income and a 20% VAT. Greece has a 49% personal income tax, 26% corporate tax, 45% payroll tax and 23% VAT.  Unbearable tax rates drive a fourth of the Greek economy underground while businesses in the formal economy migrate or shut down.

What about government spending (which Keynesian economists call “fiscal stimulus”)?  Government spending in Bulgaria was 35.7% of GDP in 2012, according to Eurostat, compared with 53.7% in Greece.

If the word “austerity” is used to mean excessive frugality in governmen spending, as defined by Joe Stiglitz and Paul Krugman, then Greece is very far from austere.  A rising share of Greek government spending is now going to pay interest on accumulated debt, to be sure, but that is simply past profligacy coming home to roost.

On the other hand, if austerity is sensibly defined as punitive marginal tax rates on entrepreneurship, effort and investment, then Greece is indeed practicing suicidal austerity.

Alex Nowrasteh

One of the more interesting arguments in favor of further restricting lower-skilled immigration comes from the prolific pen of Reihan Salam.  His piece is worth reading in its entirety, especially his emphasis on the importance of the melting-pot metaphor, a far better approach to the ideal of assimilation than the salad bowl or other concepts.  Salam understates the amount of “togetherness” Americans feel and the degree to which immigrants and their descendants rapidly adopt American identity, as well as exaggerating the benefits of such togetherness.  But my disagreement lies elsewhere.

The big take away from Salam’s piece is that a constant flow of lower-skilled immigrants into the United States slows the economic and cultural assimilation of that immigrant group.  As a result, further restricting low-skilled immigration would aid in the assimilation of current immigrants who are settled here.  As he wrote, “the melting and fusing of different ethnic groups is essential to building a more cohesive and human society, and that slowing down immigration would help this process along.”

His conclusion rests on two points. 

The first is that new immigrants economically compete with immigrants who came before them and little with lower skilled natives.  That’s true (here is some work on that issue).  Salam’s concern is that additional lower skilled immigrants will lower the wages of already settled immigrants, preventing them from rising.  How would increasing the wages for lower skilled occupations incentivize those workers to climb the skills ladder after closing immigration?  No idea.

Salam’s second point is that turning off lower-skilled immigration will more quickly assimilate those immigrants of the same ethnic group who are already here.  Salam’s point here is less sound as it confuses stocks and flows.  Salam relies upon the 1920s immigration restrictions and the subsequent assimilation of those immigrant ethnic groups that followed.  He cites a quick comment by sociologist Mary C. Waters:

In the absence of appreciable numbers of new arrivals successive generations of acculturated Americans, not unassimilated greenhorns, became the majority among the new ethnics. Today most Italian Americans or Polish Americans are second, third, and fourth generation. They did not cease being Italian or Polish and become just plain ‘Americans.’ But their ethnicity became less intense and increasingly intermittent, voluntary, even recreational. If some still enjoyed ethnic holidays or special foods, their ethnicity rarely determined their occupation or residence. As more and more of the later generations of white ethnics intermarried, their ethnic identity became even more attenuated, and individuals felt increasingly free to choose whether to identify with their mother’s or father’s or grandmother’s or grandfather’s ethnic origins. As a result the vast majority of Italian Americans live in neighborhoods that are not predominantly Italian American. As fewer new immigrants from Italy arrived, the nation’s Little Italys gradually shrank and evolved into places visited by suburbanites in search of restaurants or other ethnic stores.

Waters’ quote is not about the pace of assimilation for the immigrants who were already here, merely how assimilated the stock of ethnics from those countries appeared to be after the flow was stopped.  That is a very different point from the one that Salam is trying to make.  Of course the stock of ethnics appeared to be more American when their flow was halted by immigration restrictions – stopping the flow will make the stock in the United States more American in their cultural affinities.  Assimilation will have appeared to improve if there is no more immigration because there are no new people to assimilate.  But that is very different from claiming that the cut off in immigration flows caused that assimilation to occur.  Cutting off immigration in the 1920s is not responsible for the rapid subsequent assimilation of those already settled immigrants and their descendants.

Some of Waters’ comments are similar to those made by Princeton sociologist Doug Massey.  In this paper, Massey wrote:

Moreover, because the social and economic forces that produce assimilation operate slowly, while those promoting immigration work quickly, the rate at which ethnic culture is augmented by new arrivals from abroad will tend to exceed the rate at which new ethnic culture is created through generational succession, social mobility, and intermarriage in the United States.  As a result, the character of ethnicity will be determined relatively more by immigrants and relatively less by later generations, shifting the balance of ethnic identity toward the language, culture, and ways of life of the sending society.

Massey’s argument is that the total stock of ethnics from a particular country will be less Americanized if there is continual immigration, which is undoubtedly true.  Massey’s argument is not that continual waves of immigration stunt the assimilation of the American-born second-generation from the same ethnic group.  Massey then goes on to argue that the post-war economic boom pushed up many second and third-generation Americans.  That economic boom did not result from immigration restrictions.

Fortunately, we have additional evidence on the pace of assimilation for the immigrant ethnic groups of the early 20th century.  If immigration restrictions boosted assimilation, we should see an increase in the success of the second-generation after those restrictions were put in place.  That did not occur.  Immigrants continued to assimilate after the immigration restrictions just as they had before.

How the assimilation of immigrants and their descendants progressed before and after the enactment of immigration restrictions is an empirical question.  Fortunately there is a lot of research on the topic. 

Joel Perlmann’s Italians Then, Mexicans Now measures the progress of Italian immigrants and their descendants by birth cohort.  He tracked the assimilation progress of American-born children of Italian immigrants by the period of years in which they were born.  Through that method, he could compare the progress of the second-generation born from 1891-1895 to the second-generation born from 1921-1925.  Tracking by generation and year of birth created a better comparison than lumping together all second-generation immigrants of various ages and decades of birth.  Perlmann found no increase in the rate of assimilation after Italian immigration was largely closed off in the mid-1920s – assimilation continued after immigration restrictions just as it had before because the addition of new immigrants did not slow down the process.  Perlmann found an almost identical pattern for the children of Mexican immigrant using his same methods – the only real lag being with income because the economy put a higher premium on education post-1965 than during the early 20th century.

One way to approach the question is to examine the pace of assimilation prior to the 1920s immigration restrictions and comparing that to the rate of assimilation after the laws were enacted.  Abramitzky, Boustan, Eriksson found rapid economic assimilation prior to the immigration restrictions of the 1920s.  They didn’t extend their analysis after that point, but we all know what happened.  On the civic and cultural front, Jacob Vigdor also found rapid assimilation both before and after the immigration restrictions of the 1920s.

Learning English, becoming accustomed to American norms and habits, and integrating is a long and sometimes arduous process.  However, immigrants and their descendants today are becoming American just as rapidly as those a century ago.  The difference is that we are in the middle of this wave of immigrant and assimilation, which makes it appear messy from our perspective, whereas we can look to the past and see a straight line of “Americanization.”  To many Americans from a century ago, assimilation was not occurring. 

The immigration restrictions of the 1920s and the assimilation subsidies of the American Movement do not appear to have impacted that assimilation trend.  There is little evidence to support the notion that closing off lower-skilled immigration today will boost the rate of assimilation, which is already high, going forward.  Those claiming that the immigration restrictions of the 1920s increased the rate of assimilation have all of their work ahead of them.  

David Boaz

Thanks to Nick Gillespie and Reason.tv for allowing me to talk at length in this interview about my path to libertarianism, self-evident truths, Ayn Rand, Rand Paul, and a lot of other topics related to The Libertarian Mind. About one hour:

Cato’s David Boaz Talks Politics, History, and His Path to Libertarianism

There’s a mostly accurate transcript here.

You can find the transcript of last night’s Reddit AMA here.

The Libertarian Mind is out of stock at Amazon! Of course, you can still get it on Kindle. Or you can buy it at many other fine bookstores, both storefront and online, some of which are linked here.

Paul C. "Chip" Knappenberger and Patrick J. Michaels

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

As the snow keeps piling up in Boston, so does the climate change nonsense. Never letting a good weather story go to waste, our nation’s scribes are in high dudgeon that global warming is causing the serial burial of Boston.

We discussed the illogic (or at least the selective reasoning) behind the global-warming-made-this-snowstorm-worse excuses forwarded during the first big nor’easter to wallop the area (back on January 27th), and now, after the third big event (with likely more to come!) the din is deafening. Just today there are major stories in USA Today and the Washington Post strongly suggesting that global warming enhances snowfall in New England.

Perhaps we can test this hypothesis, glibly hiding as a fact.

Back in the late 1990s, we were involved in a research project investigating the relationship between winter temperature and winter snowfall across Canada. Our results were published in the peer-reviewed Journal Geophysical Research back in 1999.  We weren’t investigating the meteorology of any one specific storm, but rather the climatology (i.e., the general relationship) of temperature and snowfall, looking to see if there were really places that were “too cold to snow” and whether a warming climate might result in more snowfall, or precisely what is being presented as fact today.

Here is the context of our investigations:

If one accepts the projections of most climate models that future temperatures will increase in winter in the middle and high latitudes [Houghton et al., 1996], the higher temperatures could have two different impacts on the liquid water equivalent of snowfall: (1) Total snowfall could increase with increasing air temperature since the Clausius-Clapeyron relationship dictates that saturation vapor pressure increases exponentially as a function of temperature, thereby allowing for the possibility of a more moist atmosphere, or (2) total snowfall could decrease with increasing air temperature as warmer conditions would increase the amount of precipitation that falls as rain (or mixed precipitation) relative to snow.

Note that the global warming press as of late only focuses on possibility number 1. Except during winters when it doesn’t snow, when they shift their focus to number 2.

Figure 1 shows what we found after examining 50 years of data for locations all across Canada. 

Figure 1. Map of the January “zero contour” of the snowfall-temperature relationship (solid line) superimposed on the mean January temperature (°C) (dashed lines) (from Davis et al., 1999).

A little explanation is obviously in order. The solid black line labelled “0” is the line north of which higher temperatures result in more snow and south of which higher temperatures lead to less snow. The dashed lines are contours of the average January temperature (in °C). The circles represent the locations of data that went into our analysis.

Although U.S. stations weren’t part of our study, it is pretty clear via visual extrapolation what is most likely going on in the lower 48. Nowhere does the “0” line extend to the Atlantic coast. In fact, it barely extends into New England at all. In other words, the temperature/snowfall relationship along the entire Atlantic coast of the U.S. is negative—on average, the warmer it is, the less it snows.

In order to further those who are thriving in a fact-free environment, we present, in Figure 2, a scatterplot of winter snow versus winter temperature in Boston. What we surmised above is, in fact, the case.  Warm years tend to be low-snow years and vice-versa.

 

Figure 2. Total monthly snowfall versus average monthly temperature in Boston for all Januarys and Februarys since 1891 (data source: National Weather Service and National Climatic Data Center).

Unless human-caused global warming is going to lead to lower than normal winter temperatures in New England (hint: it isn’t), then less snow there is what is “consistent with” global warming.

While you could argue until your blue in the face as to whether or not the snow totals from a specific nor’easter storm event impacting the Northeastern U.S. were enhanced because of global warming, the big picture is much clearer—a warmer climate will lead to less snowfall there on average.

If/when such an impact actually becomes detectable, though, is still, well, up in the air.

Reference:

Davis, R.E., M.B. Lowit, P.C. Knappenberger, and D.R. Legates, 1999. A climatology of snowfall-temperature relationships in Canada. Journal of Geophysical Research, 104, 11985-11994.

Nicole Kaeding

ObamaCare gives states the option to expand Medicaid to cover all individuals below 138 percent of the federal poverty level, which is approximately $33,500 a year for a family of four. To encourage states to expand, the federal government agreed to fund 100 percent of expenditures for the newly-eligible participants until 2016, and then slowly decrease the match to 90 percent in 2020 and into the future.

Democratic and Republican governors alike are showing their penchant for “free” federal dollars by supporting expanded Medicaid roles in their state. Republicans governors—who often say they dislike Obamacare—are in many cases pushing their legislatures to expand Medicaid to take advantage of this windfall.

GOP Governor Bill Haslam in Tennessee announced that he would support Medicaid expansion. His administration promoted the plan by saying, “Insure Tennessee will leverage the enhanced federal funding which will pay for between 90 and 100 percent of the cost and in doing so will bring federal tax dollars Tennesseans are already paying back to the state.”

To help minimize the state’s contribution and maximize federal funding, Haslam decided to expand the state’s health provider tax. Under a provider tax, a state agrees to increase Medicaid reimbursements to the providers paying the tax, such as hospitals. The higher reimbursement level draws a higher federal contribution. So state politicians and hospitals win, but federal taxpayers lose.  

In this case, luckily, Tennessee’s legislature denied Haslam’s  expansion attempts.

Governor Mike Pence in Indiana is pushing for Medicaid expansion, dubbing the program “Healthy IN Plan 2.0.” Governor Pence received an “A” in our Fiscal Policy Report Card on America’s Governors last year for his tax-and-spending restraint. But his decision to expand Medicaid to include working-aged, able-bodied, childless adults sends a very different signal.

Governors Pence and Haslam aren’t the only two Republicans wanting to expand Medicaid. Wyoming Governor Matt Mead said that by rejecting Medicaid expansion the legislature is “rejecting $120 million dollars meant for Wyoming.” Governor Gary Herbert of Utah has said that Medicaid expansion allows “Utah [to bring] taxpayer dollars back to our state.” More than 10 Republican governors support Medicaid expansion, many using this same sort of rhetoric.

These governors justify their actions by claiming that it will return tax dollars to their states. But Medicaid spending is not a fixed pie. The more that each state expands its program, the more that the nation’s taxpayers will be hit.  Federal expenditures are funded based on the matching percentage. It’s not true to say that if Tennessee doesn’t expand, that the money goes to California. Instead, if Tennessee doesn’t expand, then the money isn’t spent and taxpayers keep more of their earnings.

As I’ve discussed before, expanding Medicaid is also a risky proposition for state budgets, which some Republican governors do not seem to understand. They boast their fiscal conservatism, but their recent actions on Medicaid expansion come at the expense of a larger burden on the nation’s taxpayers.

Michael F. Cannon

The plaintiffs in King v. Burwell claim the Patient Protection and Affordable Care Act only offers premium subsidies, as the statute says, “through an Exchange established by the State.” Members of Congress who voted for the PPACA – most recently Sen. Bob Casey (D-PA) and former Sen. Ben Nelson (D-NE) – now swear it was never their intent to condition Exchange subsidies on state cooperation.

Ironically, Casey’s and Nelson’s decision to wade into the King debate demonstrates why, when a statute is clear, courts traditionally assign no weight to what members of Congress claim they intended a law to say – especially if, as here, those claims come after a clear provision has proven problematic. While he claims he never intended to condition subsidies on states establishing Exchanges, Casey repeatedly voted to condition Exchange subsidies on state cooperation, has misrepresented what Congress intended the PPACA to do, and continues to misrepresent the PPACA on his Senate web site. Nelson’s claims about what Congress intended should likewise be taken with a grain of salt. In an unguarded moment in 2013, Nelson admitted that in 2009 he paid no attention to “details” such as whether the PPACA authorized subsidies in federal Exchanges.

All Sides Agree: Casey Supported Conditional Exchange Subsidies

Casey and Nelson exchanged correspondence exactly one day before amicus briefs supporting the government were due to be filed with the Supreme Court. Casey asked for Nelson’s recollection of whether, in 2009, Nelson or anyone else suggested the PPACA’s subsidies would only be available in states that established Exchanges. Perhaps more than anyone, Nelson was a pivotal figure in the debate over the PPACA. Not only did he insist on state-based Exchanges rather than a national Exchange run by the federal government, his was the deciding vote that enabled the bill to pass the Senate and become law – and he withheld his vote until his demands were met.

In his letter to Nelson, Casey discussed conditioning Exchange subsidies on state cooperation as if it were a foreign concept:

The plaintiffs in King argue that the law was intentionally designed to deny tax credits to people in states with federally facilitated exchanges in order to “induce” states into operating their own Exchanges…

[A]ccording to the King plaintiffs…residents of a state which did not operate its own Exchange would lose access to premium tax credits intended to ensure that those residents could afford health insurance.

I do not recall you – or any other member of the House or Senate – insisting upon such a structure. I would appreciate any clarification you can offer regarding your role in shaping this important law, as I believe it will be beneficial to the American public and the justices themselves.

Yet conditioning Exchange subsidies on state cooperation is hardly a foreign concept to Casey. In 2009, he supported and voted for another health care bill that even the Obama administration and congressional Democrats acknowledge conditioned Exchange subsidies on state cooperation. That bill was S. 1697, reported by the Senate’s Health, Education, Labor, and Pensions Committee:

As Jonathan Adler and I explained in a brief we filed before the district court in King, every Democrat on the Senate’s HELP Committee voted in favor of S. 1697, and therefore in favor of conditioning Exchange subsidies on state cooperation:

  1. Sen. Jeff Bingaman (D-NM)
  2. Sen. Sherrod Brown (D-OH)
  3. Sen. Bob Casey (D-PA)
  4. Sen. Chris Dodd (D-CT)
  5. Sen. Kay Hagan (D-NC)
  6. Sen. Tom Harkin (D-IA)
  7. Sen. Jeff Merkley (D-OR)
  8. Sen. Barbara Mikulski (D-MD)
  9. Sen. Patty Murray (D-WA)
  10. Sen. Jack Reed (D-RI)
  11. Sen. Bernie Sanders (I-VT)
  12. Sen. Sheldon Whitehouse (D-RI).

In Casey’s words, then, he himself voted for a bill that “included the threat” that residents of uncooperative states “would lose access to premium…credits intended to ensure that those residents could afford health insurance.”

If you were a judge, what would you consider a better indicator of what Casey actually intended: what he repeatedly voted to enact, or what now he says to influence the courts after the clear language he voted to enact has proved problematic?

Casey Continues To Claim “If You Like The Coverage You Have, You Can Keep It”

Before you answer, keep in mind that Casey, like dozens of other Democratic senators and representatives, claimed the PPACA lets everybody keep the health plans they had before the bill became law:

To this day, Casey still claims on his official Senate web site, “If you like the coverage you have, you can keep it; the government will not force you to change it.” This tells us either (A) Casey does not understand the legislation he voted to enact into law, or (B) he is willing to dissemble to advance his policy preferences. Personally, I think it’s (A).

Either way, if you were a judge, which would you think more accurately represents what Casey intended: what he repeatedly voted to enact, or what he now says to influence the courts after what he voted to enact has proved problematic?

Nelson’s Letter: The Irrelevant “Bombshell”

Nelson’s response to Casey received most of the attention, however. Here’s the key excerpt:

In either scenario—a state or federal exchange—our purpose was clear: to provide states the tools necessary to deliver affordable healthcare to their citizens, and clearly the subsidies are a critical component of that effort regardless of which exchange type a state chooses. I always believed that tax credits should be available in all 50 states regardless of who built the exchange. The final law also reflects that belief as well.

Doug Kendall, who filed the amicus brief with members of Congress who enacted the PPACA in which the Casey-Nelson letters first appeared, calls Nelson’s comments “a bit of a bombshell.” Not so much. Kendall and others don’t seem to understand, and therefore misrepresent, the plaintiffs’ argument about how Nelson fits into the story.

Kendall, the congressional amici, and the Huffington Post’s Jonathan Cohn accuse the petitioners of claiming that the language conditioning subsidies on state cooperation was inserted into the PPACA at Nelson’s request. That is simply not true. Neither the plaintiffs, nor Adler, nor I have ever claimed that Nelson even suggested, much less insisted, that the PPACA condition Exchange subsidies on state cooperation. (Nor did he need to: this feature appeared in the HELP bill, the Finance Committee’s bill, and the PPACA with or without his suggestion.)

What the plaintiffs, Adler, and I actually argue is that Nelson matters because, and only because, (1) he insisted on state-run Exchanges rather than a single, nationwide Exchange, and (2) his vote was crucial to get a bill through the Senate, and, since Congress cannot force states to implement federal programs, (3) the PPACA’s drafters therefore needed some way to states to establish Exchanges – a part of the Act that has turned out to be very costly, difficult, and fraught with political peril. So what the PPACA’s drafters do? They adopted a wacky, hair-brained, far-out idea that has been proposed only on numerous occasions by multiple Congresses as well as Presidents Johnson, Nixon, Clinton (more than twice), and Bush. They created an incentive for states to implement federal priorities by conditioning federal benefits on state cooperation.

Kendall, Cohn, and the congressional amici either (A) don’t understand the plaintiffs’ arguments, or (B) are deliberately misrepresenting them. Personally, I think it’s (A). Kendall writes, “The petitioners’ assertion that Sen. Nelson insisted on conditional tax subsidies is itself pure speculation without a shred of support in the record.” That assertion is moot, because Kendall’s straw man is pure invention, without a shred of support in the briefs.  

The real significance of Nelson’s response to Casey is not how much Nelson says, but how little. He says he wanted subsidies in both state-established and federally established Exchanges. Okay, that’s great. But it doesn’t tell us what Nelson intended, because it offers no insight into what he voted to enact into law. In his last sentence, opines that the PPACA reflects his preference for subsidies in federal Exchanges. But that’s the source of the dispute in King, and Nelson offers no evidence to help us resolve what the law says.

In 2013, Nelson Admitted He Didn’t Know What The Bill Said

Nor does Nelson deserve to be considered an authority on what the PPACA says about subsidies in federal Exchanges, because in 2013 he admitted he didn’t pay attention.

Thanks to a handful of intrepidresearchers and the North Dakota Department of Insurance, I happened to find audio of a press conference Nelson gave in January 2013, upon being appointed CEO of the insurance-regulators lobby in Washington, D.C.. As luck would have it, a reporter asked him about subsidies in federal Exchanges. Here’s part one of the press conference, but the relevant part is part two (at 8:20). When discussing negotiations over the crafting of the PPACA, Nelson described federal Exchanges as an afterthought, and admits he voted for the bill without paying any attention to whether the bill actually authorized subsidies in federal Exchanges:

NELSON (8:20): This is Ben Nelson again. I might add that I don’t know what everyone who voted for the health care act was thinking. But I can tell you that the discussions for having state-based Exchanges as an option for the states was to assure that the states would have that role. There was never really any intent for the federal government to assume any role, except by default or at the request of the states. So there was no way that the federal government was to have an initiative in this direction. It was more of a backup, fallback situation, should the states decide that they didn’t want, or a state decided it didn’t want for establish a state-based Exchange, but preferred to do it with a federal FFE, as it’s called, or join together on a multi-state basis for an Exchange. As many options as possible, but the goal was to be as far away from any kind of federal preemption as possible.

REPORTER (9:32): Was there, was the discussion along the lines of, we don’t want the subsidies to go through the federal Exchange? I’m sure you’re aware of that issue. Was that part of the thinking? And why did they go the way, they write the law the way [inaudible].

NELSON (9:43): I don’t think it ever got quite that specific, at least not during any time that I was involved in discussions. But when the discussion about an Exchange occurred, it was always, once [we] got over the hurdle of saying yes, states first, federal second, that it was clear that there was no real pre-emption, we didn’t get into, unfortunately, the details, because now they have to be fleshed out. So there are some levels of uncertainty.

I know of no evidence that calls into question Nelson’s claim that he always wanted subsidies in federal Exchanges. But these comments tell us (1) he never insisted on subsidies in federal Exchanges, (2) he never inquired about subsidies in federal Exchanges, (3) he never paid attention to whether the bill authorized subsidies in federal Exchanges, and (4) voted for the PPACA anyway. In an unguarded moment, Nelson admitted that whether the PPACA authorized subsidies in federal Exchanges just wasn’t that important to him. He admitted the issue now “ha[s] to be fleshed out” because there is “uncertainty” about whether he had indeed voted to authorize subsidies in federal Exchanges. In other words, if we want to know what Nelson actually intended to become law, asking Ben Nelson is not an option. Our only option is to read the bill.

Again, if you were a judge, which would you think more accurately captures Nelson’s intent: the clear language he voted to enact, or what now he says to influence the courts after the clear language he voted to enact – which he admitted was not a high priority for him – has proved problematic?

Conclusion

The King plaintiffs’ case does not depend on Casey or Nelson or any PPACA supporters consciously knowing that they were voting to condition Exchange subsidies on state cooperation. The fact that PPACA supporters voted to enact clear statutory language conditioning subsidies on states establishing Exchanges is enough. It means that statutory language is both the law and Congress’ intent – even if no members of Congress actually harbored such thoughts. The facts that some of them repeatedly voted to condition Exchange subsidies on state cooperation, and that others were indifferent, merely strengthens the plaintiffs’ case. 

Jason Bedrick

School choice is safe in the Granite State.

This morning, the New Hampshire Senate Education Committee voted 3-2 along party lines against SB 204, a bill to repeal New Hampshire’s trailblazing scholarship tax credit law, which was the first in the nation to include homeschoolers. The repeal bill is likely to be rejected in a vote of the entire state senate later this week. Thus far, no state has legislatively repealed a school choice law.

Last month, the Cato Institute released a short documentary on the fight for school choice in the “Live Free or Die” state, titled “Live Free and Learn: Scholarship Tax Credits in New Hampshire.” You can watch the film here:

Live Free and Learn: Scholarship Tax Credits in New Hampshire

David Boaz

In The Libertarian Mind, which is officially published today, I have a chapter titled “What Big Government Is All About” that aspires to be applied Public Choice analysis. Much of it relates to what I think Jonathan Rauch first called “the parasite economy,” the part of the economy that involves getting through government what you can’t get through voluntary market processes. Reason.com has just published an excerpt from that chapter, with a few recent examples added, such as these all-too-typical stories:

Lobbying never stops. One week in December, the Kaiser Health News reported that “growth opportunities from the federal government have increasingly come not from war but from healing.” That is, “business purchases by the Department of Health and Human Services have doubled to $21 billion annually in the past decade.” And who showed up to collect some of the largesse? Well, General Dynamics was having trouble making ends meet with defense contracting, so suddenly it managed to become the largest contractor to Medicare and Medicaid. “For traditional defense contractors,” wrote Kaiser Health, “health care isn’t the new oil. It’s the new F-35 fighter.”

Of course, the old F-35, despite a decade or more of running behind schedule and over budget, is still doing pretty well. That same week Congress passed the $1.1 trillion “Cromnibus” spending bill, including $479 million for four F-35 fighters from Lockheed that even the Pentagon didn’t want. The Wall Street Journal reported that the bill “sparked a lobbying frenzy from individual companies, industries and other special interests”—pretty much the same language you could have read in earlier stories about Porkulus and Obamacare. Every provision in the bill—from the $94 billion in Pentagon contracting to $120 million for the Chicago subway to an Obamacare exemption for Blue Cross and Blue Shield—has a lobbyist or several shepherding it through the secretive process.

And I also talked about the parasite economy on John Stossel’s television show last Friday night:

For more on the parasite economy, and everything else you wanted to know about libertarianism, read The Libertarian Mind.

Chris Edwards

Are federal government employees “public servants,” who faithfully execute the laws and aim at the broad public good? Do they match the Progressive-era ideal of neutral and selfless experts free of political bias?

Perhaps many federal workers do. But a story in GovExec suggests that other motivations are also in play:

Lawmakers from both parties addressing unionized federal employees at a conference Monday pledged more support and respect for the civil service, but the union itself promised to “whoop [the] ass” of Congress if it stood in the group’s way.

At its annual legislative gathering, the American Federation of Government Employees vowed to combat any congressional efforts to shrink the federal workforce, cut pay and benefits or weaken unions. While Congress has succeeded in slashing agency rolls and freezing pay, union leaders said, those actions have better positioned the union to prevent similar efforts in the future.

Every time the “fools” in Congress try to hurt the federal workforce, said AFGE National President J. David Cox in a passionate address to his members, “We get bigger. We get stronger and we fight harder.”

He added: “We are a force to be reckoned with and we are a force that will open up the biggest can of whoop ass on anyone” who votes against the union’s interests…

The union chief called on each of those [AFGE] members to help push its agenda. “I’m begging you,” he said, “I’m pleading with you: Get in the fight.”

Maybe it is no surprise that federal workers and their unions fight for themselves. But can we count on federal legislators to stand up for taxpayers and citizens and check union power? Maybe not:

Lawmakers who addressed the attendees emphasized they would not be alone in that struggle; the lawmakers promised to bring the message of the positive and essential work feds do back to their colleagues and into the public sphere.

Freshman Congressman Don Beyer, D-Va., promised to be a “champion” for federal employees, adding the “critical question” for the workforce is how to change the perception of civil servants. He pledged to mention the positive work feds do in every speech he gives, suggested creating public service announcements highlighting federal employees and even proposed someone write a movie in which an “anonymous civil servant” is the hero.

“We have a great, great story to tell,” Beyer said of the federal workforce. “We just have to find every possible way to tell it.”

Beyer and his fellow Virginian, Republican Rep. Rob Wittman, agreed one crucial step to demonstrating that support is to repeal the across-the-board budget cuts known as sequestration.

I think we can see who is the real boss in Washington today. Beyer and Wittman have figured it out, and they are standing firmly in line. AFGE chief, David Cox, barked the orders: “If I meet one more politician who tells me we need to tighten our belts, I’m going to take my belt off and I’m going to whoop his ass.”

Jim Harper

You’ve probably heard some version of the joke about the chemist, the physicist, and the economist stranded on a desert island. With a can of food but nothing to open it, the first two set to work on ingenious technical methods of accessing nutrition. The economist declares his solution: “Assume the existence of a can opener!”…

There are parallels to this in some U.S. state regulators’ approaches to Bitcoin. Beginning with the New York Department of Financial Services six months ago, regulators have put proposals forward without articulating how their ideas would protect Bitcoin users. “Assume the existence of public interest benefits!” they seem to be saying.

When it issued its “BitLicense” proposal last August, the New York DFS claimed “[e]xtensive research and analysis” that it said “made clear the need for a new and comprehensive set of regulations that address the novel aspects and risks of virtual currency.” Yet, six months later, despite promises to do so under New York’s Freedom of Information Law, the NYDFS has not released that analysis, even while it has published a new “BitLicense” draft.

Yesterday, I filed comments with the Conference of State Bank Supervisors (CSBS) regarding their draft regulatory framework for digital currencies such as Bitcoin. CSBS is to be congratulated for taking a more methodical approach than New York. They’ve issued an outline and have called for discussion before coming up with regulatory language. But the CSBS proposal lacks an articulation of how it addresses unique challenges in the digital currency space. It simply contains a large batch of regulations similar to what is already found in the financial services world.

The European Banking Authority took a welcome tack in its report on Bitcoin last July, submitting itself to the rigor of risk management. The EBA sought to identify the risks that digital currency poses to consumers, merchants, and a small variety of other interests. The EBA report did not apply risk management as well as it could have, and it came to unduly conservative results in terms of integrating Bitcoin into the European financial services system, but the small number of genuine risks it identified can form the basis of discussion about solutions.

It is very hard to assess a batch of solutions put forward without an articulation of the problems they are intended to solve, as the draft model regulatory framework unfortunately does. Hopefully, future iterations of CSBS’s work will include needed articulation.

My comment spends some time on the assumption that state-by-state licensing for financial services providers has benefits that justify its large costs. “The public interest benefits of licensing obviously do not increase arithmetically with each additional license,” I wrote, assuming correctly, I hope, how the world works. CSBS is in a unique position to streamline the licensing regime.

I also caution CSBS about the assumption that making our finances “transparent to law enforcement” is an appropriate regulator’s role. The Supreme Court has been moving away from the Fourth Amendment doctrine under which some 1970s cases appeared to take constitutional protection away from our financial activities. Financial services regulators should take the side of law-abiding consumers on the question of financial privacy.

Sincerely, the CSBS effort is a fair one, and I think the organization is in a good position to steer its members away from technology-specific regulation like we saw from New York. I look forward to continued, deeper discussion with CSBS and to more work that integrates Bitcoin into the U.S. financial services system.

Nicole Kaeding

The Department of Energy (DOE) is admitting that it failed. Last week, it announced that it will stop development of FutureGen 2.0, a federally-financed, coal-fired power plant in Illinois. FutureGen, and its successor FutureGen 2.0, wasted millions of tax dollars, and was beset with multiple delays and cost overruns.

FutureGen was one of many federal energy projects experimenting in so-called “clean coal” technology. FutureGen sought to demonstrate the technical capabilities of carbon capture and sequestration (CCS) technology. CCS attempts to capture carbon dioxide emissions from coal-fired power plants and store it underground, eliminating an increase in atmospheric carbon dioxide.

FutureGen was launched in 2003 by the George W. Bush administration as a public-private partnership to demonstrate CCS with a site chosen in Illinois. Costs would be shared among the federal government and 12 private energy companies. The project’s estimated cost grew from $1 billion to $1.8 billion by 2008, when it was cancelled due to the cost overruns.  

In 2010 the Obama administration revived the project using stimulus funding. The new project, FutureGen 2.0, was allotted $1 billion from the federal government, with private investors supposed to be providing additional funding.

The project was plagued with problems. Estimated costs grew quickly, rising from $1.3 billion to $1.65 billion. The Congressional Research Service cited “ongoing issues with project development, [and] lack of incentives for investment from the private sector.” Private investors were unwilling to invest in the project. As of August 2014, the FutureGen Alliance had yet to raise the $650 billion in private debt and equity needed. There were additional concerns about the legality of a $1 a month surcharge to subsidize the project that would have been added to the electricity bills of all Illinois residents. Late last year, the Illinois Supreme Court agreed to hear the case.

Now, DOE announced that it will suspend funding for the project. Energy Secretary Ernest Moniz told reporters, “frankly, the project has got a bunch of challenges remaining,” which is a startling admission from the administration. DOE said that the project failed to make enough progress to keep it alive and would not meet a September 30, 2015 deadline for spending the remaining stimulus funds that it had been allotted.

The project spent $202.5 million of the $1 billion before being cancelled. Together, the two iterations of FutureGen ended up costing taxpayers $378 million.

A related issue is that proposed regulations from the Obama administration would functionally require CCS for all new coal-fired power plants in the United States. But with the failure of FutureGen, the federal government has not demonstrated that it works properly. DOE’s other CCS demonstration project in Mississippi is experiencing delays as well. Some experts question if CCS is technologically possible at a cost-effective price.

FutureGen and FutureGen 2.0 are part of a long list of DOE failures. Repeating mistakes made during the Bush administration, DOE reopened FutureGen, which put millions more tax dollars at risk. DOE should stop trying to centrally plan technological advances, and instead let entrepreneurs experiment and the market guide the nation’s energy progress.

Patrick J. Michaels

Matt Drudge has been riveting eyeballs by highlighting a London Telegraph piece calling the “fiddling” of raw temperature histories “the biggest science scandal ever.” The fact of the matter is some of the adjustments that have been tacked onto some temperature records are pretty alarming—but what do they really mean?

One of the more egregious ones has been the adjustment of the long-running record from Central Park (NYC). Basically it’s been flat for over a hundred years but the National Climatic Data Center, which generates its own global temperature history, has stuck a warming trend of several degrees in it during the last quarter-century, simply because it doesn’t agree with some other stations (which also don’t happen to be in the stable urban core of Manhattan).

Internationally, Cato Scholar Ross McKitrick and yours truly documented a propensity for many African and South American stations to report warming that really isn’t happening.  Some of those records, notably in Paraguay and central South America, have been massively altered.

At any rate, Chris Booker, author of the Telegraph article, isn’t the first person to be alarmed at what has been done to some of the temperature records.  Others, such as Richard Muller, from UC-Berkeley, along with Steven Mosher, were so concerned that they literally re-invented the surface temperature history from scratch. In doing so, both of them found the “adjustments” really don’t make all that much difference when compared the larger universe of data. While this result has been documented  by the scientific organization Berkeley Earth, it has yet to appear in one of the big climate journals, a sign that it might be having a rough time in the review process.

That’s quite different than what was found in 2012 by two Greek hydrologists, E. Steirou and D. Koutsoyiannis, who analyzed a sample of weather stations used to calculate global temperature and found the adjustments were responsible for about half of the observed warming, when compared to the raw data. Their work was presented at the annual meeting of the European Geosciences Union, but has not been published subsequently in the scientific literature. That’s not necessarily a knock on it, given the acrimonious nature of climate science, but it seems if it were an extremely robust, definitive paper, that it would have seen the light of day somewhere.

But, before you cry “science scandal” based upon the Greek results, it’s a fact that one of the adjustments that has been commonly used—taking into account the biases introduced by the time of day in which the high and low temperatures for the previous 24 hours are recorded—in fact does induce warming into most records, a change that in fact is scientifically justified.

In sum, I’d hold fire about “the biggest science scandal ever.” The facts are:

  • when the global temperature records were reworked by people as skeptical as yours truly, nothing much emerged;
  • some of the data have been mangled, like the Central Park record—and there are serious problems over some land areas in the Southern Hemisphere; and
  • some of the adjustments for measurement biases introduce scientifically defensible warming trends.

David Boaz

I’m delighted to announce that my new book, The Libertarian Mind: A Manifesto for Freedom, goes on sale today. Published by Simon & Schuster, it should be available at all fine bookstores and online book services.

I’ve tried to write a book for several audiences: for libertarians who want to deepen their understanding of libertarian ideas; for people who want to give friends and family a comprehensive but readable introduction; and for the millions of Americans who hold fiscally responsible, socially tolerant views and are looking for a political perspective that makes sense. 

The Libertarian Mind covers the intellectual history of classical liberal and libertarian ideas, along with such key themes as individualism, individual rights, pluralism, spontaneous order, law, civil society, and the market process. There’s a chapter of applied public choice (“What Big Government Is All About”), and a chapter on contemporary policy issues. I write about restoring economic growth, inequality, poverty, health care, entitlements, education, the environment, foreign policy, and civil liberties, along with such current hot topics as libertarian views of Bush and Obama; America’s libertarian heritage as described by leading political scientists; American distrust of government; overcriminalization; and cronyism, lobbying, the parasite economy, and the wealth of Washington.

The publisher is delighted to have this blurb from Senator Rand Paul: 

“They say the libertarian moment has arrived. If you want to understand and be part of that moment, read David Boaz’s The Libertarian Mind where you’ll be drawn into the ‘eternal struggle of liberty vs. power,’ where you’ll learn that libertarianism presumes that you were born free and not a subject of the state. The Libertarian Mind belongs on every freedom-lover’s bookshelf.”

I am just as happy to have high praise from legal scholar Richard Epstein:

“In an age in which the end of big government is used by politicians as a pretext for bigger, and worse, government, it is refreshing to find a readable and informative account of the basic principles of libertarian thought written by someone steeped in all aspects of the tradition. David Boaz’s Libertarian Mind unites history, philosophy, economics and law—spiced with just the right anecdotes—to bring alive a vital tradition of American political thought that deserves to be honored today in deed as well as in word.” 

Find more endorsements here from such distinguished folks as Nobel laureate Vernon Smith, John Stossel, Peter Thiel, P. J. O’Rourke, Whole Foods founder John Mackey, and author Jonathan Rauch. And please: buy the book. Then like it on Facebook, retweet it from https://twitter.com/David_Boaz, blog it, buy more copies for your friends.

 

Chris Edwards

In recent decades, the Democratic Party has moved far to the left on economic policy. I have discussed the leftward shift on tax policy, which was illustrated once again by President Obama’s generally awful proposals in his new budget (see here, here, and here).

What about regulations? Consider the following statement by President Jimmy Carter on his signing a landmark railroad deregulation bill in 1980. Have you ever heard President Obama express such views or push for similar sorts of legislation?

Today I take great pleasure in signing the Staggers Rail Act of 1980. This legislation builds on the railroad deregulation proposal I sent to Congress in March 1979. It is vital to the railroad industry and to all Americans who depend upon rail services.

By stripping away needless and costly regulation in favor of marketplace forces wherever possible, this act will help assure a strong and healthy future for our Nation’s railroads and the men and women who work for them. It will benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service to shipper needs. America’s consumers will benefit, for rather than face the prospect of continuing deterioration of rail freight service, consumers can be assured of improved railroads delivering their goods with dispatch …

This act is the capstone of my efforts over the past 4 years to get the Federal Government off the backs of private industry by removing needless, burdensome regulation which benefits no one and harms us all. We have deregulated the airlines, a step that restored competitive forces to the airline industry and allowed new, innovative services. We have freed the trucking industry from archaic and inflationary regulations, an action that will allow the startup of new companies, encourage price competition, and improve service. We have deregulated financial institutions, permitting banks to pay interest on checking accounts and higher interest to small savers and eliminating many restrictions on savings institutions loans.

Where regulations cannot be eliminated, we have established a program to reform the way they are produced and reviewed. By Executive order, we have mandated regulators to carefully and publicly analyze the costs of major proposals. We have required that interested members of the public be given more opportunity to participate in the regulatory process. We have established a sunset review program for major new regulations and cut Federal paperwork by 15 percent. We created a Regulatory Council, which is eliminating inconsistent regulations and encouraging innovative regulatory techniques saving hundreds of millions of dollars while still meeting important statutory goals. And Congress recently passed the Regulatory Flexibility Act, which converts into law my administrative program requiring Federal agencies to work to eliminate unnecessary regulatory burdens on small business. I am hopeful for congressional action on my broad regulatory reform proposal now pending, to help complete congressional action on my regulatory reform proposals.

Today these efforts continue with deregulation of the railroad industry and mark the past 4 years as a time in which the Congress and the executive branch stepped forward together in the most significant and successful deregulation program in our Nation’s history. We have secured the most fundamental restructuring of the relationship between industry and government since the time of the New Deal.

In recent decades the problems of the railroad industry have become severe. Its 1979 rate of return on net investment was 2.7 percent, as compared to over 10 percent for comparable industries. We have seen a number of major railroad bankruptcies and the continuing expenditure of billions of Federal dollars to keep railroads running. Service and equipment have deteriorated. A key reason for this state of affairs has been overregulation by the Federal Government. At the heart of this legislation is freeing the railroad industry and its customers from such excessive control.

Steve H. Hanke

In my misery index, I calculate a ranking for all countries where suitable data exist. My misery index — a simple sum of inflation, lending rates, and unemployment rates, minus year-on-year per capita GDP growth — is used to construct a ranking for 108 countries. The table below is a sub-index of all Latin American countries presented in the world misery index.

A higher score in the misery index means that the country, and its constituents, are more miserable. Indeed, this is a table where you do not want to be first.

Venezuela and Argentina, armed with aggressive socialist policies, end up the most miserable in the region. On the other hand, Panama, El Salvador, and Ecuador score the best on the misery index for Latin America. Panama, with roughly one tenth the misery index score of Venezuela, has used the USD as legal tender since 1904. Ecuador and El Salvador are also both dollarized (Ecuador since 2000 and El Salvador since 2001) – they use the greenback, and it is clear that the embrace of the USD trumps all other economic policies.

The lesson to be learned is clear: the tactics which socialist governments like Venezuela and Argentina employ yield miserable results, whereas dollarization is associated with less misery.

Chris Edwards

President Obama proposed an expansive spending plan for highways, transit, and other infrastructure in his 2016 budget.

Here are some of the problems with the president’s approach:

  • Misguided Funding Source. The president proposes hitting U.S. corporations with a special 14 percent tax on their accumulated foreign earnings to raise $238 billion. This proposal is likely going nowhere in Congress, and it is bad economic policy. The Obama administration seems to view the foreign operations of U.S. companies as an enemy to be punished, but in fact foreign business operations generally complement U.S. production and help boost U.S. exports.
  • Increases Spending. The Obama six-year transportation spending plan of $478 billion is an increase of $126 billion above current spending levels. Instead of increasing federal spending on highways and transit, we should be cutting it, as it is generally less efficient that state-funded spending. To close the Highway Trust Fund (HTF) gap, we should cut highway and transit spending to balance it with current HTF revenues, which mainly come from gas and diesel taxes.
  • Increases Central Control. The Obama plan would increase federal subsidies for freight rail and “would require development of state and regional freight transportation plans,” according to this description. But freight rail has been a great American success story since it was deregulated by President Jimmy Carter in 1980. So let’s not reverse course and start increasing federal intervention again. Let’s let Union Pacific and the other railroads make their own “plans;” we don’t need government-mandated plans.
  • Undermines User Pays. For reasons of both fairness and efficiency, it is a good idea to fund infrastructure with charges on infrastructure users. In recent decades, the HTF has moved away from the original user-pays model of gas taxes funding highways, as funds have been diverted to mass transit, bicycle paths, and other activities. Obama would move further away from user pays, both with his corporate tax plan and with his proposed replacement of the HTF with a broader Transportation Trust Fund.
  • Expands Mass Transit Subsidies. The Obama plan would greatly increase spending on urban bus and rail systems. But there is no proper federal role in providing subsidies for such local activities. Indeed, federal transit subsidies distort efficient local decision making—the lure of “free” federal dollars induces local politicians to make unwise and wasteful choices. Arlington, Virginia’s million-dollar bus stop is a good example.

For background on the transportation battle heating up in Congress, see my articles here and here. And see the writings of Randal O’Toole, Robert Poole, Emily Goff, and Ken Orski.

And you can check out the writings of Robert Puentes of Brookings, who joined me on C-Span today to discuss these issues.

David Boaz

Both Jeb Bush and Rand Paul are talking about broadening the appeal of the Republican Party as they move toward presidential candidacies. Both say Republicans must be able to compete with younger voters and people of all racial backgrounds. Both have talked about the failure of welfare-state programs to eliminate urban poverty. But they don’t always agree. Bush sticks with the aggressive foreign policy that came to be associated with his brother’s presidency, while Paul wants a less interventionist approach. Bush calls for “smarter, effective government” rather than smaller government, while Paul believes that smaller government would be smarter. Perhaps most notoriously, Bush strongly endorses the Common Core educational standards, building on George W. Bush’s policy of greater federal control of schooling.

Meanwhile, Paul promises to bring in new audiences by talking about foreign policy and civil liberties. As Robert Costa reported from an Iowa rally this weekend:

Turning to civil liberties, where he has quarreled with hawkish Republicans, Paul chastised the National Security Agency for its surveillance tactics. “It’s none of their damn business what you do on your phone,” he said. 

“Got to love it,” said Joey Gallagher, 22, a community organizer with stud earrings, as he nursed a honey-pilsner beer. “It’s a breath of fresh air.”

But the rest of Paul’s nascent stump speech signaled that as much as he wants to target his father’s lingering network, he is eager to be more than a long-shot ideologue.

Paul cited two liberals, Sen. Bernard Sanders (I-Vt.) and Rep. Alan Grayson (D-Fla.), during his Friday remarks and said he agrees with outgoing Attorney General Eric H. Holder Jr. on curbing federal property seizures and softening sentencing laws for nonviolent drug offenders — all a nod to his efforts to cast himself as a viable national candidate who can build bipartisan relationships and expand his party’s political reach.

“Putting a kid in jail for 55 years for selling marijuana is obscene,” Paul said.

Alan Grayson and Eric Holder? That’s pushing the Republican comfort zone. And what was the reception?

“Just look at who’s here,” said David Fischer, a former Iowa GOP official, as he surveyed the crowd at Paul’s gathering Friday at a Des Moines winery. “He is actually bringing women, college students and people who are not white into the Republican Party.”

That’s his plan. It’s a real departure from the unsuccessful candidacies of old, hawkish John McCain and old, stuffy Mitt Romney. It just might create the kind of excitement that Kennedy, Reagan, and Obama once brought to presidential politics. The question is whether those new audiences will show up for Republican caucuses and primaries to join the small-government Republicans likely to be Paul’s base.

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