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EPA’s Clean Power Plan: Likely to fail regardless of litigation outcome

November 24, 2014, 9:00 AM

In less than two weeks, comments are due for the Environmental Protection Agency’s highly controversial Clean Power Plan (CPP), which would regulate carbon dioxide emissions from existing power plants. According to the agency’s self-imposed schedule, the CPP is expected to go final in June 2015, with state plans to be presented a year later and the possibility of one- or two-year extensions for multi-state plans. The EPA will then have a year to review each proposal, which the agency can reject if it determines that a state’s targets will not be met. EPA Administrator Gina McCarthy has warned the agency will impose a federal plan if necessary.

While many observers are looking to the courts, ultimately, to determine the fate of the EPA’s efforts, fewer people appear to appreciate that the rule is highly likely to fail as proposed, regardless of the outcome of legal challenges. The Clean Air Act was not designed to regulate carbon emissions; that fact will become even more obvious to the public as more and more states simply cannot comply with the CPP over time – in many cases, at no fault of their own.

The CPP reflects a potential power grab by Washington because of the plan’s proposed compliance options, which do not reduce emissions at the entities EPA has set out to regulate. Under federal law, the agency has the authority to regulate emissions from specific sources (i.e., the plan’s first building block), but those powers do not extend outside the physical boundaries of such sources (i.e., “outside the fence”). For the other three building blocks of the CPP, the federal government has either no or only very limited powers to guarantee state compliance.

Statements by McCarthy that the agency might seek to enforce provisions in state plans that currently fall outside of EPA’s authority have raised concerns that the EPA’s efforts could undermine traditional state rights regarding energy and environmental policymaking.  For instance, if a state with a renewable portfolio standard (RPS) included the mandate in its state plan, but then later lowered or repealed the RPS via the state Legislature, the EPA could move to enforce the original target, dismissing the will of a state’s elected officials.

These valid concerns have resulted in a number of state legislatures adopting laws that would actually forbid pursuing compliance methods “outside the fence” – a step that helps protect the balance of power between the states and the federal government. Next year, that list of states will likely grow, as state officials become more aware of the threat posed by EPA, resulting in the submission of a number of plans by the June 2015 deadline that are limited to “inside the fence” approaches. Many of these states will fall short of EPA compliance. Other states may simply refuse to provide plans to the agency.

Significantly, most of the plan’s compliance options require some states, particularly those dependent on coal and poor in renewable resources, to take various legislative actions that are not politically viable, especially in the timeframe prescribed by the agency. A coal state with a Democratic governor, for example, could find it impossible to coerce the state Legislature to accept new or dramatically increased renewable energy or efficiency targets. Accordingly, it makes practical sense for some states simply to say “no” to the EPA and wait for the agency’s response or for the litigation process to play out.

Undoubtedly, the agency would then be forced to move forward with a federal plan. But the scope of such action would be limited to “inside the fence” options that likely would not be technically viable, calling into question the legality of any federal plan. After all, the EPA cannot force a state legislature to pass any law that it does not support, including a renewable portfolio standard or an energy-efficiency mandate. The success of the Clean Power Plan in the near term thus depends on the willingness of states to surrender authority to the federal government and approve compliance actions over which the EPA has no control.

In the long term, the most significant threats to the Clean Power Plan, however, are the hurdles to compliance that fall outside the powers of the states and the EPA. Despite its much-vaunted flexibility, the CPP makes too many misguided assumptions about the availability of natural gas infrastructure, which the plan assumes will allow mass fuel switching from coal. After all, coal plants simply cannot be replaced by natural gas plants. EPA also appears to ignore the absence of a federal resolution of the nuclear waste issue – a problem that prevents nine U.S. states from building new nuclear units – and the potential challenges posed by other federal laws to the permitting of natural gas and renewable infrastructure (e.g., Endangered Species Act and National Environmental Policy Act).

Consequently, some states with every intention to meet the targets under the Clean Power Plan will find themselves unable to deliver the needed reductions at no fault of their own, which will pose major difficulties to EPA’s enforcement arm.

The collapse of the CPP will thus play out over time. Some states will refuse to play by the EPA’s rules upfront. Other states will fail to reach their targets over the long term, for a variety of reasons. The potential negative impact on environmental federalism – the foundation of our success in cleaning the nation’s air and water – is deeply troubling.

An EPA that relies on the willingness of states to surrender authority, with no power of its own to force those same steps, seriously calls into question the future of the agency’s credibility in compliance and enforcement.

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

Don’t overregulate taxis, ride-sharing

November 21, 2014, 1:00 PM

The hallmark of downtown Sacramento’s renaissance has been the emergence of a high-quality restaurant and bar scene. It is perhaps unsurprising, then, that Sacramento, geographically diffuse as it is, has the ninth-highest rate of alcohol-related fatalities in the nation, according to the National Highway Traffic Safety Administration.

To reduce drunken driving fatalities, it is crucial that Sacramento maintain a healthy transportation-for-hire industry that accommodates taxis, limos and ride-sharing services, formally known as transportation network companies.

In recent years, it has become both more important and more difficult to maintain regulatory balance in the industry. It has become increasingly competitive as services such as Uber and Lyft, which offer smartphone applications to arrange rides with amateur or semiprofessional drivers, have claimed a niche.

This new source of competition has put taxis and limo services on the defensive, which in turn have put political pressure on elected leaders. Some cities have buckled, erecting regulatory barriers to TNC operations. In more extreme cases, cities sought to tear them down completely.

To appraise the state of the market, my colleagues at the R Street Institute have released a study examining transportation-for-hire regulations in 50 cities across the nation. Sacramento ranks 11th best, and fourth out of eight cities in California. While encouraging, Sacramento’s relative success is a function of some particularly onerous approaches in other jurisdictions.

There is room for improvement.

Sacramento has been among the nation’s best in embracing ride-sharing services. California’s legal framework, cemented during the last legislative session, has resolved much of the insurance and liability ambiguity that plagues regulators elsewhere. For its part, City Hall has maintained a light-handed approach by refusing to adopt anti-competitive fleet or service restrictions.

But for taxis, the regulatory situation is markedly worse. Sacramento limits the number of taxi permits and strictly controls how cabs can be dispatched to customers. In May, the City Council passed new rules mandating cabbies to accept credit cards and drive vehicles less than eight years old. The regulations also require taxi drivers to pass a test that checks their ability to speak English and their knowledge of the city’s geography.

On their face, these regulations aspire to ensure a higher level of service by forcing low-performing companies out of the market. In reality, these regulations place taxis at a competitive disadvantage.

To encourage the competition necessary to lower rates and increase availability, the last thing Sacramento should consider is extending these regulations. Similarly burdensome requirements on TNCs would only stymie their development. With the arrival of new competition, Sacramento should instead let consumers decide.

As ride-sharing services succeed, taxis will adapt to demands for newer vehicles and better service, or they will simply go out of business. Municipal regulations are slow, cumbersome and imprecise when compared with the realities enforced by ever more discerning customers.

Downtown Sacramento’s transportation-for-hire environment should embrace the new without burdening the old. But each sector of the industry will be necessary to overcome the region’s penchant for drinking and driving.

Read more here: http://www.sacbee.com/opinion/op-ed/soapbox/article4036517.html#storylink=cpy Read more here: http://www.sacbee.com/opinion/op-ed/soapbox/article4036517.html#storylink=cpy

The Great American Smokeout: Easier said than done for long-time smokers

November 21, 2014, 12:31 PM

From KNAU:

E-Cigarettes are battery powered devices that look a lot like the real thing. But instead of delivering nicotine to the body through tobacco combustion – the most dangerous part of smoking – they deliver it through a water and glycol-based vapor. Brad Rodu is an oral pathologist and professor of medicine at the University of Louisville’s School of Medicine. He says, “E-Cigarettes and other smoke-free products are a way for the smoker to take back a measure of control over that behavior and reduce his or her risk for a number of deadly diseases.”

For 20 years, Rodu’s research has focused on Tobacco Harm Reduction, the substitution of safer tobacco products by people who aren’t able – or willing – to quit. “Keep in mind,” Rodu says, “that cigarettes are the  most dangerous and toxic consumer product in the United States. And so, smoke-free tobacco products represent an enormous reduced risk potential for smokers.” He adds, “Many, many of the nation’s 45,000,000 smokers do not want to quit.”

Obama’s immigration authority defense by Department of Justice is one big contradiction

November 21, 2014, 12:20 PM

When the president announced his executive actions to address immigration issues, he undoubtedly knew that his decision to categorically suspend immigration law enforcement for millions of undocumented immigrants would be met with intense legal skepticism.

In his remarks to the nation, President Barack Obama articulated the specifics of his proposal:

If you’ve been in America for more than five years; if you have children who are American citizens or legal residents; if you register, pass a criminal background check and you’re willing to pay your fair share of taxes….[W]e’re not going to deport you.

Immigration reform is one of the more contentious policy issues facing the United States, but the most significant issue with Obama’s executive actions has much less to do with policy preferences than it does with the scope of presidential power. Opponents of the president’s actions argue that he is acting well outside of this constitutional authority, while President Obama argues that he is acting in a manner consistent with the responsibilities of the executive branch.

President Obama called upon the Office of Legal Counsel within the Department of Justice (DOJ) to offer the legal basis for his deferred action for undocumented immigrants. Unfortunately, the 33-page DOJ memorandum creates even more questions about the president’s authority and the nature of the non-enforcement proposal itself.

The memorandum correctly articulates a conventional understanding of prosecutorial discretion as a case-by-case enforcement decision regarding an individual. The problem for the DOJ is that the president publicly highlighted his action as a blanket non-enforcement policy.

DOJ attorneys are well aware of the distinction between prosecutorial discretion and the president’s broad modification of immigration law. As a result, the DOJ’s guidance characterizes the president’s promise of deferred action in a completely different manner than the proposal presented by the president himself.  The DOJ memorandum notes, “the proposed policy provides a general framework for exercising enforcement discretion in individual cases, rather than establishing an absolute, inflexible policy of not enforcing the immigration laws in certain categories of cases.”

In his national address, President Obama clearly stated the conditions under which broad categories of undocumented aliens would not be deported. The DOJ simultaneously argues that there is no “inflexible prioritization policy.” The two positions seem to be in direct contradiction with each other.

The DOJ recognizes that if the president’s executive actions on immigration are successfully characterized as “not enforcing the immigration laws in certain categories of cases,” they could be challenged as attempts to rewrite the immigration laws or avoid statutory responsibilities to enforce them.

While President Obama and many Americans may feel strongly about changing federal immigration law, the president does not have the ability to make categorical changes without Congress. More importantly, the president should not present one plan to the American people on national television as his lawyers prepare another one hoping to survive legal challenges.

Texas cities are losing control of fracking

November 21, 2014, 12:03 PM

Overall, conservatives in Texas had a very good election night earlier this month. Republicans took all the statewide offices, as indeed they have in every election since 1994, and claimed virtual supermajorities in both the state house and senate. Even a ballot measure on a light rail project in liberal Austin went down to defeat.

Yet in the midst of this dominance of common sense came one ominous result. Voters in the city of Denton approved a ballot measure banning all hydraulic fracturing within city limits. While municipalities have banned fracking in states ranging from Colorado to Pennsylvania, Denton represents the first time a city in energy-loving Texas has done so. And unless swift action is taken, it may not be the last.

What happened? The anti-fracking campaign raised the typical objections: fracking contaminates groundwater; fracking causes earthquakes; fracking will lead to a zombie apocalypse. But the arguments that seem to have gotten the most traction were the “quality of life” concerns. A drilling boom is accompanied by increased traffic and noise, among other things that residents find to annoying. The pro-drilling campaign emphasized the huge economic benefits that the city was foregoing, but in the end, the idea of NIMBY—“not in my backyard”—won out.

What happens next will be utterly predictable. First, there will be lawsuits. In fact, they have already begun. Mere hours after the election results were announced, the Texas Oil and Gas Association filed suit in state court seeking an injunction of the ban. The lawsuit argues that the city ban violates state law by prohibiting drilling on sites where it is permitted by the state. As a “home rule” city, Denton does have a good deal of regulatory latitude, but can’t pass restrictions that contradict state law.

The new ordinance is also vulnerable to claims that it has taken property without paying just compensation. Both the Texas and U.S. Constitutions provide that government entities must pay when they deny landowners the use of property, including mineral interests, via regulation. These lawsuits have also already started. In September, Denton-area attorney Charles Chandler Davis sued Denton for a million dollars based on a takings claim, and many other suits are expected. Given how much valuable oil and gas is stored beneath the ground there, paying compensation could leave the city in a dire situation.

You might wonder why the city government would support such a daft idea. And, in fact, the answer is that they didn’t. A fracking ban was voted down by the Denton city council this past summer. Instead, Tuesday’s referendum was the result of an environmentalist-led petition drive, whereby a small percentage of a city’s overall population can force an issue onto the ballot. It’s reasonable to expect that the campaign that proved successful in Denton will become a model for efforts to block production in other cities and counties.

This is hardly the first time that a city has pulled out a rifle and taken aim at its own foot (see, Detroit). And ordinarily if a city wants to pass stupid laws, that’s up to them. But energy is different. The shale boom is transforming both the Texas and American economies. Natural gas production is up by a third since 2005, and Texas alone is now producing 36 percent of America’s crude oil output. The efforts are underway to put large fractions of that energy off limits to production, with the Denton ban only one small example, are misguided at best.

The relationship between the states and the federal government is full of give and take. Cities, in contrast, are ultimately creatures of the state in which they were built. Local control cannot be a pretext to justify taking private property. When cities like Denton begin losing control over fracking regulation to environmentalist campaigners, it’s time for the state to step in and reaffirm who has primary authority over regulating energy production.

Fresno hits right note on for-hire ride services

November 21, 2014, 11:55 AM

When it comes to getting around town, Fresno has struck a good balance between regulation and innovation.

A newly released study by my colleagues at the R Street Institute, which examined the regulatory environment for taxis, limos and transportation network companies, ranked Fresno third best overall, behind only Minneapolis and Washington, D.C.

In California, Fresno ranks first — by miles.

Over the past few years, the transportation-for-hire industry has become increasingly competitive. TNCs, services that allow people to use applications on their smartphones to arrange rides with amateur or semi-professional drivers, have claimed a niche in this slow-to-change industry. The introduction of a new type of competition has pushed taxis and limo services onto the defensive.

Some cities have buckled under the political pressure of the taxi and limo industries and have erected regulatory barriers to TNC operations. In more extreme cases, cease-and-desist orders were sent to TNCs in an effort to shut them down completely.

Fresno has resisted these efforts, perhaps because it already had a moderate approach on taxi and limo regulation. For instance, Fresno places no fleet-size restrictions on taxi operators and insists on no minimum fare for limo services. By showing regulatory restraint, Fresno has offered all sectors of the transportation-for-hire industry an opportunity to flourish.

In less dense metropolitan regions, like Fresno, transportation-for-hire is critical. National Highway Traffic Safety Administration statistics indicate that, of major cities, Fresno residents suffer the seventh-highest rate of alcohol-related fatal crashes per capita. Fostering an environment conducive to affordable and readily available transportation for those under the influence of alcohol will forestall utterly avoidable fatalities.

TNCs, in particular, are well suited to provide services on the city’s periphery, with flexible and less costly alternatives to traditional transportation options. Since TNCs operate on the principle that drivers pick-up passengers in close proximity to them, they are able to realize savings that cabs or limos cannot when they are summoned from great distances.

To be sure, TNC services are not without their unresolved issues. Questions about how to accommodate disabled passengers and what kinds of insurance policies will be required to cover TNC activity, demand ongoing attention. Still, as with any novel venture, these questions will be answered over time through trials of the various costs and benefits.

An opportunity to refocus on the role and regulation of transportation-for-hire should not be confined to TNCs. Fresno’s success in the R Street study is relative to other, more hostile, jurisdictions. Thus, to create a truly friendly regulatory environment, serious consideration should be given to relaxing the regulatory burden on all parts of the transportation-for-hire industry.

Still, Fresno has set itself apart in California and demonstrated the kind of municipal leadership that other jurisdictions need. The people of Fresno are better for it.

Read more here: http://www.fresnobee.com/2014/11/20/4243622/ian-adams-fresno-hits-right-note.html#storylink=cpy

Surgeons general say the darndest things about tobacco

November 21, 2014, 11:53 AM

Acting U.S. Surgeon General Boris Lushniak recently tweeted:

.@OxfordWords #Vape may be #WOTY but the increase in never-smoking youth using e-cigs is a not a trivial story http://t.co/mqeuIvgQRX

— U.S. Surgeon General (@Surgeon_General) November 19, 2014

The tweet referred to the Oxford English Dictionary’s having designated “vape” as the word of the year, and reflected a CDC report claiming that e-cigarette use among children had increased in 2013. The prevalence of e-cig use among youth who had never smoked was 0.3 percent.

Tobacco use by youth is never trivial, but in taking an extreme position, Dr. Lushniak was acting in the tradition of previous surgeons general.

In December 1992, Surgeon General Antonia Novello announced:

The majority of our experts predict an oral cancer epidemic beginning two or three decades from now if the current trends in spit tobacco use continue.

That was shocking news for many, including this oral cancer expert. As an oral pathologist for 15 years at Emory University and the University of Alabama at Birmingham – deep in smokeless tobacco country – I had made microscopic diagnoses in hundreds of oral cancer cases (almost all smoker/drinkers), and I had assisted in the treatment of hundreds more. Over time, I had become increasingly bothered by the disconnect between the dogma I taught my medical and dental students (that smokeless tobacco was a death sentence for oral cancer) and what I had experienced in practice (that smokeless tobacco was almost never listed as a behavior on the pathology request forms, the rare exception being powdered dry snuff).

Dr. Novello’s announcement was the catalyst for my research, which led to my first journal articles in 1994, and my book, “For Smokers Only”, in 1995. (An updated version with a new chapter on e-cigarettes is now available in print and as an audiobook here).

I testified at a 2003 congressional hearing on tobacco harm reduction, at which Surgeon General Richard Carmona also testified. (Dr. Carmona is today an NJOY director and chair of its scientific advisory committee.) In that hearing Dr. Carmona said, “there is no significant evidence that suggests smokeless tobacco is a safer alternative to cigarettes.” I subsequently noted in a Washington Times editorial that the surgeon general had ignored decades of published research and the findings of Britain’s esteemed Royal College of Physicians.

Dr. Carmona so blundered in supporting a ban on all tobacco products that Bush administration officials had to backtrack. “This is not the policy of the administration,” White House spokesman Scott McClellan said, adding that Dr. Carmona’s comments reflected his views alone.

The surgeon general occupies one of the most trusted positions in American medicine. The individual holding that post should speak the truth about safer cigarette substitutes, today and always.

Post-election scrum powers ride-sharing bills in the Midwest

November 20, 2014, 4:09 PM

It is disappointing to see all the public policy debates that languished over the last several months, both in Washington and in the state capitals, suddenly light up the legislative scoreboard after the election. Now that the democracy part of representative democracy has selected champions for next year, the issues will largely be resolved in the weeks before and after Black Friday, to ensure a minimum of citizen involvement and no pushback at the polls.

If this was the only strategy available to do the right thing, it would be a minor and theoretical corruption. But the country has more trouble than ever agreeing what the “right thing” is.

For instance, there’s been no notable consumer outcry about the emergence of ride-sharing services like Uber and Lyft, and every indication that travelers have welcomed this enhancement of local transportation options. Yet too often, the first thought of state governments has been to shut down what plainly is a very popular service. There are several locales here in the Midwest where these battles are being fought right now.

In Michigan, for example, there was a bill introduced last week and a hearing two days later to make some state-wide sense out of a confection of approaches in the six Michigan cities where Uber and Lyft have launched their services. Embraced by the capital area cities, legendary liberal Ann Arbor immediately filed cease-and-desist orders against both companies. In fact, Lansing and East Lansing have formed the Greater Lansing Taxi Authority to regulate all of the transportation options. Detroit, Flint, Grand Rapids and Kalamazoo also have service from one or both.

The new taxi authority testified against state-wide regulation at the hearing, in favor of local regulation. The question posed by the bill’s sponsor, Republican Tim Kelly, is: what happens when a ride is secured from a regulated city to an illegal city? Good question.

Just yesterday, Illinois avoided reigniting that state’s ride-sharing drama, as state Rep. Mike Zalewski, D-Riverside, put on hold a call to override Gov. Pat Quinn veto of a bill that would regulate transportation services by favoring the taxis and limiting the newcomers. Today, lawmakers announced they had reached a deal with the ride-sharing and taxi industries for a set of basic standards, although details are still being negotiated.

The veto allowed Mayor Rahm Emanuel’s Chicago ordinance to go into effect in a few days, permitting the smart phone-summoned services to compete. (Chicago’s ride-sharing rules earned a “B” grade in R Street’s recent report on for-hire driving regulation in the 50 largest cities.) Since a taxicab medallion used to cost around $500,000, and was the major family or business asset for the people who paid that fee, the taxi companies are pulling out all the stops to get the state bill passed. What they don’t appear to realize is that they will be sucked dry for contributions every year from now on to keep the law from being repealed, if it does pass. State legislators who are using the ride-sharing services themselves everywhere they go will eventually tire of protecting the municipal monopolies.

It is not unheard of for these fights (think about cable, phone and satellite services) to last for years, but the business advantages eventually go to the efficient, competent and user-friendly service after awhile. The public doesn’t like to see the law skewed against advances in technology by “prison guards of the past”, as Newt Gingrich describes them.

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

Rep. Gosar speaks out against online sales tax legislation

November 20, 2014, 1:46 PM

From Rep. Paul Gosar:

Other speakers at the press conference included representatives from the Free Congress Foundation, WE R HERE Coalition, National Taxpayers Union, Heritage Action for America, Americans for Tax Reform and R Street Institute.

Greater foreign ownership of US nukes possible as NRC reconsiders its rules

November 20, 2014, 1:30 PM

From SNL Financial:

But in the long run, foreign dollars could play a greater role in supplying much-needed capital to prevent the U.S. reactor fleet from waning as plants get older and retire. “There are a lot of countries out there that could be potential partners in helping restart the U.S. industry,” according to George David Banks, a senior fellow at the R Street Institute and senior fellow for nuclear energy policy at the Center for Strategic & International Studies. “For the U.S. nuclear industry to survive, I think you are going to see a greater integration between U.S. and foreign interests.”

Why one Democrat is so over Obama’s climate regulations

November 20, 2014, 1:21 PM

From National Journal

In the conservative Weekly Standard last week, R Street Institute President Eli Lehrer reiterated his support for the carbon fee as “better than regulation,” and said it could break the logjam on energy policy. Lehrer backed it as a possible path forward for Republicans, provided it was part of a deal where the Left gave up “new revenue, new regulations and new resource-development restrictions.”

Republican Senate a boon to carbon bill — Whitehouse

November 20, 2014, 1:16 PM

From E&E News:

Meanwhile, Lori Sanders of the conservative R Street Institute said the liberal Whitehouse “is just probably the wrong messenger” to engage Republicans on a revenue-neutral carbon tax.

“It’s encouraging to see a Democrat attempting to be so flexible, but it’s unlikely that at least right now, Republicans are going to want to engage on this now when there are many easy wins coming up for them in January,” Sanders said. R Street supports a revenue-neutral carbon tax in certain circumstances.

Mail surveillance: The time for secrecy has passed

November 20, 2014, 11:11 AM

Recent news that federal authorities approved 49,000 instances of mail surveillance in 2013 is disturbing. Not only was this a huge jump from the usual average number of 8,000 annual approvals, but according to the Postal Service’s Inspector General, more than one-fifth of the surveillance requests from law enforcement agencies were inappropriately approved.

This massive expansion of the “mail covers” program, which began as a limited surveillance technique, will be the topic of a hearing Wednesday before the House Oversight and Government Reform Committee. Initially, mail covers involved postal inspectors hand-copying or photographing information from the outside of mail envelopes and packages tracks as going to or coming from a criminal suspect. As administered today, the USPS sucks the data off every piece of mail it handles, no matter who sends or receives it.

At the very least, Oversight Chairman Darrell Issa, R-Calif., should ask the Postal Service what it is doing with all the information it is vacuuming up. Determining whether the Postal Service is adequately protecting this data is crucial, especially since USPS’ employee data was hacked two months ago.

The committee also should compel the Postal Inspection Service to explain how exactly this program administered. In daily practice, the mail covers program has no external oversight, with no need for a judge, for example, to review requests. In fact, when a law enforcement agency requests a mail cover, nobody outside the Inspection Service and the agency are informed. The public has a right to know whether mail cover requests are reviewed judiciously or rubber stamped.

This latest mail covers controversy came to light largely because a brave inspector general, David Williams, publicly released his audit of the program over the Postal Service’s objections. The New York TimesRon Nixon also investigated mail covers for more than a year and drew national attention with his reporting.

But the bigger governance problem is the secrecy that has shrouded mail covers since its inception in the 1890s. Forty years ago, a congressional investigation revealed an array of abuses, including surveillance of individuals for political activities and mail illegally opened without a warrant. Just 12 years ago, the National Law Journal discovered a spike in the use of mail covers, but were mostly stonewalled by officials when they investigated the cause.

The committee should require the Inspection Service to explain publicly the scope of the program. In part because there was no federal law to establish the program, it doesn’t face the same limits as, for example, federal wiretap laws. It’s simply not clear how many individuals and businesses have been subject to mail covers surveillance.

The inspector general report, for example, did not examine mail covers initiated by the Inspection Service itself, for instance in investigations of child porn, embezzlers and scam artists. We also do not know if the 49,000 mail covers approved last year is the total number or if there are far more. In the past, the Postal Service has only released data on mail covers performed pursuant to criminal investigations.

Congress should compel the Postal Service and its Inspection Service to publicly release annual data on the program. There is no harm to letting the American public know how many mail covers have been approved each year, nor in sharing data on the number of mail covers by agency. Citizens should know whether data about their communications is flowing mostly to, say, the Internal Revenue Service or to local cops.

It is time for the secrecy surrounding the mail covers program to end.

R Street commends Gov. Scott for pursuing sensible Gulf restoration projects

November 20, 2014, 11:08 AM

TALLAHASSEE, Fla. (Nov. 20, 2014) – The set of projects proposed by Gov. Rick Scott under the federal RESTORE Act should be commended as a sensible approach to the budget and proposal process, the R Street Institute said today.

The $77 million in RESTORE Act funds requested by the governor would go toward five proposals that make up multiple projects to improve five different Florida watersheds affected by the 2010 Deepwater Horizon oil spill.

“The proposals submitted by Gov. Scott to the Gulf Coast Ecosystem Restoration Council are exactly the kinds of projects the RESTORE Act was designed to fund,” said R Street Florida Director Christian Cámara.

Cámara added that the proposals include commonsense infrastructure improvements, environmental restoration and pollution-reducing efforts to stimulate the state’s vital fishing, oyster harvesting and ecotourism industries, but importantly, would not create ongoing liabilities for taxpayers or expand the size of government.

“These projects should serve as examples to Florida’s Gulf Coast counties and other Gulf states as they consider how best to invest their portions of RESTORE Act funds,” Cámara said.

Once the council receives all proposals, they will review and create a draft Funded Priorities List, which will be available in mid-2015 for public comment.

“Florida’s economy is deeply interconnected with its coastal environment, which makes it possible to make wise investments that benefit both,” said Cámara.

Online sales tax measure may snag in House

November 20, 2014, 10:58 AM

From Roll Call:

Tax policy analyst Andrew Moylan, who spoke with the members of House Judiciary about the online sales tax issue in March, said one of the alternatives Goodlatte is considering would require online vendors to claim a physical presence somewhere, such as a brick-and-mortar store, and apply that state’s sales tax to its sales.

Called origin sourcing, the concept is intended to keep retailers from having to keep up with nearly 10,000 tax jurisdictions across the U.S. and prevent the precedent of giving states the power to tax outside their borders, said Moylan, who is executive director of R Street Institute, a conservative think tank.

“To give states taxing power that’s as massive and unlimited as the Internet is not a particularly conservative impulse,” Moylan said.

The Keystone pipeline is not about oil—it’s about milk

November 20, 2014, 10:55 AM

On Tuesday evening, the U.S. Senate finished the latest performance in one of its oldest pastimes: political theater. Facing a December runoff that she is widely predicted to lose, Louisiana Sen. Mary Landrieu attempted to, er, re-energize her campaign by spearheading Senate passage of a bill approving the Keystone XL pipeline.

Yet despite passing easily in the House earlier this month, the Keystone bill fell just short of the 60 votes necessary for Senate passage. While that made for some high drama, two facts made the final vote a bit of an anti-climax: Even if Landrieu had produced the necessary 60 votes, President Barack Obama likely would have carried through on threats to veto the bill; and come January, a new Republican Senate should be able to pass the measure regardless.

If all of this seems somehow drearily familiar, there’s a reason for that. Like the plot of a cliffhanger-laden soap opera, approval of the Keystone pipeline has repeatedly appeared imminent, only to be pushed off to some later date. Keystone looked headed for State Department approval in 2010, when the Environmental Protection Agency raised objections over environmental concerns. In 2011, the hold-up was the route through Nebraska. TransCanada ultimately proposed a different route, and Congress passed legislation requiring the Obama administration to rule on Keystone within 60 days. In January 2012, Obama rejected TransCanada’s application, saying the matter required more study. Subsequent reviews undercut concerns that Keystone would have significant environmental harms. Nevertheless, in April 2014, the State Department announced that it was again delaying a decision on Keystone.

Keystone is overwhelmingly popular. The State Department estimates the project would create 42,000 jobs and contribute roughly $3.4 billion to the U.S. economy. Because pipelines are safer and less-emissions intensive than other forms of oil transport, the State Department has also concluded that the project will have minimal environmental impacts. Given all this, the continued inability of the federal government to resolve this issue after years of deliberation may seem mystifying. Particularly noteworthy has been the Hamlet-like pose the administration has adopted, never quite coming out explicitly against the project, but never willing to approve it, either.

Keystone Politics: A Renewable Resource

What’s going on? In my view, the key to understand the politics of Keystone is that the controversy is fundamentally not about oil, but about milk. In his recent book, “Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets,” Peter Schweizer describes what he calls a “milker bill”:

Politicians from some parts of the country refer to ‘milker bills,’ which are intended to ‘milk’ companies and individuals to pass or stop legislation that will benefit or hurt them… [P]oliticians often don’t want these bills to pass because if they do, the opportunity for future extortion is removed. A good milker bill can be introduced repeatedly, milking donors year after year.

Keystone is what you might call a “milker executive action.” In fact, when it comes to Democrats, the Keystone pipeline is what Schweizer describes as the coveted “double-milker,” which “is designed to play two deep-pocketed industries against each other, setting off a lucrative arms race.”

In this case, Keystone pits two traditionally Democratic allies each other. In one corner are well-heeled environmentalists, who have spent big fighting Keystone in the court of public opinion. In the other corner is organized labor, which largely favors approval as a source of jobs, and even some energy companies (which have contributed to Landrieu’s campaign). Any final decision on Keystone would risk alienating a key Democratic constituent (and would threaten to cut off the pipeline of campaign donations). By keeping the issue in everlasting limbo, however, Democrats can continually use the prospect of Keystone approval as a renewable resource, both financially and electorally.

The political dynamics surrounding Keystone may shift somewhat next year when the new Congress comes to Washington. Keystone opponents, however, will probably urge vetoes or even lawsuits to keep the project from going forward. So we may have to wait a few more seasons still before the great Keystone saga is finally resolved.

Testimony to House Subcommittee on Housing & Insurance

November 19, 2014, 3:04 PM

R Street Senior Fellow Don Brown testified today before a House Financial Services Subcommittee on Housing & Insurance hearing on “Opportunities for a Private and Competitive Sustainable Flood Insurance Market.” The hearing focused on H.R. 4558, the Flood Insurance Market Parity and Modernization Act of 2014, introduced by Reps. Dennis Ross and Patrick Murphy. The bill would clarify that flood insurance offered by private carrier could satisfy mandatory purchase requirements in federal mortgage lending rules.Brown, a former Florida state legislator and longtime insurance agency owner, discussed emerging private options for flood insurance coverage and the dangers of proposals to lay protectionist taxes on offshore affiliate reinsurance transactions.

Gulf Coast spill money is starting to flow

November 19, 2014, 2:04 PM

On Monday, the National Fish and Wildlife Foundation announced a second round of grants from its Gulf Environmental Benefit Fund. The fund – established as part of the plea agreement between BP, Transocean and the federal government over the 2010 Deepwater Horizon oil spill – distributes money paid into the fund by BP and Transocean to states affected by the spill.

Each of the affected states (Texas, Louisiana, Mississippi, Alabama and Florida) are to receive a set proportion of the overall funds. Of the $99 million in grants announced this week, Texas projects received $13.2 million. Eventually, Texas can expect to receive around $203 million in grants from the fund.

The NFWF fund is not to be confused with the similar funds created by the RESTORE Act. Passed by Congress in 2012, RESTORE sets aside 80 percent of the civil and administrative penalties paid due to the Deepwater spill, which are similarly divided among the states. The pot of money under RESTORE is considerably larger, and could be as much as $18 billion (though Texas’ share would be considerably less).

Dedicated R Street followers will recall that we have repeatedly called for vigilance with respect to how the RESTORE Act funds are spent. Money should be used to address market or government failures; shouldn’t commit the state to ongoing future expenses once the fund expires; and should be focused on the areas affected by the storm.

Unlike the RESTORE Act funds, the NFWF grants are decided by a private foundation, so the same level of oversight isn’t really applicable. Still, it’s worth taking a look at the sorts of projects getting funded by NFWF, especially since several of the project grants were developed in consultation with various Texas state agencies. Encouragingly, most of the Texas grants involve restoration of coastal marshes. R Street’s 2013 Policy Study on RESTORE specifically cited wetland restoration as a potentially beneficial use of funds.

A full list of Texas projects is available here.

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

State of Illinois should not strip regulatory control of transportation network companies from Chicago, other cities

November 19, 2014, 2:02 PM

CHICAGO (Nov. 18, 2014) – Chicago performs reasonably well among big cities in friendliness to transportation network companies like Uber and Lyft, and state lawmakers should not usurp the city’s authority to regulate these services, the R Street Institute said today.

“We’re glad to see that Gov. Pat Quinn vetoed recent state legislation that would have made it far more difficult for TNCs to operate in the Windy City, and we would encourage lawmakers not to override that veto,” said Zach Graves, R Street policy fellow.

Chicago earned a “B” grade for its TNC regulatory framework as a part of Ridescore 2014: Hired Driver Rules in U.S. Cities, a joint research study between R Street and Engine to grade 50 of the largest American cities on their legislative framework and friendliness toward TNCs, taxicabs and limousines. Graves added that Chicago’s approach to TNCs “clarifies important liability questions and brings ridesharing out of the legal gray market.”

The study gives the city high marks for its approach to TNCs and to limousine regulation.  However, due in part to its medallion system, Chicago received a “D” grade for taxi regulation, resulted in an overall grade of “C+.” A full explanation of the methodology and scoring can be found in the study.

Gov. Quinn vetoed legislation in August that would have made it much more challenging for TNCs to operate in Chicago and the rest of the state by imposing onerous restrictions on rates and electronic tipping, among other requirements that make for bad policy. Lawmakers in Springfield are expected to vote tomorrow to attempt to override the governor’s veto.

“While there is value in clarifying important questions of insurance, safety, and other issues concerning TNCs, Chicago already has a reasonable legal framework in place. A heavy-handed state bill would only serve to undo the progress that has been made in Illinois’ primary market for ridesharing,” Graves said.

R Street has introduced a user-friendly website at ridescore.org that outlines all of the cities and grades from its study. Washington, Minneapolis and Fresno, Calif. scored the highest among major U.S. cities, earning the only combined “A” grades in the study. At the other end of the spectrum, Las Vegas and Portland, Ore. received combined grades of “F,” with Kansas City, Mo.; Philadelphia; and San Antonio, Texas just marginally better, with grades of “D-.”

R Street will host a panel discussion on regulations in cities across the nation on Wednesday, Nov. 19 at 6:30 pm in Washington. The event is open to the public and details can be found here.


Ridesharing in the District: How the Nation’s Capital Is Regulating Drivers-for-Hire

November 19, 2014, 1:30 PM
Join the R Street Institute and the Washington Examiner for an in-depth discussion of the state of transportation in America's 50 largest cities.