The Daily Caller reports that Senator Harry Reid (D-NV) is planning another effort at Internet regulation—right on the heels of the SOPA/PIPA debacle. The article seems calculated to insinuate that a follow-on to SOPA/PIPA might slip into cybersecurity legislation the Senate plans to take up. Whether that’s in the works or not, I’ll detail here the privacy threats in cybersecurity language being circulated on the Hill.

A Senate draft currently making the rounds is called the “Cybersecurity Information Sharing Act of 2012.” It sets up “cybersecurity exchanges” at which government and corporate entities would share threat information and solutions.

Sharing of information does not require federal approval or planning, of course. Information sharing happens all the time according to market processes. But “information sharing” is the solution Congress has seized upon, so federal information sharing programs we will have. Think of all this as a “see something, say something” campaign for corporate computer security people. Or perhaps “e-fusion centers.”

Reading over the draft, I was struck by sweeping language purporting to create “affirmative authority to monitor and defend against cybersecurity threats.” To understand the strangeness of these words, we must start at the beginning:

We live in a free country where all that is not forbidden is allowed. There is no need in such a country for “affirmative” authority to act. So what does this section do as it in purports to permit private and governmental entities to monitor their information systems, operate active defenses, and such? It sweeps aside nearly all other laws controlling them.

“Consistent with the Constitution of the United States and notwithstanding and other provision of law,” it says (emphasis added), entities may act to preserve the security of their systems. This means that the only law controlling their actions would be the Constitution.

It’s nice that the Constitution would apply</sarcasm>, but the obligations in the Privacy Act of 1974 would not. The Electronic Communications Privacy Act would be void. Even the requirements of the E-Government Act of 2002, such as privacy impact assessments, would be swept aside.

The Constitution doesn’t constrain private actors, of course. This language would immunize them from liability under any and all regulation and under state or common law. Private actors would not be subject to suit for breaching contractual promises of confidentiality. They would not be liable for violating the privacy torts. Anything goes so long as one can make a claim to defending “information systems,” a term that refers to anything having to do with computers.

Elsewhere, the bill creates an equally sweeping immunity against law-breaking so long as the law-breaking provides information to a “cybersecurity exchange.” This is a breath-taking exemption from the civil and criminal laws that protect privacy, among other things.

(1) IN GENERAL.—No civil or criminal cause of action shall lie or be maintained in any Federal or State court against any non-Federal governmental or private entity, or any officer, employee, or agent of such an entity, and any such action shall be dismissed promptly, for the disclosure of a cybersecurity threat indicator to—
(A) a cybersecurity exchange under subsection (a)(1); or
(B) a private entity under subsection, (b)(1), provided the cybersecurity threat indicator is promptly shared with a cybersecurity exchange.

In addition to this immunity from suit, the bill creates an equally sweeping “good faith” defense:

Where a civil or criminal cause of action is not barred under paragraph (1), a good faith reliance by any person on a legislative authorization, a statutory authorization, or a good faith determination that this Act permitted the conduct complained of, is a complete defense against any civil or criminal action brought under this Act or any other law.

Good faith is a question of fact, and a corporate security official could argue successfully that she acted in good faith if a government official told her to turn over private data. This language allows the corporate sector to abandon its responsibility to follow the law in favor of following government edicts. We’ve seen attacks on the rule of law like this before.

A House Homeland Security subcommittee marked up a counterpart to this bill last week. It does not have similar language that I could find.

In 2009, I testified in the House Science Committee on cybersecurity, skeptical of the government’s ability to tackle cybersecurity but cognizant that the government must secure its own systems. “Cybersecurity exchanges” are a blind stab at addressing the many challenges in securing computers, networks, and data, and I think they are unnecessary at best. According to current plans, cybersecurity exchanges come at a devastating cost to our online privacy.

Congress seems poised once again to violate the rule from the SOPA/PIPA disaster: “First, do no harm to the Internet.”

The Senate’s SOPA Counterattack?: Cybersecurity the Undoing of Privacy is a post from Cato @ Liberty - Cato Institute Blog

A stated aim of the Obama-Reid jobs bill is to preserve the “competitive edge” that our “world-class” education system purportedly gives us. In an attempt to do that it would throw tens of billions of extra taxpayer dollars at public school employees.

A few problems with that: we’re not educationally world-class; we don’t have a competitive edge in k-12 education; and this bill would actually push the U.S. economy closer to a Greek-style economic disaster.

First, the belief that increasing public school employment helps students learn is demonstrably false. Over the past forty years, public school employment has grown 10 times faster than enrollment. If more teachers union jobs were going to boost student achievement, we’d have seen it by now. We haven’t. Achievement at the end of high school has been flat in reading and math and has declined in science over this period. I documented these facts the last time Democrats decided to stimulate their teachers union base, just one year and $10 billion ago.

So what has our public school hiring binge done for us? Since 1980, it has raised the cost of sending a child from Kindergarten through the 12th grade by $75,000 — doubling it to around $150,000, in 2009 dollars.

And what would going back to the staff-to-student ratio of 1980 do? It would save taxpayers over $140 billion annually.

But don’t those school employees need jobs? Of course they do. But we can’t afford to keep paying for millions of phony-baloney state jobs that have no impact on student learning. We need these men and women working in the productive sector of the economy — the free enterprise sector — so that they contribute to economic growth instead of being a fiscal anchor that drags us ever closer to the bottom of the Aegean. Freeing up the $140 billion currently squandered by the state schools would provide the resources to create those productive private sector jobs.

Continuing to tax the American people to sustain or even expand the current bloat, as Obama and Reid want to do, cripples our economic growth prospects by warehousing millions of potentially productive workers in unproductive jobs. The longer we do that, the slimmer our chances of economic recovery become. This Obama-Reid bill is such an incredibly bad idea, so obviously bad, that it is hard to imagine any remotely well-informed policymaker supporting it… unless, of course, they think the short term good will of public school employee unions is more important than the long-term prosperity of the American people.

Obama-Reid ‘Jobs’ Bill Soaked in Greece is a post from Cato @ Liberty - Cato Institute Blog

These are the times that try budget analysts’ souls—especially budget analysts who’d like to see Washington dramatically cut spending. The debate over lifting the debt ceiling has produced a number of proposals from Capitol Hill—none of them have been worth celebrating. We can now add House Speaker John Boehner’s latest proposal to the pile.

Boehner’s proposal boils down to the following: cap discretionary spending over 10 years to achieve $1.2 trillion in savings; have (another) bipartisan group of policymakers come up with $1.8 trillion in “deficit reductions” over ten years; and get a vote on a balanced budget amendment. In exchange, the president would get to increase the deficit by $900 billion this year and by another $1.6 trillion next year.

Here are some thoughts on Boehner’s plan:

• Under the Congressional Budget Office’s optimistic spending baseline, the federal government will spend $46 trillion over the next ten years. Obviously, reducing spending by $1.2 trillion oven ten years is relatively small.

• The same dysfunctional congress that treats entitlement programs like lit sticks of dynamite is supposed to come up with $1.6 trillion in “deficit reduction.” Note that we’re not even talking specifically about spending cuts here, so that figure would likely include tax increases assuming they’re able to even come up with something.

• Under the Boehner plan, spending and debt will continue to rise. At the most, the plan would produce an average of $300 billion a year in cuts in exchange for increasing the debt ceiling by $2.5 trillion over the next two years.

• Boehner’s bill includes language that tightens up the definition of what constitutes “emergency” spending. Congress regularly slaps the “emergency” designation on all sort of non-emergency spending bills. I have no faith that the new language will stop the foxes guarding the henhouse from continuing to devour chickens.

• Where are the immediate spending cuts? Once again, we have the promise of cuts but no specifics. Even if the discretionary caps hold the line on that portion of spending, total federal spending (and debt) will continue its unsustainable upward climb. Entitlement spending is the biggest driver of our long-term budgetary problems but entitlement spending isn’t capped under the Boehner plan.

In sum, this plan is another stinker. But with Harry Reid controlling the Senate and Barack Obama sitting in the White House, the votes just aren’t there to get a plan passed that sufficiently addresses our fiscal mess by reining in the size and scope of government.

Thoughts on the Boehner Plan 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

Back in February, Democratic leader Harry Reid promised fellow senator Rand Paul that—after years of kicking the can down the road—there would be at least a week reserved for full and open debate over three controversial provisions of the Patriot Act slated to expire this weekend, with an opportunity to propose reforms and offer amendments to any reauthorization bill.  And since, as we know, politicians always keep their promises, we can look forward to a robust and enlightening discussion of how to modify the Patriot Act to better safeguard civil liberties without sacrificing our counterterror capabilities.

Ha! No, I’m joking, of course. Having already cut the legs out from under his own party’s reformers by making a deal with GOP leaders for a four-year extension without reform, Reid used some clever procedural maneuvering to circumvent Rand Paul’s pledged obstruction, slipping the Patriot extension into an unrelated small-business bill that’s privileged against filibusters. All this just to prevent any debate on amendments—the most prominent of which, the Leahy-Paul amendment, is frankly so mild that it ought to be uncontroversial. (Among other things, it modifies some portions of the statute already found constitutionally defective by the courts, and codifies some recordkeeping and data use guidelines the Justice Department has already agreed to implement voluntarily.) Apparently it’s too much to even allow these proposals to be debated and voted on.

One reason may be that a growing number of senators—most recently Ron Wyden and Mark Udall—have been raising concerns about a classified “sensitive collection program” that makes use of the sunsetting “business records provision,” also known as Section 215.  They’ve joined Dick Durbin and (former Senator) Russ Feingold in hinting that there may be abuses linked to this program the public is unaware of, and that, moreover, the secret Foreign Intelligence Surveillance Court has interpreted this provision (in a classified ruling, of course) in a way that the general public would find surprising, and which goes beyond the law’s apparent intent. Intelligence operations, of course, must remain secret, but this means we are now governed by a body of secret law, potentially at odds with citizens’ understanding of the public statute—with the result that we cannot even know the true reason that common sense reforms, once endorsed unanimously by the Senate Judiciary Committee, cannot be adopted. This is—to put it very mildly—not how a democracy is supposed to function. Equally troubling, there’s strong circumstantial evidence (which I’ll outline in a separate post) that the program in question may involve large-scale cell phone location tracking and data mining—a conclusion shared by several other analysts who’ve followed the issue closely.

The one silver lining here is that, while press may not have the patience for a complicated policy debate involving byzantine intelligence law—especially now that many Democrats have decided that powers which raised the specter of tyranny under George W. Bush are unobjectionable under an Obama administration—they are always happy to cover a legislative boxing match. Perhaps, thanks to Sen. Paul’s intransigence, we’ll finally see a little sunlight shed on these potent and secret surveillance powers.

No Time to Debate Patriot is a post from Cato @ Liberty - Cato Institute Blog

The Washington Post reported yesterday that Republican senators were turning their back on a massive spending bill stuffed full of their own earmarks. Those earmarks, the Post noted, included quite a few to benefit Mississippi, the home state of Senators Roger Wicker and Thad Cochran:

Wicker, along with Cochran, had by then already sponsored earmarks in the spending bill that would fund an airport expansion in Tunica ($1.75 million), new riverwalk lights in Columbus ($300,000), improvements to a hiking and biking trail in Hattiesburg ($700,000) and improvements to an assortment of bridges, highways, trails, railways and streets across Mississippi.

A burgeoning Tea Party revolt against earmarks caused the bill to be withdrawn. Senate Majority Leader Harry Reid held a press conference to defend earmarks as the constitutional duty of the people’s elected representatives. (And, as many of our friends have emailed to tell us, held up a copy of the Cato pocket Constitution — 10 for $10 this Christmas season! — to make his point. Ah, well.)

But the real problem here is not earmarks. The underlying issue is not whether members of Congress or unelected bureaucrats spend the money that Congress appropriates for highways and the like. The real question is, why are local roads and bridges and hiking trails and riverwalk lights being paid for by taxpayers across the country?

If the people of Columbus, Mississippi, want new lights on their riverwalk, why are they asking the families of New Hampshire and Indiana and Oregon to pay for them? Shouldn’t they pay for their own lights, and let the people of Hattiesburg pay for their own hiking trails, and let the people of Oregon pay for any roads, bridges, or hiking trails that they value?

The fundamental problem is not earmarks. It is that the federal government is paying for clearly local and state responsibilities. Opponents of excessive spending should not stop at an earmark ban. They should insist that the federal government pay for national needs and leave state and local projects to the states and towns that want them.

Earmarks, Spending, and the Scope of the Federal Government is a post from Cato @ Liberty - Cato Institute Blog

There’s a lot of attention being paid to yesterday’s landslide vote in the House to prevent a big tax increase next year. If you’re a glass-half-full optimist, you will be celebrating the good news for taxpayers. If you’re a glass-half-empty pessimist, you will be angry because the bill also contains provisions to increase the burden of government spending as well as some utterly corrupt tax loopholes added to the legislation so politicians could get campaign cash from special interest groups.

If you want some unambiguously good news, however, ignore the tax deal and celebrate the fact that Senator Harry Reid had to give up his attempt to enact a pork-filled, $1 trillion-plus spending bill. This “omnibus appropriation” not only had an enormous price tag, it also contained about 6,500 earmarks. As I explained in the New York Post yesterday, earmarks are “special provisions inserted on behalf of lobbyists to benefit special interests. The lobbyists get big fees, the interest groups get handouts and the politicians get rewarded with contributions from both. It’s a win-win-win for everyone — except the taxpayers who finance this carousel of corruption.”

This sleazy process traditionally has enjoyed bipartisan support, and many Republican senators initially were planning to support the legislation notwithstanding the voter revolt last month. But the insiders in Washington underestimated voter anger at bloated and wasteful government. Thanks to talk radio, the Internet (including sites like this one), and a handful of honest lawmakers, Reid’s corrupt legislation suddenly became toxic.

The resulting protests convinced GOPers — even the big spenders from the Appropriations Committee — that they could no longer play the old game of swapping earmarks for campaign cash. This is a remarkable development and a huge victory for the Tea Party movement.

Here’s part of the Washington Post report on this cheerful development:

Senate Democrats on Thursday abandoned their efforts to approve a comprehensive funding bill for the federal government after Republicans rebelled against its $1.2 trillion cost and the inclusion of nearly 7,000 line-item projects for individual lawmakers.

…Instead, a slimmed-down resolution that would fund the government mostly at current levels will come before the Senate, and Reid and Minority Leader Mitch McConnell (R-Ky.) said it will pass by Saturday.

…The majority leader’s surrender on the spending bill marked a final rebuke for this Congress to the old-school system of funding the government, in which the barons of the Appropriations Committee decided which states would receive tens of millions of dollars each year.

…Almost every Senate Republican had some favor in the bill, but as voter angst about runaway deficits grew before the midterm elections, Republicans turned against the earmark practice.

This is a very positive development heading into next year, but it is not a permanent victory. Some Republicans are true believers in the cause of limited government, but there are still plenty of corrupt big spenders as well as some Bush-style “compassionate conservatives” who think buying votes with other people’s money somehow makes one a caring person.

In other words, fiscal conservatives, libertarians, and Tea Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of liberty.

Taxpayers Got a Big Christmas Present Yesterday, but It Wasn’t the Tax Bill is a post from Cato @ Liberty - Cato Institute Blog

That’s not just my view; that’s the view of writer Barry Estabrook, an ardent critic of the food industry (“Politics of the Plate“), writing at The Atlantic. You needn’t go along completely with Estabrook’s dim view of industrialized agriculture to realize he’s right in one of his central contentions: “the proposed rules would disproportionately impose costs upon” small producers, including traditional, low-tech and organic farmers and foodmakers selling to neighbors and local markets. Even those with flawless safety records or selling low-risk types of foodstuff could be capsized by new paperwork and regulatory burdens that larger operations will be able to absorb as a cost of doing business. (Earlier here and here.)

Things could reach a showdown any day now. The food safety bill had stalled in the Senate under criticism from small farmer advocates, as the New York Times acknowledged the other day in an absurdly slanted editorial that somehow got printed as a news article. Now Harry Reid is talking about forcing the bill through before the midterms. Significantly — as advocates of the bill trumpet — large foodmakers and agribusiness concerns have signed off on the bill as acceptable to them. Well, yes, they would, wouldn’t they?

I was on TV the other week (Hearst news service) trying to make a few of these points. I borrowed my closing line from an excellent Steve Chapman column, which I was unable to credit on air, but can credit here.

‘New Food Safety Bill Could Make Things Worse’ is a post from Cato @ Liberty - Cato Institute Blog

I went back home to Kentucky to attend the Fancy Farm Picnic last Saturday. It may be the biggest political event in the state; it takes place every August, 10 miles from where I grew up, and somehow I’d never attended before. It was time. I got there just in time to hear Senate candidates Jack Conway and Rand Paul give their 7-minute speeches. (There are lots of speakers, and timekeepers are strict.) There were plenty of advocates for both candidates among the 2000 or so people watching. It’s an old Democratic area, but they’re conservative Democrats who now mostly vote Republican in federal races.

It was well over 90 degrees and humid, so both candidates handed out fans:

As I listened to the candidates, my main impression was this: Conway accused Rand Paul of being an extremist, and Paul accused Conway of being a Democrat. The question for November is which charge will stick.

Gov. Steve Beshear, introducing Conway, warmed up the attack: “[Paul] is going to balance the federal budget on the backs of our school children. He’s going to balance the federal budget on the backs of our coal miners. On the backs of our farmers. On the backs of our law enforcement officials,” he shouted. “The entire commonwealth of Kentucky — Republicans, Democrats and independents — ought to be scared to death about Rand Paul!” Referring to last year’s controversy over Conway’s calling himself a “tough son of a bitch” — it’s a church picnic, after all — and the “seven words you can’t say on television,” Paul said, “There are six more words you won’t hear Jack Conway say [on the campaign trail]: President Obama, Nancy Pelosi and Harry Reid.”

So which do Kentucky voters dislike more: the national Democratic party’s big-government agenda or the prospect that Rand Paul might actually try to cut the size of government? In a world where everyone gets something from government, it’s not obvious. But so far Paul is holding on to a lead in the polls. In Fancy Farm, I noticed that all the Conway supporters had the campaign’s official signs and buttons, plus hand-lettered signs that had clearly been produced in campaign offices, such as this ”NeanderPaul” sign that I picked up after the shouting was over:

Paul’s supporters, on the other hand, brought a lot of their own homemade signs. Conway’s supporters were more disciplined. You didn’t see any Conway supporters showing up dressed as Abraham Lincoln or a colonial soldier (though news reports say there was a guy dressed as a “neanderthal” holding the above sign), or wearing T-shirts reading “Who is John Galt?” The greater grass-roots enthusiasm for Paul has both pluses and minuses. Clearly he’s appealing to stronger currents than mere partisan politics and generating more enthusiasm. But that means he’s more at risk of supporters doing things that might embarrass the campaign.

Both candidates accused the other of “flip-flopping.” Conway’s team erected a “Rand Paul’s Waffle House” in the familiar yellow-and-black design and claimed he was waffling and flip-flopping on a number of issues. (Are waffling and flip-flopping the same thing? Not really.) Paul’s campaign handed out flip-flops labeled “cap” and “trade” to draw attention to Conway’s alleged backing away from his previous support for the “cap and trade” energy legislation.

One thing you can say about the Fancy Farm Picnic, it’s the best $10 meal you’ll ever eat — Kentucky pork and mutton, fresh-picked tomatoes and corn, and homemade pies and cakes.

And one final thought: They estimate that 15,000 people attend the picnic but that only 2,000 listen to the political speeches, which is a good reminder of reality for us political junkies. And that estimate would seem to be confirmed by my reflection after the weekend that, except for the drive from Mayfield to Fancy Farm, I drove about 500 miles in Kentucky this weekend and I’m not sure I ever saw a campaign sign or bumper sticker. The election is still almost three months away, and politics just isn’t life for most people.

Live from the Fancy Farm Picnic is a post from Cato @ Liberty - Cato Institute Blog

With Majority Leader Harry Reid’s announcement that Democrats have the 60 votes needed for final passage of the Dodd-Frank financial bill, we can take a moment and remember this as the moment Congress planted the seeds of the next financial crisis.

In choosing to ignore the actual causes of the financial crisis — loose monetary policy, Fannie/Freddie, and never-ending efforts to expand homeownership — and instead further expanding government guarantees behind financial risk-taking, Congress is eliminating whatever market discipline might have been left in the banking industry.  But we shouldn’t be surprised, since this administration and Congress have consistently chosen to ignore the real problems facing our country — unemployment, perverse government incentives for risk-taking, massive fiscal imbalances — and instead pursued an agenda of rewarding special interests and expanding government.

At least we’ll know what to call the next crisis: the Dodd-Frank Crash.

Senate Bill Sows Seeds of Next Financial Crisis is a post from Cato @ Liberty - Cato Institute Blog

Today Politico Arena asks:

Will Reid be able to portray Angle as an extremist?

With an air of wonder, POLITICO reports this morning that Sharron Angle, facing Senate majority leader Harry Reid in the fall elections, “has previously made eyebrow-raising statements about withdrawing the U.S. from the United Nations, eliminating the departments of Energy and Education, and privatizing Social Security.” Eyebrow-raising? As in “who could stand for such things”?

Beyond the Beltway (and even in pockets within the Beltway), there actually are people who believe that American taxpayers should not be subsidizing the play things of such human-rights-respecting exemplars as Cuba, China, Russia, and their ilk, all of whom sit on the United Nations Human Rights Council. And for some reason, we actually did have both energy and education in this country before the Departments of Energy and Education were created, hard as it may be to believe, just as we had art, philosophy, and radio before the NEA, NEH, and NPR were created. And people retired, on their own savings, before the Social Security system was invented. Speaking of which, it might be useful to note that that Ponzi scheme is now operating in the red, six years earlier than expected. Now there‘s a reason to raise one’s eyebrows.

The Horror of It! is a post from Cato @ Liberty - Cato Institute Blog

In 2009, congressional Democrats fashioned their health care legislation out of public view.  That enabled them to avoid some public intra-party spats; to hide maybe 60 percent of the cost of the legislation and otherwise game the Congressional Budget Office’s scoring rules; to deny the public enough time to learn about how the legislation would work; and to cram the legislation through the Senate the day before Christmas.  Senate Majority Leader Harry Reid’s backroom negotiations are rightfully infamous.

Now comes word that, rather than follow the usual conference procedure that we all learned about as children, House and Senate Democrats will conduct informal negotiations — behind closed doors, all by themselves, with no C-SPAN cameras — in the hope of crafting the bill that can command 218 votes in one chamber and 60 votes in the other.

Let me be clear that Democrats are not violating any rules of which I am aware.  But one senses that the object here is not the sort of good government or open government that the Left claims to seek.  Rather, the object is power.  As my colleague Will Wilkinson writes, “They seem interested primarily in how a temporary majority can do more, faster, now.”  And a key tactic is to hide from the public as much of the process as possible.

Congress Chooses the Low Road. Again. is a post from Cato @ Liberty - Cato Institute Blog

If — and it is still a big “if — Democrats pass a health bill, that bill will owe as much to former Massachusetts governor Mitt Romney as to Nancy Pelosi and Harry Reid. In fact, with the so-called “public option” out of the Senate health bill, the final product increasingly looks like the failed Massachusetts experiment.  Consider that the final bill will likely include:

• An individual mandate
• A weak employer-mandate
• An Exchange (Connector)
• Middle-class subsidies
• Insurance regulation (already in place in Massachusetts before Romney’s reforms)

As to why this will be a disaster for American taxpayers, workers, and patients, I’ve written about it here, and my colleague Michael Cannon has covered it here and here.

Gee, thanks, Mitt.

Health Reform: Blame Mitt is a post from Cato @ Liberty - Cato Institute Blog

On Day #179 of the ObamaCare Cost Estimate Watch, Sen. Jim Webb (D-Va.) wrote in The Winchester Star of his involvement in the Senate health care debate:

At the start of this debate I was one of eight senators who called on Senate Majority Leader Harry Reid to post the text and complete budget scores of the health-care bill on a public web site for review at least 72 hours prior to both the first vote and final passage. This request was agreed to, affording proper transparency in the process.

On the contrary, as I explain in this Richmond Times-Dispatch oped, Reid did not comply with Webb’s request.

Indeed, a memo recently issued by the Congressional Budget Office suggests that Reid has been working very hard to conceal the legislation’s full cost all along.

ObamaCare Cost Estimate Watch: Day #180 is a post from Cato @ Liberty - Cato Institute Blog

It has been 178 days since Democrats introduced the first version of President Obama’s health plan, and a growing chorus of voices is demanding that the Congressional Budget Office reveal the full cost of Sen. Harry Reid’s health care legislation — including the cost of the private-sector mandates.

• Philadelphia Inquirer columnist Kevin Ferris writes: “Have the CBO score the entire Senate bill — both on-budget expenses and off. Let senators and taxpayers see the real cost – before a vote is taken. Then decide what the nation can afford.”
• Former New Jersey Governor and EPA administrator Christie Whitman — who should know a little something about private-sector mandates — writes: “the CBO estimates do not count the costs the private sector will have to pay to insurance companies as ‘taxes,’ even though they are surely costs for the system…I believe we need health care reform in this country. But we should start with honest accounting, responsible fiscal policies for the sake of our grandchildren, and a recognition of who is really going to shoulder the burden of this undertaking. Anything less is just more of the same.”

I also had an oped in Sunday’s Richmond Times-Dispatch where I argue that if Sen. Jim Webb (D-Va.) really meant what he wrote to Majority Leader Harry Reid back in October about holding an open and honest debate, Webb should insist on a complete CBO cost estimate — including the cost of the private-sector mandates — before the bill moves any further.

(Cross-posted at National Journal’s Health Care Experts Blog.)

ObamaCare Cost-Estimate Watch: Day #178 is a post from Cato @ Liberty - Cato Institute Blog

Senate Majority Leader Harry Reid (D-NV) has announced that he has reached a super secret compromise on how to deal with the so-called public option for health reform.  While Reid said the agreement was too important to actually tell anyone what is in it, most of the details have been leaked to the press.

Rather than set-up a completely government-run insurance plan to compete with private insurance, Congress would establish a program similar to the Federal Employees Health Benefit Program (FEHBP), which currently covers government workers, including Members of Congress.  The FEHBP offers a variety of private insurance plans under a program managed by the US Office of Personnel Management (OPM).  Each year OPM uses the Federal procurement process to solicit bids from insurance companies to be one of the plans offered.  Premiums can vary, but participating plans operate under stringent rules.   As a model, the FEHBP is apparently acceptable to moderate Democrats because the insurance plans are private rather than government entities, while liberals like it because it is government regulated and managed.

In addition, the compromise plan would expand Medicare, allowing workers ages 55 to 65 to “buy in” to the program, and may also expand Medicaid.

A few reasons to believe this is yet another truly bad idea:

1. In choosing the FEHBP for a model, Democrats have actually chosen an insurance plan whose costs are rising faster than average.   FEHBP premiums are expected to rise 7.9 percent this year and 8.8 percent in 2010.  By comparison, the Congressional Budget Office predicts that on average, premiums will increase by 5.5 to 6.2 percent annually over the next few years.  In fact, FEHBP premiums are rising so fast that nearly 100,000 federal employees have opted out of the program.
2. FEHBP members are also finding their choices cut back.  Next year, 32 insurance plans will either drop out of the program or reduce their participation.  Some 61,000 workers will lose their current coverage.
3. But former OPM director Linda Springer doubts that the agency has the “capacity, the staff, or the mission,” to be able to manage the new program.  Taking on management of the new program could overburden OPM.  “Ultimate, it would break the system.”
4. Medicare is currently $50-100 trillion in debt, depending on which accounting measure you use.  Allowing younger workers to join the program is the equivalent of crowding a few more passengers onto the Titanic.
5. At the same time, Medicare under reimburses physicians, especially in rural areas.  Expanding Medicare enrollment will both threaten the continued viability of rural hospitals and other providers, and also result in increased cost-shifting, driving up premiums for private insurance.
6. Medicaid is equally a budget-buster. The program now costs more than $330 billion per year, a cost that grew at a rate of roughly 10.7 percent annually.  The program spends money by the bushel, yet under-reimburses providers even worse than Medicare.
7. Ultimately this so-called compromise would expand government health care programs and further squeeze private insurance, resulting in increased costs and higher insurance premiums, and provide a lower-quality of care.

No wonder Senator Reid wants to keep it a secret.

FEHBP Plan Is No ‘Moderate Compromise’ is a post from Cato @ Liberty - Cato Institute Blog

• Just in time for Thanksgiving, the turkey has arrived: How Harry Reid’s health care “reform” bill is stuffed with extra costs.

• A few things you might not know about the Chrysler bankruptcy.

• Why you should not blame Obama for Bush’s 2009 deficit.

• Standing against the storm: Nien Chang, 1915-2009.

• Podcast: Think the Federal Reserve is independent? Think again.

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

There are two different stories coming from the same political party on global warming, leading to only one conclusion: President Obama is about to (or has) ordered the Environmental Protection Agency (EPA) to mandate some type of cap on U.S. carbon dioxide emissions.

Harry Reid and other democratic leaders in the Senate have clearly indicated that cap-and-trade legislation will be put off at least, until what they call “spring”, which is long after the upcoming UN climate conference in Copenhagen next month. At the same time, President Obama has said that the U.S., along with China, will announce some type of emissions cap in Copenhagen. Obviously this cannot refer to legislation that has yet to be voted on in the Senate.

President Obama keeps using the language “operationally significant” when referring to what the U.S. will agree to in Copenhagen. The only way that he can get around the Senate and still have a credible position in Copenhagen is for the EPA to announce specific regulations for carbon dioxide emissions between now and the conclusion of the Copenhagen meeting in mid-December.

The Long Road to Copenhagen is a post from Cato @ Liberty - Cato Institute Blog

Michael Cannon has some astute analysis of the Senate health care bill below. I posted these thoughts at Politico’s Arena:

According to the Chamber of Commerce polls, strong majorities in every state they polled believe the health care bills will increase the deficit. In this case the public’s cynical instincts are almost certain to be more accurate than the computer models of the CBO. As David Dickson of the Washington Times reviewed yesterday, government health care programs have a history of cost overruns.

And not small overruns, like overdrawing your checking account — massive, order-of-magnitude cost overruns. Is that because politicians intentionally overstate the benefits and underestimate the costs of their proposals? Or just that computer models aren’t very good at predicting how entitlements programs change behavior? Either way, just look at the record: In 1967, the House Ways and Means Committee said the entire Medicare program would cost $12 billion in 1990. The actual cost in 1990 was $98 billion. In 1987, Congress projected that Medicaid would make special relief payments to hospitals of less than $1 billion in 1992. The actual cost, just five years after the projection, was $17 billion. Similarly, Medicare’s home care benefit was projected in 1988 to cost $4 billion in 1993, but the actual cost — again, just five years after the projection — was $10 billion.

The government is running a trillion-dollar annual deficit already, and Congress and the president propose to create a new program that promises to cover millions more people with health insurance, drag currently insured people onto government programs, and save billions of dollars in the process. No wonder levels of trust in government are at record lows.

What Will the Reid Bill Cost? is a post from Cato @ Liberty - Cato Institute Blog

The fat lady hasn’t even started to warm up yet.

The narrow 220-215 victory in the House on Saturday night was a step forward on the road to a government takeover of the health care system.  But as close and dramatic as that vote was, that was the easy part.  The Senate must still pass its version of reform—which will not be the bill that just passed the House.  Nancy Pelosi was, after all, able to lose the votes of 39 moderate Democrats.  Harry Reid cannot afford to lose even one.  A conference committee must reconcile the two vastly different versions.  And then, Pelosi must hold together her 3 vote margin of victory (if it gets that far).  Yet several House Democrats who voted for the bill on Saturday said they did so only to “advance the process.” Their vote is far from guaranteed on final passage.  And, House liberals are almost certain to be disappointed by the more moderate bill that may emerge from the conference.

Among the more contentious issues:

Individual Mandate: This should’ve been low-hanging fruit. Democrats agreed on a mandate early in the process. But it became increasingly plain that a mandate would hit those with insurance as well as the uninsured — forcing people who are happy with their plan to switch to a different, possibly more expensive plan. With this mandate now being seen as a middle-class tax hike, qualms have developed.  The House bill contains a strict mandate, with penalties of 2.5 percent of income backed up by up to five years in jail.  The Senate Finance Committee, on the other hand, watered down the mandate’s penalties and delayed the mandates implementation.

Employer Mandate: The House bill also contains an employer mandate, a requirement that all but the smallest employers provide insurance to their workers or pay a penalty tax of up to 8 percent of payroll.  The Senate,  looking at unemployment rates over 10 percent, seems unlikely to include an employer mandate.

The Public Option: The House included, if not a “robust” public option, at least a semi-robust one.  But moderate Democrats in the Senate are clearly not on board.  Joe Lieberman (I-CT) says that he will join a Republican filibuster if the public option is included.  Harry Reid is trying various permutations: a trigger, an opt-in, an opt-out.  But as of now there is not 60 votes for any variation.

The Sheer Cost: Fiscal hawks like Sen. Evan Bayh (D-IN) say they will not support a bill that adds to the deficit or spends too much.  But the house bill cost a minimum of $1.2 trillion.

Taxes: The House plan to add a surtax on incomes of $500,000 or more a year has no support in the Senate. At the same time, the Senate plan to slap a 40 percent excise tax on “Cadillac” insurance plans is unacceptable to key Democratic constituencies like labor unions.

Abortion: Conservative Democrats insisted on a strict prohibition on the use of government funds for abortion.  The bill could not have passed without the inclusion of that provision.  House liberal swallowed hard and voted for the bill, despite what they called “a poison pill” anyway with the expectation that it will be removed later.  If the final bill includes the prohibition at least a couple liberals could defect.  If it doesn’t, conservative Democrats won’t be on board.

Immigration: The Senate Finance Committee included a provision barring illegal immigrants from purchasing insurance through the government-run Exchange.  The House Hispanic Caucus says that if that provision is in the final bill, they will vote against it.

As if these disagreements among Democrats wasn’t bad enough, public opinion is now turning against the bill.

President Obama has called for a bill to be on his desk before Christmas—the latest in a series of deadline that are so far unmet.  It is hard to see how Congress can meet this one either.  The Senate has not yet received CBO scoring of its bill and is not prepared to even begin debate until next week at the earliest.  That debate will last 3-4 weeks minimum, assuming there are 60 votes for cloture.  That means, the bill cant’ go to conference committee until mid-December, even if everything breaks the way Harry Reid wants.  Privately, Democrats are now suggesting late January, before the State of the Union address, is the best they can do.

The fat lady can go back to sleep—this isn’t over yet.

Health Care: Not Close to Over is a post from Cato @ Liberty - Cato Institute Blog