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How the Clean Power Plan is like the Death Star

August 05, 2015, 12:20 PM

Trigger warning: Nerdy analogies; some discussion of taxes.

On Monday, the Obama administration released the final version of its “Clean Power Plan,” which mandates a 32 percent reduction in carbon-dioxide emissions from 2005 levels by 2030.

The rule, which runs for more than 1,500 pages (not counting technical appendixes) is full of lengthy discussions on matters ranging from its own legality (dubious) to calculations of the amount of increased heat-rate efficiency obtainable from power plants in different regions.

But what the rule really reminded me of, more than anything else, was the Death Star.

The Obama administration’s Death-Star governance

As you’ll recall, unless you’ve just awoken from a 40-year coma, the Death Star was the giant space station the bad guys built in the original “Star Wars” movie. At the beginning of the film, the Empire has just freed itself from the last vestiges of legislative control by abolishing the Republican Senate. This centralization of executive power has raised questions of how the Empire will continue to govern faraway planetary systems.

The Death Star, which is capable of destroying entire planets, is supposed to resolve this problem by allowing the Empire to present recalcitrant local governments with a choice: go along, or we will destroy you. In the words of Grand Moff Tarkin: “Fear will keep the local systems in line; fear of this battle station!”

If you have a fevered conservative brain like mine, the parallels to the new Environmental Protection Agency (EPA) rule are pretty obvious. After being unable to get a cap-and-trade plan through the Senate, the Obama administration decided to sidestep Congress altogether by having the EPA impose reductions directly on each individual state. If a state chooses not to comply, it risks getting zapped by a federal plan that could be highly damaging to its economy and electric reliability.

The Clean Power Plan’s exhaust port

As imposing as the Death Star was, it also had a hidden weakness: a small exhaust port that, if it sustained a direct hit, could set off a chain reaction destroying the entire station. Similarly, the Clean Power Plan contains a provision that, if properly exploited, could nullify many of the rule’s otherwise harmful effects.

On page 899 of the rule, the EPA indicates that a state could be deemed in compliance with the rule through “imposition by a state of a fee for CO2 emissions from affected [electrical generating units, i.e., power plants].” EPA goes on to say that this “plan type would allow the state to implement a suite of state measures that are adopted, implemented and enforceable only under state law” (emphasis added).

This means a state has the option of ignoring most of the previous 898 pages of the rule, with its discussions of improved heat-rate efficiency or dispatch priority for renewable generation. It can instead simply impose a modest fee on carbon-dioxide emissions from electrical generation. This system would be a matter of state law, and unlike most EPA-imposed plans, the details would not be federally enforceable. What’s more, any revenues from the fees could be tied to comparable cuts to state taxes to ensure the overall scheme doesn’t grow the size of government.

A back-up plan for other attacks

Even most hardcore climate skeptics will concede that if you had to reduce CO2 emissions, a carbon fee would be preferable to command-and-control regulation. By making the fee revenue-neutral, states could offset much, if not all, of the economic damage the CPP otherwise would impose on the economy. Effectively, states that choose this route can keep the EPA’s hands off their electrical grids while simultaneously cutting taxes.

None of this is to say that states shouldn’t challenge the Clean Power Plan in court or that conservatives shouldn’t seek legislative repeal of EPA’s authority. But given the current make-up of the Supreme Court and the Washington establishment, it would be nice if there were a back-up plan in case Justices John Roberts and Anthony Kennedy end up acting like, well, Roberts and Kennedy.

The Clean Power Plan may be a clear example of executive overreach, but the details of the final rule provide states an opening to get out from under its most onerous requirements if they choose. At the risk of a horrible pun, that should provide us all with “a new hope.”

White House finalizes CPP, but will it stand?

August 04, 2015, 4:04 PM

President Barack Obama yesterday released long-awaited regulations intended to reduce carbon emissions from the power sector by 30 percent by 2030. The stakes are high. Designed under decades-old legislation, the rules aim to achieve carbon reductions by radically expanding the government role in electricity markets and reshaping the markets themselves.

The rules expand government, increase electricity costs and burden power producers and their customers, without making much progress on climate change. When you add them to the administration’s six other major regulatory initiatives on carbon, as well as the carbon reductions achieved by the broad market switch from coal to natural gas, the administration’s climate plan still falls well short of carbon reduction commitments pledged by the president to the international community.

Energy interests and conservatives in Congress have been pushing back against these regulations since they first were proposed last June. Most recently, 26 members of the House and Senate have asked the White House’s regulations chief to be sure the rules will not require states to comply before the inevitable legal challenges can be resolved by the courts.

It’s an important point. This tension between compliance and litigation timelines is why Murray Energy and 12 states challenged the regulations before they were finalized (Murray Energy Corp. v. Environmental Protection Agency). Dismissed in June by the D.C. Circuit Court, the challenge was designed to settle whether the regulations were legal before states had to grapple with carbon reductions.

We have reason to be concerned. In a separate case, Michigan v. EPA, the Supreme Court in June remanded a different EPA rule to the lower court, stating that the agency had inappropriately failed to consider costs in deciding to issue the rule.

The rule that troubled the court was “Utility MACT,” which established technology standards for reducing hazardous pollutant emissions like mercury from power facilities. EPA predicted the rule would cost the power sector and its customers $9.6 billion per year. The resulting benefits from reducing hazardous pollutant emissions amount to a whopping $0.5 to $6 million.

As Justice Antonin Scalia wrote in the majority opinion, “one would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.” Counting reductions in other pollutants, the EPA estimates so-called “co-benefits” of the rule to be as much as $89 billion, which ultimately helped the rule survive a cost-benefit test.

The legitimacy of implementing a regulation justified only by its ancillary benefits certainly should be questioned. If there are so many achievable benefits left on the table from reducing other types of emissions, aren’t there probably cheaper ways to achieve those reductions?

But an even greater concern is that the Supreme Court didn’t make its decision on Utility MACT until June 2015; the deadline for achieving reductions was April 2015. The EPA crafted a rule that ultimately was unable to survive a legal challenge, but still induced compliance and passed nearly $10 billion in costs along to taxpayers.

Tight compliance timelines are a clear point of difficulty for power providers. Regulations get baked into years-long capital planning and investment processes for generation facilities. That means operators started making decisions about the April 2015 compliance deadline as soon as the regulation was finalized.

Even those facilities that were given an additional year to comply with the Utility MACT regulations already have made their investments and scheduled outages to install the expensive scrubber technology or switch to natural gas. The decision in Michigan v. EPA, at most, affects only about 22 plants, or 1 percent of the power supply; the rest either have already complied with the rule or have closed.

The Michigan ruling clearly vindicates efforts to resist the Clean Power Plan. When Senate Majority Leader Mitch McConnell, R-Ky., tells states not to comply with the regulations until the Supreme Court has heard the inevitable challenge, he is erring on the side of caution. The Ratepayer Protection Act, introduced by Rep. Ed Whitfield, R-Ky., is a backstop against forcing compliance until we have certainty over whether the regulation will stand. The Clean Power Plan, by design, will overhaul electric generation, dispatch systems and state-level energy laws. If the court finds yet again the administration has inappropriately interpreted a law to fit its regulatory agenda, those efforts will be for naught.

The consistent conservative opposition to the White House’s unrelenting regulatory pressure on the fossil-energy industry is an important counterpoint to an ambitious environmental agenda poorly founded in the law. We have achieved tremendous improvements in environmental quality and expanded economic opportunity while sticking to the letter of the law. If anything, Michigan should remind regulators that they compromise both their goals and industry confidence when straying from congressional intent.

That’s what makes the recent letter from congressional conservatives so important. Supported by, among many others, Senate Environment and Public Works Chairman Jim Inhofe and House Energy and Commerce Chairman Fred Upton, it clearly declares Congress’ intent to eliminate damaging and expensive executive branch overreach. Especially in the wake of the Michigan decision, the EPA and the White House should tread carefully on their latest regulatory effort.

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Study: Agencies miss rulemaking deadlines half the time

August 04, 2015, 10:52 AM

From The Hill:

Federal Agencies have missed half of their Congressional deadlines in the last two decades, according to a new study released by the R Street Institute on Tuesday.

In analyzing data from the Office of Management and Budget, Scott Atherley, an associate fellow at the D.C.-based think tank, found that unrealistic guidelines set by Congress and a lack of consequences for agencies that fail to comply were the main reasons for missed rulemaking deadlines.

“One might argue that these are exceptional cases, but unfortunately, deadline compliance is a systemic problem. Data collected for this analysis suggest that federal agencies failed to meet more than 1,400 deadlines between 1995 and 2014, which translates into an estimated success rate of less than 50 percent,” Atherley said in his study.

Given the number of missed statutory deadlines each year and the other massive demands on Congress’ time, Atherley said oversight tends to be neglected.

The study, however, found that agencies are far more likely to comply with deadlines set by a court order rather than Congress. The overall compliance rate for judicial deadlines during the years studied was nearly 80 percent.

With a compliance rate at nearly 90 percent, the study found that Department of Interior and the Environmental Protection Agency has little trouble meeting judicial deadlines.

To improve agency compliance with statutory deadlines, Atherley recommends the Congress require agencies to report their progress.

“Congress cannot monitor federal agencies effectively without a system dedicated to tracking directives and following up to evaluate agency responsiveness,” he said in the report.  

He also recommended Congress establish a new Regulatory Affairs Office to track agency compliance.

Federal agencies missed half their congressional deadlines

August 04, 2015, 9:40 AM

WASHINGTON (Aug. 4, 2015) – Federal agencies over the past two decades have a less than 50 percent success rate in complying with congressional rulemaking deadlines, according to a new study released today by the R Street Institute.

In his analysis of Office of Management and Budget data compiled since 1996, R Street Associate Fellow Scott Atherley found that two of the strongest reasons for missed deadlines were unrealistic guidelines set by Congress and a lack of consequences for agencies that fail to comply.

“Congress often is the only party to suffer any form of harm from a neglected deadline, yet cannot in practice sue the agency in question,” Atherley wrote. “If no party has standing to sue over an unmet deadline, legal recourse is extremely difficult to achieve. Congress’ only option is to pass another law.”

Atherley notes that agency deadlines set by the courts have a much higher success rate, at almost 80 percent, suggesting that agencies treat court-ordered deadlines as higher priorities than deadlines developed by Congress. Oversight of judicial deadlines frequently is conducted by the outside groups who brought suit.

In order to improve agency compliance with statutory deadlines, more detailed information regarding agencies’ progress in meeting statutory regulatory deadlines needs to be recorded and made available.

“The analysis is limited by the lack of detailed data linking statutory directives to specific required actions,” wrote Atherley. “Congress cannot monitor federal agencies effectively without a system dedicated to tracking directives and following up to evaluate agency responsiveness.”

Reporting requirements could be updated to include more detail, such as recording the precise action required by Congress. Policymakers would benefit from a database in which agencies record regulatory milestones as they complete them, the paper contend.

Additionally, Atherley argues that Congress would benefit greatly from an organization or office devoted to legislative engagement with the regulatory process. Atherley also noted that Congress would benefit from an institution empowered to litigate on its behalf.

“A Congressional Regulatory Affairs Office tasked with making and tracking requests of federal agencies could save time and effort for both congressmen and agency officials,” he wrote. “There are likely large numbers of unnecessarily complex, duplicative or unclear requests issued from legislators to civil servants.”

Federal agency compliance with congressional regulatory deadlines

August 04, 2015, 8:00 AM

The final years of the Obama administration, like the Bush administration before it, have been characterized by acrimonious debates over executive power and accountability. Regulatory deadlines are just one area in which the legislative and executive branches fail to see eye to eye. The ongoing implementation of the Patient Protection and Affordable Care Act (ACA) is a case in point. A 2012 American Action Forum report found that federal agencies had missed 47 percent of deadlines associated with the ACA. Similar analyses by Avik Roy indicate that roughly half of the mandated regulations associated with the ACA were either completed late or not completed at all.

Problems with Congressional deadlines go beyond the ACA: a June 2012 report by the liberal advocacy group Public Citizen analyzed 159 regulations subject to statutory deadlines in 2011 and found that agencies failed to complete 78 percent of required actions within the time-period allotted. Low levels of statutory deadline compliance are a concern to those on both ends of the political spectrum.

One might argue that these are exceptional cases, but unfortunately, deadline compliance is a systemic problem. Data collected for this analysis suggest that federal agencies failed to meet more than 1,400 deadlines between 1995 and 2014, which translates into an estimated success rate of less than 50 percent.

Interestingly, deadlines set by the judicial branch are met at a considerably higher rate – nearly 80 percent. The disparity in compliance rates emerges, in part, from the disparate legal treatment of different types of deadlines and from congressional incentives to engage in oversight. The fact that different deadlines generate different results suggests that deadline compliance can be improved by making oversight easier and by making statutory deadlines directly enforceable.

White House offers tepid response on email privacy

August 04, 2015, 7:00 AM

As we have previously noted, proposed reforms to the Electronic Communication Privacy Act recently have received increased attention. Congress appears on the verge of finally restoring email privacy protections to all emails even correspondence over 180 days old.

As of the writing of this post, H.R. 699, the Email Privacy Act, has 292 cosponsors.  Sponsored by Rep. Kevin Yoder, R-Kan., the measure is still the most-supported bill in this Congress not to receive a hearing, much less a vote.

Back in 2013, in an effort to draw attention to the outdated 1986 law governing email privacy, activists started an online White House petition calling on the Obama Administration “to support ECPA reform and to reject any special rules that would force online service providers to disclose our email without a warrant.”

The petition received 113,035 signatures within 30 days, triggering the White House to fulfill a self-imposed requirement to write a response.

Last week, after 18 months of silence the White House finally responded. The administration acknowledged that “some of ECPA’s components therefore seem outdated” and “should be reformed,” but deferred responsibility to Congress to hash out the actual fix.

Privacy activists were disappointed the administration’s statement didn’t go further. Tech Dirt observed that the “administration agrees that reform of this law… is needed. However, it does so both belatedly, vaguely and disingenuously.”

This is especially disappointing because many of the government agencies that are accessing (or potentially accessing) old emails without a warrant exist within the executive branch, such as the FBI and the IRS. Instead of closing access to private correspondence, “the administration will not force federal agencies to get a warrant to access older emails.”

As Congress prepares to debate the right balance on email privacy, it isn’t quite clear how supportive or opposed the White House will be of the final product. One hopes Congress will not be deterred by the administration’s lukewarm input and instead build off the support they have tech sector and grassroots excitement to restore Fourth Amendment protections to email.

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

There’s a government form for your moon expenses

August 04, 2015, 6:30 AM

As far as government paperwork goes, this might just be the best ever filed.

According to the federal government, employees embarking on government-sponsored missions for which there are billable expenses must fill out expense reports and submit them, including if their government-sponsored mission was to the moon.

Yesterday, former NASA astronaut and noted moon missioner Buzz Aldrin shared the paperwork he filed with NASA in order to get $33.31 worth of fuel expenses back – expenses he accrued driving from Houston to Cape Kennedy, Fla., where he boarded the Apollo spacecraft.

The paper, which is beyond cool and more than a little surreal, lists the mission as a “round trip” for Col. Edwin A. “Buzz” Aldrin, going from Houston to Cape Kennedy to the moon to Cape Kennedy and back to Houston.

Note that Aldrin was not reimbursed for his expenses from Cape Kennedy to the moon and back. He used a “government spacecraft” for that, and his meals and fuel were NASA provided, of course. That’s good, since, as one commenter on Gizmodo pointed out, at the standard reimbursement rate of $.10 per mile listed, the 472,000 mile journey would have cost the government (and, first, Aldrin) about $48,000, more than twice Aldrin’s yearly salary at the time. There’s no indication as to whether he would have earned a per diem rate (but probably not).

The REINS Act: A constituent’s question receives a vote in Congress

August 04, 2015, 6:00 AM

In Washington, it’s not every day legislation actually begins with a constituent’s idea. The REINS Act is one of those ideas.

The House last week passed H.R. 427, also known as the Regulations from the Executive In Need of Scrutiny Act. The measure requires Congress to vote on and the president to sign a resolution explicitly approving federal rules that have an economic impact of greater than $100 million.

We don’t like to talk about it, but many pieces of legislation originate with a lobbyist drafting text and finding a legislator willing to carry the bill. The REINS Act is different. It started as a question from a constituent in Kentucky.

The Environmental Protection Agency in 2009 entered into an expensive consent decree regarding stormwater management issues in Covington, Ky. While discussing the issue with former Rep. Geoff Davis, R-Ky., Lloyd Rogers of Alexandria, Ky., asked who actually was accountable for the regulations average citizens face.

The simple question carried tremendous weight.  Davis realized he really didn’t have a meaningful opportunity to vote on those rules and voters never had the chance to hold bureaucrats accountable, other than a vote every four years for their boss.

Depending on which party is in the White House, members of Congress frequently bemoan the regulatory overreach of the executive branch. From interpretations of the Patriot Act to EPA rules, politicos across the ideological spectrum routinely explain to constituents that they’re powerless to stop the federal regulatory train.

That’s a convenient excuse for lazy politicians. The train doesn’t have any fuel absent congressional authority. The executive branch can make administrative rules to implement law, but it can’t make the substantive legal changes we’ve seen over the last few decades without Congress delegating the authority to do so.

Congress needs to be accountable for the laws we face. If you don’t think federal regulations are laws, just try ignoring them.

Obviously, the REINS Act would make the president less powerful, so we can safely assume that almost any resident of the White House won’t like it.

Who else doesn’t like the REINS Act? Businesses and special interests that use the power of government to smash their competition.

Think about it. Is it easier to secure special favors from a cozy relationship with one regulator or 535 members of Congress? Let’s not kid ourselves; it’s no accident that special interests like to hold up the notion that we should leave the details of laws to regulatory “experts.”

If you have the cash and clout to fashion regulations for yourself, the cumbersome and opaque federal regulatory process is a tremendous tool. You even get the added bonus of being able to complain about it at the same time you benefit from it.

That’s why we have a divided legislature making the laws in the first place. Doing so shouldn’t be easy and it certainly shouldn’t be streamlined for those who plan to use government for their private advantage.

The House repeatedly has passed the REINS Act only to watch it die in the Senate. Democrats have played protectionist politics instead of acting responsibly. Were a Republican in the White House, you can bet the GOP would behave the same way.

The REINS Act didn’t come from an elite industry player or union; it started with a concerned voter. The REINS Act makes sense precisely because it’s not designed to favor any party or policy. It’s about accountability for our politicians—accountability to the people rather than the powerful.

Now that the REINS Act has once again passed the House, we’ll get to see who caves to cronyist pressure first. Will it be Senate Majority Leader Mitch McConnell, R-Ky., refusing to bring up the REINS Act to protect well-heeled business interests or will it be Democrats blocking a vote in an effort to put partisan politics over the American people?

We’re certainly not going to agree on politics, but maybe we can settle on a simple idea from a concerned voter that the people who write our laws should answer to us.

The three dumbest “conservative” objections to patent reform

August 03, 2015, 6:56 PM

From Townhall:

Zach Graves of the R Street Institute already eviscerated this argument at some length, and some of his choicer passages deserve to be repeated here:

Patent reform enjoys a long tradition of intellectual support from a wide range of right-leaning think tanks and advocacy groups. Conservative and libertarian groups that have advocated for patent reform in one form or another include Americans for Tax Reform, the Heartland Institute, the Cato Institute, the Heritage Foundation, the Competitive Enterprise Institute, the MercatusCenter, Americans for Prosperity, Frontiers of Freedom, the Independent Institute, the <href=”#.vxbxbvxvhbc”>Manhattan Institute, the Mises Institute, Institute for Liberty, Hispanic Leadership Fund, the Institute for Policy Innovation, the Latino Coalition, Independent Women’s Forum, Lincoln Labs,the American Enterprise Institute, the Center for Individual Freedom, American Commitment,Taxpayers Protection Alliance, the Discovery Institute, Generation Opportunity, Citizen Outreach and others.[…]

The American Conservative Union’s own scorecard ranks members sponsoring patent reform legislation among the most conservative in the nation. This includes members such as Sens. Mike Lee (R-Utah – 100 percent), Chuck Grassley (R-Iowa – 84 percent), John Cornyn (R-Texas – 93 percent) and Orrin Hatch (R-Utah – 89 percent); and Reps. Bob Goodlatte (R-Va. – 94 percent), Darrell Issa (R-Calif. – 89 percent), Jason Chaffetz (R-Utah – 92 percent), and Blake Farenthold (R-Texas – 80 percent), among others.

Graves also notes, and this bears repeating, that if patent reform were really such a left-wing idea, you would have expected it to pass the Senate while it was still controlled by Democrats. Yet the bill was blocked, not by conservatives, but by then-Sen. Majority Leader Harry Reid (D-NV) on the grounds that it would offend trial lawyers, who are some of the biggest profiteers from frivolous patent litigation, or patent trolling.

R Street Institute disappointed by President Obama’s energy plan

August 03, 2015, 5:23 PM

WASHINGTON (Aug. 3, 2015) – The R Street Institute expressed disappointment at the energy plan released today by President Barack Obama, noting both the increased costs and unworkable compliance framework established for the states.

“We agree that science demonstrates that the climate is changing because of rising carbon emissions,” said Catrina Rorke, R Street’s director of energy policy. “What we oppose is the idea that science compels irresponsible, expensive policy and aggressive government overreach.”

The plan aims to reduce greenhouse-gas emissions by 32 percent by 2030, largely by reducing the share of coal generation. Coal generation currently accounts for nearly 40 percent of power generation, down from 50 percent five years ago. According to Environmental Protection Agency estimates, the rule will impose $8.4 billion in costs on all Americans.

“There are other methods to address climate change in a workable framework for both the states and power generators that will not impose nearly these kinds of costs,” Rorke said. “Power generators already have achieved about half of the reductions called for by the president through technological innovation, state initiatives and increases in efficiency and distributed generation. The Clean Power Plan, by design, is less effective in achieving reductions than the private sector has been over the last decade.”

The plan also will be unworkable in some states, notably the four states (representing more than 12 percent of our coal fleet) that will not have a legislative session between now and the time that initial compliance strategies must be submitted in 2016.

“This rule continues to rely on a very shaky legal foundation, requiring technologies and investments far removed from the coal plants the rule ostensibly targets,” said Rorke. “We have reason to be very concerned that states will be required to change law, bear costs and compel carbon reductions for a rule that will later be struck down in the courts.”

Rorke noted that the rule does allow states to rely on a carbon fee approach, a result of comments provided by R Street and other groups to provide a simpler, more market-based strategy.

The Clean Air Act, passed 45 years ago, has been successful in reducing actual pollution emissions levels by 70 percent, while the U.S. economy tripled in size during the same period, Rorke noted. But while the act is well-designed to address certain kinds of pollution, it was never intended to address carbon, she said.

“The best way to fight the negative impacts of climate change is to be much richer in the future,” Rorke continued. “We need a climate strategy that will expand the economy, not impose undo costs on business. Congressional action is necessary now more than ever.”

Alabama facing political gut check, not a budget shortfall

August 03, 2015, 11:09 AM

Listen to any Alabama politician discussing the General Fund budget. You’ll undoubtedly hear the phrase, “budget shortfall.”

The use of those specific words is intentional. It creates the impression Alabama’s governor and legislators face grave fiscal problems forcing them to find more revenue.

It sounds good. Too bad it’s not true.

“Shortfall” isn’t one of those complicated words with many different meanings. It’s simply a deficit of what’s required or expected.  Let’s take each of those in turn.

Are Alabama’s politicians required to spend more than the $1.6 billion in revenue they’re projecting? No.

Are they expecting to have more than $1.6 billion to spend? No.

In case this is lost on anyone, we still don’t have a General Fund budget. That means it’s particularly hard to have a shortfall of said budget.

When a federal mandate unexpectedly causes the state to spend more than appropriated, that’s a shortfall. When the economy tanks after budgets are enacted, that’s a shortfall. We’ve seen what actual budget shortfalls look like in Alabama, but this isn’t one of them.

We are expecting less revenue than last year, but we’ve basically seen this coming since 2012. Remember the multiyear transfer from the Alabama Trust Fund intended to give legislators “breathing room” to solve the General Fund budget issues?

That move basically kicked the budgetary can down the road, but not much actually changed. Now we’re again at the same point, but continuing to write IOUs to ourselves isn’t on the table this go-round.

So we either tighten our belts, move money around or pony up more taxes and fees to grow spending to the levels to which we’re accustomed.

We may not have a conventional budget shortfall, but we’ve clearly reached gut check time in the Alabama Legislature. Are our political leaders dedicated to keeping government within the bounds of current revenues, or will we grow it to match political spending desires?

That’s the choice.

Gov. Robert Bentley has cast his lot. All that’s left is for legislators to decide where they believe his plan is the one they’re willing to defend before their constituents at the ballot box three years from now.

EFF tells federal appeals court: Google subpoena threatens online speech and innovation

August 03, 2015, 9:22 AM

From the Electronic Frontier Foundation:

Shortly thereafter, Google sought protection from a Mississippi federal court, asking the court to issue a preliminary injunction blocking the Attorney General from enforcing the subpoena. EFF filed an amicus brief—joined by the Center for Democracy and Technology (CDT), New America’s Open Technology Institute (OTI), Public Knowledge (PK), and R Street Institute—in support of Google, arguing that Section 230 of the Communications Decency Act (CDA) clearly protects hosts of Internet content from liability and burdensome discovery based on content generated by third-party users. The district court agreed with us and granted Google’s request for a preliminary injunction.    

The Attorney General was unsatisfied with this result and appealed the district court’s order to the Fifth Circuit.  EFF—again with CDT, OTI, PK, and R Street—filed a second amicus brief in support of Google, voicing our concern that allowing this type of abuse of investigatory powers by state officials would set a dangerous precedent. It would violate not only Section 230 of the CDA—which was intended by Congress to encourage the development of new communication technologies by shielding intermediaries from liability based on third-party content—but also the First Amendment. The First Amendment protects both the right of service providers to exercise editorial control over the third party content they host, and the right of Internet uses to receive and engage with such information online.

New White House report gives states a license to deregulate

August 03, 2015, 8:00 AM

Republicans and Democrats don’t agree on a lot these days. But if a recent report released by the White House on occupational licensing is any indication, we may have to conclude that bipartisanship is not quite dead yet.

Requirements that individuals must obtain licenses before practicing particular occupations have exploded in recent decades. In the 1950s, 5 percent of Americans worked in a field requiring an occupational license. Today it’s more than 20 percent. Getting a license can require thousands of dollars and years of instruction, and is especially hard on groups like military spouses, who may have to get relicensed when they move to a new state.

Lawmakers’ stated motivation for passing occupational licensing laws is to protect public health and safety by ensuring a minimum level of quality among practitioners. We don’t want someone practicing open-heart surgery when his only training is watching a “how to” video on the Internet.

However, while licensing might make sense for professions like doctors, most licensed occupations do not fall into that category. Depending on your state, you may need a license to do anything from braiding hair to arranging flowers.

Not only are licensing requirements burdensome for applicants, but in most cases, the connection between licensing and higher-quality service is pretty thin. Of the more than 1,100 occupations licensed in at least one state, fewer than 60 are regulated in all 50 states. The requirements for getting a specific license also vary greatly from state to state. As the White House report notes:

Michigan requires three years of education and training to become a licensed security guard, while most other states require only 11 days or less. South Dakota, Iowa and Nebraska require 16 months of education to become a licensed cosmetologist, while New York and Massachusetts require less than eight months.

These differences allow researchers to see whether stricter licensing rules actually result in higher quality of service. The results generally aren’t pretty. A variety of studies have found that licensing requirements have no impact on quality of services for occupations ranging from floristry to teaching. That might be because many licensing requirements are more about checking a box than they are about ensuring quality. Alternatively, it might be that the need for businesses to provide good service if they want to stay in business does about as good a job of ensuring minimum quality as licensing does.

By contrast, studies have found that licensing does increase the price of services between 3 and 16 percent, and reduces the number of practitioners in the licensed occupation. In other words, occupational licensing often hurts consumers instead of protecting them.

The White House report suggests that states look at certification as an alternative to licensing. Certification is similar to licensing, except that it’s not mandatory. Someone who wanted to cut hair without certification as a barber could still do so, but would have to let customers know that he or she wasn’t certified. This option would serve as a reality check, keeping the requirements for certification from expanding into inanity.

While a number of groups (such as the libertarian Institute for Justice) have been highlighting the problems of occupational licensing, the issue hasn’t gotten nearly the attention it deserves. Hopefully the administration’s report will help show that occupational-licensing reform is an issue that deserves support from across the political spectrum.

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

Mississippi is on the wrong track with telemedicine

August 03, 2015, 7:00 AM

Recent years have seen plenty of debates about misguided health and safety regulations, but the current one in Mississippi threatens to frustrate one of the brightest trends in all of American health care – telemedicine. Providers who offer this service, against the backdrop of shrinking provider networks and untamed cost curves, have a remarkable record of success in offering treatment and medicine to patients more quickly and more efficiently.

Generally speaking, most efforts to manage health-care costs are focused on chronic-care management, preventative care and keeping people out of emergency rooms. Telemedicine instead offers an alternative for the kinds of care most people most typically receive – visits to doctors. By linking patients with doctors either via telephone or video chat, barriers of distance can be eliminated, which is particularly crucial for rural areas. But the technology also offers promise for many types of routine consultations.

A study of the national firm Teladoc by Harvard University’s Niteesh Choudhry and colleagues, which appeared in the May 2014 edition of Health Affairs, found that, over a 30-day period, use of Teladoc’s telemedicine service saved an average of $191 compared with physician office visits and $2,661 compared with emergency room visits. For employers, the savings were $727 per telemedicine consultation, with annual savings for one employer of more than $5.4 million.

A December 2014 Harris Poll conducted on behalf of telemedicine firm American Well found that 64 percent of Americans said they were interested in remote visits with their doctors. A separate American Well survey of doctors, released in May 2015, found more than 57 percent would be willing to meet with patients via video.

Founded in 2002, Teladoc, whose clients include PepsiCo and Bank of America, claims 298,000 consultations and recently closed its initial public offering. American Well’s Amwell app now has 1.6 million users, up 400 percent from 2013 to 2014. Apple also recently got into the market, which also features such names as Myca Health (makers of the HelloHealth service) and RelayHealth, by launching its own Apple Health app earlier this.

But this emerging market doesn’t sit well with some state regulators. In May, Teladoc won a federal injunction against the Texas Medical Board, which is attempting to enforce a rule that requires physicians must meet face-to-face with patients before they may prescribe them medications. In Mississippi, which in 2013 became the 16th state to pass a law explicitly permitting telemedicine, the State Board of Medical Licensure promulgated new rules in March that likely would make life more difficult for telemedicine firms, requiring they establish formal relationships with in-state providers and disallowing prescribing medications over the phone. The rules state:

A physician may not prescribe medications based on a phone call or a questionnaire for the purpose of telemedicine. Videoconferencing is required as part of the teleconsult if a medication is to be prescribed.

Thankfully, the rules have been delayed, albeit only temporarily, in response to a challenge that noted the board did not conduct an economic impact study before implementing them, as required by the Mississippi Administrative Procedures Act.

These sorts of rules clearly are bad for health-care consumers. Who among us can say we haven’t wished we could just get our own doctor on the phone for a minute or two to get a prescription processed for a common medical condition? What difference should a video picture make for prescribing treatment for an acute respiratory episode or a urinary tract infection? Those were, in fact, the two leading reasons for telemedicine visits by children and adults, according to a 2014 RAND Corp. study of California Public Employees’ Retirement System’s telemedicine program.

The Mississippi rules are simply harassment, and the Mississippi Legislature should rise up and swat the licensing folks down if they decide to try again. The RAND study and others have found that telemedicine consultations produce outcomes sufficiently comparable with office visits. The research also suggests that telemedicine is effective in meeting the standard of care and the error rate of diagnosis is no worse than office visits. Teladoc reports a 95 percent patient satisfaction rate.

One big factor in the future of expansion of telemedicine could be the Interstate Medical Licensure Compact, sponsored by the Federation of State Medical Boards. Last month, Illinois became the 11th state to join the compact, which allows doctors licensed in one state to enjoy certain practicing privileges in other compacting states.

In April 2014, the federation also promulgated a model policy for the appropriate use of telemedicine. While a perfectly reasonable document, it’s faced some pushback from groups like the American Medical Association and the American Academy of Pediatrics, who argue that telemedicine should only be provided to patients a physician has already met in-person and also that physicians should be compensated the same for telemedicine visits that they would be for in-person visits. Sadly, one suspects fear of competition and lower profits may be playing a bigger role in those groups’ stances than concern for patients.

Mississippi is poised to let a very small group of doctors running an anticompetitive licensure racket dictate that the medical establishment turn its back on tens of thousands of patients who could take advantage of today’s technology to get quality care cheaply and efficiently. Given the environment we already face with the implementation of the Obamacare regime, this is a colossally bad idea.

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

Free-market groups urge International Trade Commission not to assert authority over digital transmissions

August 03, 2015, 6:00 AM

Dear Chairwoman Broadbent,

On behalf of the undersigned free-market organizations, we write to express our deep concern about the International Trade Commission’s April 9, 2014 decision in investigation 337-TA-833. The commission declared in that decision that “electronic transmission of digital data” over the Internet constituted “importation… of articles” subject to regulation under Section 337 of the Tariff Act of 1930. This decision currently is under appeal to the Federal Circuit in ClearCorrect Operating, LLC v. ITC.

We believe treating cross-border digital transmissions as acts of importation is an injudiciously broad interpretation of the Tariff Act and would open a Pandora’s Box of new complaints and investigations that concern a wide range of business activities heretofore untouched by the commission. Proceeding down this path would undermine traditional legal structures and encumber a broad slice of the innovation economy with unnecessary government strictures. The effects would be felt by everyone from Internet service providers, to telecommunications companies, to small businesses and even individual Internet users.

Our specific concerns include:

I. The commission’s decision is an unprecedented expansion of its power, far beyond what the statute contemplated.

Transmission of digital data is not the same as importation of a physical good. It’s clear that electronic transmissions were never intended to be part of the commission’s purview. There are numerous cases, going back to W. Union Tel. Co. v. Pendleton (1887), that debunk the notion that Congress could not have foreseen the need to regulate electronic transmissions of data under the powers granted to the commission.

While the commission argues the Tariff Act was written “at a time when Internet downloads were not in existence,” this argument does not hold water. As the Electronic Frontier Foundation and Public Knowledge noted in a jointly filed amicus brief, “although Internet downloads did not exist in 1930, plenty of other transmissions of telecommunications data, including cross-border transmissions, did exist and were certainly known to Congress at that time.” Indeed, cross-border radio communications and trans-Atlantic telegraph cables had been in place for decades before the Tariff Act. In addition, there had been widely documented discussion of their use as a form of commerce posing new intellectual property concerns. Thus, the exclusion of electronic communications from the commission’s jurisdiction under Section 337 should be seen as a deliberate choice by Congress.

II. The commission should not defy the will of Congress on site blocking.

An exclusion order, the commission’s primary remedy, cannot easily be applied to the Internet. If the commission were to exercise its enforcement powers through wholesale site blocking, this would have radical implications for global commerce that pose a serious threat to free access to lawful content on the Internet.

Indeed, Congress already has rejected the Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA), both of which attempted to do just that. If the commission were to implement similar strategies by fiat, it would contradict the will of the legislative branch and the statutory limits of the commission’s powers. It also would open new avenues for abuses that circumvent traditional legal structures for resolving intellectual property disputes, with potentially drastic unintended consequences.

III. There is absolutely no need to manufacture new agency powers over digital data.

Markets for digital goods have thrived for decades without the commission exercising these powers. They represent one of the most vital segments of the U.S. economy. The authority of domestic courts has been more than sufficient to handle disputes over intellectual property rights concerning digital goods. The commission’s entry into this space is a wholly unwelcome and unnecessary government intervention and will only complicate matters concerning digital commerce.

IV. Free-market principles are fundamental to the success of the Internet and ITC-imposed trade barriers would fracture that free market.

The Internet’s explosive growth over the past quarter-century has been due largely to the hands-off regulatory approach taken by governments. The growth of Internet services around the world largely has been a result of “permissionless innovation,” the idea that innovators and entrepreneurs need not ask permission before embarking on new experimental endeavors.

Additional barriers to overcome in “exporting” new ideas and services in digital form will only forestall continued progress in this emergent industry and lead to further balkanization of the Internet economy.

For all of these reasons, the undersigned organizations contend that the commission should reconsider its attempt to regulate the “electronic transmissions of digital data.”


Niskanen Center
R Street Institute

Another case for lowering the drinking age

August 02, 2015, 7:52 AM

From Overlawyered.com:

Very few countries have a national age as high as 21, argues Jeffrey Tucker at Newsweek (originally FEE), and women of college age may be more vulnerable if the only drinking venues available are dorms and fraternities. R.J. Lehmann of the R Street Institute says that even if considerations such as individual liberty make a cut in the age advisable, we should go into the process with eyes wide open about the safety impacts, not all of which will be positive. Earlier here.

R Street applauds challenge to French ‘right to be forgotten’ rules

July 31, 2015, 9:50 AM

WASHINGTON (July 30, 2015) – The R Street Institute applauded today’s request by Google Inc. to the Commission Nationale de l’Informatique et des Libertés (CNIL) of France to withdraw its formal order that Google remove links that mention European Union citizens who have invoked a “right to be forgotten” from all Google websites worldwide.

The French agency in June ordered Google to take down the links in response to individual citizens’ requests, setting a precedent with which would be prohibitively expensive for content companies to comply. While Google has removed links from EU-facing websites in accordance with its interpretation of a 2014 decision by the EU Court of Justice, it is challenging the French demand that it must do so for all Google sites globally.

“Google is doing the right thing by challenging this ruling,” said Mike Godwin, director of innovation policy at R Street.  “Advocates around the world who support freedom of inquiry and oppose needless censorship have been hoping that Google would continue to challenge the broad, potentially unlimited scope of the right to be forgotten, both within the EU and worldwide.”

Godwin noted that other, less-established companies would not have the resources to comply with the potentially millions of requests that could be generated by the rule.

“For smaller startup companies, it’s easiest just to remove links or other content in response to every demand. It’s easy to see how this default impulse will hurt freedom of expression and freedom of inquiry on the Internet in the long run,” said Godwin.”

Clinton emails missing two months, but have plenty of classified information otherwise

July 31, 2015, 8:42 AM

The U.S. State Department has been busy releasing Hillary’s emails, and while they contain a lot of notable insights into her personal development — including, but not limited to, her learning process for fax machines — they are missing some key details from the summer of 2012.

Although they may yet come out, as the State Department turns up the faucet on releases, all emails for May and June 2012 are missing from the cache. They also haven’t been submitted to the Benghazi committee, although records show that Libya was facing a spate of sectarian violence throughout the summer that year, leading up to the eventual Benghazi attack. Even though there were at least three separate terrorist incidents over the course of that summer, any mention of those incidents has been scrubbed from the collection (along with basically everything else).

Also missing? Emails having to do with Huma Abedin’s side job, which she started in the spring of 2012, but which is still a mystery to investigators (along with basically everyone else).

What we do know is that Hillary Clinton did an awful lot of transacting in classified data, as is to be expected from a secretary of state. The problem is that she did it on a server that wasn’t exactly prepared to host information that needed that level of protection.

Intelligence officials who reviewed the five classified emails determined that they included information from five separate intelligence agencies, said a congressional official with knowledge of the matter.

The public Benghazi email contained information from the NSA, the Defense Intelligence Agency and the National Geospatial-Intelligence Agency, a spy agency that maps and tracks satellite imagery, according to the official, who asked to remain anonymous because of the sensitivity of the matter.

The other four classified emails contained information from the Office of the Director of National Intelligence and the CIA, the official said.

And those are just the emails released to the Benghazi committee — and even then, that’s just a sampling of 40 emails from the 30,000 the committee received. Just last Saturday, Clinton claimed that she hadn’t sent a single email containing classified information. And yet, no one even had to dig to find it. The inspector-general even noted that while Clinton was claiming to have never done so much as typed out the acronym “NSA” on her private email server, her lawyer had every last email she’d turned over to the committee on a thumb drive.

Maybe she should ask him for it.

The next batch of emails will come in the Friday afternoon news dump. I can hardly wait.

Ant-Man: A hero for criminal justice reform?

July 31, 2015, 8:00 AM

Last weekend, I managed to talk my wife into seeing Ant-Man, Marvel’s latest superhero movie. Not exactly at the top of anyone’s superhero pantheon, to the extent the character of Ant-Man has penetrated public consciousness at all, it’s as a punchline. The film makes a virtue of this, treating the superhero genre with a healthy serving of humor.

But despite its lighthearted approach, the film raised serious issues about prisoner re-entry and criminal justice reform (warning: some very mild spoilers follow). At the beginning of the film, Scott Lang (Paul Rudd) is released from prison after serving a term for burglarizing a company that had stolen money from its customers. Talking with a friend about his plans, Lang says, reasonably enough, that he will need to find a job. The friend points out that this might be difficult, as “a lot of employers don’t hire ex-cons.” “I have a master’s degree in mechanical engineering,” Lang replies, “I’ll be fine.”

The scene then cuts to Lang working the register at a Baskin Robbins. Even this turns out to be short-lived, as Lang is fired when his manager finds out about his criminal record (“Baskin Robbins always finds out.”) Faced with a lack of job options, Lang is tempted to return to a life of crime… before ultimately becoming a superhero who can change size and talks to ants.

That last part is not realistic, obviously. But the rest is sadly typical. Around 650,000 offenders are released from prison each year. Whether they can find adequate housing and employment are major factors for whether they will reoffend. Yet some employers are reluctant to hire ex-offenders, particularly if there are other non-offender applicants for the same position.

In response, a number of activists have been pushing to ban employers from asking about a job applicant’s criminal history, at least during the early stages of the hiring process. While well-intentioned, placing restrictions on employers is not the best way to deal with this problem. Flexible labor markets have been a major boon to the U.S. economy, helping to keep unemployment lower than it otherwise would have been. And there are some cases, such as crimes of violence, where we would want employers to know that a potential employee has committed a given crime.

Instead, states should focus on limiting their own role in exacerbating the problem.

In some cases, employers that want to hire ex-offenders are prohibited from doing so by state occupational licensing rules. In Illinois, more than 100 occupational licenses either can or must be denied to anyone with a criminal record. In Texas, recent reforms allow ex-offenders to obtain provisional licenses in certain cases.

Employer reluctance to hire ex-offenders also stems from a fear of lawsuits should something go wrong. States could also encourage employers to hire ex-offenders by passing tort reform, limiting their liability for negligent hiring cases.

Finally, we need to be more culturally accepting of second chances for those who have paid their debt to society. Nonprofits like the Prison Entrepreneurship Program pairs offenders with businesspeople to provide advice on finding work or starting businesses. And some businesses even give preference to ex-offenders in employment.

Most ex-offenders aren’t going to save the world from the machinations of HYDRA, but they do have the potential to be positive contributors to society. Regulations that cut off options for offenders’ reintegration back into society not only hurt ex-offenders, but the rest of us too.

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

Green Scissors Coalition letter to former Gov. Jeb Bush

July 31, 2015, 7:00 AM

Dear Gov. Bush:

The Green Scissors Coalition, made up of environmental, taxpayer and free-market groups dedicated to eliminating wasteful spending that harms the environment, applauds your recent comment that we should cut preferences in the tax code directed at oil and gas.

As members of the Green Scissors Coalition, our organizations have devoted ourselves to pursuing reductions in wasteful and environmentally harmful spending and tax provisions. While we have different visions about the proper scope of the federal government, we’re united in the belief that the next president must get serious about reforming the tax code to tackle special-interest provisions that damage the environment and distort markets.

Our research, available at greenscissors.com, has uncovered dozens of wasteful provisions across a wide range of policy areas that we believe will aid policymakers in the difficult work ahead to reform our environmental policy. The list includes policies targeting fossil fuels, alternative energy, nuclear power, public lands, agriculture, transportation and water projects. In total, they amount to more than $250 billion in potential deficit reduction. With our nation now facing a staggering $18 trillion debt, we believe eliminating these policies will help the federal government to protect our natural resources and make a significant dent in our ongoing budget challenges.

We support your call to reform policies that damage our environment. While it’s a tall task, an easy first step should be targeting the ways in which the federal government encourages environmental harm, a cause to which the Green Scissors coalition has been devoted for more than 20 years.

Kind regards,

The Green Scissors Coalition

Friends of the Earth
Taxpayers for Common Sense
R Street Institute