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McConnell’s highway bill robbery

July 27, 2015, 2:14 PM

Before I start into the GOP-on-GOP war that took place last night while I was zoning out watching a David Crosby-lookalike save puppies on Animal Planet, I want to say that I am, for starters, whole-heartedly opposed to the feel-good, get-it-off-our-plate legislative approach some of our elected officials occasionally take with hot-button issues. Last night, in a haste to get something on the record, Republican senators attached a doomed-to-fail amendment to “defund” Planned Parenthood to the same highway bill I’m about to discuss, claiming that they were “working hard” to put an end to baby-parts trafficking in this honorable country.

They weren’t. They were, as one friend termed it, engaging in “failure theater,” the practice of doing something, doomed to fail, just so they can claim to have done something about it. See also: shutting down the government over Obamacare. This happened last night, it got a bunch of people riled up, and all it did was boost a lagging presidential candidate’s poll numbers briefly in an early caucus state.

But I digress. The sin of “failure theater” is nowhere near the high crimes committed in the name of the Export-Import Bank last night. It started Friday, with a spat between Ted Cruz and Mitch McConnell on the Senate floor, after the former discovered that the latter had shut down all of the conservative amendments (including yet another Quixotic repeal of Obamacare and, ultimately, Cruz’s amendment forcing Iran to recognize Israel as part of their weapons deal) to the bill so that the latter’s Ex-Im extension (corporate welfare, how quaint!) could sail through a Senate vote without trouble, likely pursuant to a secret deal. After all, Boeing simply cannot live without those millions in taxpayer funds.

Last night, Ted Cruz asked for a roll call vote on his amendment. Denied.

Then, Mike Lee asked for a roll call vote on his (Obamacare) amendment. Denied.

Then, they were asked to approve a roll call vote on defunding Planned Parenthood. Denied.

Why? So that Mitch McConnell could prevent Democrats from filibustering the highway bill with the contentious amendments attached, just so that he could get his temporary Ex-Im reauthorization passed without delay. And that’s exactly what happened.

Lawmakers are pushing forward on must-pass highway legislation after an amendment reviving the federal Export-Import Bank provoked a heated clash on the Senate floor.

The amendment advanced over a procedural hurdle by a vote of 67-26 in an unusual Sunday session, and was likely to win approval Monday to be included on the highway bill. But that was only after senior Senate Republicans publicly rebuked Texas GOP Sen. Ted Cruz, who last week accused Senate Majority Leader Mitch McConnell of lying to him about whether there was a deal to allow the vote on the Export-Import Bank.

Conservatives strongly oppose the bank, calling it corporate welfare, and are trying to ensure that it stays dead after congressional inaction allowed it to expire June 30.

Three of the Senate’s highest-ranking Republicans rose after the Senate convened Sunday afternoon to counter the stunning floor speech Cruz gave on Friday in which he attacked McConnell, R-Ky.

Like I said before, sure, the Obamacare thing, the Planned Parenthood thing, even the Iran thing – they were never going to pass. They were all ploys, on the part of public-relations seekers looking to get a temporary rise out of an electorate that has mostly forgotten they exist, because Donald Trump keeps opening his yap and monopolizing airtime. These plots allow them to go to their respective constituents, claim that the Mean Old Establishment Republicans were standing in the way of success, whilst they get away with not actually having to do anything meaningful in pursuit of their platforms. Obamacare won’t be repealed, Planned Parenthood won’t be defunded and Iran will recognize Israel when they use their newly manufactured nuclear weapons to turn it into a sea of green glass.

But that’s only the second most egregious crime that took place here. After all, all of those amendments would have easily passed the House, had they made it through a Senate filibuster, making Barack Obama responsible for vetoing the efforts. I suppose, also, in some way, it puts Democrats on record as supporting an organization now revealed to be chopping babies up into bits and selling those bits for scientific research, too, though I don’t think Democrats care that much about it.

The Republican leadership, which was, ostensibly, given a majority in a midterm election less than a year ago, is already wasting that “mandate” on corporate welfare and a literal highway boondoggle. They weren’t elected to bash other Republicans over the head in their haste to hand out checks to their financial backers. They were elected to actually do something. And even the “failure theater” of doomed amendments is something exactly opposite of and more than McConnell actually did. Do Americans really want a party that claims to be in favor of “limited government” and “tax reform” and “debt relief,” to be making reauthorization of the Ex-Im Bank their crowning jewel?

Probably not.

Anyway, this bill is headed for the House, which also has its own highway bill that doesn’t intentionally fill corporate coffers, so I suppose we’re in for a battle royale. Stay tuned.

Congressional Internet Caucus and ‘fractally complex’ music licensing

July 27, 2015, 12:25 PM

Speaking at a July 17 discussion hosted by the Congressional Internet Caucus on music streaming and Congress’ role in the world of music licensing, caucus Advisory Committee Executive Director Tim Lordan cited R Street Innovation Policy Director Mike Godwin’s characterization of the market as “fractally complex.”

It’s entirely possible that you could take a four-credit course, at Georgetown or at GW and — the entire semester — maybe not really, really understand this entire marketplace.  You can, if you’re an economics major, you might want to do your PhD thesis on the rate-setting aspect of it alone, and you probably still wouldn’t even understand fully this entire complex space. Mike Godwin from the R Street Institute wrote a piece and tried to break down the music rates and said it’s ‘fractally complex,’ and I think that’s a really good description. We are not going to get anywhere near that complexity. We’re going to try to keep it high level.

You can watch that clip here, or the full discussion here.

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A liberal nightmare: What if GMOs were the solution to climate change?

July 27, 2015, 10:38 AM

From the Daily Caller:

It shouldn’t come as a surprise that GMOs are more environmentally friendly. Josiah Neeley, a senior fellow at R Street Institute, writes that “existing GMO crops allow for less use of fertilizers and tilling, thus potentially reducing emissions and aiding carbon sequestration.”

The findings pose something of a dilemma for liberals, with many hostile to GMOs but eager to slash greenhouse gases. Neeley warns the whole issue of GMOs could be in danger of becoming irreparably polarized between left and right. “If GMOs can be shown to mitigate climate change, will that make liberals more open to accepting them? Maybe, but probably not. In fact, the left’s growing opposition to GMOs could have the perverse effect of making liberals more skeptical of climate change,” writes Neeley.

GMOs help fight climate change, but will anyone care?

July 27, 2015, 7:00 AM

Last Wednesday, the Los Angeles Times reported on a new study that ties together two highly charged issues in the ongoing political battles over science: genetically modified organisms (GMOs) and climate change. According to the story:

 Growing rice emits methane, a potent greenhouse gas — to the tune of 25 million to 100 million metric tons of methane every year, a notable contribution to human-caused greenhouse gas emissions.

As the world’s population grows and needs more food, the problem is likely to get worse, but genetic engineering could help, a new study reports. By transferring a barley gene into a rice plant, scientists have created a new variety of rice that produces less methane while still making highly starchy, productive seeds. The development of the new rice strain is described this week in the journal Nature.

The study comes at a time when both GMOs and climate change increasingly are in the news. The U.S. House of Representatives just voted to pre-empt laws in California and several other states requiring labeling of genetically modified foods. And on the climate front, the Environmental Protection Agency is preparing to release the final version of its Clean Power Plan, which mandates reductions in greenhouse gas emissions from U.S. power plants.

The authors of the methane/rice study are prudently cautious, saying that “[m]ore research about how much methane whole rice paddies (and not just individual plants) emit over the entire growing season is necessary.” But even before this study, there was good reason to think GMOs could help lower greenhouse gas emissions. Existing GMO crops allow for less use of fertilizers and tilling, thus potentially reducing emissions and aiding carbon sequestration. Future modifications might make plants capable of pulling more CO2 out of the atmosphere.

Public opinion on climate change in the United States is highly polarized along ideological lines. Liberals tend to think it’s a big threat, while conservatives tend to think it’s no big deal. Views on GMOs are similarly polarized in Europe but, at least historically, haven’t been in the United States. Most Americans don’t care about GMOs, and what little opposition does exist is spread across the political spectrum.

However, as more attention is drawn to the issue, there is a risk that opposition to GMOs will become politically polarized in a way similar to climate change. This recent exchange on Bill Maher’s HBO show, for example, is quite troubling.

If GMOs can be shown to mitigate climate change, will that make liberals more open to accepting them? Maybe, but probably not. In fact, the left’s growing opposition to GMOs could have the perverse effect of making liberals more skeptical of climate change.

To see why, consider a famous psychological experiment from a few years ago about how people form their opinions on climate change:

The study involved an experiment in which subjects assessed a scientific study on climate change. The study (a composite of two, which appeared in Nature and Proceedings of the National Academies of Sciences) reported researchers’ conclusion that previous projections of carbon dissipation had been too optimistic and that significant environmental harm could be anticipated no matter how much carbon emissions were reduced in the future.

The subjects, all of whom read the dissipation study, were divided into three groups, each of which was assigned to read a different mock newspaper article. Subjects in the “antipollution” condition read an article that reported the recommendation of scientists for even stricter CO2 limits. Subjects in the “geoengineering condition” read an article that reported the recommendation of scientists for research on geoengineering, on which the article also supplied background information. Finally, a “control condition” group read an article about a municipality’s decision to require construction companies to post bonds for the erection of traffic signals in housing developments.

Participants were then asked to assess the validity of the scientific arguments showing that climate change was worse than previously thought. From a strictly logical point of view, whether these arguments are correct is independent from the question of what should be done about it, so it shouldn’t matter what solution was proposed.

But if you’ve met any flesh-and-blood human beings, you won’t be surprised to learn that the solution presented had a big impact on how people assessed the science. Conservatives were less skeptical of the study when paired with geoengineering as a solution, and were more skeptical when regulation was presented as the answer. By contrast, broaching geoengineering as an option made liberals more skeptical of climate change being a serious threat than they were when no solution or a regulatory solution was presented.

In other words, to the extent that GMOs creep liberals out, pitching them as a solution to climate change isn’t likely to change that, and could even backfire.

This has been your daily dose of despair.

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In the Bible Belt, Alabama politicians look to tax “sin” and spend

July 27, 2015, 6:00 AM

If you’re a politician who promised not to raise taxes in Alabama, increasing the amount of “sin taxes” or creating new ones violates that pledge.

We already have some of the highest alcohol taxes in the nation, but some politicians in the state seem to think there’s room to grab more money on tobacco, electronic cigarettes and sugary drinks.

Social pressures associated with using alcohol and tobacco products often mean that people paying these high taxes rarely mount the opposition we’d see with a similar sales or income tax hikes across the board.

Most people in the South understand the politics of “sin taxes.” If you don’t, just look up the litany of jokes about stopping a Baptist from drinking your beer.

Consuming alcohol in excess isn’t healthy, and neither is smoking like a chimney. But before we start piling on our traditional “sin” targets, think about where this is going.

That sweet tea you’re drinking like it’s going out of style is a potential highway to diabetes…delicious, refreshing diabetes. The same goes for cheeseburgers and french fries. Munching on candy every day has serious consequences, and we all know that a sedentary life in front of the television can lead to obesity.

We’d go nuts if politicians put a 25-cent tax on super-sizing our combo meals or increased our cable bill for watching too many hours of television. Let’s not even think about the violence that would ensue if we proposed a peach cobbler tax.

Yet some politicians want to head down the slippery slope of “sin taxes.” They’re willing to take the political hit for increasing taxes because they’re allegedly concerned about public health.

Let’s test that theory.

If “sin taxes” are really more about improving health than politically shrewd money grabs, there should be some rational correlation between the harm the targeted products impose on the public and the assessed tax.

Consider Governor Bentley’s interest in increasing the tax on tobacco cigarettes and imposing a new one on vapor products.

Vapor products like electronic cigarettes deliver nicotine without the tar and many other chemicals contained in traditional cigarettes. These certainly aren’t products for children, but they seem to be a step in a better direction in terms of health consequences for people who smoke. If the “sin tax” on tobacco is really about reducing the harmful impacts of smoking, we should see the vapor product tax proportionally lower than that imposed on traditional cigarettes to incentivize less harmful behavior.

We don’t.

In fact, we see the opposite. Alabama politicians first seek to raise the tax on cigarettes which haven’t become any more harmful to the public as the number of smokers decreases. At the same time, they’re also pushing proposals intended to impose a radically higher a tax on vapor products than tobacco cigarettes. It simply doesn’t make any sense.

But this isn’t about health; it’s about many of our politicians wanting to spend more money than they have. They’re willing to grab money wherever they can find it, and frankly they don’t care where it comes from.

We might live in the Bible Belt, but tax and spend is the same even if you’re targeting “sin.”

 

Coalition urges removal of FOIA exemptions from transportation bill

July 26, 2015, 11:41 AM

Dear Senators McConnell and Reid:

On behalf of the undersigned organizations concerned with government openness and accountability, we are writing to urge the removal from H.R. 22 of the FOIA exemptions in: Sec.21015 (a) (4); Sec. 32003(a); Sec. 35436 §20168(i) and Sec. 35438 (3). Each of these creates unnecessary, overbroad and unwise exemptions to the Freedom of Information Act (FOIA).

Much of the sensitive information likely to be shared is already protected from disclosure under the FOIA; other information that may be shared could be critical for the public to ensure its safety. Unnecessarily wide-ranging exemptions of this type have the potential to harm public safety more than they enhance that interest; the public is unable to assess whether the government is adequately combating safety issues and, therefore, unable to assess whether or how to participate in that process, and to hold officials accountable.

Sec.21015 (a)(4), covering Public Safety Transportation information, exempts records provided to the Secretary of Transportation pursuant to the review or audit of a public transportation agency safety plan, if the information contains information detailing safety risks and information about how these risks would be mitigated. While the specifics of safety risks – such as vulnerabilities in rail systems – and the steps that should be taken to mitigate these risks might merit temporary protection, there is no justifiable reason to keep such information secret permanently. Risk to public safety is exactly the type of information that FOIA is intended to prevent being shielded from the public. Information about what the government knew and what it did about these risks is essential to accountability.

Sec. 32003(a) covers the safety scores assigned to motor vehicle/trucking companies and their drivers on the basis of the seven BASIC categories. The safety scores assigned to motor vehicle/trucking companies and their drivers are essential consumer safety information and should not be exempt from FOIA, under any circumstances. As written, the provision blocks both publishing the scores, rankings and alerts on the agency website for public viewing and prohibits the release of records containing the same information through FOIA. The public has a right to know the safety scores of companies hauling often dangerous material through their communities and near their homes and schools, and also the scores of the drivers so the companies hiring them are able to be held accountable for accidents and deaths those drivers cause.

Sec. 35436 § 20168(i) concerns accident footage from audio or video cameras in intercity rail and commuter trains. The bill requires that intercity rail and commuter trains install cameras in their cabs. This provision would exempt from disclosure the audio or video from that the Secretary “obtains as part of an accident or incident investigated by the Department of Transportation.” This exemption is unnecessary – such information would already be covered by Exemption 7 (investigation/law enforcement exception), and, if there are privacy implications, these would be covered under Exemption 6.

Sec. 35438(3) concerns information related to tank cars used in high hazard flammable train service. The bill requires the Secretary to collect information to implement a new reporting requirement to monitor progress toward modifying tank cars used in high hazard flammable train service. This provision exempts from disclosure data that the secretary collects from shippers and tank owners related to how many tank cars have been modified and what the modifications are, and information related to the facilities doing the modifications. This exemption is also unnecessary – much of this information would already be covered under Exempt 4 (confidential commercial information and trade secrets).

Any amendment to the Freedom of Information Act, especially amendments of this scope, should be referred to the Senate Judiciary Committee, which has jurisdiction over FOIA. FOIA-related legislation needs the careful consideration by that Committee, including through public hearings; such care is necessary to ensure that the bill promotes transparency and public accountability while allowing the government to withhold only that information which truly requires protection. Time and again over the past quarter-century, proposals to amend the Act’s existing exemptions have been rejected as unwise.

We urge you to remove these provisions. We look forward to working with Congress to ensure any transportation legislation passed into law both protects our nation’s transportation infrastructure and promotes transparency and accountability to the public in order to ensure public safety. If you would like to discuss these issues further, please contact Patrice McDermott, Executive Director of OpenTheGovernment.org, at 202-332-6736 or pmcdermott@openthegovernment.org.

American Society of News Editors
Association of Alternative Newsmedia
Bill of Rights Defense Committee
Campaign for Accountability
Cause of Action
Center for Science and Democracy at the Union of Concerned Scientists
Citizens for Responsibility and Ethics in Washington (CREW)
Data Transparency Coalition
Defending Dissent Foundation
Demand Progress
Essential Information
Food & Water Watch
OpenTheGovernment.org
National Security Archive
Progressive Librarians Guild
Project on Government Oversight (POGO)
R Street
Rural Coalition
Society of Professional Journalists (SPJ)
Sunlight Foundation

North Carolina Senate passes ridesharing bill

July 24, 2015, 5:14 PM

Yesterday was a big day for ridesharing in North Carolina as the state Senate passed S.B. 541, which creates a regulatory framework for transportation network companies. The bill includes background checks on drivers, a requirement for company-provided liability insurance and a $5,000 annual state fee.

According to a recent R Street publication, North Carolina currently stands as one of six states with pending ridesharing legislation. Out of the remaining 44 states, 26 have enacted statewide legislation and 18 have some form of not attempted, failed, or adjourned legislation.

One of the 26 states with enacted ridesharing legislation is North Carolina’s sister state, South Carolina, which just passed legislation in late June. If the Tarheel State wants to have statewide legislation similar to their neighbor’s to the south, the current bill will now need to pass through the state House of Representatives and be signed by Gov. Pat McCrory

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6 charts to debunk fear-mongering about contractors and the Uber economy

July 24, 2015, 5:09 PM

From the Foundation for Economic Education

The headlines are, by now, depressingly familiar: “more Americans are stuck in part-time work” or “part-time jobs put millions in poverty…

And then there were three: Obamacare forces health insurer consolidation

July 24, 2015, 1:58 PM

In the latest in what has become a roller coaster of mergers and acquisitions in the health insurance sector this month, No. 2 insurer Anthem Inc. announced this morning it will purchase No. 4 competitor Cigna Corp. in a $54.2 billion deal. If approved, the move would allow Anthem to leapfrog over UnitedHealth Group to become the largest in the nation by number of members served.

The news comes on the heels of two other significant deals earlier this month. First, No. 6 insurer Centene Corp. announced it was buying No. 7 insurer Health Net Inc. in a $6.3 billion deal. Then, No. 3 insurer Aetna Inc. announced a $37 billion deal to buy No. 5 insurer Humana Inc. The combined Aetna-Humana would have been the second-largest group, but with the Anthem-Cigna deal, now likely will remain at No. 3.

With these deals, there would be only three significant general purpose health insurers operating at the national level — Anthem, Aetna and UnitedHealth. The rest of the market is largely composed of state-level mutuals, Medicaid specialists and supplemental plan underwriters. Of course, this assumes that Anthem isn’t still considering being swallowed by UnitedHealth, a much-rumored transaction the past few weeks, which would leave us with only two.

All this consolidation is a predictable, even inevitable result of the medical cost pressures that were exacerbated by Obamacare. The combination of the individual mandate; the guaranteed issue requirement; lifting the cap on annual and lifetime benefits; rules requiring an 80 or 85 percent minimum loss ratio; and a lengthy list of mandatory benefits all boost demand for health care, while the law does nothing to alleviate any of the pressures that constrain supply.

It isn’t that health insurers were hurt by Obamacare, per se. As the ranks of the uninsured shrink, they gain access to many more customers. Indeed, as shown by this chart from SNL Financial on companies’ Q2 performance, most are seeing significant earnings gains for the first time in years:

And it’s true that the first couple years of Obamacare actually were accompanied by relatively low medical inflation: 6.5 percent in 2014 and a projected 6.8 percent this year, far below the double-digit growth you saw in the early part of the century.

But bear in mind that the spread between medical inflation and general consumer inflation — which rose just 0.8 percent last year — remains pretty significant.  And there are delayed effects just over the horizon, given massive consolidation by hospital groups, pharmaceutical companies and others on the provider side of the equation.

In response, the first move by health insurers has been to raise rates, something that is obviously easier to do in an environment with fewer competitors. In the longer run, to get ahead of the cost curve, health insurers are consolidating to gain more bargaining power. But you can be sure this arms race won’t end here. There will be more provider network consolidation in the future and, likely, even more health insurer consolidation as well.

I’m skeptical that insurers can win this arms race. Partly, because the health insurance sector already is fairly concentrated; certainly much more so than the provider sectors. But also because, whereas the insurers must contend with government-imposed price controls, the providers don’t have that problem.

In the old days, the left used to debate whether it would be better to have a single-payer system, like Canada, or a single-provider system, like the United Kingdom. We appear to be well on our way to having both.

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Uber dust-up shows the Empire State has an innovation problem

July 24, 2015, 9:37 AM

Unless you live under a rock, it was hard to miss the showdown this past week in New York City between Mayor Bill De Blasio and ridesharing platform Uber.

Uber faced a De Blasio-supported proposal to cap its growth, as the mayor blamed the platform for causing traffic congestion and harming the taxi industry. With the help of a wide range of media including a New York Times ad, a television ad and even a De Blasio-themed ride service, Uber was able to successfully stop De Blasio’s assault.

The company even got some unexpected celebrity support on social media, including tweets from current Broadway star Neil Patrick Harris:

.@BilldeBlasio: 25K new residents use @Uber_NYC each week. How is a fixed # of cars supposed to serve this demand for rides? #UberMovesNYC

— Neil Patrick Harris (@ActuallyNPH) July 22, 2015

And Frozen star Kristen Bell:

having taken #ubercarpool accidentally & LOVED it, i wanna know why @BillDeBlasio is restricting access in the outer boroughs? #ubermovesNYC — Kristen Bell (@IMKristenBell) July 23, 2015

And supermodel Kate Upton:

.@BilldeBlasio Why do you want to return to days when only those in Midtown & Lower Manhattan could get a ride? #UberMovesNYC

— Kate Upton (@KateUpton) July 22, 2015

Meanwhile, over on Facebook, actor Ashton Kutcher — apparently taking to heart the philosophy of the man he recently portrayed, Steve Jobs — delivered what appeared to be a full-blown manifesto in favor of innovation and the sharing economy: Even if they were somewhat obviously part of a coordinated public relations push, bearing the #UberMovesNYC hashtag, the celebrity tweets apparently did have an impact:

How @KateUpton took on @BilldeBlasio and saved @Uber drivers’ jobs http://t.co/O5eotmt6U8 Did the mayor make the right call? #UberMovesNYC — Slant (@SlantNews) July 24, 2015

This obviously wasn’t the first time Uber and other ridesharing services have faced difficulties with state and local lawmakers and regulators in New York. From this week’s showdown, to earlier this summer in the Hamptons, to the state Senate and Assembly failing to advance ridesharing legislation during this year’s legislative session, New York has developed a harsh reputation for its handling of transportation network companies.

Even in the recent past, it would have not been uncommon to see TNCs face battles on so many different local fronts within a state. However, now as almost 65 percent of states have either enacted or pending ridesharing legislation, it is becoming less and less common to see such discrepancies. This leaves us to ask, when will we see changes? And, even more intriguingly, why New York?

Unfortunately, since the state Legislature has adjourned for this year, the answer to the first question won’t come until at least 2016. To answer the second question, one of the main catalysts for such a heightened statewide inclination to regulate and limit TNCs has been private interests.

With New York City possessing roughly 48 percent of the state’s overall population, it makes sense that the taxi industry has been able to play such an influential role in both the city and state as a whole. Combined with the fact that New York is a primarily Democratic state, its exerted levels of control over the likes of Uber have been shocking to no one.

Moving away from the city to a location like the Hamptons, the town of East Hampton required all drivers to maintain a physical business presence in the town. While this decision left many scratching their head, it can be simply broken down into being both a form of excessive regulation that favors incumbent local businesses, as well as a means for the town to keep tax revenues within its borders.

This tale of private interests playing a role in government regulations has been seen countless times before with ridesharing services; nevertheless, in very few of the previous instances have any of these private interests held complete control of bodies to the degree they do the behemoth that is the New York City Taxi Commission.

To the disappointment of many, this is also certainly not the last we’ll hear of Mayor De Blasio attempting to regulate Uber and defend his “beloved campaign contributor,” the taxi industry.

The task of taking on the private interests and regulators of New York state may seem like a daunting one, but if we look at what Uber did this past week in New York City, it stands as an example of how we can combat those who stand against innovation and consumer interests.

Beyond the usual arguments advocates point to when defending the TNCs – including job growth, innovation and convenience – that beneficial these services have been, there is another aspect of Uber’s impact that should speak volumes in New York. During his 2013 campaign for mayor, Bill De Blasio took 52 Uber rides in comparison to just 18 cabs.

It may be a long way to 2016, when New York can finally establish fair and permanent legislation, but if one thing’s for sure, it’s going to take one heck of a fight to get Uber to back out of the Empire State.

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Labor roundup

July 23, 2015, 10:54 AM

From Overlawyered.com:

“6 charts that debunk the ‘gig’ economy” [R.J. Lehmann, R Street Institute]

Solar bailout? Don’t bet on it

July 23, 2015, 9:17 AM

Is the U.S. solar energy market in a bubble? Analysis suggesting that the burgeoning industry is overvalued certainly aren’t new, and the list of observers who have deigned to call the purported bubble’s pending pop include e21 in 2014, The Wall Street Journal in 2013, CBS News in 2012, the Freakonomics blog in 2011 and even CNet all the way back in 2008.

In a July 9 piece, the Washington Times‘ Drew Johnson joins this chorus of solar bears, but adds a new twist. Likening the solar industry and related financial instruments to the 2008 housing crisis, Johnson asserts that when the solar asset bubble does pop, it will put taxpayers on the hook for billions in bailouts. There are many potential lessons one can draw from the financial crisis, its causes and the government’s response.

The lesson Johnson seems to have drawn is that securitization – the process by which assets are turned into tradeable financial instruments and sold to investors – can be a dangerous proposition. While it is not without its own unique challenges, the process of securitization can help unleash private capital for investment and more equitably spread risk. Bundling the income streams associated with a given asset (in this case, solar equipment leasing) allows risk to be distributed across a wider pool of investors.

It’s a market innovation about which most conservatives are cautiously optimistic, not reflexively skeptical. And while Johnson is not alone in taking a bearish position on the solar industry’s prospects, other talented industry watchers disagree. Major Wall Street players like Goldman Sachs have invested significant sums in various solar-related securities. Johnson argues those investments are likely to fail if the 30 percent solar investment tax credit expires as scheduled at the end of next year, leaving taxpayers holding the bag for the losses.

But there’s simply no evidence that, even if the solar industry collapsed catastrophically, any sort of 2008-style bailout would be forthcoming. The scale of investment in solar-related securities is small enough that it would barely amount to a ripple in the broader economy. While the fledgling industry has been growing rapidly and estimates of total solar market size vary widely, the U.S. market is likely less than $100 billion.

Housing finance, by contrast, accounts for as much as $21 trillion. Widespread failure of solar-backed securities would be an annoyance to investors, while widespread failure of mortgage-backed securities – particularly when multiplied by thousands of bets bundled as synthetic securities – was the kind of systemic threat the nation faced down in 2008. In economic terms, the comparison isn’t apples and oranges; it’s more like a single apple and Apple Inc. Furthermore, the prospect of the tax credit ending is hardly some closely guarded secret.

Wall Street is well aware that it could disappear, so the risk to income streams from the underlying assets is surely priced into the securities in question. In that way, it’s no different than investing in Boeing when there’s a possibility that the misguided Export-Import Bank from which it benefits might finally end for good. If the investments were to fail, it’s difficult to see Washington responding with much sympathy in any case, given tight budgets and Republican control of the House and Senate. The chances of a solar bailout are approximately equal to the chances of a Bernie Sanders-Donald Trump presidential race: zero.

To be clear, solar power should be asked to compete on its own merits and without the benefit of taxpayer subsidies. The same should be asked of every energy source, a process that will keep legislators busy dismantling our stupefying array of subsidies, tax preferences and accounting gimmicks granted to both traditional and emerging energy options. A truly level playing field is the only way to ensure that markets are free of distortion and taxpayers are free of unnecessary burdens. Regardless of solar’s prospects, however, the safe bet is that taxpayers won’t face any additional exposure associated with securities.

The dysfunctional federal workforce

July 23, 2015, 8:34 AM

The following op-ed was co-authored by R Street Governance Project Director Kevin Kosar.

 

The Survey on the Future of Government Service, released last week by Vanderbilt University’s Center for the Study of Democratic Institutions, reveals significant problems with the federal workforce. According to the data, collected from 3,551 federal executives, the civil service is struggling to recruit and retain America’s best and brightest — and agencies are plagued by underperforming employees who are difficult to fire.

We have seen the by-products of this malfunctioning personnel system for years. The Department of Veterans Affairs has lurched from one crisis to another. Government-wide improper payments reached a new height of $124.7 billion in 2014, fueled by mistakes made by the Department of Health and Human Services and the U.S. Treasury. The General Services Administration, for its part, is unable to provide a correct inventory of the number of federal properties, let alone unload the unneeded ones.

 The true insight of this survey is that these crises are predictable; our current civil-service system is not structured to be highly productive. Politicians have ladened the system with other objectives, such as job security.

Here are four more notable findings from the study.

1. The federal workforce is inadequately skilled and likely to stay that way.

Recruitment is a problem for the public sector — 42 percent of federal executives believe their agency is unable to recruit the best employees. Troublingly, 39 percent of respondents think inadequately skilled federal workers represent a significant obstacle for agency mission fulfillment.

Recruitment is hindered by a lack of opportunity (cited by 54 percent of respondents), “rigid civil service rules” (54 percent), and salary (53 percent). However, only 32 percent of federal executives report lacking a qualified applicant pool. So not all is lost; high performers are still interested in public-sector jobs despite these negatives. But there are barriers (like the cumbersome USAjobs site and baroque agency hiring practices) that keep employers from effectively landing them.

2. Underperforming federal managers and employees are seldom fired.

Even if agencies streamlined recruitment, they still would be stuck with low-performing employees who are nearly impossible to dismiss. Some 64 percent of respondents said subpar managers are rarely (if ever) dismissed, and 70 percent said the same for non-managers. Private companies face far fewer obstacles, with 52 percent of private-sector executives surveyed saying non-managers could be reassigned or dismissed within six months. Only 4 percent of public-sector executives said the same.)

3. Federal executives do not feel that they have been properly trained.

Not only do the executives feel their workforce is inadequate, but many also don’t feel up to the task of managing those employees. Fewer than three-quarters of career executives and just 45 percent of appointees felt they had received “sufficient training and guidance on how to manage” federal employees.

The appointee/career split is stark, but unsurprising. Political appointees often come to their positions with little background in the civil service and its maddeningly complex thicket of statutes and rules.

Though career executives felt more confident in their abilities than appointees, the percentages are still distressingly low. It prompts the question, How are people getting to such high levels without sufficient training?

4. Agencies are poaching leaders from one another.

Some agencies are lucky enough to hire the best and brightest. But once they do, the battle to keep them begins. Of the executives polled, 42 percent of appointees and 39 percent of career executives said they’ve been approached about other positions within the last year. Who was top poacher? Other federal agencies.

This behavior is unsurprising. Since the 1960s, federal spending has quadrupled while federal-employee counts have remained steady. Congress and the federal courts have created a complicated system of hiring and firing that prevent agencies from acquiring and maintaining a skilled workforce.

The new survey reveals a high degree of variability among agencies, demonstrating that the situation is not hopeless. When asked about employee retention, 66 percent of the executives from one agency said they were able to retain top employees, while only 30 percent of executives at another agency reported the same. Some agencies, like the Federal Trade Commission, are doing a particularly good job. In the Best Places to Work Index of 2014, the FTC scored highly, and the survey confirmed the agency’s executives felt it could recruit top performers.

This variability was also found in a recent GAO survey that gauged federal employees’ level of engagement. The agency breakdowns are similar to those in the new study, with the VA and Department of Defense scoring low while the FTC maintains high engagement.

As the Vanderbilt survey points out, we can easily examine which agencies are succeeding to determine best practices to implement at others. We have the data for this type of reform; we just need to use it.

Letter to Congress: Support the PREPARE Act

July 23, 2015, 7:45 AM

On behalf of the undersigned free-market and taxpayer organizations, we urge you to join Reps. Matt Cartwright, D-Pa., and Leonard Lance, R-N.J., in supporting the Preparedness and Risk Management for Extreme Weather Patterns Assuring Resilience and Effectiveness (PREPARE) Act of 2015. By streamlining the federal government’s processes and coordinating agency response to extreme weather events, the act goes a long way toward ensuring taxpayer dollars aren’t wasted in the wake of a natural disaster.

That the federal government will spend emergency funds on disasters in the future is virtually guaranteed. When disaster strikes, no Congress will be able to resist the call for assistance. Since further spending is inevitable, it is imperative to take the necessary steps to ensure an efficient, streamlined response.

Since 2000, only two years have seen less than 100 disaster declarations. In 2011, there were 242 such declarations, as well as 1,096 deaths linked to natural catastrophes and $23.9 billion in damage. From 1988-2013, the National Weather Service estimates that all hazard damages totaled $461.8 billion, for an annual average of $26.2 billion.

Yet despite these dire statistics, the federal government has yet to adopt many of the recommendations from the 2013 Government Accountability Office High Risk Report, such as the need to centralize strategy for coordinated response, monitor and verify agency effectiveness at responding to disaster, and the need to pass data and recommendations along to state and local governments. We can’t afford to delay any longer. With an average of 680 hazardous weather-related deaths per year, it’s time for the federal government to act and improve preparedness and mitigation, both in federal agencies and across states and localities.

Toward this end, the PREPARE Act:

  • Creates an interagency council to set goals and priorities for resilience, preparedness, and risk management at the federal level;
  • Assists state, local and tribal governments in managing their preparedness and risk by accessing the interagency council for recommendations and resources;
  • Requires the interagency council to craft recommendations for how to respond to the GAO High Risk report; and
  • Compels each agency to submit a disaster response plan and merge the plans to create a coordinated federal-level response to severe weather events, ensuring each agency can conduct business effectively during a disaster.

Thirty-three disasters have already been declared for 2015, and more are sure to come. Please join your fellow congressmen and help reduce the fiscal and human costs of these disasters by supporting the PREPARE Act.

Sincerely,

R Street Institute
Coalition to Reduce Spending
Niskanen Center
Taxpayers for Common Sense
Taxpayers Protection Alliance

6 other federal agencies you don’t want creeping on your life

July 23, 2015, 7:30 AM

The Electronic Communication Privacy Act, first passed back in 1986, is badly in need of an update. For instance, current law allows federal civil agencies to obtain any “electronic communication” older than 180 days without a warrant.

As I have written before, H.R. 699, the Email Privacy Act, would begin the updating process by requiring government agents to obtain a warrant before accessing the content of private emails, texts or other digital correspondence.

While many civil libertarians and privacy advocates rightly have focused on efforts to curtail the invasive surveillance of the National Security Agency and the FBI, there are a number of federal civil agencies that could exploit weaknesses in the outdated ECPA to invade your privacy. Below are a few such agencies, and why they might be snooping through your private emails, texts, photos and other digital correspondence.

  • Securities and Exchange Commission

The SEC has been a vocal opponent of ECPA reform, defending the ability to snoop through private emails without a warrant, because catching bad guys is way more important than the Bill of Rights. So if you randomly come under questioning for alleged insider trading (as happened to Dallas Mavericks owner Mark Cuban, who beat the rap) now you know the answer to the question “where did they get that info?”

  • Internal Revenue Service

The IRS also isn’t too keen to lose its ECPA snooping power. While it hasn’t yet been reported as an issue, it’s conceivable the IRS – which usually wants to fight loopholes — could use this loophole in the law for tax-auditing purposes. Or, say, to “check on” conservative-leaning groups for further “examination” of their nonprofit status.

The SEC and IRS have been the most vocal agencies fighting ECPA reform, but here are a few other federal civil agencies who just might enjoy being able to access your private emails and texts.

  • Bureau of Alcohol, Tobacco, Firearms and Explosives

I can only imagine the myriad ways the ATF could exploit ECPA to search through your emails without a warrant. For fun, here are a few:

  1. To see if you are evading the 50 percent taxes on cigarettes;
  2. To find out what gun clubs you are a member of;
  3. To learn that secret moonshine recipe you are cooking up at the still

  •  Federal Communications Commission

Maybe the FCC wants to make sure your electronic communication is upholding certain decency standards. No cursing!

  • Environmental Protection Agency

It has become far too common for the EPA to impede on Americans’ private property rights. It isn’t too far-fetched to think the EPA might try to read your emails to collect information about your upcoming home remodel.

  • Department of Education

As educators and policymakers are working to establish privacy protections of student data, it is important the Department of Education maintain students’ privacy and not use the power of ECPA to misuse students’ confidential data.

I’ll admit these last few are a bit over the top, but I hope the point isn’t lost. Federal agencies can use many different avenues to access our private communication. As more of our lives are conducted online, it is essential that our private messages, discussions and ideas be protected from unwarranted, prying eyes.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

On highway bill, good governance and bipartisanship head in opposite directions

July 23, 2015, 7:00 AM

A recent Senate deal marked a win for bipartisanship, but at the cost of responsible governance. After a highway bill was finalized Tuesday afternoon, a vote for cloture was held less than an hour later, despite the legislation being longer than the Affordable Care Act.

For Senate Majority Leader Mitch McConnell, R-Ky., the transportation bill is high stakes. Getting a long-term funding bill enacted both takes the issue off the 2016 debate stage and shows the public that Republicans can govern.

McConnell worked across the aisle with Sen. Barbara Boxer, D-Calif., to put together a 1,030-page bill. The esoteric negotiations between staff yielded an agreement both parties seemed open to embracing. McConnell then brought the bill to the Senate floor, asking the body to move forward with debate. A coalition of Democrats and 11 Republicans voted against cloture, signaling to leadership that debating a bill that few senators had time to read was not a good way to govern.

McConnell and Boxer believe this vote was a small roadblock and that the long-term solution–as opposed to the short-term solution proposed by the House–still has a chance. To determine whether the bill will become law, these questions are important to consider:

How long will the bill be effective?

The plan authorizes highway and transit programs for six years, but only provides enough funding for three years. The sponsors cite their ability to find consensus on “pay-fors” as sufficient reason to believe the next Congress will be able to finance the last three years of the highway fund.

Over the past six years, Congress has passed 34 reauthorizations of the highway fund. The results of this patchwork have been uncertainty, unnecessary gridlock and inefficient government. The House passed a bill last week that would follow this trend, providing funding only until Dec. 18. Alternatively, if Congress can pass meaningful legislation in the two weeks before summer recess, it would provide the Department of Transportation the financial security necessary to fix our roads.

Where will the money come from?

Each year, the federal government spends about $50 billion on highways. Under the McConnell-Boxer proposal, that spending would be financed by:

  • About $105 billion from the federal gas tax and transportation taxes; this share of funding, however, is decreasing with the fall in the cost of fuel and the growing popularity of hybrid vehicles.
  • $16.3 billion would be generated with cuts to the Federal Reserve’s fixed dividend rate. For banks with more than $1 billion in combined assets, the dividend would be cut from 6 percent to 1.5 percent.
  • $9 billion would come from the sale of 101 million barrels of oil from the Strategic Petroleum Reserve over 10 years.
  • $3.5 billion will come from an extension of Transportation Security Administration fees.
  • $4 billion is expected to be created by indexing customs fees to inflation.
  • $2.3 billion would come from limiting Social Security benefits paid to fugitives with warrants for their arrest, as a result of a proposed change in the 1935 law.

What provisions do Republicans oppose?

Sen. Richard Shelby, R-Ala., the Banking Committee chairman, opposes the deal because of the restrictions placed on the Federal Reserve. Others, especially in the House, are concerned that the bill authorizes spending for three years without any pay-fors. Tax watchdogs may also argue that indexing customs to inflation is a tax increase, putting pressure on Republicans to reject that funding mechanism.

What provisions do Democrats oppose?

Changes to safety provisions regulating auto, trucking and rail are raising concerns among Democrats, including Sen. Richard Blumenthal, D-Conn, according to the New York Times. The only way these concerns can be realized or remedied is if the senators have time to read the bill. Democrats also rightfully are concerned about the precedent that may be set by taking money out of the Social Security fund to be spent elsewhere, especially as Republicans point (accurately) to 2034 as the date the fund will become depleted.

Going forward

Despite concerns from both sides of the aisle, it appears a bipartisan coalition does exist to pass the bill on its merits. The question is, why did McConnell try to force a vote so quickly if he knew he had a good deal?

For one, he fears that a long, deliberative process will result in irrelevant amendments being attached to the bill. Second, he recognizes that he must give the House adequate time to discuss the bill before authority to take money from the Highway Trust Fund expires Aug. 1.

Senate Democrats, with some bipartisan support from Republicans, have considered attaching a reauthorization of the Export-Import Bank to the bill. House Majority Leader Kevin McCarthy, R-Calif., and House Ways and Means Committee Chairman Paul Ryan, R-Wis., have warned the Senate to keep Ex-Im reauthorization off the road bill.

Another senator likely will attempt to tie Iran to the highway bill, even though the country is on another continent. Sen. Ted Cruz, R-Texas, a presidential candidate, has said publicly he will offer an amendment to the bill that would prohibit any deal with Iran until the country recognizes Israel and frees three American hostages.

Fellow presidential hopeful, Sen. Rand Paul, R-Ky., wants to offer an amendment that would halt federal funding for Planned Parenthood, in the wake of a pair of recently released videos that have raised questions about how the organization is compensated for fetal tissue.

What process would produce the best outcome?

The Export-Import Bank has nothing to do with the highway bill. Neither does the Iran deal. Nor does Planned Parenthood. Those debates deserve their own space, deliberation and separate bills.

Sen. McConnell should have provided more time for senators to negotiate; it is important that elected officials can knowledgeably debate and offer relevant amendments. But he is not wrong to push a vote sometime this week—even if it requires working through the weekend—because the House and the president must sign off on something by the end of the month.

House leadership did cast doubt on whether the legislation could pass that chamber. If the Senate passes their version of the bill, it would force the chamber to either take up the Senate’s version or go to a conference committee. In a conference committee, the numerous differences between the two laws would have to be worked out.

Congress plays by weird rules that many Americans do not understand. We should question why senators are offering noteworthy but irrelevant amendments to an important highway bill. We should also question representatives who say they are passing another six-month extension so they have time to “carefully consider” the issue, even though they have said the same thing 34 times in the last six years.

The same people who are crying “foul” on the fast cloture vote are likely to slow down the highway bill much more than necessary or desired by the American people. We deserve both bipartisanship and good governance, not one or the other.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

E-cigarettes used by 4.2% of men, 3.4% of women in 2014, as smoking declined

July 23, 2015, 6:30 AM

Last week, I announced first-ever national estimates, generated from new Centers for Disease Control and Prevention data, of U.S. e-cigarette users in 2014, almost 2 million of whom are former smokers.  Here, I provide more information about current e-cigarette use, especially in the context of current smoking.

The first chart shows the percentages of men and women in the United States who smoked in 2013 and 2014, along with e-cigarette use in 2014. Among men, smoking declined from 20.5 percent to 18.8 percent, despite the fact that 4.2 percent were e-cigarette users. Smoking among women also declined, although the drop wasn’t as strong. Overall, 3.4 percent of women currently used e-cigarettes in 2014.

The remaining charts show e-cigarette and smoking rates for men and women ages 18-24, 25-44, 45-64 and 65+ years. Smoking declined among men at all ages, with the largest declines at 18-24 years (-16 percent), 45-64 years (-11 percent) and 65+ years (-9 percent). Among women, declines in smoking were only seen in those 18-24 years (-3 percent) and 45-64 years (-7 percent).

E-cigarette use among men was 5.8 percent at age 18-24 and was lower in each successive age group. The same pattern occurred among women, with 4.4 percent of 18-24 year olds vaping.

While prohibitionists insist that e-cigarettes will “renormalize” smoking and erase decades of progress, CDC data clearly show that smoking continued to decline in 2014 as e-cigarettes surge in popularity.

TNCs, price optimization and roofing fraud top agenda at NCOIL

July 23, 2015, 6:15 AM

Model legislation governing insurance for transportation network companies may have headlined the summer meeting of the National Conference of Insurance Legislators, but other topics – from “price optimization” to contractor fraud to Europe’s Solvency II – might prove more fruitful areas of discussion for the state lawmakers’ group down the road.

NCOIL continued the focus it has maintained on transportation network companies since the group’s November meeting in San Francisco. Early attempts to produce a model law were complicated by both intra- and inter-industry disputes between insurers, taxis and TNCs. During this most recent convention, two sessions of the Property and Casualty Committee were held to consider a model based on the national compromise that was struck between TNCs and insurers in late March 2015.

Original indications of consensus were dashed when state Rep. William Botzow, D-Vt., took the floor to articulate a list of concerns, ranging from technical drafting issues to substantive matters concerning the employment status of TNC drivers. Hurried changes were made before the committee convened again the following morning and there was some concern that a difference of opinion this late in the game would again delay the model.

However, when Sunday arrived, the final amended language passed unanimously. In its final form, it was substantially amenable to all parties, with the exception of some concern about the identification of specific rating agencies in the model.

Other topics of debate and discussion there were on tap in Indianapolis included:

Price optimization

A panel of experts briefed legislators on the relative merits and drawbacks of using “price optimization” techniques in insurance rate-setting. A subsequent panel of insurance regulators also weighed in on the topic. As should be expected, no consensus was reached about whether or not price optimization should be permitted. While actuaries expressed optimism about the potential for price optimization to reduce cross-subsidies between policyholders, the consumer advocates and insurance commissioners voiced skepticism about moving away from risk-based pricing.

Indiana Insurance Commissioner Steve Robertson made clear he is no fan of the practice, likening its identification to Supreme Court Justice Potter Stewart’s formulation for identifying pornography: “I may not know how to define it, but I know it when I see it.”

Insurance fraud

There was some initial discussion of a model bill to regulate “storm-chaser” roofing contractors who have no permanent place of business. Reports have come in from various quarters that unscrupulous contractors, sometimes with no intention or capacity to perform the work, are taking deposits from desperate homeowners with leaking roofs who can’t wait for the insurers to repair them. Since most homeowners never get up on their own roofs, they may sometimes be talked into replacing a sound roof with a shoddy new roof after a big storm.

Witnesses before the Property & Casualty Committee attested that roofing fraud is the fastest-growing fraud in Kentucky, according to the state’s attorney general, and the crime generating the most complaints, according to the state Chamber of Commerce.

National and global regulation

After years of squabbling merely about who speaks for the states on insurance matters – the lawmakers or the regulators – the front for insurers has expanded significantly, thanks to the Dodd-Frank Act and Europe’s Solvency II. The effort to defend state-based insurance regulation from federal incursion has now layered on top of it proposed international regulation, embracing capital standards, market conduct, executive compensation and governance issues.

Global insurers looking at new international requirements and international accounting standards note they have been locked out of meetings of the International Association of Insurance Supervisors. They also report difficulty figuring out with whom to speak and guessing what authority any particular regulator might have when it all shakes out. The reports are almost comical with people being appointed to new advisory bodies, but unable even to comment on what business was considered or concluded in closed door meetings.

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SCOTUS’ mercury decision probably won’t end EPA overreach

July 23, 2015, 6:00 AM

Conservatives have spent the past month rejoicing over the U.S. Supreme Court’s ruling that the Environmental Protection Agency failed to appropriately account for industry costs when deciding to propose rules limiting mercury emissions from power plants. And rightly so.

After years of sounding the alarm about the massive economic costs the EPA is imposing, seemingly without concern, conservatives find themselves vindicated. For the first time in a long time, it seems there perhaps is a limit to what previously seemed like completely unchecked power. After all, the concept that costs should be appropriately accounted, and that you cannot simply claim any and all benefits, however tangential, to justify a regulation, is the most basic part of regulatory analysis. It shouldn’t take the Supreme Court to affirm this idea.

The question remains, now that the Supreme Court has ruled that the agency must do better, what will happen in future legal challenges over pending regulations, particularly the Clean Power Plan? And how should conservatives who oppose the rules react?

It’s tempting to draw too much hope from the ruling. It’s simply not yet clear what will happen or whether the rule will be vacated during the reevaluation of costs and benefits. Even if it were, a victory in the mercury case doesn’t guarantee a victory later. If anything, conservatives who want to halt the Clean Power Plan will at best get a brief reprieve while the agency figures out a “smarter” way to structure and justify the rule. The Supreme Court’s ruling doesn’t weaken, and may strengthen, liberals’ resolve to regulate any and all emissions. Moreover, the Clean Air Act’s language compels the agency to regulate dangerous pollutants, and the Supreme Court has found that carbon emissions qualify.

Conservatives should see this as a window of opportunity. The left is dead set on doing something about carbon emissions. The rules of the game are such that, if we stay on the current course, we will get some form of onerous regulation to achieve those emissions reductions. Therefore, the right should be proactive during this period of uncertainty and put forward a permanent, market-based solution, using that as a justification to remove the authority from the EPA.

We at R Street long have advocated for a revenue-neutral carbon tax at the federal level that includes preemption of EPA’s regulatory authority to regulate carbon. In absence of federal action, state-level carbon taxes as a means to comply with the CPP are the next best option. As we all know, and even the American Legislative Exchange Council has affirmed, pricing an externality is a far preferable method of control to regulation. At the federal level, the tax could be used to reduce, or even potentially eliminate, the corporate income tax. At the state level, it could be used to reduce taxes that discourage business development and economic growth.

Rather than using the recent ruling to rest on our laurels, conservatives should view this as a golden opportunity. The nation’s highest court has affirmed that the cost of regulation needs to be considered, and that the benefits may not be as high as the EPA claims. But it doesn’t end the agency’s prerogative to act. Congress must present smarter solutions, and once and for all take ownership over the climate change issue. Otherwise we’re merely waiting and hoping the issue will go away. That seems a too much of a longshot on which to gamble the future of America’s energy economy.

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Making oversight win-win

July 22, 2015, 3:05 PM

Mere mention of the word “oversight” can make a public administrator queasy. It’s not because bureaucracies inevitably have something tawdry or corrupt to hide. Indeed, government agencies often have much to crow about. Keeping the trains moving every day is an achievement, especially as legislatures layer multiple, often-conflicting duties upon those charged with execution.

Administrators and civil servants frequently feel their efforts are little known or appreciated. Which is not a surprise; few notice when government functions smoothly. But lo, when something goes wrong, a white hot light is cast.

Last month’s House and Senate hearings on the breach of Office of Personnel Management (OPM) data systems were typical. To be clear, OPM erred. It had been warned that a number of its systems were insecure and did not fix the problem. At least 4 million and possibly as many as 22 million current and former federal employees, contractors and other persons had personal information pilfered. I myself was a victim. Still-unknown malefactors have my Social Security number, address, federal work history and more.

The hearings brought some useful information to light about the hacks. The public benefited from getting an explanation as to when the cyber-attacks began and why OPM delayed notifying affected individuals. But the hearings also featured mega political grandstanding and ugliness.

Katherine Archuleta, OPM’s then director, was pummeled by legislators, who tagged her with the word “failure” repeatedly. She did herself no favors by saying nobody at OPM was to blame for the hacks. In doing so, Archuleta followed the well-trodden path of political appointees by shifting the blame to bad actors and, to a lesser extent, to Congress, for failing to better fund the office.

Members of Congress called for her head and got it. Some critics spoke as if Archuleta and OPM had no other responsibilities beyond data security, which they plainly do. OPM is the federal government’s civil service human resources shop. It has 5,500 employees and an annual budget of more than $240 million. OPM directs government-wide hiring, employment policies and employee benefits programs. OPM’s responsibilities are many, and its successes drew very little comment in the hearings. Indeed, the previous Congress’ hearings on OPM focused heavily on “problems” revealed in media exposes.

Politics long has been part of hearings. One need only recall Sen. Joseph McCarthy’s rants for the television cameras against “communist infiltrators” six decades back. That said, too many oversight hearings today are mostly partisan public-relations spectacles. They aim to perpetuate media narratives in hopes of attracting votes, donors or both. Some good emerges, but these hearings inflict long-term damage and immense distrust between public administrators and legislators. The former feel they are being pulled into a game of “gotcha.” The latter think they are being deceived and fed talking points. Neither side is entirely wrong.

Not long ago, congressional committees conducted oversight of agencies on a fairly predictable annual schedule. Hearings focused less on crises and more on routine operational matters. During the succeeding weeks, committee staff would work collaboratively to produce reports filled with findings of facts and proposed remedies. The media may have been bored to tears, but government was the better for it.

Committees and the agencies they oversaw, developed relationships that were based on trust and mutual interest. An agency head could tell committee leaders about a problem and expect to receive help, rather than face reprisal via a story on the front page of the next morning’s newspaper. Committees could get straight answers from agency personnel rather than spin from appointees and spokespersons.

For certain, there were committees and agencies whose relationships were a bit too cozy. Government wrongdoing and waste got swept under the rug and committee members’ parochial interests often were fed by the very agencies they were supposed to oversee. It was not perfect.

Why hearings morphed from dry procedure to carnivals of opportunism is a complex story. The shifting of control of the Congress has been a major factor. Since 1995, control of Congress has gone from Democrats to Republicans to Democrats to Republicans. As Frances E. Lee wrote:

The last three decades have seen the longest period of near parity in party competition for control of national institutions since the Civil War…The permanent campaign and politicians’ continual eye on the next election pervasively discourage efforts to work across party lines.

This is regrettable, but not irremediable. Congressional leadership could encourage committees to schedule regular oversight hearings that generally focus on agency operations. Committees also could adopt rules requiring more polite treatment of witnesses. (Congress has decorum rules for legislators’ talks on the floor.) Agencies, meanwhile, should start each Congress by meeting frequently with committee staff. Political appointees need to step back and allow agency professional staff to develop trust-based relationships with legislative staff.

Oversight should be a collaborative exercise for the public benefit. Agency officials bring expertise developed from their years of toil in the minutiae of policy implementation. Legislators provide fresh eyes and ideas and democratic accountability to public administration. Oversight really can be a win-win exercise.