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The D.C. Circuit Grants En Banc Review of Halbig

Cato Op-Eds - Thu, 09/04/2014 - 12:01

Michael F. Cannon

My reaction to the D.C. Circuit’s decision to grant en banc review of Halbig v. Burwell in a nutshell:

  1. It is unnecessary.
  2. It is unwise.
  3. It is unfortunate.
  4. It appears political, as would a decision to overrule Halbig.
  5. It will likely only delay Supreme Court review.
  6. En banc review does not necessarily mean the court will overturn Halbig, though it doesn’t look good.
  7. I predict that even if the court overturns Halbig, the Obama administration will lose ground.
  8. The D.C. Circuit will not have the last word.

If you want to go outside the nutshell, where I unpack all this with more words and facts and links, go here

Categories: Policy Institutes

The D.C. Circuit Vacates Its Panel’s Halbig Decision

Cato Op-Eds - Thu, 09/04/2014 - 11:10

Roger Pilon

A quick note on unfortunate happenings at the U.S. Court of Appeals for the D.C. Circuit this morning: The court vacated its excellent July 22 decision in Halbig v. Burwell, which had held that Obamacare’s plain language precluded the federal government from subsidizing the health insurance premiums of policies people obtain through exchanges established by the federal government. Just hours after that July 22 decision came down, the Fourth Circuit Court of Appeals ruled the other way on the question in King v. Burwell, setting up a circuit split and a reason for the Supreme Court to promptly decide the question, especially given the scope and magnitude of the issues at stake (36 states have declined to establish state exchanges, for which Obamacare does provided subsidies).

Thus, with the D.C. Circuit now having vacated its three-judge panel’s decision and having agreed to rehear the case en banc (by the entire court), there is no longer a circuit split and less urgency for the Supreme Court to take up the issue. Other cases challenging the federal subsidies are coming along, but for the moment, this is where things are. For more on these issues, see Ilya’s latest post and a WSJ op-ed by Adam White, both written before this morning’s decision. It’s rare for any circuit, but especially for the D.C. Circuit, to grant en banc rehearings. But then nothing has been normal about Obamacare, which is what you should expect when so politicized a program is thrust upon the nation.

Categories: Policy Institutes

Supreme Court Must Resolve Obamacare Chaos

Cato Op-Eds - Thu, 09/04/2014 - 10:05

Ilya Shapiro

When the Affordable Care Act was being debated in Congress, former House Speaker Nancy Pelosi infamously insisted that “we have to pass the bill to find out what’s in it.”  It turns out, however, that the Obama administration—which has been making it up as it goes along with regard to ACA enforcement—doesn’t care “what’s in it.”

The IRS in particular has been implementing Obamacare as it thinks the law should be, not as it is. The ACA encourages states to establish health insurance exchanges by offering people who get their health coverage “through an Exchange established by the State” a tax credit—a subsidy to help them pay their premium. In the event a state declines to establish an exchange, Section 1321 further empowers the Department of Health and Human Services to establish federal exchange in states that decline to establish their own exchanges (without providing for the premium subsidy).

When, contrary to the expectations of the law’s achitects, 34 states declined to establish an exchange—two more have since failed—the IRS decided that those getting their insurance on federally established exchanges should qualify for tax credits regardless of the statutory text. In conflict with the U.S. Court of Appeals for the D.C. Circuit in a similar case called Halbig v. Burwell, the Fourth Circuit in King v. Burwell found the legal text to be ambiguous and thus deferred to the IRS interpretation.

The so-called Chevron doctrine counsels that statutory text controls when Congress has spoken clearly on an issue. But where Congress is ambiguous or silent, the agency can fill the regulatory gap with its own rules and policies. The problem here is that the ACA’s text was not ambiguous and there is no evidence that Congress intended to delegate to the IRS the power to determine whether billions of taxpayer dollars should annually be dispersed to those purchasing health care coverage on federal exchanges. That the Fourth Circuit has bent over backwards to accommodate the administration’s latest Obamacare “fix shows that it, too, is not so concerned with “what’s in” the law. 

To that end, Cato joined four other organizations to support the plaintiffs’ petition for review by the Supreme Court. Our brief argues that the Court should hear the case because it offers the opportunity to reverse potentially grave harm to the separation of powers, to correct a misapplication of the Chevron doctrine, and to restore the idea that drastically altering the operation of a major legislative act belongs to the political process and not in a back rooms of an administrative agency. Just because those who voted for the ACA didn’t care what it said doesn’t mean that the executive and judicial branches should also turn a blind eye.  

To see the legal machinations now at play in these cases regarding the Obamacare-IRS-tax-credit, see my recent op-ed in the National Law Journal. Since that was published this past Monday, the government received a 30-day extension in which it has to file its response to the King cert petition. That means that the Supreme Court will be considering at some point next month whether to take the case.

For Cato’s previous briefs in Halbig and King, respectively, see here and here.

Categories: Policy Institutes

FSOC’s Arbitrary, Ever-Changing Double Standard

Cato Op-Eds - Wed, 09/03/2014 - 17:10

Mark A. Calabria

In the Dodd-Frank Act, Congress, without irony, decided the best way to end “too big to fail” was to have a committee of regulators label certain companies “too big to fail.”  That committee, established under Title I of Dodd-Frank, is called the Financial Stability Oversight Council (FSOC) and is chaired by the Treasury Secretary. Like so much of Dodd-Frank, FSOC gets to write its own rules. Unfortunately FSOC won’t even write those rules, but instead it has decided that it knows systemic risk when it sees it. This has led to an ad hoc process that almost makes the bailouts of 2008 look systematic.

Compare the process for asset management firms and that for insurance companies. In late 2013, the Treasury released a report on the asset management industry. It was widely viewed as an attempt to make the case for labeling some asset management firms “systemic.”  The report was widely criticized. Such criticism did not stop FSOC from conducting a public conference on the asset management industry in May 2014.  Whether it was the public reaction to the conference or the paper, FSOC has largely abandoned labeling asset managers as “too big to fail.”  That was an appropriate outcome as firms in that industry are not systemic and shouldn’t be lead to expect a federal rescue.

Now don’t get me wrong: A shoddy report and a conference do not constitute a thorough process. As someone who has overseen a rulemaking process, I can say they do not even meet the basics of the Administrative Procedures Act. But just when that process seemed wholly inadequate, along comes the “process” for insurance companies.

Not unexpectedly, AIG went along without a peep. Given its role in the crisis that’s not a surprise. But there’s been no report or even a conference on whether insurance companies pose systemic risk. Completing either one would, of course, require FSOC to define systemic risk and to offer some minimal metrics. Instead, what we have is unelected bureaucrats simply making it up as they go along.

And here I was thinking Dodd-Frank was meant to end the haphazard behavior of regulators in 2008 and lead us towards a predictable rules-based approach to ending systemic risk!

Categories: Policy Institutes

Vehicle Fleet Mess at Homeland Security

Cato Op-Eds - Wed, 09/03/2014 - 15:01

Nicole Kaeding

Duplication and waste are common themes within the Department of Homeland Security. A recent report from the DHS inspector general (IG) provides another example of wasted tax dollars.

The federal government owned or leased 650,000 motor vehicles in fiscal year 2012. DHS’s fleet was the government’s second largest, consisting of 56,000 vehicles. This armada of cars and trucks cost taxpayers $534 million in 2012. Given the large expense, the IG reviewed a portion of the DHS fleet, 753 vehicles, “to determine whether, for FY2012, the Department met requirements to right size the composition of its motor vehicle fleet, [and] eliminate underused vehicles.”

The IG found that DHS vehicle management is poor. Vehicle identification numbers were not listed correctly for 39 percent of vehicles. Fifty-four percent of acquisition dates did not match other department records. The most damning finding was that 59 percent of vehicles were underused, meaning they were driven less than 12,000 miles, the governmental standard, in one year. Apparently, DHS has far too many cars and trucks, even assuming that the vehicles are used for efficient purposes.

The IG found that DHS does not purge unnecessary vehicles. Eighty-six percent of the underused vehicles were still owned by the department a year later. DHS was unable to provide documentation justifying vehicle retention and the additional expense.

These results led the IG to conclude: “we estimate that operating these underused vehicles cost between $35.3 million and $48.6 million. For these reasons, DHS cannot ensure its vehicle fleet composition is cost efficient, complies with department requirements, and has the correct number of motor vehicles to accomplish this mission.”

This is not the first time DHS has been criticized for its handling of its vehicle fleet. In 2013, the Government Accountability Office criticized DHS for similar problems, including incomplete data and failing to adequately analyze and utilize its vehicles. DHS is also not the only agency with underutilized vehicles, as GAO has been highlighted for years.

The federal government spends $3 billion annually on its vehicle fleet, excluding the United State Postal Service. This should be an area in which bipartisan reforms are possible.

Categories: Policy Institutes

Opinions of Climate Change: Related to Dependency on Government Money?

Cato Op-Eds - Wed, 09/03/2014 - 12:09

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

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.”

— 

In our post last week titled “Climate Alarmism: When is this Bozo Going Down?” we described how new research increasingly casts doubt on the validity of climate models and their projections of future climate change.  It is increasing clear that climate models simply predict too much warming from human greenhouse gas emissions. 

But the scientific community, or at least that part of it which makes its living off climate alarm, is slow to accept this.

Who can blame these folks?  More money flows from the government into universities (or government labs) to study the effects of climate change if we all agree that human greenhouse gas emissions are leading to climate change of a dangerous magnitude.

So it is left to the emeritus or retired profs to lay bare the truth.

A fine example of this can be found in a recent article in the New York Times’ DotEarth blog run by ex-Times science reporter Andy Revkin. In his story looking into the implications of new scientific findings concerning the potential impacts of ocean circulation variability on our understanding of the behavior the global average surface history (parts of which we described in our last post), Revkin interviewed four prominent climate researchers.  The level of confidence that each showed in the mainstream (climate model-driven) global warming meme (despite this new research suggesting that something may be rotten in the state of Denmark) appears proportional to how much professional advancement still lies ahead.

Josh Willis’ (a young scientist from the government’s Jet Propulsion Laboratory) views on climate change seemed unshaken by the new research:

In regards to your question, if you mean how robust is the “slowdown” in global surface warming, the answer is it just probably just barely statistically significant. If you are wondering whether is it meaningful in terms of the public discourse about climate change, I would say the answer is no. The basic story of human caused global warming and its coming impacts is still the same: humans are causing it and the future will bring higher sea levels and warmer temperatures, the only questions are: how much and how fast?

Andrew Dessler, a mid-career professor at Texas A&M, appeared pretty much equally unmoved:

Second, I think it’s important to put the hiatus in context. This is not an existential threat to the mainstream theory of climate. We are not going to find out that, lo and behold, carbon dioxide is not a greenhouse gas and is not causing warming. Rather, I expect that the hiatus will help us understand how ocean variability interacts with the long-term warming that humans are causing. In a few years, as we get to understand this more, skeptics will move on (just like they dropped arguments about the hockey stick and about the surface station record) to their next reason not to believe climate science.

John Michael Wallace, a late-career professor at the University of Washington who recently became emeritus, expressed much more interest in the idea that the new research could lower confidence in just how much human greenhouse gases were impacting climate change:

…It seemed to me that the hiatus in the warming, which by then was approaching ten years in length, should not be dismissed as a statistical fluke. It was as legitimate a part of the record as the rapid rises in global-mean temperature in the 1980s and 1990s…

The new paper by Tung and Chen goes much farther than we did in making the case that Atlantic multidecadal variability needs to be considered in the attribution of climate change. I’m glad to see that it is attracting attention in the scientific community, along with recent papers of Kosaka et al. and Meehl et al. emphasizing the role of ENSO-like variability. I hope this will lead to a broader discussion about the contribution of natural variability to local climate trends and to the statistics of extreme events.

And finally Carl Wunsch, late-career professor emeritus at M.I.T. was pretty frank about the new research and the state of climate science:

The central problem of climate science is to ask what you do and say when your data are, by almost any standard, inadequate? If I spend three years analyzing my data, and the only defensible inference is that “the data are inadequate to answer the question,” how do you publish? How do you get your grant renewed? A common answer is to distort the calculation of the uncertainty, or ignore it all together, and proclaim an exciting story that the New York Times will pick up.

We couldn’t have said that better ourselves!

 

Categories: Policy Institutes

Uber Signups Soar Following German Ban

Cato Op-Eds - Wed, 09/03/2014 - 11:13

Matthew Feeney

Uber has experienced an explosion in signups in Germany after a Frankfurt court handed down a temporary injunction banning the transport technology company. The countrywide ban follows a suit brought against Uber by Taxi Deutschland, an association of taxi dispatchers. Taxi Deutschland claimed that Uber did not have the necessary permits to operate. Under German law, drivers without a commercial licenses can pick up passengers as long as they do not charge more than the operating costs for the ride.

The Telegraph notes that Uber says it will continue to operate in Germany despite Taxi Deutschland claiming it will seek a fine of as much as €250,000 every time Uber provides a service without a license.

Since the injunction was issued, Uber claims that it has experienced a larger than 500 percent increase in signups compared to the same period last week in some parts of Germany. As City A.M.’s Guy Bentley notes, the Uber app has been downloaded in parts of Germany where Uber drivers do not operate:

The taxi app company doubled signups in all five German cities where it operates, with demand in both Hamburg and Düsseldorf rising over 500 per cent. Even people who don’t live in cities where Uber operates are downloading the app, perhaps in an act of capitalist solidarity. Uber now ranks in the top ten most downloaded apps in Germany.

According to Uber, the increased signups on September 2 in the five German cities where it operates compared to the same period last week are as follows:

- Uber Hamburg up 590 percent

- Uber Dusseldorf up 518 percent

- Uber Munich up 329 percent

- Uber Berlin up 270 percent

- Uber Frankfurt up 228 percent

I noted in July that, according to Uber’s U.K. general manager, Uber enjoyed an 850 percent increase in British signups in one day following a London black cab protest against how Uber was being treated by London’s transportation agency.

Taxi companies are understandably frustrated by the rise of Uber and will continue to seek legal means to stifle the company’s growth. However, events in Germany and the U.K. have shown that attacks on Uber can provide the company with welcome exposure and new customers.

 

Categories: Policy Institutes

Police Unions and Excessive Force

Cato Op-Eds - Wed, 09/03/2014 - 09:22

Walter Olson

[cross-posted from Overlawyered]

The need for police forces isn’t going away, so what practical suggestions do libertarians have in the here and now for discouraging police resort to excessive force? Thanks to Ed Krayewski at Reason for quoting me on the subject of tackling the power of police unions, which not only protect bad actors from removal but tie the hands of well-intentioned administrators in a dozen other ways and exert political pressure against effective reform. (Other suggestions in the piece: increase use of body- and dash-cams, extend the role of civilian oversight boards, and end the Drug War; relatedly, curtail SWAT tactics and the use of other paramilitary force.)

On a perhaps not unrelated note, the Washington Post reports today on the police shooting of an unarmed suburban Washington, D.C. man in his front doorway after he refused to let police into his home following a domestic call. The fact that jumped out at me was that, a year after it happened, the Fairfax County police department is still releasing no information about the incident, not even the name of the officer who pulled the trigger. According to the Post’s account (related lawsuit), police shot kitchen contractor John Geer once but first aid did not arrive until an hour later — he bled to death — and his body remained unmoved for hours, like that of Michael Brown on the street in Ferguson, Mo. The Fairfax chief says his department is just following its own policy by not releasing the officer’s name or other information while an investigation is pending (and pending and pending) — but how that policy came to be adopted, and for whose benefit, are questions worth asking.

Categories: Policy Institutes

Kidney Shortage? Cato Discussed That

Cato Op-Eds - Tue, 09/02/2014 - 15:36

Michael D. Tanner

A New York Times editorial yesterday brought attention to the severe shortage in the number of kidneys available for transplant. There are over 100,000 Americans on the waiting list for a kidney transplant, and the average wait time is almost five years. Last year there were only 4,715 transplants from living donors. The vast majority of these donations were from relatives, only 463 kidney donations were from unrelated individuals. Relative to the pool of people waiting, this is little more than a drop in the bucket. Clearly, demand for kidneys is far outpacing the supply and our system for supplying viable organs to those who need them is failing, and these failures have serious consequences. The National Kidney Foundation estimates that almost 3,381 patients died while waiting for a kidney transplant last year.  Absent change, this problem will only get worse in the future.

It is commendable that the editorial board raises this issue, but they then devote the rest of the post to trying to find ways to remedy the problem without having to “resor[t] to paying for kidneys.” The primary reasons for dismissing any kind of market for organs are that such a market is prohibited by law and is not supported by the World Health Organization.  There are ethical concerns and fears of exploitation, and these should not be summarily dismissed. However, given how badly our current system is failing, could it be time to rethink our policy? Could a free-market better address the needs of thousands of organ transplant patients? Because organ sales are currently illegal in most industrialized countries, there is almost no empirical data and no sense of what to expect if we were to make this shift. However, at a Cato event in March, Sigrid Fry-Revere shared what she learned from observing one of the only countries with a free-market for organ donations. 

“The Kidney Sellers: A Journey of Discovery in Iran” (featuring the author, Sigrid Fry-Revere)
Categories: Policy Institutes

Net Neutrality -- or Destroying Internet Innovation and Investment?

Cato Op-Eds - Tue, 09/02/2014 - 15:28

David Boaz

The Sunlight Foundation reports that the Federal Communications Commission has received more than 800,000 public comments on the topic of “net neutrality,” more than 60 percent of them form letters written by organized campaigns and more than 200 from law firms on behalf of themselves or their clients. That’s an impressive outpouring of public comments. 

But Berin Szoka, a long-ago Cato intern who now runs TechFreedom, argues, “This debate is no longer about net neutrality. A radical fringe has hijacked the conversation in an attempt to undo two decades of bipartisan consensus against heavy-handed government control of the Internet.” TechFreedom has just launched DontBreakThe.Net, a web-based campaign to expose the danger facing the internet from well-meaning demands for something called “net neutrality.” In an open letter to FCC chairman Tom Wheeler, Szoka says:

Subjecting broadband to Title II of the 1996 Telecom Act would trigger endless litigation, cripple investment, slow broadband deployment and upgrades, and thus harm underserved communities. Al Gore may not have exactly ‘invented the Internet,’ but President Clinton’s FCC chairman Bill Kennard deserves much credit for choosing not to embroil the Internet in what he called the ‘morass’ of Title II. Kennard’s approach of ‘vigilant restraint’ unleashed over $1 trillion in private investment, which built the broadband networks everyone takes for granted today. Abandoning that approach would truly break the Internet.

Net Neutrality supporters such as Google, Facebook, and the NAACP haven’t jumped on the Title II bandwagon because they understand that Title II would threaten the entire Internet. Title II proponents claim the FCC can simply ‘reclassify’ broadband, but in truth, there’s no such thing as reclassification, only re-interpretation of the key definitions of the 1996 Telecom Act. If the FCC re-opens that Pandora’s Box, the bright line Chairman Kennard drew between Title II and the Internet will disappear forever. Startups and edge/content providers will inevitably be caught in the fray. And besides, the FCC has a long history of overstepping its bounds.

Invoking Title II would trigger years of litigation. It’s not clear the FCC could ultimately ‘reclassify’ broadband at all, and even less clear the FCC could, or actually would, follow through on talk of paring back Title II’s most burdensome rules, like retail price controls. Even if ‘reclassification’ stood up in court, the FCC still couldn’t do what net neutrality hardliners want: banning prioritization. The FCC would succeed only in creating a dark cloud of legal uncertainty. That would slow broadband upgrades and discourage new entrants, such as Google Fiber, from entering the market at all.

The best policy would be to maintain the ‘Hands off the Net’ approach that has otherwise prevailed for 20 years. Innovation could thrive, and regulators could still keep a watchful eye, intervening only where there is clear evidence of actual harm, not just abstract fears. As former FCC Chairman Bill Kennard put it, ‘I don’t want to dump the whole morass of Title II regulation on the cable pipe.’ If we want to maintain a free and open Internet, and encourage broadband competition, the FCC would do well to heed his advice.

TechFreedom created this catchy graphic for its campaign to encourage more people to understand what’s at stake in the so-called “net neutrality” fight.

 

Categories: Policy Institutes

More Foreign Competition in Software and Internet Services?

Cato Op-Eds - Tue, 09/02/2014 - 09:13

Simon Lester

We’ve gotten used to American dominance in the internet/software industries.  That may not last forever:

Over the weekend, China announced that it was planning to launch a homegrown operating system to replace Windows and Android for running the nation’s desktop and mobile devices. The first iteration of this “Made in China” OS could roll out as early as October

There is some good and bad with this.  The good is that more competition in these industries would be great.  While there is already a fair amount of disruption and innovation here, there are also some key products/services where a couple firms are pretty dominant.  Consumers would benefit tremendously from more competition.

At the same time, this may not play out exactly like we free market supporters would like.  For example:

Americans have gained a lot from Chinese exports of products over the years.  It would be great if the same thing could happen in the internet and software worlds.

Categories: Policy Institutes

Washington Should Stop Praising Military Tyranny in Egypt

Cato Op-Eds - Tue, 09/02/2014 - 09:10

Doug Bandow

CAIRO—Egypt’s capital is crowded, busy, confused, and messy.  Security isn’t obvious, until you get close to a sensitive site, such as the Interior Ministry. 

The military has taken firm control, elevating its leader, Abdel Fata al-Sisi, to the presidency.  The army permitted dictator Hosni al-Mubarak’s ouster by street protests in 2011 because he planned to turn military rule into a family dynasty.

If ousted president Mohamed al-Morsi and the Muslim Brotherhood been defeated in a future election, they would have been discredited peacefully.  However, the coup turned the movement’s members into angry victims.  In Cairo they took over Rab’a al-Adawiya and al-Nahda Squares, just as the anti-Mubarak and anti-Morsi crowds had done in Tahir Square. 

The military government responded with a campaign of premeditated murder.

In a new report Human Rights Watch detailed the junta’s crimes.  From the beginning the military used deadly force with no concern for casualties.  In fact, the army began using live ammunition against protestors just two days after the coup. 

The most horrific episode occurred when the regime deployed soldiers, APCs, bulldozers, police, and snipers to destroy a vast tent village in Rab’a Square.  Explained HRW:  “security forces used lethal force indiscriminately, with snipers and gunmen inside and alongside APCs firing their weaponry on large crowds of protestors.  Dozens of witnesses also said they saw snipers fire from helicopters over Rab’a Square.” 

In roughly 12 hours HRW figured that at least 817 and likely more than 1000 people were slaughtered.  Since then, said HRW:  “Security forces have continued to use excessive lethal force against demonstrators.” 

Moreover, the regime moved against liberals and other critics, including youthful leaders of the revolution against Mubarak.  Bahey al-Din Hassan, head of the Cairo Institute for Human Rights Studies, argued that military control “is more horrible than the old regime.” 

In fact, by its own count the government has arrested 22,000 people, many of whom have been tortured.  When meeting a visiting delegation organized by the International Coalition for Freedoms and Rights of which I was part, Ayaalaa Hosni, spokeswoman for a women’s anti-coup group, complained that you can’t demonstrate without a warrant but if you “go to ask for a warrant you get arrested.”

Outside assessments are uniformly negative.  David Kramer, president of the group Freedom House, declared in June:  “the human rights situation has worsened compared to what it was at any point under Hosni Mubarak.”   His organization reported that Egypt had gone from “Partly Free” to “Not Free” after the coup, with significant deterioration across the board. 

In a separate study Freedom House rated Egypt’s media “not free.”  An organizer for press freedom told our delegation that ten journalists had been killed.  Scores had been shot and injured, more than 100 had been assaulted, and scores more had been arrested.  Another reporter said simply:  “Journalism has become a crime.”

Yet repression is unlikely to deliver stability.  Terrorism may be seen by more than jihadists as the only way to challenge a regime which bars peaceful dissent.  Mubarak’s jails helped turn Brotherhood member Ayman al-Zawahiri into al-Qaeda’s leader. 

There isn’t much the U.S. can do to change Cairo.  But the Obama administration could stop intervening constantly and maladroitly.  In fact, Washington’s influence is extremely limited.

As I wrote in Forbes online:  “The U.S. should work with Cairo on issues of shared interest but otherwise maintain substantial distance.  In particular, the administration should stop using foreign aid to bribe Egypt’s generals.  They don’t have to be paid to keep the peace and shouldn’t be paid for anything else.”

Egypt appears likely to end up without liberty or stability.  Instead of pretending to be in control, Washington should step back from a crisis which it cannot resolve.

Categories: Policy Institutes

Anti-School Choice Activists Demand Judge's Recusal Because She's Catholic

Cato Op-Eds - Mon, 09/01/2014 - 10:00

Jason Bedrick

It’s bad enough that a Florida teachers union, the Florida School Boards Association, and the PTA filed a lawsuit to deprive low-income students of scholarships citing the state constitution’s historically anti-Catholic, Know-Nothing inspired “Blaine amendment.” But now anti-school choice activists are demanding that a judge recuse herself from another lawsuit against the state’s choice laws because she’s Catholic.

Kathleen Oropeza, president of the ironically-named Fund Education Now (given that they want to deny tax-credit scholarship funds to low-income students), filed a motion demanding that the circuit court judge recuse herself for the following reasons:

2. On August 26 and 27, 2014, I discovered facts concerning Judge Angela C. Dempsey that cause me to believe that she is biased against the Plaintiff’s position that the Florida Tax Credit Program and the McKay Scholarship Programs are violations of Article IX of the Florida Constitution.

3. The facts are as follows:

a. Judge Dempsey is a member of the Board of Directors of Catholic Charities, and a contributor to same.

b. Judge Dempsey has been a speaker at Trinity Catholic School in Leon County, which is a recipient of funds from the Florida Tax Credit Scholarship Program and the McKay Scholarship Program as well as Step Up for Students which provides vouchers to Trinity Catholic School. (See Ex. A.)

c. The Florida Catholic Conference was an amicus curiae in Bush v. Holmes, 919 So. 2d 392, 404 (Fla. 2006), and supported Opportunity Scholarship vouchers which were struck down by the Florida Supreme Court.

d. Plaintiff’s research has led her to discover a Catholic strategy for saving Catholic education through Florida-style Opportunity Scholarships. A 2011 report, From Aspirations to Action, provides the strategy for this Catholic position complete with “Opportunity Scholarship” model legislation and with getting rid of the Blaine/No Child language through-out the nation, which Plaintiff believes has made Judge Dempsey unable to be impartial in this case. Also, Rev. Larry Snyder, president of Catholic Charities USA, is listed as a Council Member of the National Leadership Roundtable on Church Management, the organization which produced the position statement. (Ex. B, at 77.)

e. On April 20, 2014, Face the Nation reported that Cardinals and Bishops of the Catholic Church are pushing vouchers as a solution to a public school report. […]

4. These facts make me believe there is a continuing association between Judge Dempsey and the interests in my case through her relationship with the Catholic doctrine and position on vouchers for Catholic schools; Catholic Charities; Trinity Catholic School; and as a contributor to Catholic causes. Had I been aware of this relationship, I would have moved to disqualify her before she ruled in my case.

The judge belongs to a Catholic charity and has spoken at a Catholic school, the local Catholic Conference took a position in the original lawsuit, and a cardinal in another state said nice things about school choice on TV, therefore the anti-school choice activists want her to recuse herself. In other words, they want her to recuse herself because she’s Catholic.

The defendants’ response to the motion of recusal firmly rejects Oropeza’s arguments as “legally insufficient” and not “objectively reasonable”: 

10. Plaintiffs’ claim, as articulated in Ms. Oropeza’s affidavit, is legally insufficient. Of the five reasons articulated by Ms. Oropeza, only two—Judge Dempsey’s membership in and board service for Catholic Charities of Northwest Florida, and her role as a speaker at a Leon County parochial school—actually relate to the judge’s own activities. But neither of these affiliations indicate that Judge Dempsey is biased on the question of so-called voucher programs. According to its website, Catholic Charities of Northwest Florida focuses its charitable efforts on immigration, crisis pregnancy and adoption, and emergency assistance—not vouchers or other education issues. And a speaking engagement by Judge Dempsey at a parochial school that receives voucher funds—at an unspecified time, on an unspecified topic and in an unspecified capacity—provides no basis to impute any bias to Judge Dempsey on the question of vouchers or any other topic at issue in this lawsuit.

11. The remaining three “facts” alleged in Ms. Oropeza’s affidavit show nothing more than some individuals and organizations, with some degree of affiliation to the Catholic Church, support the enrollment of students at parochial schools through voucher programs. Unless Plaintiffs were to assert that all Catholics, by reason of their faith, support voucher programs to such a degree that they are unable to render an unbiased opinion on the issue—a position that Ms. Oropeza expressly disclaims—there is nothing about these third party positions that could shed any light on Judge Dempsey’s own ability to fairly and impartially preside over this case.

The defendants also note that there “are no judges in this state who have no involvement with the schools of this state,” since they “either have or had children in school, studied in Florida schools themselves, or have close relatives involved in Florida’s schools,” yet it would be ludicrous to demand that a judge recuse herself for such reasons. It would be equally absurd to demand that female judges not preside over cases involving abortion or sexual harassment or that black judges recuse themselves from cases involving racial discrimination.

Hilariously, Oropeza claimed in her motion, “I do not base this motion on Judge Dempsey’s religious beliefs, but rather on the positions of the organizations with which she is affiliated.” Yes of course, organizations like… the Catholic church and affiliated Catholic charities. But this has nothing to do with the judge’s religious beliefs, she claims, it’s just an attempt to protect citizens from the nefarious “Catholic strategy” that she “discovered” in her “research.” That sounds awfully familiar…

 

Image: Thomas Nast’s infamous 1875 “American River Ganges” cartoon depicts a noble white Protestant male protecting his family from the bishops’ “Catholic strategy.”

Last year, plaintiffs demanded that a federal judge recuse himself from a case involving the Catholic church because he is Catholic. Sadly, the demand that Catholic judges recuse themselves from certain cases is increasingly common, even from seemingly respectable sources. The imposition of a religious test for judges should be vigorously resisted.

Categories: Policy Institutes

Ensuring Safe Food in a Free Market: A Lesson from China

Cato Op-Eds - Fri, 08/29/2014 - 13:14

K. William Watson

Many Americans view the dissemination and enforcement of food safety standards as a basic function of government, and it’s difficult for them to imagine a world where food is both safe and unregulated. Libertarians can point out that the safety of a product is, just like quality and price, something that consumers directly care about and as such will be most effectively preserved in a competitive free market.  But it’s one thing to make abstract economic arguments and quite another to have real life examples.

Well, here’s an interesting story from China, as reported by Reuters last week:

A Chinese retailer is offering insurance to customers who buy infant milk powder, highlighting the lengths to which companies are going to address concerns about food safety in China.

Suning Commerce Group Ltd, which owns the Redbaby chain of stores, told Reuters it had launched the policy this week, backed by China’s second largest insurer, Ping An Insurance Group.

The policy stipulates that if a brand of milk powder is recalled, customers who bought cans from any Redbaby store or its e-commerce website would be paid up to 2,000 yuan ($325) per can, with payments capped at 100,000 yuan.

“In recent years, the milk powder market in China has been in a mess,” Suning said in an email.

“We realized that parents pay a great deal of attention to their children’s health and safety, and in particular, the safety of their infants’ foods,” it added. Insurer Ping An said Suning’s policy is the first of its kind in China.

Concerns about the safety of baby milk powder came to the fore in 2008 when thousands of infants fell sick and six died after an industrial chemical was added to raise the apparent protein content of certain products.

Personally, I doubt consumers actually want recall insurance. Parents don’t want to be compensated for buying a product that might injure their babies; they want safe products. But Suning’s providing the insurance signals to consumers that the retailer is willing to vouch for the safety of its product. 

Now that the retailer is on the hook financially, it will predictably put pressure on its suppliers and manufacturers. All of this is done simply to get more business from anxious customers and make more money.

Retailers have always played an important role in bridging the gap between mysterious supply chains and consumer confidence. Even in a highly regulated market, they reliably step in when regulators fail, and they do a better job of meeting the diverse demands of consumers in a pluralistic society.

Categories: Policy Institutes

Why Tax Credits Survive Legal Challenges But Vouchers Often Don't

Cato Op-Eds - Fri, 08/29/2014 - 11:18

Jason Bedrick

Yesterday, on the same day that the New Hampshire Supreme Court rejected a challenge to the state’s scholarship tax credit law, a district court judge struck down Oklahoma’s special-needs voucher law.

Both vouchers and scholarship tax credit laws are constitutional under the U.S. Constitution, but vouchers laws have often run afoul of states’ historically anti-Catholic Blaine Amendments, which prohibit public funds from being expended at religiously affiliated schools. By contrast, scholarship tax credit laws have a perfect record at both the federal and state courts because they rely on voluntary, private donations. Donors to nonprofit scholarship organizations receive tax credits worth 50 percent to 100 percent of their donation, depending on the state. In ACSTO v. Winn, the U.S. Supreme Court held tax credit funds did not constitute public money because they had not “come into the tax collector’s hands.” These credits are constitutionally no different than tax deductions for charitable donations to nonprofits (including religious organizations) or the 100 percent property tax exemption granted to houses of worship. In none of those cases do we say that the nonprofit or religious institution is “publicly funded.” 

Yesterday’s decision is heartbreaking for the hundreds of Okie children with special needs who use the vouchers to attend the schools of their parents’ choice. If Oklahoma policymakers want to help those children, they will follow the legal advice of the Institute for Justice and enact a special-needs scholarship tax credit or expand their existing tax credit law

Categories: Policy Institutes

They're Not Making Jeff Smiths Like They Used To

Cato Op-Eds - Thu, 08/28/2014 - 16:53

David Boaz

For generations of Americans, “Jefferson Smith” was the archetype of the honest, hard-working man of the people who gets into politics to serve the public interest and stands up to powerful interests. Mr. Smith Goes to Washington is the quintessential movie about a corrupt system that can be toppled by a single man of integrity. So maybe it’s no surprise that there seem to be a lot of Jeff Smiths getting into politics. What better name to inspire confidence?

Unfortunately, Sen. Jeff Smith of some unnamed Western state would be mighty embarrassed by some of the Jeff Smiths who have come along in his wake.

Today in Washington, D.C., former city council candidate Jeff Smith was sentenced to 60 days in jail for accepting illegal campaign funds and making false reports to the city’s campaign finance office. Like D.C. mayor Vincent Gray, Smith was essentially accused of benefiting from an illegal shadow campaign run by a major donor who makes his money from city contracts.

Today’s Jeff Smith story reminded me of one from a few years ago. As Jason Zengerle reported in the New Republic, Missouri state senator Jeff Smith “was the brightest young star in the Missouri Democratic Party. Thanks to an award-winning documentary about him, he was also a national political figure—a crusading reformer whose combination of charisma, idealism, and intelligence prompted comparisons to Howard Dean, Paul Wellstone, and even Barack Obama. Although he was only in his first term, no one (least of all of Smith himself) doubted he was destined for greatness.”

Jefferson Smith was the leader of the Boy Rangers. Jeff Smith of Missouri taught political science at Washington University and had equally devoted young supporters. Indeed, that Jeff Smith was so Capra-esque – at least to liberal eyes – that filmmaker Frank Popper made a film about him. Zengerle writes that the film, “Can Mr. Smith Get to Washington Anymore?, is a minor masterpiece of the political documentary genre. After its release in 2006, it broadcast nationally on PBS’s prestigious ‘Independent Lens’ series and earned Popper, a first-time feature director, numerous festival accolades.”

But then it all went wrong. Right from the beginning, actually. In his first campaign, afraid of losing, Smith turned to some sketchy operatives who put together – whattaya know? – an illegal shadow campaign to attack his opponent. Eventually the FEC came calling, and then the FBI. Things spiraled out of control. One of the operatives ratted him out. His campaign manager committed suicide. Smith was sentenced to a year in jail.

I remember hearing back in Kentucky about a woman who refused to vote for a friend for public office because “if a man’s not ruint when he gets in there, he’s ruint when he comes out. And there’s no sense in ruining a good time.” Frank Capra’s fictional Jeff Smith could resist the temptations of power, but it seems that a lot of regular folks named Jeff Smith – or anything else – can’t.

 

 

Categories: Policy Institutes

Another "Winn" for Educational Freedom in New Hampshire

Cato Op-Eds - Thu, 08/28/2014 - 11:13

Andrew J. Coulson

In ACSTO v. Winn (2011), the U.S. Supreme Court upheld Arizona’s scholarship donation tax credit program on the grounds that plaintiffs did not have standing to sue in the first place, because they could not show any specific injury to themselves caused by the voluntary program. Today, the New Hampshire Supreme Court reached the same conclusion in a case involving that state’s new scholarship program. Importantly, this preserves the perfect legal record of modern education tax credit school choice programs.

Under these programs, individuals or businesses can donate money to a non-profit Scholarship Granting Organization that then uses the money to make private education affordable to lower income families. The donor’s taxes are cut in proportion to the size of the donation they make (100% in AZ, 85% in NH). No one is compelled to make a donation, and those who do not donate have their taxes collected as they always were. Those who choose to make donations can pick the organization that receives their money, just as they would pick any other charitable organization.

To have standing to sue over the constitutionality of a law, it is generally required to show that the law has personally and concretely harmed you in some way. Though this may seem arbitrary, it has a very important purpose, which the NH ruling explains in detail: without the harm requirement, courts would have sweeping power to override the will of voters and their elected representatives. If anyone could sue to overturn any law for any reason, innumerable cases would be filed and courts could simply agree to hear the ones pertaining to whatever laws they happened not to like.

But there is another reason why it is important that both the U.S. and NH Supreme Courts rejected challenges to education tax credits due to lack of standing: freedom of conscience. The plaintiffs lacked standing in these cases because the programs are voluntary. No one has to donate to a scholarship organization. Those who do not donate see their taxes collected as they’d always been. As a result, no one is compelled to pay for religious instruction, which would violate many state constitutions.

In fact, education tax credits offer a meaningful improvement for freedom of conscience over the public schooling status quo. Under the current system, everyone is forced to pay for a single official system of education that cannot possibly reflect the values of such a diverse nation. The result, as my colleague Neal McCluskey has shown, is an endless battle over the content of public schooling. Education tax credits avoid that compulsion, allowing people to choose the organization that receives their education donations. In a mature program like the one in Pennsylvania, there are over a hundred different scholarship organizations to choose from. It is thus possible to ensure funding to a diverse range of educational choices without forcing any taxpayer to support a particular sort of instruction that might violate his or her most deeply held convictions.

As I wrote three years ago, in the wake of the U.S. Supreme Court ruling, education tax credits are A “Winn” for Education and Freedom of Conscience.

Categories: Policy Institutes

Live Free and Learn: NH Supreme Court Upholds School Choice

Cato Op-Eds - Thu, 08/28/2014 - 09:57

Jason Bedrick

Low- and middle-income children in New Hampshire will now be able to use tax-credit scholarships at any school they choose, whether secular or religious.

This morning, the New Hampshire Supreme Court (NHSC) followed the precedent of the U.S. Supreme Court in unanimously ruling that the petitioners challenging the “Live Free or Die” state’s scholarship tax credit law lack standing because they could not demonstrate any harm. The law grants tax credits to corporations worth 85 percent of their donations to nonprofit scholarship organizations that help low- and middle-income families send their children to the schools of their choice. 

When two anti-school choice organizations challenged the law, the Institute for Justice intervened, representing several low-income families who had applied for the scholarships. The Cato Institute filed an amicus brief defending the law’s constitutionality.

The NHSC overturned a lower court’s flawed and unprecedented decision, which had forbidden scholarship recipients from using the funds at religiously-affiliated private schools. The lower court held that the scholarship funds constituted “money raised by taxation” and therefore violated the state’s historically anti-Catholic Blaine Amendment, which states: 

[No] money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination. (New Hampshire Constitution, Part II, Article 83)

The NHSC did not address the merits of the lower court’s decision because it held that petitioners were unable to demonstrate that “their personal rights have been impaired or prejudiced.” The U.S. Supreme Court, in rejecting the petitioners’ standing in ACSTO v. Winn, held that the tax-credit funds did not constitute public money because they had not “come into the tax collector’s hands.”

This is great news for the tens of thousands of students who qualify for tax-credit scholarships. Last year, nearly 97 percent of scholarship families reported being satisfied with the schools they chose for their children. 

The decision’s import reaches far beyond New Hampshire’s borders. The NHSC’s ruling today takes some wind out of the sails of the Florida School Boards Association (FSBA), which is inexplicably suing the Sunshine State over its more-than-decade-old scholarship tax credit law, in a complaint that mirrors the legal reasoning of the NH petitioners.  It is likely that the Florida Supreme Court’s reasoning will mirror that of the NHSC and U.S. Supreme Court.

Categories: Policy Institutes

Gov. Quinn Vetoes Rideshare Bill

Cato Op-Eds - Wed, 08/27/2014 - 14:58

Matthew Feeney

Earlier this week, Illinois Gov. Pat Quinn (D) vetoed HB 4075, a ridesharing bill backed by Illinois’ taxi industry that was overwhelmingly passed by the state House and Senate earlier this year. If the bill had been signed into law, Illinois drivers using ridesharing services for more than 18 hours a week would have had to adhere to burdensome regulations such as a requirement for a chauffeur’s license. The bill would also have created a new legal category (“commercial ridesharing agreements”) and required rideshare companies to provide its drivers with the commercial liability insurance used for taxis. Quinn should be praised for vetoing the bill. However, given the bill’s popularity among state legislators, there is a chance of an override of the veto.

The Illinois House passed HB 4075 in April by 80 votes to 26. In May, the Illinois Senate passed the bill by 46 to 8. In order to override a veto, 36 votes are needed in the Senate and 71 are needed in the House.

A few weeks after the Illinois Senate passed HB 4075, the Chicago City Council approved a rideshare ordinance, which goes into effect next week. The ordinance is far from perfect. For instance, it requires that all drivers using a rideshare company’s technology to have a chauffeur’s license if the driver workforce of that company averages more than 20 hours per week per driver. The ordinance also requires that rideshare companies whose drivers operate fewer than 20 hours per week on average have their vehicle inspections and background checks approved by the city. However, the ordinance is less restrictive than HB 4075 and its trailer bill HB 5331, which Quinn also vetoed. 

In his veto letter, Quinn rightly points out that it would be “premature—and perhaps counterproductive” to impose a statewide ridesharing regulatory structure on Illinois when the Chicago ordinance has yet to come into effect and that there is not enough evidence to judge the effectiveness of ridesharing ordinances.

However, it should be remembered that the ordinance in Chicago increases the number of regulations. While free marketers may be tempted to welcome legislation that allows ridesharing companies to operate, it is worth keeping in mind that as local lawmakers across the country try to regulate rideshare companies, there is a risk of regulatory capture and, as the Competitive Enterprise Institute’s Marc Scribner has warned, a risk of ridesharing companies eventually using legislation to their advantage to stifle competition as technology continues to advance.  

 

Categories: Policy Institutes

The Unintended Consequences of Environmental Policy: For the Birds

Cato Op-Eds - Wed, 08/27/2014 - 14:39

Marian L. Tupy

So, here is a story to make your blood boil. According to National Review, “the federal government acted with a bias, giving renewable-energy companies a pass on unlawful bird deaths while rigorously prosecuting traditional energy companies for the same infractions.” The NR article follows a string of recent stories complaining about tens of thousands of birds cut up to pieces or fried in the sky by windmills and solar plants.

Speaking of birds…

Five decades ago, Rachel Carson, of Silent Spring infamy, helped to ban a pesticide called DDT. Back then, DDT was widely used not only in agriculture, but also in malaria control. Carson argued, among other things, that the use of DDT endangered bird populations. The political left jumped on Carson’s arguments. After a massive campaign, DDT was withdrawn from agriculture and its use in malaria control was greatly restricted. Most countries followed the American example and banned DDT for use in agriculture.

Although developing countries could technically use DDT for disease control, no donor agencies (dominated by western leftists) would support its use. This amounted to a de facto ban of DDT in malaria control. Nobody knows for sure, but thousands of Africans, perhaps millions, have died of malaria since the use of DDT was prematurely discontinued, all because of a hysterical drive to save the birds in the West.

Today, tens of thousands of birds are dying to satisfy the newest progressive fetish: the drive for renewable energy. At least they are dying in an environmentally friendly way.

As the left likes to say, you cannot make an omelet without breaking some eggs!

Categories: Policy Institutes

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