My Cato colleague John Cochrane – who is way smarter than I am — has a generally excellent op-ed in today’s Wall Street Journal on ObamaCare’s contraception mandate:

Salting mandated health insurance with birth control is exactly the same as a tax—on employers, on Catholics, on gay men and women, on couples trying to have children and on the elderly—to subsidize one form of birth control…

The tax rate and spending debates that occupy the media are a small part of the effective taxes and spending that the government achieves by these regulatory mandates…

The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don’t have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society…

Sure, churches should be exempt. We should all be exempt.

My only quibble is with his claim, “Insurance is a bad idea for small, regular and predictable expenses.”

That’s generally true. But medicine is an area where, potentially at least, small up-front expenditures (e.g., on hypertension control) could prevent large losses down the road. So it may be economically efficient for health plans to cover some small, regular, and predictable expenses. Both the carrier and the consumer would benefit. In fact, that would be the market’s way of telling otherwise uninformed consumers, “Hey! Controlling your hypertension is a really good for you!” And really, if someone is so risk-averse that they want health insurance with first-dollar coverage of everything – and they’re willing to pay the outrageous premiums that would accompany such coverage — why should we take issue with that?

ObamaCare’s contraceptive-coverage mandate demonstrates that government does  a horrible job of picking only those types of “preventive” services for which first-dollar coverage will leave consumers better off. But I also think advocates of free-market health care generally need to let go of the idea that health insurance exists only for catastrophic expenses.

Cochrane on ObamaCare’s Contraceptive-Coverage Mandate is a post from Cato @ Liberty - Cato Institute Blog

Politico‘s Jason Millman writes:

How much does Rick Santorum hate President Barack Obama’s health care law? So much that he even opposes the parts a lot of Republicans like.

The Republican presidential candidate, talking health care across the street from Minnesota’s Mayo Clinic Monday morning, blasted parts of the Affordable Care Act that poll well even among Republican voters — like guaranteeing coverage for people with pre-existing conditions and making health insurers cover preventive care.

Santorum, who has touted free market health principles like health savings accounts as an alternative to the Affordable Care Act, defended insurance industry practices the law eliminates, like setting premiums based on people’s health status.

Sigh. I refer my right honorable friend to the smack-down I gave such silliness some time ago:

Asking people whether they support the law’s pre-existing conditions provisions is like asking whether they want sick people to pay less for medical care.  Of course they will say yes.  If anything, it’s amazing that as many as 36 percent of the public are so economically literate as to know that these government price controls will actually harm people with pre-existing conditions.  Also amazing is that among people with pre-existing conditions, equal numbers believe these provisions will be useless or harmful as think they will help.

But as the collapse of the CLASS Act and private markets for child-only health insurance have shown, and as the Obama administration has argued in federal court, the pre-existing conditions provisions cannot exist without the wildly unpopular individual mandate because on their own, the pre-existing conditions provisions would cause the entire health insurance market to implode.

If the pre-existing conditions provisions are a (supposed) benefit of the law, then the individual mandate is the cost of those provisions. If voters don’t like the individual mandate–if they aren’t willing to pay the cost of the law’s purported benefits–then the “popular” provisions aren’t popular, either.

Or, as Firedoglake’s Jon Walker puts it, ObamaCare is about as popular as pepperoni and broken glass pizza.

Even among Republican voters? Good grief.

But, But…Price Controls Poll Well! is a post from Cato @ Liberty - Cato Institute Blog

The media tide of the past two days has carried in a great flood of stories on science, technology, engineering and math (STEM) education. ABC, NBC, AP, Reuters, the Christian Science Monitor, Politico, the Detroit News, and others joined in. This torrent of attention is due to a White House science fair at which the president announced several initiatives to boost student achievement in those fields. Details are scant, but based on the administration’s press release it seems that $100 million or so would go to encourage particular kinds of teacher’s college programs. Various extracurricular STEM programs funded by non-profit foundations were also touted in the release.

The obvious irony in the president’s plan to tweak teachers’ college programs is that those programs are themselves a key part of the problem. The nation’s state school monopolies typically require most or all of their teachers to either have a degree from a government-approved college of education or to be pursuing such a degree during evenings and weekends. Few of those studying or working in STEM fields are willing to sit through a teachers’ college program—with good reason. Not only are these programs often pointless according to their own graduates, they are not associated with improved student performance. They are a requirement without a function–at least without a function that benefits students. The one thing they do accomplish is to erect a barrier to entry that protects incumbent teachers from competition, allows the specter of “teacher shortages” to be floated at regular intervals, and thus to justify above market wages [state school teachers receive compensation that is roughly $17,000 per year higher than their private sector counterparts].

As a result, many of the most promising teaching candidates in these fields are weeded out from the start. President Obama’s plans to “improve” this barrier to entry into the profession amounts to reupholstering the deck chairs on the sunken Titanic.

But how to ensure that only effective teachers lead the nation’s classrooms given that the government certification process is not just useless but counterproductive? Here, again, there is irony. Somehow, in the thousands of different fields in which scientists and engineers work every day, the competent are distinguished from the incompetent. And somehow, those who underperform are either helped to improve or cut loose to seek work in a field (or with an employer) to which their talents are better suited. It is ludicrous to suggest that managers can effectively evaluate the work of the scientists and engineers they employ in every field _except_ education.

The media would do us all a favor if they would look past the Obama administration’s marshmallow launcher for a moment and contemplate the effect that our massive barrier to entry into the teaching profession has on recruiting scientists and engineers.

The Irony of the President’s STEM Initiatives is a post from Cato @ Liberty - Cato Institute Blog

President Obama is catching some well-earned blowback for his decision to force religious institutions “to pay for health insurance that covers sterilization, contraceptives and abortifacients.” You see, ObamaCare penalizes individuals (employers) who don’t purchase (offer) a certain minimum package of health insurance coverage. The Obama administration is demanding that coverage must include the aforementioned reproductive care services. The exception for religious institutions that object to such coverage is so narrow that, as one wag put it, not even Jesus would qualify. HHS Secretary Kathleen Sebelius reassures us, “I believe this proposal strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services.” Ummm, Madam Secretary…the Constitution only mentions one of those things. The Catholic church is hopping mad. Even the reliably left-wing E.J. Dionne is angry, writing that the President “utterly botched” the issue “not once but twice” and “threw his progressive Catholic allies under the bus.”

As I wrote over and over as Congress debated ObamaCare, anger and division are inevitable consequences of this law. I recently debated the merits of ObamaCare’s individual mandate on the pages of the Wall Street Journal. Here’s a paragraph that got cut from my essay:

We can be certain…that the mandate will divide the nation. An individual mandate guarantees that the government—not you—will decide what medical services you will purchase, including contraceptives, fertility services that result in the destruction of human embryos, or elective abortions. The same apparatus that can force Americans to subsidize elective abortions can also be used to ban private abortion coverage once the other team wins. The rancor will only grow.

Or as I put it in 2009,

Either the government will force taxpayers to fund abortions, or the restrictions necessary to prevent taxpayer funding will reduce access to abortion coverage. There is no middle ground. Somebody has to lose. Welcome to government-run health care.

The same is true for contraception. The rancor will grow until we repeal this law.

ObamaCare highlights a choice that religious organizations — such as the United States Conference of Catholic Bishops, where my grandfather served as counsel — have to make. Either they stop casting their lots with Caesar and join the fight to repeal government health care mandates and subsidies, or they forfeit any right to complain when Caesar turns on them. Matthew 26:52.

Contraceptives Mandate Brings ObamaCare’s Coercive Power into Sharper Focus is a post from Cato @ Liberty - Cato Institute Blog

The center-right consensus is that in order to balance the budget and improve health care, Congress needs to overhaul Medicare using some form of voucher or premium support.  Whereas the current program offers an essentially unlimited subsidy for medical care, under these options Congress would give each enrollee a fixed subsidy with which they could purchase private health insurance.  But how should Congress determine the size of these fixed subsidies?

The House GOP approved a budget under which Congress would pick the amount.  Beginning in 2022, all new enrollees would receive a voucher.  The average voucher amount would be equal to the average amount Medicare currently spends per enrollee in 2011, adjusted for overall inflation.  Congress would adjust the actual voucher amount for each enrollee based on health status and income, so some enrollees would receive larger and some would receive smaller vouchers.  But since the average voucher would grow at the rate of inflation (i.e., about 2.5 percentage points slower than per-enrollee Medicare spending currently grows), this approach would reduce Medicare spending over time.

A drawback of this approach is that opponents can (and do) demagogue it, claiming that the vouchers would be insufficient and seniors would die for lack of medical care.  This demagoguery ignores two important factors.

First, as Peter Orszag and President Obama themselves loved reminding us during the ObamaCare debate, there is lots of wasteful spending in the Medicare program.  Orszag frequently cites the Dartmouth Atlas, which estimates that one third of Medicare spending is pure waste.  Since the amount of the House GOP’s vouchers would be based on per-enrollee Medicare spending, they would essentially give Medicare enrollees 50 percent more money than they would need to purchase all the beneficial medical care that Medicare currently provides.  The vast amount of wasteful Medicare spending is a disgrace.  But when converting to a voucher system it’s an absolute boon, because it provides a huge margin of safety.  It means that enrollees could reduce their medical consumption by one third without harming their health.

Second, the anti-reform demagogues presume that vouchers would do absolutely nothing to make health care more efficient.  Vouchers would make the nation’s 50 million heaviest consumers of medical care cost-conscious in a way they have never been before.  Like an old man trying to send back soup at a deli, they will force providers to cut costs and thereby make their vouchers go farther.

It is because of this second factor that Yuval Levin proposes a different way of setting the voucher amount(s).  Levin proposes to use a competitive-bidding process.  Under this approach, everyone in Medicare would receive a voucher equal to the second-lowest bid that health plans submit to provide a standard package of benefits.  Enrollees could then apply their voucher to any private plan or even a government-run plan.  Under this approach, enrollees would still be cost-conscious: if the health insurance policies they choose cost more than the voucher amount, they would have to make up the difference; if the policies cost less, they would keep the savings.  Levin argues that this cost-consciousness would also lead enrollees to put pressure on providers to cut costs, and therefore the amount of the second-lowest bid would automatically grow at a slower rate than per-enrollee spending under the current Medicare program.  ”In such a system,” Levin writes, “the premium-support benefit would grow exactly as quickly as required to provide a comprehensive insurance benefit, since the growth rate would be determined by a market process rather than a preset formula. ” Voila!  The competitive forces of the market would cut Medicare spending.

The best evidence that competitive bidding will reduce Medicare spending is that the durable medical equipment manufacturers have fought efforts to impose it on them.  So while I’m not hostile to the idea, I don’t think it’s an improvement over the House GOP plan.

First, Levin calls competitive-bidding “the Confident Market Solution” because he is confident that markets will reduce the cost of health care.  I’m confident of that too.  But I’m also confident that rent-seeking will be present in Medicare, no matter what reforms Congress enacts.  I am far less confident that markets will reduce costs faster than rent-seeking will increase them.  My sense is that politicians will be much more likely to hold the line on rent-seeking if they actually draw one.

Second, House Budget Committee chairman Paul Ryan (R-WI) crafted a House budget that proposed to reduce the growth of Medicare spending using hard, score-able numbers.  Hundreds of House members likewise stuck their necks out by voting for it.  The Confident Market Solution essentially undercuts those folks by telling them they should not have done something so bold and courageous.  Levin is no doubt correct that a competitive-bidding process that doesn’t specifically commit Congress to reducing Medicare spending growth is more politically feasible than a voucher plan that does.  When politicians choose the more politically perilous option, however, reformers should tell the world why that was the right thing to do.

Third, Levin would include a public option in the competitive-bidding system.  I am also confident that the government would heavily subsidize that health plan until it drove private insurers (and any hope of cost-cutting innovations) out of the market.

I’ve discussed what I think is a better approach to Medicare reform here and here.

Let the Market Cut Medicare? is a post from Cato @ Liberty - Cato Institute Blog

Sen. John McCain has exhibited personal courage, but his geopolitical judgment is uniformly awful.  Over the last 30 years there has been no war or potential war that he has opposed.  In 2008 he wanted to confront nuclear-armed Russia over its neighbor Georgia, which started their short and sharp conflict.  It would have been ironic had the Cold War ended peacefully, only to see Washington trigger a nuclear crisis in order to back Georgia as it attempted to prevent the territories of Abkhazia and South Ossetia from doing what Kosovo did with U.S. military aid:  achieve self-determination (by seceding from Georgia).

Now Senator McCain is banging the war drums in Libya.  But he seems to have trouble remembering who are the good guys and who are the bad guys.

Although now crusading against Moammar Qaddafi, two years ago he joined Sens. Joe Lieberman and Lindsey Graham in Tripoli to sup with the dear colonel.  There the three opponents of tyranny whispered sweet nothings in the dictator’s ear, offering the prospect of military aid.  After all, the former terrorist had become a good friend of America by battling terrorists.

Andrew McCarthy reported on the sordid tale from the WikiLeaks disclosures:

A government cable (leaked by Wikileaks) memorializes the excruciating details of meetings between the Senate delegation and Qaddafi, along with his son Mutassim, Libya’s “national security adviser.” We find McCain and Graham promising to use their influence to push along Libya’s requests for C-130 military aircraft, among other armaments, and civilian nuclear assistance. And there’s Lieberman gushing, “We never would have guessed ten years ago that we would be sitting in Tripoli, being welcomed by a son of Muammar al-Qadhafi.” That’s before he opined that Libya had become “an important ally in the war on terrorism,” and that “common enemies sometimes make better friends.”

Obviously, that was then and this is now.  Along the way Senator McCain and his fellow war enthusiasts realized that Qaddafi wasn’t a nice guy after all.  Who knew?  I mean, he had only jailed opponents, conducted terrorist operations against the United States, and initiated a nuclear weapons program.  So earlier this year they demanded that the United States back the rebels, the new heroes of democracy. 

Until now, anyway.

Anyone who has covered civil wars won’t be surprised to learn that the insurgents aren’t always playing by Marquess of Queensbeerry rules.  Indeed, the opposition is united only by its hatred of Qaddafi.  It includes defectors, including  Qaddafi’s former interior minister who was just assassinated under mysterious circumstances; jihadists and terrorists, some of whom fought against U.S. forces in Iraq; tribal opponents of Qaddafi; and genuine democracy advocates devoted to creating a liberal society.  Unfortunately, there is no guarantee that the good guys will win any power struggle certain to follow Qaddafi’s ouster.

The Obama administration claimed to enter the war to protect civilians.  Yet NATO has occasionally threatened to bomb the rebels if they harm civilians.  Reports of summary executions and looting by insurgent forces have emerged.  Now Senator McCain has written the opposition a letter—more polite than sending a drone, I suppose—demanding that the Transition National Council stop being mean to former Qaddafi supporters.

Reports the British Independent newspaper:

In his letter to the TNC, dated 20th July, Senator McCain, writing as “your friend and supporter,” pointed out “recent documentation of human rights abuses committed by opposition figures in the western Libyan towns of al-Awaniya, Rayayinah, Zawiyat al-Bagul, and al-Qawalish”. He continued: ” According to Human Rights Watch, a highly credible international non-governmental organisation, rebel fighters and supporters have damaged property, burned some homes, looted from hospitals, homes and shops, and beaten some individuals alleged to have supported government forces.

“I am confident you are aware of these allegations…. It is because the TNC holds itself to such high democratic standards that it is necessary for you and the Council to take decisive action to bring any human rights abuses to an immediate halt.”

Who would have imagined that a civil war could be nasty and that not everyone who opposes a dictator is a sweet, peace-loving liberal?  Certainly not John McCain.

The point is not that Qaddafi is a nice guy.  The world would be a better place if he “moves on,” so to speak.  But there’s no guarantee that a rebel victory will result in a liberal democracy dedicated to international peace and harmony.  And there’s nothing at stake that warrants involving the United States in yet another war in a Muslim nation—the fifth ongoing, if one counts the extensive drone campaigns in Pakistan and Yemen, along with Iraq and Afghanistan.

When Senator McCain urges Washington to bomb or invade the sixth Islamic state, which is inevitable given his past behavior, it would be worth remembering how he has managed to be on every side of the Libya issue, supporting tyranny before he opposed it.  When it comes to war, the best policy is to do the opposite of what he advises.  Only then will America find itself finally at peace.

John McCain: Ever Confused, Always for War is a post from Cato @ Liberty - Cato Institute Blog

The American welfare state has been in crisis for decades. Many of the problems faced in 1995 fight have become less tractable problems today. John Samples comments in yesterday’s Cato Daily Podcast.

One notable difference between 1995 and today, Samples says, is that the GOP of 1995 kept Social Security off the chopping block for spending cuts.

Subscribe to the podcast here (RSS) and here (iTunes).

Parallels to 1995 in Spending Fight is a post from Cato @ Liberty - Cato Institute Blog

Cato Institute scholars Daniel J. Mitchell and Chris Edwards evaluate the plans offered by Republicans for lowering federal spending using a so-called “Cut, Cap and Balance” proposal that would make small cuts to federal spending in the short run, cap federal spending, and balance the federal budget using a tax-limited balanced budget amendment to the Constitution.

‘Cut, Cap and Balance,’ the Debt Ceiling and Federal Spending is a post from Cato @ Liberty - Cato Institute Blog

In the video clip above, President Obama blames America’s current unemployment problem on… automation. ATMs and airport kiosks are singled out.

These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his  life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more  labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.

If you do more than just think for a second — if you read an economic history book, for instance — you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.

There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment,  if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.

Update:

For those having trouble viewing the video, here is a transcript of the relevant Q&A:

Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?

A: [....] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.

Barack Obama, Luddite? is a post from Cato @ Liberty - Cato Institute Blog

Cornel West feels jilted. In an article on him at Truthdig, Princeton’s Professor of African-American Studies and Religion criticizes President Obama for being ungrateful for West’s service to his campaign.

Much of the article reads like post-breakup grumblings. West describes how Obama never calls him back, “but then a month and half later I would run into other people on the campaign and he’s calling them all the time. I said, wow, this is kind of strange. He doesn’t have time, even two seconds, to say thank you or I’m glad you’re pulling for me and praying for me, but he’s calling these other people.”

Most interesting are West’s criticisms of Obama’s presidency. Like many former supporters, Professor West feels betrayed by Obama’s “same as the old boss” policies. In order to explain this, West engages in the quixotic pursuit of pathologizing President Obama. As Ilya Somin and Jonah Goldberg point out, this is oddly reminiscent of Dinesh D’Souza’s recent book, The Roots of Obama’s Rage, and equally confusing. Run-of-the-mill liberal policies from a liberal president don’t need extensive and convoluted explanations.

Pathologizing political opponents is a difficult and largely self-serving task. Although there are many reasons we believe what we do, it does healthy intellectual discourse a disservice to classify opponents rather than try to refute them. Honest disagreements should not be relegated to the pages of the DSM-IV. Usually, this strategy only helps you feel better about your beliefs. While you have reason and arguments supporting your beliefs, all your opponent has is a long line of racial confusion and societal pressures.

According to West, President Obama (“my brother Barack Obama”) “has a certain fear of free black men” caused by his mixed-race background that has made him always “fear being a white man with black skin.” Obama comes from “Kansas influence, white, loving grandparents, coming out of Hawaii and Indonesia, when he meets these independent black folk who have a history of slavery, Jim Crow, Jane Crow and so on, he is very apprehensive.” Thus, “he has a certain rootlessness, a deracination.”

As Gene Healy has consistently pointed out, President Obama needs no explanation. In the era of the imperial presidency we have presidents who become imperious. Big surprise. What does need an explanation, however, is why Cornel West, an unquestionably intelligent man, still finds this surprising.

Or perhaps he doesn’t. The most striking thing said by West in the article is this: “The tea party folk are right when they say the government is corrupt. It is corrupt. Big business and banks have taken over government and corrupted it in deep ways.” Now, I don’t expect to see Professor West at Glenn Beck rallies, but maybe his disappointment in Obama will lead him to stop believing that the problems with government are personal rather than institutional—that is, that government can be fixed if we just put the right people in office.

Or maybe he’ll just support the next candidate who returns his phone calls.

Obama/West Relationship Status Update: ‘It’s Complicated’ is a post from Cato @ Liberty - Cato Institute Blog

A few highlights from this week’s health care news:

• Politico reports that Florida Gov. Rick Scott (R) is a former health insurance executive. (He was a hospital executive.)
• Suzy Khimm writes that to fix the problems created by centralized planning of the health care sector, we need more centralized planning of the health care sector.
• The Obama administration  blows the doors open on the colossal failure that are ObamaCare’s high-risk pools, but doesn’t bother to say where the  money is coming from.

Health Care Odds & Ends is a post from Cato @ Liberty - Cato Institute Blog

When President Obama, following his midterm “shellacking” at the polls, announced his belated conversion to the cause of regulatory relief, I was skeptical. I noted that, despite the reputation of OIRA chief Cass Sunstein as a brilliant scholar with an openness to cost-benefit analysis rare on the Left, the first two years of the Obama administration had been marked by a tremendous ramping up of regulatory burdens on the economy, both in areas of new legislation (ObamaCare, Dodd-Frank) and in new agency rulemakings gearing up from the “ultras” — ardently pro-regulatory appointees like Margaret Hamburg at FDA, Lisa Jackson at EPA, and David Michaels at OSHA. I also observed that in boasting of its deregulatory accomplishments, the administration chose an exceedingly minor example (saccharin’s reclassification as not being a hazardous waste) in which no one important seemed to have been pushing on the opposite side. That suggested that the Obama White House might lack the stomach to press deregulation when doing so might actually offend pro-regulation constituencies.

Yesterday the administration announced the results of its comprehensive review in which more than two dozen agencies looked at existing regulations to identify areas where burdens could be reduced [WaPo, AEI Enterprise, Wayne Crews/CEI]. As Cary Coglianese notes at the Penn Program on Regulation’s RegBlog,

[M]any of the initial rules agencies have proposed to put under the microscope seem underwhelming. Frequently they are what might be considered “paperwork” rules, with agencies hoping to find ways to streamline reporting and make more information available online. The Treasury Department, for example, plans to review an Internal Revenue Service regulation so as to correct instructions about where to file for a tax refund or credit. The Commerce Department’s plan identifies, among other things, the rule governing the “application number” and “filing date” for patents.

There’s nothing wrong with streamlining paperwork, of course, but it’s a cause that even “ultras” can get behind. Indeed, one of the largest line-item claims of savings comes from an OSHA plan “to finalize a proposed rule that would harmonize U.S. hazard classifications and labels with those used by other nations, which is expected to result in an annualized $585 million in estimated savings for employers.” As Coglianese notes, “few of the rules listed in the plans as targets for review are the salient regulatory issues of the day.” Tellingly, one of the most significant retreats on a regulatory issue in recent weeks — the EPA’s decision to pull back expensive new regulations on boiler emissions — is not boasted about, perhaps because the retreat is intended to be only temporary.

I do note with a ripple of “great minds think alike” satisfaction that Sunstein did advance, as one of his central examples of a new administration accomplishment, the EPA’s very belated recognition that spills of milk on dairy farms are not “oil spills” requiring elaborate containment and remediation measures. I had been writing about that one in this space for a while, and had specifically cited it in January as an example of the sort of craziness the Obamanauts should be trying to address if they want to be taken seriously on the issue of deregulation.

Obama as Reluctant Deregulator: Four Months Later is a post from Cato @ Liberty - Cato Institute Blog

Barack Obama’s AutoPen has signed another four-year extension of three Patriot Act powers, but one silver lining of this week’s lopsided battle over the law is that mainstream papers like The New York Times have finally started to take note of the growing number of senators who have raised an alarm over a “secret interpretation” of Patriot’s “business records” authority (aka Section 215). It would appear to be linked to a “sensitive collection program” referenced by a Justice Department official at hearings during the previous reauthorization debate—one that would be disrupted if 215 orders were restricted to the records of suspected terrorists, their associates, or their “activities” (e.g., large purchases of chemicals used to make bombs). Naturally, lots of people are starting to wonder just what this program, and the secret interpretation of the law that may be associated with it, are all about.

All we can do is speculate, of course: only a handful of legislators and people with top-secret clearances know for sure. But a few of us who closely monitor national security and surveillance issues have come to the same conclusion: it probably involves some form of cellular phone geolocation tracking, potentially on a large scale. The evidence for this is necessarily circumstantial, but I think it’s fairly persuasive when you add it all up.

First, a bit of background. The recent fiery floor speeches from Sens. Wyden and Udall are the first time widespread attention has been drawn to this issue—but it was actually first broached over a year ago, by Sen. Richard Durbin and then-Sen. Russ Feingold, as I point out in my new paper on Patriot surveillance. Back in 2005, language that would have required Section 215 business record orders to pertain to terror suspects, or their associates, or the “activities” of a terror group won the unanimous support of the Senate Judiciary Committee, though was not ultimately included in the final reauthorization bill. Four years later, however, the Justice Department was warning that such a requirement would interfere with that “sensitive collection program.” As Durbin complained at the time:

The real reason for resisting this obvious, common-sense modification of Section 215 is unfortunately cloaked in secrecy. Some day that cloak will be lifted, and future generations will ask whether our actions today meet the test of a democratic society: transparency, accountability, and fidelity to the rule of law and our Constitution.

Those are three pretty broad categories of information—and it should raise a few eyebrows to learn that the Justice Department believes it routinely needs to get information outside its scope for counterterror investigations. Currently, any record asserted to be “relevant” to an investigation (a standard so low it’s barely a standard) is subject to Section 215, and records falling within those three categories enjoy a “presumption of relevance.” That means the judges on the secret Foreign Intelligence Surveillance Court lack discretion to evaluate for themselves whether such records are really relevant to an investigation; they must presume their relevance. With that in mind, consider that the most recent report to Congress on the use of these powers shows a record 96 uses of Section 215 in 2010, up from 22 the previous year. Perhaps most surprisingly though, the FISC saw fit to “modify” (which almost certainly means “narrow the scope of”) 42 of those orders. Since the court’s discretion is limited with respect to records of suspected terrorists and their associates, it seems probable that those “modifications” involved applications for orders that sweep more broadly. But why would such records be needed? Hold that thought.

Fast forward to this week. We hear Sen. Wyden warning that “When the American people find out how their government has secretly interpreted the Patriot Act, they will be stunned and they will be angry,” a warning echoed by Sen. Udall. We know that this surprising and disturbing interpretation concerns one of the three provisions that had been slated for sunset. Lone Wolf remains unused, so that’s out, leaving roving wiretaps and Section 215. In the context of remarks by Sens. Feingold and Durbin, and the emphasis recently placed on concerns about Section 215 by Sen. Udall, the business records provision seems like a safe bet. By its explicit terms, that authority is already quite broad: What strained secret interpretation of it could be surprising to both legislators and the general public, but also meet with the approval of the FISC and the Office of Legal Counsel?

For one possible answer, look to the criminal context, where the Department of Justice has developed a novel legal theory, known as the “hybrid theory,” according to which law enforcement may do some types of geolocation tracking of suspects’ cellular phones without obtaining a full-blown probable cause warrant. The “hybrid theory” involves fusing two very different types of surveillance authority. “Pen registers” allow the monitoring, in real time, of the communications “metadata” from phones or other communications devices (phone numbers dialed, IP addresses connected to). For cellular phones, that “metadata” would often make it possible to pinpoint at least approximately—and, increasingly, with a good deal of precision, especially in urban areas—the location of the user. Federal law, however, prohibits carriers from disclosing location information “solely” pursuant to a pen register order. Another type of authority, known as a 2703(d) order, is a bit like Patriot’s business records authority (though only for telecommunications providers), and is used to compel the production of historical (as opposed to real-time/prospective) records, without any exclusion on location information. The Justice Department’s novel theory—which I discussed at a recent Cato event with Sen. Wyden on geolocation tracking—is that by bundling these two authorities in a new kind of combination order, they can do real-time geolocation tracking without the need to obtain a full Fourth Amendment warrant based on probable cause. Many courts have been skeptical of this theory and rejected it—but at least some have gone along with this clever bit of legal origami. Using the broad business records power of Patriot’s Section 215 in a similar way, to enable physical tracking of anyone with a cellphone, would seem to fit the bill, then: certainly surprising and counterintuitive, not what most people think of when we talk about “obtaining business records,” but nevertheless a maneuver with a legal track record of convincing some courts.

Now, consider that Sen. Wyden has also recently developed a concern with the practice of mobile location tracking, which has become so popular that the U.S. Marshall Service, now the federal government’s most prolific (known) user of pen register orders, of which it issued over 6,000 last year, employs the “hybrid theory” to obtain location information by default with each such order. Wyden has introduced legislation that would establish standards for mobile location tracking, which has two surprising and notable feature. First, while the location tracking known to the public all involves criminal investigations subject to the Electronic Communications Privacy Act (ECPA), that’s not where Wyden’s bill makes its primary modifications. Instead, the key amendments are made directly to the Foreign Intelligence Surveillance Act—which language is then incorporated by reference into ECPA. Second, even though one section establishes the “exclusive means” for geolocation tracking, the proposal goes out of its way to additionally modify the FISA pen register provision and the Section 215 business records provision to explicitly prohibit their use to obtain geolocation information—as though there is some special reason to worry about those provisions being used that way, requiring any possible ambiguity to be removed.

Sen. Udall, meanwhile, always uses the same two examples when he talks about his concerns regarding Section 215: he warns about “unfettered” government access to “business records ranging from a cell phone company’s phone records to an individual’s library history,” even when the records relate to people with no connection to terrorism.  The reference to libraries is no surprise, because the specter of Section 215 being used to probe people’s reading habits was raised so insistently by librarians that it became common to see it referenced as the “library provision.” The other example is awfully specific though: he singles out cell phone records, even though many types of sensitive phone records can already be obtained without judicial oversight using National Security Letters. But he doesn’t just say “phone records”—it’s cell phone records he’s especially concerned about. And where he talks about “an individual’s” library records, he doesn’t warn about access to “an individual’s” cell phone records, but rather the company’s records.  As in, the lot of them.

Tracking the location of suspected terrorists, and perhaps their known associates, might not seem so objectionable—though one could argue whether Section 215′s “relevance” standard was sufficient, or whether a full FISA electronic surveillance warrant (requiring a showing of probable cause) would be a more appropriate tool. But that kind of targeted tracking would not require broad access to records of people unconnected to terror suspects and their known associates, which is hinted at by both Sen. Udall’s remarks and the high rate of modifications imposed on Section 215 orders by the FISA court. Why might that be needed in the course of a geolocation tracking program?

For a possible answer, turn to the “LocInt” or “Location Intelligence” services marketed to U.S. law enforcement and national security clients by the firm TruePosition. Among the capabilities the company boasts for its software (drawn from both its site and a 2008 white paper the company sponsored) are:

● the ability to analyze location intelligence to detect suspicious behavioral patterns,
● the ability to mine historical mobile phone data to detect relationships between people, locations, and events,
● TruePosition LOCINT can mine location data to find out if the geoprofile of a prepaid phone matches the geoprofile of a potential threat and identify it as such, and
● leveraging location intelligence, officials can identify mobile phones of interest that frequently communicate with each other, or are within close proximity, making it easier to identify criminals and their associates. [Emphasis added.]

Certainly one can see how these functions might be useful: terrorists trained in counterintelligence tactics might seek to avoid surveillance, or identification of co-conspirators, by communicating only in person. Calling records would be useless for revealing physical meetings—but location records are another story. What these functions have in common, however, is that like any kind of data mining, they require access to a large pool of data, not just the records of a known suspect. You can find out who your suspect is phoning by looking at his phone records. But if you want to know who he’s in close physical proximity to—with unusual frequency, and most likely alone—you need to sift through everyone’s phone location records, or at any rate a whole lot of them.  The interesting thing is, it’s not obvious there’s any legal way to actually do all that: full-fledged electronic surveillance warrants would be a non-starter, since they require probable cause for each target. But clearly the company expects to be able to sell these capabilities to some government entity. The obvious candidate is the FBI, availing itself of the broad authority of Section 215—perhaps in combination with FISA pen registers when the tracking needs to happen in real time.

As a final note of interest, the Office of the Inspector Generals’ reports on National Security Letter contain numerous oblique references to “community of interest [REDACTED]” requests. Traditional “community of interest” analysis means looking at the pattern of communications of not just the primary suspect of an investigation, but their whole social circle—the people the suspect communicates with, and perhaps the people they in turn communicate with, and so on. Apparently the fact that the FBI does this sort of traditional CoI analysis is not considered secret, because that phrase remains unredacted. What, then, could that single omitted word be? One candidate that would fit in the available space is “location” or “geolocation”—meaning either location tracking of people called by the suspect or perhaps the use of location records to build a suspect’s “community of interest” by “identify[ing] mobile phones…within close proximity” to the suspects. The Inspector General reports cover the first few years following passage of the Patriot Act, before an opinion from the Office of Legal Counsel held that NSLs could not properly be used to obtain the full range of communications metadata the FBI had been getting under them. If NSLs had been used for location-tracking information prior to that 2008 opinion, it would likely have been necessary to rely on Section 215 past that point, which would fit the timeline.

Is all of that conclusive? Of course not; again, this is speculation. But a lot of data points fit, and it would be quite surprising if the geolocation capabilities increasingly being called upon for criminal investigations were not being used for intelligence purposes. If they are, Section 215 is the natural mechanism.

Even if I’m completely wrong, however, the larger point remains: while intelligence operations must remain secret, a free and democratic society is not supposed to be governed by secret laws—and substantive judicial interpretations are no less a part of “the law” than the text of statutes. Whatever power the government has arrogated to itself by an “innovative” interpretation of the Patriot Act, it should be up to a free citizenry to consider the case for it, determine whether it is so vital to security to justify the intrusion on privacy, and hold their representatives accountable accordingly. Instead, Congress has essential voted blind—reauthorizing powers that even legislators, let alone the public, do not truly understand. Whether it’s location tracking or something else, this is fundamentally incompatible with the preconditions of both democracy and a free society.

Atlas Bugged: Why the “Secret Law” of the Patriot Act Is Probably About Location Tracking is a post from Cato @ Liberty - Cato Institute Blog

• How to identify as a leftist totalitarian.
• How to reinforce the status quo in the Middle East peace process.
• How to learn and understand the Founders’ intent for the United States.
• How to save billions of dollars annually and reduce the deficit:

Friday Links is a post from Cato @ Liberty - Cato Institute Blog

• “Consistent bets for higher oil prices in futures markets have not been particularly lucrative.”
• “The vast, swaying bulk of America’s military has absolutely nothing to do with effectively combating terrorism—including the large land armies that we deploy to Muslim countries in efforts to destroy and then reconstitute their states.”
• “‘Poking and prodding’ is what good government does to perfect strangers. And that’s what the Obama administration has been doing, with unusual zeal, for the past 2 1/2 years.”
• The Cato 2011 State Legislative Guide is designed to help state policymakers free their constituents from the burden of overextended government and addresses unfunded pension liabilities, ballooning Medicaid enrollment, massive budget gaps, failing education systems, and other important issues.
• The Kentucky v. King decision has delivered a blow to Fourth Amendment protections:

  Read more here.

Thursday Links is a post from Cato @ Liberty - Cato Institute Blog

The most recent, comprehensive Pew higher education survey has gotten a lot of coverage for its findings on how important the public thinks college is, its financial payoff for grads, etc. For some reason, though, by far the most interesting statistic in the report has gotten roughly zero play, either from Pew itself or media coverage of the report: “Among all college graduates, 33% say they are in a job that does not require a college degree.”

Wait. One-third of all college graduates are in jobs that don’t call for a college education? So one-third of all college degrees are quite possibly total economic wastes? (To be fair, no doubt some of those grads are looking for jobs requiring a degree, mitigating this somewhat. On the flip side, many jobs probably require a degree without actually requiring college-level skills, counterbalancing that.)

In light of this, can someone please tell me why President Obama wants the United States to lead the world in the precentage of its population with a college degree by 2020? And please, explain why Washington furnished over $113 billion in student aid in the 2009-10 academic year? I’d really like to know.

One-third of College Degrees Wasted? is a post from Cato @ Liberty - Cato Institute Blog

• Next up for marriage equality: Perry v. Schwarzenegger. Please join us at 12:00 p.m. Eastern today as co-counsels for the plaintiffs Theodore Olson and John Boies join Center for American Progress president John Podesta and Cato chairman Robert A. Levy for a panel discussion on marriage equality, exploring legal and moral questions dating back to the landmark 1967 Loving v. Virginia decision that ended state bans on interracial marriage. If you cannot join us here at Cato, please tune in to watch a live stream of the event.
• “Republicans have an opportunity for a much more important debate, which will frame the election campaign next year.”
• In President Obama’s next speech, Cato director of foreign policy studies Christopher Preble hopes “that the president reaffirms the importance of peaceful regime change from within, not American-sponsored regime change from without.”
• What will former Massachusetts governor Mitt Romney’s next position on health care be?
• Like cleanliness next to godliness, so is democracy next to tyranny.
• The U.S. hit the debt limit–what’s next?

Wednesday Links is a post from Cato @ Liberty - Cato Institute Blog

My DC Examiner column this week focuses on Barack Obama’s transformation into our National Noodge, nudging, shoving, poking and prodding Americans into healthier lifestyles via the powers of the federal government.

A year ago, the New York Times got all excited about the “new age of regulation” the administration was busy ushering in. The president had elevated “a new breed of regulators”: folks like regulatory czar Cass Sunstein, who wants to “nudge” Americans toward healthier consumption choices, and CDC head Thomas Frieden, who, as NYC health commissioner, proclaimed ”when anyone dies at an early age from a preventable cause in New York City, it’s my fault.”

Today’s column tracks how this killjoy crusade is playing out:

Quitting smoking was “a personal challenge for [Obama],” the first lady explained recently, and she never “poked and prodded.”

Of course not. It’s obnoxious to hector your loved ones. “Poking and prodding” is what good government does to perfect strangers. And that’s what the Obama administration has been doing, with unusual zeal, for the past 2 1/2 years.

You’re not a real president until you fight a metaphorical “war” on a social problem. So, to LBJ’s “War on Poverty” and Reagan’s “War on Drugs,” add Obama’s “War on Fun.” Like the “War on Terror,” it’s being fought on many fronts…

Among them: graphic warning labels for cigarettes; a ban on clove cigarettes and possibly menthols; shutting down online poker sites; banning caffeinated malt liquor; mandatory menu-labeling and ratcheting down allowable sodium levels in food to “adjust the American palate to a less salty diet.” Even healthy “real food” aficionados can find themselves in the crosshairs, as Dan Allgyer, an Amish farmer selling raw milk discovered last month, when FDA agents and federal marshals raided his farm.

Last year, in a remarkably silly column entitled “Obama’s Happiness Deficit,” Washington Post editorial page editor Fred Hiatt wondered whether the president’s political difficulties stemmed from the fact that “he doesn’t seem all that happy being president.” I couldn’t care less whether Obama’s enjoying his job. He asked for it, he got it. But if he isn’t having fun, he shouldn’t take it out on the rest of us.

President Obama’s ‘War on Fun’ is a post from Cato @ Liberty - Cato Institute Blog

This new video, narrated by yours truly, discusses a proposal to solve Medicare’s bankrupt finances by replacing an unsustainable entitlement with a “premium-support” system for private insurance, also known as vouchers.

This topic is very hot right now, in part because Medicare reform is included in the budget approved by House Republicans, but also because Newt Gingrich inexplicably has decided to echo White House talking points by attacking Congressman Ryan’s voucher plan.

Drawing considerably from the work of Michael Cannon, the video has two sections. The first part reviews Congressman Ryan’s proposal and notes that it is based on a plan put together with Alice Rivlin, who served as Director of the Office of Management and Budget under Bill Clinton. Among serious budget people (as opposed to the hacks on Capitol Hill), this is an important sign of bipartisan support.

The video also notes that the “voucher” proposal is actually very similar to the plan that is used by Members of Congress and their staff. This is a selling point that proponents should emphasize since most Americans realize that lawmakers would never subject themselves to something that didn’t work.

The second part discusses the economics of the health care sector, and explains the critical need to address the third-party payer crisis. More specifically, 88 percent of every health care dollar in America is paid for by someone other than the consumer. People do pay huge amounts for health care, to be sure, but not at the point of delivery. Instead, they pay high tax burdens and have huge shares of their compensation diverted to pay for insurance policies.

I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants).  In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted.

Medicare reform, by itself, won’t solve the third-party payer problem, but it could be part of the solution – especially if seniors used their vouchers to purchase real insurance (i.e., for large, unexpected expenses) rather than the inefficient pre-paid health plans that are so prevalent today.

Who’s Right on Medicare Reform, Ryan and Rivlin or Obama and Gingrich? is a post from Cato @ Liberty - Cato Institute Blog

• Osama bin Laden’s death gives us a chance to end what might have become an era of permanent emergency and perpetual war.
• The Cold War ended–what are we doing in Korea?
• Two cheers for President Obama for ending eight (well, three) tax breaks to oil companies.
• Does Osama bin Laden’s death mean an end to U.S.-Pakistan relations?
• Please join us next Tuesday, May 10 at 4:00 p.m. Eastern for a Cato Book Forum on America’s Allies and War: Kosovo, Afghanistan, and Iraq, by University of Mary Washington political scientist Jason W. Davidson. Council on Foreign Relations senior fellow and Georgetown University international relations professor Charles Kupchan will join Professor Davidson in a discussion of the book and its themes, particularly U.S. relations with NATO allies, moderated by Cato director of foreign policy studies Christopher A. Preble. Complimentary registration is required of all attendees by Monday, May 9 at noon Eastern. We hope you can join us in person, but we encourage you to watch online if you cannot attend personally.

Wednesday Links is a post from Cato @ Liberty - Cato Institute Blog