Archive for April, 2011
Updated Cato Budget Plan
Over at Downsizing the Federal Government, Chris Edwards has released an updated version of his “Plan to Cut Spending and Balance the Federal Budget.” The plan proposes spending cuts of more than $1 trillion annually by 2021, which would balance the budget without resorting to damaging tax increases. Federal spending would be reduced to 18 percent of gross domestic product by 2021 under the plan, which compares to President Obama’s projected spending that year of 24.2 percent of GDP.
Some key points:
- No sacred cows are spared. Defense, domestic, and so-called entitlement programs are all cut.
- The plan recognizes that the scope of federal activities must be curtailed. It would begin the reversal of decades of federal expansion into hundreds of areas that should be left to state and local governments, businesses, charities, and individuals.
- Instead of viewing federal spending cuts as a necessary evil, the plan recognizes that the cuts would shift resources from often mismanaged and damaging government programs to the more productive private sector, thus increasing overall GDP.
- The plan doesn’t achieve budget balance by increasing taxes. Under current tax policy, federal revenues as a share of GDP will gradually return to levels considered normal in recent decades. It is federal spending that has reached abnormally high levels. It must be reduced in order to get the government’s spiraling debt under control.
The Senate’s Interventionist Caucus and Libya
An interesting window into the politics of the Obama administration’s war in Libya may open this week, when Senators Kay Bailey Hutchison (R-TX) and Joe Manchin (D-WV) reintroduce a resolution expressing the sense of the Senate “that it is not in the vital interests of the United States to intervene militarily in Libya,” and calling on NATO member states and the Arab League, two parties who are directly threatened by the violence in Libya, to provide the necessary assets to the mission.
Such resolutions almost never have a direct impact on the conduct of military operations. Hutchison-Manchin isn’t even the first attempt to constrain President Obama’s ability to wage war in Libya. A resolution offered by freshman Senator Rand Paul (R-KY), and cosponsored by Senator Mike Lee (R-UT), went well beyond the question of whether the war advanced vital U.S. national interests, and attempted to reassert the legislature’s control over the warpowers generally. Borrowing from something that then-Senator Barack Obama said in 2007, the resolution read “The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.” This language, which likely strikes most Americans as eminently sensible, managed to garner just 10 votes, all from Republicans.
Still, the prospect of a vote on a much narrower resolution must worry the war’s advocates. At a minimum, an up or down vote on Libya will test the strength of the still-vocal interventionist caucus in the U.S. Senate.
These reliably pro-war members took to the Sunday shows to make the case for escalation. On CNN’s State of the Union, Sen. Lindsey Graham called on the Obama administration “to cut the head of the snake off. Go to Tripoli [and] start bombing Qaddafi’s inner circle.” Worries that the uprising might provide cover for al Qaeda to expand its operations in the Maghreb were unfounded, John McCain asserted. McCain’s long-time friend Sen. Joseph Lieberman agreed, explaining on the same program, “We’re in the fight and the political goal is to get Qaddafi out and to help the freedom fighters achieve their own independent Libya. You can’t get into a fight with one foot. You got to get into it.”
How many others in the Senate subscribe to the interventionists’ interpretation of what America’s role in Libya should be is unclear. I have never understood why Republicans would scramble to follow foreign policy advice from a Democrat, and Al Gore’s running mate, no less. Senators McCain and Graham hold more sway among their GOP colleagues, but their outspoken support for a number of other ill-considered ventures, including especially the war in Iraq, likely gives pause to some. Graham’s fellow South Carolinian Jim DeMint, for example, voted in favor of the Paul-Lee resolution, and has otherwise shown no great enthusiasm for adding to the U.S. military’s already full plate. The Boston Globe’s Theo Emery reports today that Massachusetts Senator Scott Brown isn’t yet ready to endorse an escalation of the war. Meanwhile, Maine’s Susan Collins told Emery that the U.S. military’s role in Libya should be limited to intelligence, logistics, and other capabilities that U.S. allies lack.
Who else might vote for Hutchison-Manchin? Presumably those within the Democratic caucus who still think that war is generally a bad thing, even when it is waged by a Democratic president. No Democrat voted for Paul-Lee, but Senator Manchin’s co-sponsorship of this much more narrowly worded resolution should provide cover for centrists, as well as progressives who once reliably opposed wars of choice.
One thing is clear with respect to the war in Libya: politics favors the skeptics. There is no groundswell of public opinion calling for yet another armed nation-building mission in a strategic backwater. Though the costs of the war are small relative to the gargantuan military budget, most Americans can be counted on to oppose wars that do not clearly advance U.S. national security interests, regardless of how much or how little they cost. They are doubly skeptical given that the costs of the wars in Iraq and Afghanistan have vastly exceeded even the most pessimistic of predictions, and have not delivered the security that the advocates for war claimed.
It is a truism that politics doesn’t generally drive foreign policy. People who celebrate America’s role as the world’s policeman don’t expect to reap great political rewards for taking such an unpopular stand. McCain, Graham and Lieberman have always stood apart in that regard. Recall, for example, that John McCain bragged that he would rather lose an election than lose a war. He never appeared to consider that both eventualities were possible. Perhaps some of his fellow senators will.
Will Indiana School Choice Infringe Upon Liberty?
There’s more bad news about the school choice bill awaiting Gov. Mitch Daniels’ signature in Indiana. Yesterday, Adam Schaeffer wrote about its possible negative fiscal impact if coupled with the state’s tax credit program. Perhaps just as concerning is the law’s requirement that private schools prove that they are sufficiently “American” to participate in the program. This interview with State Sen. Carlin Yoder (R), one of the bill’s sponsors, captures the sentiment behind the requirement:
Perhaps the problem here is that, in all of the education policy community’s obsession with test scores and dollars, we’ve lost sight of what school choice should ultimately be about: freedom. It should be about creating an education system that allows people to choose for themselves what values they will embrace and how they will live, not one that allows the state to dictate — either through hard compulsion or soft bribery — those things. Giving the state that power, though the state might employ it only rarely or gently, is still ultimately giving the state authority over our thoughts and expressions, and that is the basis for, potentially, a most thorough of tyrannies.
There is great irony in this aspect of Indiana’s soon-to-be law, which would curb the ability of educators to freely teach as they please, and of parents and students to freely seek out the education they want. As Sen. Yoder says, to “make sure the students appreciate our great history in the U.S.,” the law would curb that thing that has made it great: individual liberty.
Of course, the very understandable fear animating this is that unless taught the importance of freedom as children, adults will sacrifice liberty. But government coercion to prevent that, even if well intentioned, doesn’t appear to produce the desired results — liberty is sacrificed without even getting the hoped for ends.
According to a recent summary of research compiled by University of Arkansas professor Patrick Wolf on the transmission of “civic values” such as political tolerance, civic knowledge, and even proclivity to perform community service, private-school students come out on top. Why? Most likely because in public schooling people holding lots of different opinions on what constitutes proper “American” values are forced to pay for a single system of government schools, and hence to fight over what the system teaches. All too often the road to peace is to teach, well, nothing, or close to it, in order to anger as few people as possible. Private schools, in contrast, tend to hold set, coherent values parents agree to when choosing them, and it appears that if uncoerced, people will choose to have their children educated to be good citizens.
School choice must be about freedom — the ultimate American value — not, as Indiana is on the verge of doing, undermining liberty in the name of protecting it.
Pass the Freedom Fries!
Back in 2002-03, when France opposed going to war in Iraq, conservatives spared no venom for the country some called “Our Oldest Enemy.” In retrospect, though, France was a better friend to us then than she’s been in our ongoing Libyan debacle.
As the bombing began last month, the LA Times ran a piece showing that French bellicosity (yes) had been instrumental in dragging the US to war:
Earlier in the week, French papers reported that when Sarkozy asked [Secretary of State] Clinton to come out more forcefully in favor of action in Libya, she replied, “There are difficulties” and refused to be drawn out further.
“Frankly, we are completely puzzled,” a French diplomat told one of his European counterparts. “We are wondering if Libya is a priority for the United States.”
It shouldn’t be. Apparently it is now. And that, I argue in my Washington Examiner column this week, shows the dangers of NATO, a 60-year-old entangling alliance that long ago outlived its usefulness.
Much of the piece focuses on Bernard Henri-Levy, the French celebrity-philosopher who played a key role in stoking Sarko’s dreams of military glory:
Credit or blame goes to French celebrity-philosopher Bernard Henri-Levy, who, “in the space of roughly two weeks,” the New York Times reports, got “a fledgling Libyan opposition group a hearing from the president of France and the American secretary of state, a process that led both countries and NATO into waging war.”
Who is Bernard Henri-Levy (BHL)? He’s heir to an industrial fortune, and a crusading socialist who favors open-collared shirts, stylishly long locks and “humanitarian” wars. One critic summed up BHL’s persona tartly: “God is dead, but my hair is perfect.”
Henri-Levy’s 2006 book, “American Vertigo: Traveling America in the Footsteps of Tocqueville,” was so condescending about America’s “derangements,” “dysfunctions” and “hyperobesity,” it roused NPR’s Garrison Keillor to a fit of patriotic ire. The normally placid “Prairie Home Companion” host called BHL “a French writer with a spatter-paint prose style and the grandiosity of a college sophomore.”
And yet, BHL – clever boy – helped entangle this fat, silly country in a conflict that Secretary of Defense Robert Gates admits “isn’t a vital interest for the U.S.”
But if a picture’s worth a thousand words, then this one surely trumps the 600 in my column:
THAT'S the guy who helped sucker us into war!? ARRRRGH!
This Wouldn’t Be Happening If John Kasich Were Alive
Dennis Cauchon reports in USA Today on a massive program of business subsidies in Ohio, started by Republican governor Bob Taft and expanded by new Republican governor John Kasich:
Ohio has launched what appears to be the biggest intervention in the private economy by a state government since at least the Great Depression, according to a USA TODAY review of historical data. The state is preparing new industrial parks and high-tech office buildings, loaning money and giving grants to businesses, and subsidizing clean energy, websites, nanotechnology and warehouses, among other things.
The state will spend $1.4 billion on economic development this year. Indiana, by contrast, will spend $37 million; Florida $11 million. California has 25 people working full-time on economic development. Ohio: more than 400.
Ohio’s attempt to revive its economy is a real-life case of how states act as a laboratory of democracy. This industrial state is testing a provocative economic question: Can government direct the economy into the future, or is that best done by a free market?…
It’s unclear whether Ohio’s gamble will pay off.
A USA TODAY review of two dozen of Ohio’s state-funded projects found many behind schedule or failing to deliver the jobs or investment returns promised.
Economists are skeptical of such projects:
Ohio State University economist Mark Partridge says government efforts to plan an economic revival seldom work.
“Politicians and economic development officials overestimate their ability to forecast the future — to predict the next Silicon Valley or even to know beforehand that a Silicon Valley is going to occur,” Partridge says.
Government’s poor record of picking winners and losers means that even well-intentioned programs can hurt more than help, he says.
“A tax incentive for one firm means I have to raise taxes on everyone else or cut services,” Partridge says.
But the businesses looking for subsidies are more enthusiastic:
“We’re looking to get industry up and moving again,” says Andrew Doehrel, president of the Ohio Chamber of Commerce. “We’re not saying pick Company XYZ because it has a chance of success. We’re saying pick Company XYZ because they’re into plastics and Akron is successful in that field. It’s targeting that is necessary and useful.”
And what of Governor Kasich, once a budget-cutting House Budget Committee chairman and opponent of corporate welfare, who was once pictured on 60 Minutes with the Cato Handbook for Congress sitting on his desk? Kasich would stop this nonsense, right? Well, not quite:
Kasich, the new governor, has moved some programs into a quasi-private operation called JobsOhio that he hopes will be faster and more effective.
This new approach positions the government to act more like a risk-taking investor, [Kasich's economic development director Mark] Kvamme says…. [More here.]
Kasich is expanding Ohio’s tradition of large-scale, government-directed development programs. His new budget proposes spending an extra $100 million a year in liquor profits on economic development. That amount alone dwarfs economic development spending in almost every other state.
What have you done with John Kasich, Ohio? Is this like the movie Dave, where you’ve found an actor to stand in for the actual governor? If not, then I hope Governor Kasich will decide to add government-directed economic development to his list of needed budget cuts.
Ensuring that Indiana’s New Voucher Program Lives up to Budgetary Expectations
A new voucher program in Indiana looks likely to be signed by Gov. Daniels soon, but without a slight modification it may not have the benign budgetary impact that is expected.
As written, the program could have a significant negative impact on state finances if families claim both the vouchers and funds from the state’s existing education tax credits.
There is nothing that precludes children who receive a voucher from also topping off that amount with private funds from the existing education tax credit program. That means a voucher student could accept, for example, $4,500 in government funds and then apply for a tax credit scholarship that reduces state revenue by, say, $2,000. The voucher student would cost the state $6,500, not the $4,500 that would be counted on the books. If state funding is 100 percent sensitive to enrollment, the state would save $5,000 on that student switching, and the net impact on state finances would be a $1,500 loss. In other words, the program could have a negative net impact on state finances due to double-dipping.
From a fiscal standpoint, the state would show an apparent “savings” based on the $4,500 voucher, but this would fail to take into account the reduced revenue due to the credit. And the law requires these on-paper-only savings to be passed out to public schools districts. The result? The state government could be out $7,000 on the student in this example, not the $4,500 it paid out in a voucher. The net impact wouldn’t be neutral, it would be a $2,000 loss.
This scenario looks only at how the vouchers might impact state finances. At the local level, the program is likely to have a strongly positive impact on the resources available for each student. But a school choice program’s impact on state finances — ensuring financial transparency, certainty, and a neutral or positive impact — is a critical concern in its own right.
Critics of expanding educational freedom always claim, incorrectly, that school choice programs are a drain on public resources. But the double-dipping that is allowed under this program could inadvertently prove them right — it would also make Indiana’s existing education tax credit program a mere appendage to the new government voucher system. In short, it’s an unforced error, and worth fixing.
All-Consuming Politics
Today POLITICO Arena asks:
Is Mississippi Gov. Haley Barbour’s announcement today that he will not seek the Republican presidential nomination in 2012, and the reason he gave for his decision, the right call?
My response:
Gov. Barbour’s explanation for why he will not seek the 2012 Republican presidential nomination — because a candidate today “is embracing a ten-year commitment to an all-consuming effort, to the virtual exclusion of all else,” and he cannot make such a commitment — is not only refreshingly candid but points to a much deeper problem.
We are moving inexorably not simply to news but to politics 24/7/365. And what better example than our current part-time president who, with no primary challenger in sight, is already on the campaign trail (did he ever leave it?), when the election is 19 months away. Some of us are old enough to remember when elected officials served — and ran for office or reelection only around election time.
Part of the reason for the change is the need today for vast amounts of campaign cash. But the deeper reason, I submit, is because politics has taken over so much of life. When government was more limited, and we didn’t look to it to provide our every need and want, those who “governed” didn’t feel such a need to cater to us — and we had better things to do anyway than obsess over politics. Calvin Coolidge took naps in the White House — in his pajamas! Imagine that today.
Dear Ms. Weingarten: I’ll Show You Mine if You’ll Show Me Yours
Teachers’ union president Randi Weingarten writes in the Wall Street Journal today that markets are not the answer in education. She seems to have reached this conclusion based on the testimony of a few foreign teachers’ union leaders and government officials who… run official government education monopolies.
Call me old fashioned, but I prefer to reach policy conclusions based on empirical research. So after comparing the performance of alternative school systems over the past 2,000 years, I surveyed the modern econometric literature on the subject for the Journal of School Choice. What I found is that the freest, most market-like education systems consistently outperform the sorts of state monopolies preferred by Ms. Weingarten and her fellow travelers. Appended below is the chart counting up how many studies favored education markets over state school monopolies, and vice-versa, in each of six outcome areas.
If Ms. Weingarten is aware of a similar weight of scientific evidence favoring her position, she should present it. Otherwise, why would anyone bother to heed her? More puzzling still, what was it about her alleged-dog-allegedly-bites-man op-ed that the WSJ thought worth publishing?
Supreme Court Denies Expedited Obamacare Review
That the Supreme Court declined to take up the Obamacare litigation before even a single appellate court had ruled on it is neither surprising nor game-changing.
Virginia Attorney General Ken Cuccinelli’s cert petition, whatever its merits (which were several), was a long-shot to begin with as a matter of practice and procedure. Cato, like all other interested parties, has continued filing briefs in and commenting on the various cases on appeal around the country.
The only noteworthy point here is that Justice Elena Kagan apparently participated in the consideration of the petition, which indicates that she won’t be recused when one of these cases does hit the Court. This too isn’t terribly surprising: I’m still digging through the documents regarding her involvement (or lack thereof) in discussions about the litigation when she was solicitor general, but there does not as yet seem to be a “smoking gun” requiring recusal.
In any event, see you in Richmond on May 10 for the Fourth Circuit argument in the two Virginia lawsuits.
Monday Links
- “Sadly, in Egypt’s case, a freely elected civilian government may prove powerless in the face of the deeply entrenched and well-organized military.”
- “Washington politicians from both parties, and bureaucrats, have for decades successfully decreased our freedom and liberties as they have regulated more and more of our lives, including our retirement.”
- “The Ryan proposal correctly focuses on achieving debt reduction through spending cuts, but this very gradual debt reduction schedule is a weakness that could lead to its downfall.”
- “Nearly two years ago Sen. McCain, along with Senators Graham and Lieberman, was supping with Qaddafi in Tripoli, discussing the possibility of Washington providing military aid.”
- Cato media fellow Radley Balko joined FOX Business Network’s Stossel recently to discuss your right to make video recordings of police, and why exercising that right frequently is vital to liberty:
And the Winner Is . . . !
Melissa Yu is the winner of first prize in the middle school category of C-SPAN’s StudentCam 2011 competition. Her video, “Net Neutrality: The Federal Government’s Role in Our Online Community,” is an eight-minute look at the push for regulation of Internet service with an emphasis appropriate for students on how the three branches of government have each been involved in the story up to now.
If you haven’t been following along, or if you want a refresher on net neutrality regulation, here’s a better video than I could have produced in eighth grade. Or now. Congratulations, Melissa Yu!
Boxing Gym Scores Knockout Blow for Property Rights
Last month, I wrote about a major eminent domain struggle in National City, California. City officials had decided to declare almost seven hundred properties blighted even before conducting any sort of blight study, which eventually turned out to be riddled with errors.
At the center of the fight is a private, nonprofit boxing gym that has helped keep hundreds of at-risk kids in school and off the streets. The city wanted to bulldoze the center so a wealthy developer can build luxury condos and stores.
In 2007, the Institute for Justice teamed up with the gym and filed suit to stop the city from taking the property, and here’s video about their legal fight:
Four years later, IJ scored a knockout blow against eminent domain abuse: Last Thursday, the Superior Court of California struck National City’s entire 692-property eminent domain zone and found that National City lacked a legal basis for its blight declaration.
This is a major victory for California property owners, and the first case to apply the property reforms that the state enacted to counter the 2005 Kelo decision. Learn more about the victory here.
I previously wrote about eminent domain shenanigans here and you can read more from Cato on property rights here.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
