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Cato Went 10-1 at Supreme Court This Term

Cato Op-Eds - Wed, 07/02/2014 - 16:01

Ilya Shapiro

And so another term has come and gone at the marble palace at One First Street NE. Like last year, Cato did swimmingly, compiling a 10–1 record in cases where we filed an amicus brief. Notably, we again vastly outperformed the solicitor general’s office, which went 11–9 on the year. Perhaps the government would be better served following our lead on constitutional interpretation, advocating positions that reinforce our founding document’s role in securing and protecting individual liberty.

Cato was also the only group in the country to file on the winning side of this term’s three highest-profile 5-4 cases: McCutcheon v. FEC (campaign finance), Harris v. Quinn (workers’ rights), and Burwell v. Hobby Lobby (HHS mandate). This again matches our performance last year, when we were the only ones to file on the winning side of Fisher v. UT-Austin (racial preferences), Shelby County v. Holder (voting rights), and United States v. Windsor (DOMA). There’s an obvious reason why it’s become a “best practice” among elite Supreme Court advocates to solicit an amicus brief from Cato; while our denial rate is lower than the Supreme Court’s, it’s been growing steadily given increasing requests without a commensurate growth in manpower.

For the record, here’s a record of cases in which we filed this term (in order of argument):

Winning side (10): McCutcheon v. FEC; Schuette v. Coalition to Defend Affirmative Action; Bond v. United States; Noel Canning v. NLRB; Brandt v. United States; McCullen v. Coakley; Harris v. Quinn; Burwell v. Hobby Lobby; SBA List v. Driehaus; Riley v. California

Losing side (1): Kaley v. United States

To learn more about all these cases and the views of Cato-friendly scholars and practitioners, register for our 13th Annual Constitution Day Symposium, which will be held September 17 to review the term just past and look ahead to the next one. (This year’s conference features P.J. O’Rourke, Miguel Estrada, and Judge Diane Sykes, among others.) That’s also when we’ll be releasing the latest volume of the Cato Supreme Court Review. Speaking of which, I’d better get editing…

Categories: Policy Institutes

Can Egypt Cure Its Subsidy Addiction?

Cato Op-Eds - Wed, 07/02/2014 - 15:13

Dalibor Rohac

Egypt’s government spends more on subsidies of consumer products—most prominently energy and food—than on health and education combined. Subsidies distort markets, lead to waste, and are largely ineffective in helping Egypt’s poor. Therefore, it should be heartening to see the government tackling the problem, as part of its effort to bring down the country’s fiscal deficit.

According to Finance Minister Hany Kadri Dimian, in the new fiscal year 2014–2015, “[T]he allocation for fuel subsidies has been cut from around EGP144bn ($20bn) last year to EGP100bn in the new budget.”

On the surface, that appears to be a bold step, slashing spending on fuel subsidies—which are by far the biggest fraction of the total subsidy bill—by almost a third. But there is a catch. According to the budget for the past fiscal year, 2013–2014, the subsidies to oil materials were already supposed to be close to EGP100bn ($14bn). Yet, the actual spending was drastically higher, perhaps by as much as an additional EGP70bn ($10bn)

And, similarly, in the preceding fiscal year, 2012–2013, the budget for fuel subsidies was to be EGP70bn, in what was seen at the time as an attempt to bring spending under control, especially relative to the previous fiscal year. But again, the actual spending on fuel subsidies during the year was drastically higher. Some of the Finance Ministry’s revised estimates were at EGP100bn, while others claimed the real numbers were even more sizeable.

In short, in recent years the government of Egypt systematically—and quite substantially—underestimated the planned spending on fuel subsidies. One can blame that on many factors, most prominently on the political turmoil, but this track record gives little guarantee that this time will be different.

Although the awareness of the problem, as well as the wider use of smart cards to allocate subsidies, are both encouraging, one needs to keep in mind that the most recent announcement is a far cry from a genuine reform plan. Even if actual spending on subsidies were exactly equal to the amount allocated in the budget, in nominal terms that would only bring Egypt back to the spending levels of fiscal 2011–2012, which were already unsustainable. As I argued in an earlier paper, what Egypt needs is a plan to phase out fuel subsidies altogether and replace them with targeted cash transfers. Alas, such a plan is nowhere in sight.

Categories: Policy Institutes

Century Old Terrorists Still Creating Wars From Iraq To Ukraine

Cato Op-Eds - Wed, 07/02/2014 - 12:30

Doug Bandow

The conflict in Iraq started a century ago. So did the civil war in Syria. And so did Russia’s dismemberment of Ukraine. 

All of those conflicts, and much more, grew out of World War I.

At the turn of the 20th century, Europe was prospering. But on June 28, 1914, 19-year-old Serb nationalist Gavrilo Princip assassinated Franz Ferdinand, heir to the Austro-Hungarian Empire, and his wife Sophie.

The following weeks were filled with ultimatums, plans, and pleas. But governments soon found that “control has been lost and the stone has begun to roll,” as German Chancellor Theobald von Bethmann-Hollweg put it.

Among the Great War’s participants, Great Britain enjoyed the best reputation because it was on the winning side and ran the war’s most brilliant public relations operation. Germany’s franchise was in fact broader, though Wilhelmine Germany’s political structure was flawed. Belgium looked to be the most innocent, but its rule killed millions of Africans in the Belgian Congo. France was a revenge-minded democracy. Austro-Hungary was less democratic, but the empire contained important checks and balances within.

A member of the Entente—the allies that included Britain, France, and ultimately the United States—was the antisemitic despotism of the Tsar. Its protégé, Serbia, backed Princip as an act of state terrorism against Austro-Hungary. The sclerotic and authoritarian Ottoman Empire and Bulgaria completed the Quadruple Alliance, while Romania, Italy, and Japan, joined the Entente.

The United States had nothing at stake in this quarrel. Unfortunately, America’s president, the haughty, sanctimonious, and egotistical Woodrow Wilson, imagined himself as being annointed by God to bring peace to the earth.

With Germany facing defeat, an armistice was reached in November 1918. The vainglorious Wilson enunciated high-minded principles for peace, but was out-maneuvered at the Versailles Peace Conference the following year.

The allies plundered the defeated while dictating a vengeful peace. Like the journey from Princip to World War I, the path from Versailles to Adolf Hitler was long but clear.

Wilson’s hope to reorder the world backfired spectacularly. The potentially reforming empires of Austria-Hungary, Germany, and Russia all disappeared. Eastern Europe was filled with what Germans called Saisonstaaten, or “states for a season.” The allies carved up the carcass of the Ottoman Empire, creating artificial entities like Iraq and Syria.

Economic and social crises afflicted even the victors, while the virulent bacilli of communism, fascism, and Nazism were loosed among the losers. The Great Depression spread misery widely.

A generation later, Europeans went to war again, causing more death and destruction. Today, territorial creations in the Balkans and Middle East continue to implode.

Winston Churchill observed in 1936:

America should have minded her own business and stayed out of the World War. If you hadn’t entered the war, the Allies would have made peace with Germany in the spring of 1917. Had we made peace, then there would have been no collapse in Russia followed by Communism, no breakdown in Italy followed by Fascism, and Germany would not have signed the Versailles Treaty, which has enthroned Nazism in Germany.

The so-called Great War demonstrated that appeasement often works. As I point out in my new Forbes online article:

Political figures routinely intone “Munich” without understanding that episode’s unique circumstances. A little more “appeasement” in the summer of 1914 would have prevented World War I—and its many spinoff conflicts.

Alliances often accelerate hostilities rather than deter conflict. In World War I, the two competing blocs became transmission belts of war. Two gunshots in Sarajevo triggered a conflict that eventually reached America.

War is no humanitarian exercise. Countries practiced “war socialism” and sacrificed civil liberties everywhere.

Intervention usually creates additional problems, begetting more intervention. Most every military step, from World War I to the Iraq invasion, spawned new geopolitical crises and demands for military action.

Today Washington is filled with proposals for new interventions.  Most seem unlikely to trigger a new world war.  But a century ago no one expected a distant assassination to do so either.  Americans should make war truly a last resort.

Categories: Policy Institutes

Exporting Ex-Im Bank Skepticism

Cato Op-Eds - Wed, 07/02/2014 - 12:15

Simon Lester

One of the points supporters of the Ex-Im Bank like to make is that other countries have their own versions of the bank to help finance purchases of those countries’ exports, and the United States should not “unilaterally disarm.” Here’s the NY Times:

[M]ost governments around the world support exports in similar ways, and if the United States dismantled the bank unilaterally, as some lawmakers are advocating, American companies could lose billions of dollars in overseas orders and decide to move their operations to other countries that provide generous export financing.

It’s true that other countries provide similar export subsidies, but I see this as an opportunity, not a hurdle to getting rid of Ex-Im. Liberalization through international trade negotiations has been struggling in recent years. Getting rid of Ex-Im could give it a boost. If we could end Ex-Im, and then call on our trading partners to follow our lead, it could give trade talks an important and meaningful purpose. In these negotiations, governments often seem reluctant to give up any protectionism until others agree to do so as well. That has not served us well recently; not much liberalization has occurred. It may be time to try something new, and lead the way with a unilateral liberalization proposal, to show the world we actually believe in free trade (they have good reason to doubt this), and encourage others to move in that direction as well.

Categories: Policy Institutes

Uber and Lyft Told To Halt Operations in Pittsburgh

Cato Op-Eds - Wed, 07/02/2014 - 12:10

Matthew Feeney

Yesterday ride-sharing app operators Uber and Lyft were issued cease and desist orders in Pittsburgh. The orders were granted by two judges, who were reportedly convinced by the Pennsylvania Public Utility Commission’s Bureau of Investigation and Enforcement that the two companies are a threat to public safety. The orders state that Uber and Lyft cannot operate in Pittsburgh without the Pennsylvania Public Utility Commission’s approval.

The orders come less than a month after the Virginia Department of Motor Vehicles issued Uber and Lyft cease and desist orders, saying that the companies are violating state law. Uber and Lyft have both continued to operate in Virginia despite the orders.

The Pennsylvania Public Utility Commission’s three major concerns regarding Uber and Lyft relate to background checks for drivers who use the app, vehicle inspections, and insurance. However, both companies already carry out strict background checks, have means by which to drop drivers with unsatisfactory vehicles, and have insurance schemes in place.

Drivers who want to use the Uber and Lyft apps to rideshare must pass background checks. Uber will not allow drivers to use its service if there are any DUI or drug offenses in the driver applicant’s record in the last seven years (although California requires no DUIs in the last 10 years). Lyft will not let any driver use its service if the applicant has any DUI or drug offenses at all. The background checks used by Uber and Lyft also screen for violent and sexual offenses.

Lyft carries out an in-person inspection of vehicles before drivers can use their service. Uber’s vehicle inspection is less rigorous. According to reporting from earlier this year on San Francisco drivers using UberX (Uber’s ridesharing service), Uber does not do in-person inspections of vehicles and only requires drivers to send in photos of their cars. Under legislation passed last month in Colorado, which were praised by Uber and Lyft, rideshare vehicles must be inspected.

However, it is worth noting that Uber and Lyft allow for passengers to rate drivers, and both companies do drop drivers who do not maintain good ratings. It is unlikely that a driver with a dirty or unsafe vehicle is going to be able to maintain a good rating for very long without making changes.

Both Uber and Lyft offer insurance protection, which is outlined in the images below:

 

These plans may not be the same as those demanded by the Pennsylvania Public Utility Commission, but the information is freely available to Uber and Lyft passengers and drivers.

Thankfully, Uber and Lyft have an ally in Pittsburgh Mayor Bill Peduto, who tweeted the following yesterday:

We will not let PUC shut down innovation without a battle. Ride sharing is worldwide—technology does not stand still. PA PUC must change.

The growth of so-called “sharing economy” companies such as Uber, Lyft, Airbnb, and TaskRabbit highlights not only that customers like the services that they provide, but also that the economy will almost certainly become increasingly peer-to-peer as technology improves and becomes more accessible. Cease and desist orders such as those issued yesterday are the latest examples of outdated regulatory framework that is understandably failing to keep up with technology being used by innovative companies. That innovation should be welcomed, not hampered.

Categories: Policy Institutes

NASA, Global Warming, and Free Enterprise

Cato Op-Eds - Wed, 07/02/2014 - 12:02

Stephanie Rugolo

Yesterday, NASA aborted a third attempt to launch a probe that would measure the level of atmospheric carbon dioxide, where it comes from, and where it is stored. The agency may try again today, as the probe’s findings, we are told, will be “crucial to understanding how much human activity affects the planet’s climate.”

While we eagerly await NASA’s findings, it is well-known that carbon dioxide emissions are on the rise worldwide. We also know that developed countries emit less, or increase emissions at a slower pace, than in the past. Crucially, developed countries also show falling emissions per dollar of output and per person.

According to HumanProgress.org and the World Bank, developed countries’ growth in carbon dioxide emissions has slowed or reversed over time.

Carbon dioxide emissions per person in these developed countries have been on the decline since at least 2000.

Over time, developed countries emit less carbon dioxide per unit of wealth created.

There are several causes for this trend, one of which is free enterprise. While history shows that corporations can be serious polluters, we also know that the free market helps to reduce emissions. That is because a concern for public opinion coupled with a desire to limit inputs (both of which affect profits) incentivize businesses to reduce emissions. After all, pollution is simply wasted resources contributing nothing to profits, a fact that leads companies to voluntarily reduce their emissions and waste. That is why in 1972, a pound of aluminum yielded 21.75 soda cans and in 2012 (as a result of can-makers’ use of less metal per unit), one pound of aluminum produced 33 cans.

Categories: Policy Institutes

Federal Highway Spending

Cato Op-Eds - Wed, 07/02/2014 - 11:56

Chris Edwards

The federal Highway Trust Fund (HTF) is running out of money. Congress will likely pass a short-term fix for the program in coming weeks. Over the longer term, many policymakers favor raising taxes to close the $14 billion annual gap between HTF spending and revenues.

Tax-hike advocates say the gap is caused by insufficient gas tax revenues. It is true that the value of the federal gas tax rate has been eroded by inflation since it was last raised two decades ago. But the gas tax rate was more than quadrupled between 1982 and 1994 from 4 cents per gallon to 18.4 cents. So if you look at the whole period since 1982, gas tax revenues have risen at a robust annual average rate of 6.1 percent (see data here).

In recent years, gas tax revenues have flat-lined. But the source of the HTF gap was highway and transit spending getting ahead of revenues, and then staying at elevated levels.

The chart below (from DownsizingGovernment.org/charts) shows real federal highway and transit spending since 1970. Real highway spending (red line) has almost doubled over the last two decades, from $29.1 billion in 1994 to $56.2 billion in 2014. Real transit spending (green line) has also risen since the mid-1990s. (If you visit the /charts page, you can see the dollar values by hovering the mouse over the lines.)

For more, see my congressional testimony and also recent items by Emily Goff.

Categories: Policy Institutes

A Plea to End Corporate Welfare

Cato Op-Eds - Tue, 07/01/2014 - 18:03

Caleb O. Brown

Following last week’s event for Ralph Nader’s Unstoppable, I sat down with himto discuss some of the ideas he expressed about how best to gather a large coalition to end corporate welfare, crony capitalism, and corporatism. We may agree more than this discussion indicates, but we disagree quite a bit, as you’ll see. You be the judge.

A somewhat longer audio version is available here.

Categories: Policy Institutes

The New Yorker Maps NYC's Shadow Transit System

Cato Op-Eds - Tue, 07/01/2014 - 13:51

Matthew Feeney

In a recent article for The New Yorker, Aaron Reiss explores New York City’s shadow transportation system – a network of so-called “dollar vans” that serve mostly low- income areas with large immigrant communities. The system lacks “service maps, posted timetables, and official stations or stops,” but Ross uses interactive maps and videos made with Nate Lavey to detail routes in Chinatown, Flatbush, Eastern Queens, Eastern New Jersey, and the Bronx.

Not too surprisingly, this ingenious shadow system faces serious regulatory obstacles. Vans have had a long and tumultuous regulatory history, with oversight changing hands several times in the past thirty or so years and the largely immigrant drivers facing police harassment. Since 1994, the New York City Taxi and Limousine Commission has been issuing van licenses, allowing vehicles to serve parts of the city with sufficient public need. Still, the number of illegal, unlicensed vans continues to outstrip by far the 481 licensed ones. The licensed vans operate under highly restrictive rules, which forbid them from picking up along New York City’s innumerable bus routes and require all pick-ups to be prearranged and documented in a passenger manifest.

In August last year Sean Malone of the Charles Koch Institute spoke to Reason TV about a film he had made featuring a Jamaican immigrant, Hector Ricketts, who faced regulatory hurdles after starting a commuter van service that transported healthcare workers to New York City’s outer boroughs. Thankfully, with the help of the Institute for Justice, Ricketts was allowed to stay in business.

Reiss’s article and Malone’s film both highlight the perversities of regulations that shield traditional public transit from competition in a free market. You might think that policymakers concerned with improving opportunities in low-income areas would want to celebrate and encourage the entrepreneurial initiative and community service represented by “dollar vans” and the service run by Hector Ricketts. Instead, they choose to chase such enterprising service providers into the legal shadows.

Categories: Policy Institutes

Medical Licensing in the States: Some Room for Agreement-and Reform

Cato Op-Eds - Tue, 07/01/2014 - 11:03

Charles Hughes

Even before Obamacare, many states faced the prospect of a doctor shortage due to an aging population and a limited supply of physicians. Obamacare will exacerbate this shortage by expanding insurance coverage to some degree, which will further increase the demand for care. One study projects that this increased demand will require between 4,300 and 7,000 more physicians by 2019.

Earlier this week, the New York Times reported that state medical boards across the country “have drafted a model law that would make it much easier for doctors licensed in one state to treat patients in other states, whether in person, by videoconference or online,” in what they are saying has the potential to be “the biggest change in medical licensing in decades.” This is a positive development, especially given that it seems to have a measure of bipartisan support, with 10 Republicans and 6 Democrats endorsing the plan in a recent letter.  If ultimately enacted, it could go a long way to increasing access to care, especially in underserved areas, but there are still many obstacles to seeing this plan become a reality, and it is far from the only option at the disposal of policymakers.

Another proposal to address this doctor shortfall is to expand the role of nurse practitioners (NP’s), who are registered nurses who have also received a graduate degree in nursing. States determine what services these NP’s can perform, and their scope of practice varies significantly. States that currently have reduced or restricted scope of practice should explore loosening these restrictions, because doing so could go some way to addressing the looming doctor shortage and increase access to care without a reduction in quality.

This idea has been explored in the past, garnering support from non-partisan organizations, and some states have already made progress in expanding scope of practice for NP’s. A 2010 Institute of Medicine report recommended that state legislatures “remove scope of practice barriers,” and a 2012 National Governor’s Association report suggested states “consider changing scope of practice legislation” as a way to increase the role of NP’s in providing primary care.  Despite this support that in some ways transcends traditional partisan lines, there is still much to be done, as this map shows:

Source: American Association of Nurse Practitioners, “2014 Nurse Practitioner State Practice Environment,” http://www.aanp.org/images/documents/state-leg-reg/stateregulatorymap.pdf.

This year, 19 states (and D.C.)  allow nurse practitioners to diagnose and, to some extent, treat patients without a physician’s involvement, otherwise known as ‘full practice.’ The remaining states only allow ‘reduced’ or ‘restricted’ practice, which means NP’s require some degree of physician involvement.

There has been some progress in recent years; Massachusetts and Minnesota transitioned from ‘reduced’ to ‘full’ practice this past year, but many of the most populous states like Florida, Texas and California still have restrictive scope of practice laws in place.

Skeptics of expanded scope of practice raise the concern that the quality of care could suffer as some duties are shifted from physicians to NP’s, but a systematic review of 26 recent studies in a Health Policy Brief for Health Affairs found that “health status, treatment practices, and prescribing behavior were consistent between nurse practitioners and physicians.” Some studies even find that NP’s score higher in patient satisfaction than physicians for certain services.

In a time when health care policy at the state level so often seems to be gridlocked, there are still channels to improve the access to care without increasing costs or reducing quality. This is not to say state lawmakers should shift all focus from the many pervasive problems with Obamacare, but perhaps, on this specific issue, there could be a separate peace and real, positive reform can be enacted.

Cato Institute Adjunct Scholar Shirley Svorny has explored the many problems posed by medical licensing in depth, and you can find her research here.

Categories: Policy Institutes

Jonathan Turley on Halbig v. Burwell

Cato Op-Eds - Tue, 07/01/2014 - 10:21

Michael F. Cannon

Jonathan Turley, a professor of law at George Washington University, has an opinion piece in today’s Los Angeles Times on Halbig v. Burwell:

The administration’s loss in the Hobby Lobby case is a bitter pill to swallow, but it is not a lethal threat to Obamacare. For critics of the law, Halbig is everything that Hobby Lobby is not. Where Hobby Lobby exempts only closely held corporations from a portion of the ACA rules, Halbig could allow an mass exodus from the program. And like all insurance programs, it only works if large numbers are insured so that the risks are widely spread. Halbig could leave Obamacare on life support — and lead to another showdown in the Supreme Court.

Read the whole thing.

A ruling is expected from the D.C. Circuit in Halbig any day now. Here are some materials that will let you hit the ground running.

Categories: Policy Institutes

Cato Spending Charts

Cato Op-Eds - Mon, 06/30/2014 - 17:03

Chris Edwards

How much does Congress spend on Veterans Affairs, the IRS, or Customs and Border Protection? How much has spending increased over time?

You can answer those questions quickly and easily with Cato’s updated charting tool for the federal budget.

The tool allows you to plot real outlays for about 500 departments, agencies, and programs, 1970-2014. All data is from the Office of Management and Budget.

The chart page opens blank. Click “+” to open a department and then check boxes for the departments, agencies, and programs you want to plot.

To save your chart as an image or a pdf, right click on it.

This chart shows spending on the three largest federal agencies. The data is in constant 2014 dollars.

Categories: Policy Institutes

The Republic of Gilead is Not Nigh

Cato Op-Eds - Mon, 06/30/2014 - 16:03

Julian Sanchez

If you were judging only from the outraged reaction  online, you could be forgiven for thinking that the Supreme Court’s ruling in Burwell v. Hobby Lobby had just mandated the adoption of Margaret Atwood’s The Handmaid’s Tale as the blueprint for American society.  Yet as my colleague Ilya Shapiro notes, there’s a profound disconnect between all the rhetoric about “denial of access” to contraception and the substance of the ruling.

At the heart of the majority’s opinion is this: The Department of Health and Human Services has already developed a way to exempt religious non-profit corporations—such as churches, charities, and hospitals—from the legal mandate to pay for employees’ contraception coverage.  In what amounts to an accounting trick, they permit those corporations to purchase plans without such coverage, and then require that insurance companies themselves independently provide it to the uncovered employees.  Because pregnancy is quite a bit more expensive than contraception, this apparently ends up not imposing any additional net cost on the insurers.  The result is that employees of religious non-profits end up with no-copay contraception coverage, exactly as if the employer were required to provide it directly, but the employers are satisfied by this ledger shuffling that they aren’t being compelled to violate their most deeply held moral convictions.  Which, one would think, is a win-win.

Against this background, the Court simply held that since HHS has already found a way to achieve the government’s aim of ensuring employees have access to free contraception without compelling non-profit employers to act against their profound religious convictions, they must do the same in the case of for-profit employers, at least where the for-profit corporation is “closely held.”  The majority quite explicitly denied this ruling has any implications for cases where there might not be such a happy win-win means of achieving the government’s ends, at no additional cost, without forcing employers to violate their convictions. As Justice Alito’s opinion emphasizes:

The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing.

In light of this, the outraged reaction to the ruling ought to seem a bit puzzling.  If what you are fundamentally concerned about is whether women have access to no-copay contraception, then there’s no obvious reason to invest such deep significance in the precise accounting details of the mechanism by which it is provided. You might even be heartened by a ruling that so centrally turns on the premise that accomodation for religious objectors is required when no women will lack such coverage who would have enjoyed it under a mandate.

The outrage does make sense, of course, if what one fundamentally cares about—or at least, additionally cares about—is the symbolic speech act embedded in the compulsion itself. In other words, if the purpose of the mandate is not merely to achieve a certain practical result, but to declare the qualms of believers with religious objections so utterly underserving of respect that they may be forced to act against their convictions regardless of whether this makes any real difference to the outcome.  And something like that does indeed seem to be lurking just beneath—if not at—the surface of many reactions. The ruling seems to provoke anger, not because it will result in women having to pay more for birth control (as it won’t), but at least in part because it fails to send the appropriate cultural signal. Or, at any rate, because it allows religious employers to continue sending the wrong cultural signal—disapproval of certain forms of contraception—when sending that signal does not impede the achievement of the government’s ends in any way.

Personally, I have no sympathy whatever with the substantive moral views of Hobby Lobby’s owners.   But I’m dismayed at how many friends who style themselves “liberals,” even recognizing the ruling will make no immediate difference in employee access to contraception, seem to regard it as an appalling betrayal that the Court refused to license what amounts to purely symbolic compulsion of people with retrograde ideas. If we accept that the exemption here makes no functional difference to whether people are covered, however, that’s the only rationale left for insisting on direct purchase of coverage by employers—and not, I had thought, a legitimate rationale for government coercion in a liberal democracy.

Categories: Policy Institutes

Hobby Lobby, Harris, and Stealing Each Others' Clothes

Cato Op-Eds - Mon, 06/30/2014 - 14:42

Walter Olson

Legal issues have a way of changing form over the years in such a way that the liberal and conservative teams, such as they are, each periodically migrate over to occupy the positions the other formerly held. Examples from today’s two big cases: 

  • In 1990, when the Court decided Employment Division v. Smith, the Indian peyote case, it seemed clear that the liberal stand was to sympathize with religious believers seeking exemption from otherwise applicable general laws, while the conservative position – expressed by Justice Scalia in a majority opinion over a dissent by Blackmun, Brennan, and Marshall – was that sorry, but asserting religious scruples doesn’t place you above the law. Congress then proceeded to adopt by way of RFRA, the Religious Freedom Restoration Act, a mechanism using statutory means to achieve much the same ends as the liberals had sought to locate in constitutional law. Two decades later, where are we? The analogy with Hobby Lobby is by no means exact – one might decline to constitutionalize religious conscience rights yet still favor their vigorous statutory application, and the Smith case involved individuals rather than family corporations. But still: by prevailing back then, Scalia and the conservatives shaped a more favorable terrain for what to become the liberal position in Hobby Lobby, while the position embraced by Brennan and Marshall back then, had it prevailed, would have given the religious objectors in Hobby Lobby stronger ground to stand on.
  • Protection for the speech and expression rights of public-sector employees is a specialized area of constitutional law and, under existing Supreme Court precedent, a bit of a balancing act in which the interests of the government-as-employer in maintaining an orderly and efficient workplace often outweigh the expression rights of individual public employees. Not that long ago, it would have been a plausible generalization that liberals on the Court were enthusiastic about guarding and expanding the individual expression rights of public-sector workers, while conservatives tended more to stress management prerogatives. But in today’s Harris v. Quinn, it was the conservative majority that demanded respect for individual employees’ expression rights even where doing so might tend to destabilize an overall public policy, while the dissenting liberals led by Justice Kagan deprecated those same individual expression rights as all very nice in their way but needing to yield to the rights of management. 

Has anyone tried to compile a list of all the various issues in which liberal and conservative blocs have traded positions with each other over living memory? I suspect it would be a long one.

Categories: Policy Institutes

Liberty at the High Court: Not Just (A) Hobby

Cato Op-Eds - Mon, 06/30/2014 - 12:20

Walter Olson

As someone observed, the pundit world showed deep interest in Harris v. Quinn for about twenty minutes, after which Hobby Lobby was announced and it seemed everyone wanted to talk about that and nothing else. 

My own opinion is that Harris was the more important decision today and Hobby Lobby the less, because constitutional law endures. When Congress sooner or later gets around to amending RFRA, Obamacare, or both, Hobby Lobby, a case of statutory interpretation, will become a footnote of purely historical interest. That doesn’t happen with a First Amendment case, unless of course it is overruled, overturned by Constitutional amendment, etc.

It’s surprising how many commentators are referring to today as a double win for the First Amendment. But Hobby Lobby, while an important case in its way, never reached the First Amendment. Harris did.

Categories: Policy Institutes

The Practical Impact of Harris v. Quinn: A Major Blow to Organized Labor

Cato Op-Eds - Mon, 06/30/2014 - 11:20

Andrew M. Grossman

As noted in this previous post, the Supreme Court’s decision today in Harris v. Quinn does not remake private-sector labor law but does put an end to one of the labor movement’s greatest hopes for expansion: commandeering dues payments by recipients of state subsidies. While the decision may be narrow—the Court, after all, did not rule that no public workers may be forced to support a labor union—its impact will be anything but that.

The Illinois law at issue here in Harris was at the leading edge of a nationwide movement over the past decade to organize home-based care workers, including medical assistants and even family child-care providers, and thereby to “reinvigorate organized labor.”

Though a recent phenomenon, the use of sham employment relationships to support mandatory union representation has spread rapidly across the nation.  In just the decade since SEIU waged a “massive campaign to pressure [] policymakers” in Los Angeles to authorize union bargaining for homecare workers, home-based care workers “have become the darlings of the labor movement” and “helped to reinvigorate organized labor.”  From around zero a decade ago, now several hundred thousand home workers are covered by collective-bargaining agreements.

This quick growth is the result of a concerted campaign by national unions, particularly SEIU, to boost sagging labor-union membership through the organization of individuals who provide home-based services to Medicaid recipients.  Since SEIU’s Los Angeles victory in 1999, labor unions have undertaken successful campaigns to establish nominal employers for homecare workers in Oregon (2000), Washington (2001), Illinois (2003), Michigan (2004), Wisconsin (2005), Iowa (2005), Massachusetts (2006), Missouri (2008), Ohio (2009), Pennsylvania (2010), Connecticut (2011), Maryland (2011).  (Three states—Ohio, Pennsylvania, and Wisconsin—subsequently repealed this authority.)  As labor law expert Peggie Smith puts it, those campaigns have “been hailed as labor’s biggest victory in over sixty years.”

Nor has this model been limited to homecare providers.  Over the past five years, organized labor has directed its efforts to organizing home-based childcare providers, including childcare provided by family members who receive public support or subsidies.  By February 2007, seven states had recognized unions as the exclusive representative of home-based child care providers; over the next three years, an additional seven states followed suit. 

All this has added up to big money for big labor. Just one of the Illinois programs at issue in Harris involved approximately 20,000 personal assistants who pay SEIU over $3.6 million per year.

Today’s decision will slow, and perhaps eventually end, that flow of funds, as workers decide they can represent their own interests and would prefer to keep their earnings for themselves and their families. So while the Court did not go all the way to striking down compulsory support of public-sector unions—as union supporters feared it would—it does deal a major blow to organized labor where it hurts the most: members and money.

Categories: Policy Institutes

Of Course Government Can't Violate Religious Liberty for No Good Reason

Cato Op-Eds - Mon, 06/30/2014 - 11:12

Ilya Shapiro

Hobby Lobby is a much simpler and less important case than it’s been made out to be, for reasons the Court clearly spelled out today. Obamacare’s contraceptive mandate had to fall under the Religious Freedom Restoration Act (without even getting to the First Amendment) because it didn’t show – couldn’t show – that there’s no other way of achieving its goal without violating religious beliefs. Moreover, the fact that a for-profit corporation is asserting the statute’s protections is of no moment because neither the corporate form nor the profit motive undermines RFRA’s solicitude for the rights of humans – including owners, officers, and shareholders. In short, the mandate fell because it was a rights-busting government compulsion that lacked sufficient justification. Nobody has been denied access to contraceptives and there’s now more freedom for all Americans to live their lives how they want, without checking their freedom at the office door. 

For more on how the “corporate rights” issue in the case was really a misnomer – because the free exercise of individual humans is at issue regardless of how you style the legalese – see Cato’s amicus brief

Categories: Policy Institutes

Harris v. Quinn: A Win for Workers' First Amendment Rights

Cato Op-Eds - Mon, 06/30/2014 - 10:47

Andrew M. Grossman

Enough is enough, the Supreme Court ruled today in Harris v. Quinn regarding the power of government to force public employees to associate with a labor union and pay for its speech. Although the Court did not overturn its 1977 precedent, Abood v. Detroit Board of Education, allowing states to make their workers contribute to labor unions, it declined to extend that principle to reach recipients of state subsidies—in this case, home-care workers who receive modest stipends from the state of Illinois’ Medicaid program but are not properly considered “employees” of the state.

The Court is right that Abood is “something of an anomaly” because it sacrifices public workers’ First Amendment rights of speech and association to avoid their “free-riding” on the dues of workers who’ve chosen to join a union, the kind of thing that rarely if ever is sufficient to overcome First Amendment objections. But Abood treated that issue as already decided by prior cases, which the Harris Court recognizes it was not–a point discussed at length in Cato’s amicus brief. Abood was a serious mistake, the Harris Court concludes, because public-sector union speech on “core issues such as wages, pensions, and benefits are important political issues” and cannot be distinguished from other political speech, which is due the First Amendment’s strongest protection. A ruling along those lines would spell the end of compulsory support of public-sector unions, a major source of funds and their clout. 

It was enough, however, in Harris for the Court to decline Illinois’ invitation “to approve a very substantial expansion of Abood’s reach.” Illinois claimed that home-care workers were public employees for one purpose only: collective bargaining. But these workers were not hired or fired by the state, supervised by the state, given benefits by the state, or otherwise treated as state workers. And for that reason, Abood’s purposes, which relate only to actual “public employees,” simply do not apply. Were the law otherwise, the Court observed, “a host of workers who receive payments from a governmental entity for some sort of service would be candidates for inclusion within Abood’s reach.”

While Harris is not a watershed opinion that remakes labor law consistent with First Amendment principles, it does put an end to the forced unionization of home-based workers, a practice that has spread to nearly a dozen states and had provided a substantial number of new workers to the labor movement in recent years. Harris also lays the groundwork for a challenge to what it calls “Abood’s questionable foundations.” If recent Roberts Court precedents like Shelby County and Citizens United are any guide, Harris is a warning shot that the Abood regime is not long for this world and that the next case will be the one to vindicate all public workers’ First Amendment rights. 

Categories: Policy Institutes

Immigration Enforcement Aids Smugglers – Unaccompanied Children Edition

Cato Op-Eds - Mon, 06/30/2014 - 10:16

Alex Nowrasteh

The increase of human smugglers transporting unauthorized immigrants to the United States is likely a consequence of more effective border enforcement.  Although the Obama administration has de-emphasized internal immigration enforcement after 2011, his administration has ramped up enforcement along the border – focusing on increasing the legal and economic costs imposed on unlawful immigrants apprehended while trying to enter the United States.  Since border and internal enforcement are substitutes, the shift in resources and increase in penalties for unlawful crossers does not represent a decrease in total enforcement.  Matt Graham from the Bipartisan Policy Center wrote an excellent breakdown of the reprioritization of immigration enforcement, the increase in penalties, and how it has deterred unauthorized immigration.

The price of smuggling is an indication of the effectiveness of immigration enforcement along the border.  The first effect of increased enforcement is to decrease the supply of human smugglers.  As the supply of human smugglers decreases, the price that remaining human smugglers can charge increases.  Before border enforcement tightened in the early 1990s, migrants typically paid about $725 (2014 dollars).  Currently, unauthorized migrants from Central America are paying around $7500.  

The kink in the human smuggling demand curve represents a hypothesized increase in inelasticity for certain consumers of human smuggling.  The inelastic portion of the demand curve represents consumers who very much want to come to the United States and who will pay a very high price to do so.  For that group, an increase in price does not much decrease their quantity demanded for human smuggling.  For the relatively elastic portion of the demand curve, a small rise in price causes a large drop off in the quantity demanded for human smuggling.  The increase in enforcement has shifted the supply curve to the left, pricing the immigrants with a relatively elastic demand for human smuggling out of the market while raising the price on the inelastic demanders. 

The immigrants most likely to have inelastic quantity demand for human smuggling are those fleeing violence or seeking to reunite with their families in the United States.  An increase in smuggling price will not much decrease the quantity of smuggling demanded by parents seeking to reunite with their children and children fleeing the threat of death.  Smugglers know that children reuniting with their families and those fleeing violence are the most likely to pay high prices, thus the smugglers have focused on recruiting those groups as customers – one large reason why so many unaccompanied children (UAC) are transported to the border by smugglers.     

Another result of more effective immigration border enforcement is that it increases immigrant reliance on human smugglers.  Unauthorized immigrants who used to walk across the border when immigration enforcement was light now increasingly rely on human smugglers to avoid detection.  The crackdown on unauthorized immigrants, especially after 1993, caused a big increase in the use of smugglers by unauthorized immigrants.  In 1999, 3.2 percent of apprehended unlawful immigrants reported hiring a human smuggler.  In 2008, 18 percent of apprehended unlawful immigrants reported hiring a human smuggler – an almost six-fold increase.  The Department of Homeland Security (DHS) and private organizations have also noted an increase in the price of smuggling. 

From 1972 to 2003, a 10 percent increase in the number of border patrol enforcement hours increases the price that smugglers can charge by 2.5 percent.  Line watch hours have grown by over 400 percent since the early 1990s.   

The economics of industrial organization can shed some light on why smugglers have shifted from mom and pop operations to large, organized, and violent criminal cartels who now seek children clients instead of adults.  Mom and pop smugglers ran small and unsophisticated operations to smuggle immigrants over the border.  As border patrol cracked down on them and put many out of business, more intensive smuggling operations that required more capital, planning, and violence to overcome enforcement were needed to satisfy the demand.  As a result of the shrinking mom and pop smuggling operations, serious criminal organizations and drug gangs have become specialized in smuggling migrants because of the higher profits.  The shift from mom and pop smugglers to sophisticated criminal smugglers that focus on smuggling those with an inelastic demand for smuggling is the result of larger and more effective border enforcement. 

Another consequence of higher smuggling prices is that migrants have to work for a longer period of time in the United States to justify the larger financial cost of immigrating.  As a result, migrants do not return to their home countries as frequently and many end up making the United States their permanent home.  This also incentivizes unlawful immigrants to send for their children after they arrive in the United States – further increasing the quantity demanded for smuggling.   

More intensive and expanded border enforcement can explain part of the increased reliance of UAC on human smuggling.  And just because it is not obvious to some – the number of UAC in custody is a result of effective immigration enforcement along the border.  The surge in UAC is portrayed by many immigration restrictionists as a failure of immigration enforcement.  Those commentators should realize that the shift toward human smugglers is evidence that increased border enforcement is decreasing unauthorized immigration.  Immigration restrictions are not immune from the law of unintended consequences.

Categories: Policy Institutes

The Coming School Choice Tidal Wave

Cato Op-Eds - Mon, 06/30/2014 - 09:01

Jason Bedrick

Last week I reviewed the latest survey on education policy from the Friedman Foundation but I missed something that should warm the cockles of the hearts of everyone who supports greater choice in education: each generation is progressively more favorable and less opposed to educational choice. 

Scholarship tax credits (STCs) remain the most popular form of educational choice. Even among the 55+ cohort, there is a 20 point spread in favor of choice, 53 percent to 33 percent. Support increases in each cohort by 8 to 13 points. Meanwhile, opposition falls precipitously from 33 percent to only 14 percent. The 35-54 cohort has a 39 point spread in favor of educational choice and the 18-34 cohort has a whopping 60 point spread, 74 percent to 14 percent.

Vouchers are the second most popular of the three reforms. While the oldest cohort is slightly more pro-voucher than pro-STC, opposition is 7 points higher at 33 percent, for a spread of 16 points. The margin widens considerably to 32 points for the middle cohort (65 percent support to 33 percent opposition) and 44 points for the youngest cohort (69 percent support to 25 percent opposition), which is 16 points narrower than the spread for STCs.

Education savings accounts aroused the most skepticism among the 55+ cohort. The 2 point spread (45 percent support to 43 percent opposition) was the narrowest of any category in the survey. The gap widened to 23 points in the middle cohort (57 percent support to 34 percent opposition) and 46 points among the youngest cohort (68 percent support to 22 percent opposition).

The survey data do not give us enough information to state with any certainty why younger Americans are more pro-educational choice than older Americans. Nostalgia for the “common school” among the oldest cohort may play a role. Another factor may be efforts to influence the culture like National School Choice Week or films like “Waiting for Superman” or “Won’t Back Down.” Or perhaps it’s simply that members of the iPhone generation expect and demand choices and the ability to customize nearly every aspect of their lives, and the geographically-assigned, one-size-fits-all government schools seem like an anachronistic hold-out from another era.

These numbers accord with the findings of Harvard University’s Program on Education Policy and Governance/Education Next, as detailed in Teachers versus the Public, which also found that younger Americans are significantly more likely to favor educational choice than older Americans

More research is needed on what’s actually driving these generational differences, but if trends continue, then we’re likely to see a tidal wave of new and expanded educational choice programs in the coming decades.

Categories: Policy Institutes

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