Archive for April, 2009
The REAL ID Revival Bill Should Not Get a PASS
A draft Senate bill to revive the REAL ID Act has been leaked to to the anti-immigrant Center for Immigration Studies, and they find it wanting.
The bill is an attempt to smooth down REAL ID and make the national ID law more palatable. CIS is unhappy because they want a national ID implemented right away.
REAL ID is, of course, failing. Just ten months ago, the Bush Administration’s Secretary of Homeland Security granted waivers to every state in the country – not a single one of them was in compliance by the May, 2008 deadline, and several have statutorily barred themselves from complying.
Legislation to repeal REAL ID in both the House and Senate was introduced in the last Congress, but with an administration and Department of Homeland Security eager to demagogue the issue against a Democratic Congress, that legislation did not move. Repealing REAL ID would not have the same problem in the current Congress.
But since then, Washington’s wheels have been turning. The National Governors Association has turned into an advocate of reviving REAL ID because it hopes that federal dollars will flow behind federal mandates. They won’t, but reviving REAL ID will cement NGA’s role as a beggar for federal dollars in Washington. (Maybe other state legislator groups, as well.)
Everbody in Washington, D.C. salivates over the chance to make “deals” even if that means switching positions on issues of principle like whether the U.S. should have a national ID. We’ll be watching to see which political leaders reverse themselves and support this attempt at a national ID for their love of political dealmaking.
The working name of the REAL ID revival bill is the “PASS ID Act.” It should not be given a pass by opponents of a U.S. national ID and the REAL ID Act.
Are People Finally Seeing the Gloom?
Maybe, just maybe, word might finally be getting out, and people might finally be getting angry, about the dirty dealings in Washington, DC, that are quietly killing the city’s desperately needed school voucher program.
The story has been percolating for more than ten days, ever since the U.S. Department of Education staged a stealthy and too-late-to-matter release of a study showing that DC’s voucher program works. But the coverage has largely been restricted to the blogosphere, along with a smattering of newspaper opinion pieces.
What might be changing that? A smarmy Education Department letter released late last week telling parents who thought they had won a voucher for the 2009-10 school year that no such voucher would be forthcoming. This despite the fact that the voucher program is not scheduled to end until 2010-11. Apparently, Secretary of Education Arne Duncan – who seems to be doing all of the political dirty work against DC school choice – decided that it just doesn’t make sense to let kids have a year of private schooling if they’ll just have to go back to DC public schools. Never mind that a year of good schooling is better than no good schooling, or that the program can still be saved if Congress and the DC City Council vote to reauthorize it – barring the door to quality education right now is clearly in the children’s best interest.
The department’s letter has finally sparked some news media interest in the plight of DC school choice. Spurred by the letter, this afternoon Fox News ran what, to my knowledge, is the first non-opinion piece about the Obama administration’s quiet-but-deadly campaign against choice in DC. There is also word that voucher parents are beginning to organize a response to the assault on their children’s educational lifelines, with a strategy meeting scheduled for Wednesday night. Oh, and the opinion pieces keep on coming.
Sadly, as I and a few others have noted over the least week-and-a-half, when it comes to education it seems that President Obama’s rhetoric about putting evidence ahead of politics is just that – rhetoric. Hopefully, more people are starting to see the dim, disappointing light.
Feds Pay Farmers to Till the Desert
No, this headline and story is not brought to you by The Onion.
The latest proof that there’s nothing more permanent than a temporary federal program:
As drought forces families in the West to shorten their showers and let their lawns turn brown, two Depression-era government programs have been paying some of the nation’s biggest farms hundreds of millions of dollars to grow water-thirsty crops in what was once desert.
My sympathy for this farmer lies somewhere between that which I have for Bernie Madoff and Ted Stevens:
Jim Hansen, a 69-year-old cotton grower in California’s Central Valley, said his family business would crumble if the government took away low-cost water and the nearly $1.7 million in crop payments he received in 2007 and 2008.
For more on the insanity that is federal farm policy and why the USDA needs to be downsized and/or done away with, click here.
Dust Off Your Tinfoil Hats
It’s official. Everyone supportive of federalism and/or upset about taxes, etc., is now considered a potentially dangerous “rightwing extremist” by Homeland Security.
A footnote attached to the report by the Homeland Security Office of Intelligence and Analysis defines “rightwing extremism in the United States” as including not just racist or hate groups, but also groups that reject federal authority in favor of state or local authority.
Freedom of Speech Under Attack in Ecuador
Freedom of speech is coming under attack again in President Rafael Correa’s Ecuador. Last year Correa sent armed soldiers before dawn to some 200 private businesses, including three television stations, on the pretext that the owner (an unpopular businessman and critic of the government) had not paid money owed to the government.
It was never clear why the government had to place its own people in charge of running those businesses rather than go through the usual auditing or bankruptcy procedures. The result was to reduce criticism of the government at those TV stations and send a message to the rest of the media. At the time, Gabriela Calderón, Cato’s Ecuador-based editor of our Spanish language web site, www.elcato.org, hosted a weekly talk show program on CN3 TV station with two other market-liberal commentators. The station was one of the ones taken over, after which, Gabriela and her colleagues were told that from then on, their show had to “balanced” and include pro-government spokespersons. Gabriela and her colleagues quit in protest and the show went off the air.
Now Correa is enforcing a law that explicitly violates freedom of speech. Ecuador has been an officially dollarized country since 2000, before Correa came to power. Years of high oil prices have financed an explosion in government spending. With oil prices down, Correa’s populist project is quickly running out of money and people are speculating that he will de-dollarize Ecuador, allowing him to run the printing presses. However, it is illegal in Ecuador to suggest that the country will de-dollarize, as that would violate the law against spreading rumors of devaluation. The first victim has been Rómulo López Sabando, an attorney and long-time columnist for the Diario Expreso. On March 24 he wrote a column indicating that the government is planning to dedollarize. For committing that crime, the government ordered his arrest. He has been in hiding since.
It’s a very good bet that the government will de-dollarize this year, yet the Ecuadorian press has been silent on the matter. As the law victimizes the press and, more generally, Ecuadorian democracy, López remains in hiding and the arrest warrant still holds. Will Obama and other hemispheric leaders meeting at the summit of the Americas later this week denounce these abuses?
Pirates as Tax Collectors?
[Co-authored with Ilya Shapiro.]
As we suspected, with world attention focused on the just-concluded piracy standoff, it was only a matter of time before someone would write something like this: “the right way to think about this problem is that pirates are imposing a tax on shipping in their area. They are a bit like a pseudo-government.” Perhaps the Mafia too –- “pay, or we break your legs” –- is like a pseudo-government.
The difference between a tax and extortion is not subtle, even if it seems to have escaped the cited authorities, including Noam Chomsky. A tax, at least in principle, and most often in practice, is a charge for a service rendered –- not necessarily a wanted or an evenly distributed service, to be sure, but most relevant here, protection from third-party pirates and other lawless predators, domestic and foreign. By contrast, a pirate’s shakedown puts the victim to a choice between two of his entitlements –- his freedom and his property. That distinction –- again, hardly subtle –- is what prompted us to leave the state of nature. Those who would like to return to that state will find it waiting for them on the horn of Africa.
Our Troubling Tax System
The U.S. tax code gets more complex every year. It violates civil liberties and, left unchanged, will leave the United States at a powerful competitive disadvantage in years to come, say Cato scholars in this new Cato video.
According to tax expert Chris Edwards, the tax system is growing at startling levels — there are now about 70,000 pages of tax regulations and $300 billion in compliance costs — and it’s only going to get worse.
The Beginnings of Earmark Transparency
Under reforms announced in March, House members have to publicly declare the earmarks they’re requesting from the Appropriations Committee. Most of the requests have now been published and WashingtonWatch.com has assembled a state-by-state catalogue of links to Members’ earmark requests.
Getting earmark requests published is progress. Getting them published in uniform, machine-readable formats would allow the public to do really thorough oversight of all the projects that Members of Congress think federal taxpayer dollars should go to.
In December, we had a policy forum called “Just Give Us the Data!” where we explored some of the current issues in government transparency.
Federal Tax Rates
Conveniently timed as Tax Day approaches, the Congressional Budget Office has released new data on the taxes paid by each income group. The CBO data includes federal income taxes, payroll taxes, and excise taxes, which amounts to almost the entire federal tax grab.
The CBO calculates tax rates by quintile from the lowest-earning to the highest earning households. These tax rates are simply total federal taxes paid by the group divided by total income earned by the group.
The chart makes clear that we have a very graduated or redistributive tax system, which some people call “progressive.” President Obama doesn’t think that the 25.8% rate paid by the top quintile is progressive enough, so he plans to penalize that group with an income tax rate hike.
New at Cato
Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe here.
- Malou Innocent argues that the United States should not increase its troop presence in Pakistan in a new Cato Policy Analysis.
- Doug Bandow discusses Tax Freedom Day in the American Spectator.
- Watch Tucker Carlson discuss whether a president should blame problems on past administrations on Fox News.
- Chris Edwards is finishing his live debate with French economist Thomas Piketty over whether the rich should pay higher tax rates. Readers decide who wins, so don’t miss the chance to cast your vote.
- Join the Cato Institute Wednesday, April 15 to hear James Tooley, author of The Beautiful Tree:A Personal Journey Into How the World’s Poorest People Are Educating Themselves, discuss successful ways to educate the world’s poor.
Iklé on Pirates
The are a number of statements to take issue with in Fred Iklé’s oped on piracy in today’s Washington Post. Let’s focus on one. He writes:
Terrorists are far more brutal than pirates and can easily force pirates — petty thieves in comparison — to share their ransom money. We already know that Somalia is an ideal fortress and headquarters for global terrorist activity.
Lots is possible, but the fact is that there is no connection between the Somalia pirates and terrorists, as I discussed here.
Terrorism “experts” have been heralding Somalia as the next big terrorist haven for years, and few, if any, have arrived. That is because the idea that violent political chaos is generally conducive to terrorism is wrong. Even in Afghanistan, Al Qaeda got comfortable only once there was a somewhat coherent government that allied with them, not amid total chaos. Civil wars are not, it turns out, ideal locales to hatch international terrorist plots.
While we’re here, it’s worth noting the current level of American concern about piracy is overblown. As Peter Van Doren pointed out to me the other day, the right way to think about this problem is that pirates are imposing a tax on shipping in their area. They are a bit like a pseudo-government, as Alexander the Great apparently learned. The tax amounts to $20-40 million a year, which is, as Ken Menkhaus put it in this Washington Post online forum, a “nuisance tax for global shipping.”
The reason ships are being hijacked along the Somali coast is because there are still ships sailing down the Somali coast. Piracy is evidently not a big enough problem to encourage many shippers to use alternative shipping routes. In addition, shippers apparently find it cheaper to pay ransom than to pay insurance for armed guards and deal with the added legal hassle in port. The provision of naval vessels to the region is an attempted subsidy to the shippers, and ultimately consumers of their goods, albeit one governments have traditionally paid. Whether or not that subsidy is cheaper than letting the market actors sort it out remains unclear to me.
These considerations are worth keeping in mind when we discuss the costs and benefits of particular counter-piracy proposals. Iklé suggests blockading Somalia ports, which would require a massive naval force. Condi Rice suggested a UN peacekeeping force on shore, a far more expensive and risky proposition.
Iklé does make one more promising suggestion, which is to create an international law against paying ransom to pirates. In practice this would require member states to enforce the law against payments, probably making it unenforceable, but it is an interesting idea.
A Not So Happy Anniversary for the “Massachusetts Model”
Three years ago yesterday, then-Governor Mitt Romney signed into law the most far reaching state health care reform plan to date. At the time, we warned that the plan, with its individual and employer mandates, new regulatory bureaucracy (the Connector), and middle-class subsidies would result in “a slow but steady spiral downward toward a government-run health care system.” Sadly, three years later, those predictions appear to be coming true.
- While the state has reduced the number of residents without health insurance, some 200,000 people remain uninsured. Moreover, the increase in the number of insured is primarily due to the state’s generous subsidies, not the celebrated individual mandate.
- Health care costs continue to rise much faster than the nationally. Since the program became law, total state health care spending has increased by 23 percent. Insurance premiums have been increasing by 10-12 percent per year, nearly double the national average.
- New regulation and bureaucracy is limiting consumer choice and adding to costs.
- Program costs have skyrocketed. Despite tax increases, the program faces huge deficits in the future. As a result, the state is considering caps on insurance premiums, cuts in reimbursements to providers, and even the possibility of a “global budget” on health care spending.
- A shortage of providers, combined with increased demand, is increasing waiting times to see a physician, especially primary care providers.
With the “Massachusetts model” being frequently cited as a blueprint for state or national health care reform, it is important to recognize that giving the government greater control over our health care system will have grave consequences for taxpayers, providers, and health care consumers. That is the lesson of the Massachusetts model.
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