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R Street applauds Rep. Gardner’s Earned Income Tax Credit bill

July 11, 2014, 9:21 AM

WASHINGTON (July 11, 2014) –The R Street Institute today welcomed the introduction by Rep. Cory Gardner, R-Colo., of the Earnings Advancement and Recovery Now Act, or EARN Act.

By its own estimate, the federal government made $14.5 billion in improper EITC payments last year alone, which accounts for 24 percent of the program. The legislation aims to reduce misdirected spending and dedicate the savings to expanding credit for working families.

“The Earned Income Tax Credit has proven to be one of the most effective ways to lift hard-working families out of poverty,” said Lori Sanders, R Street outreach director and senior fellow. “The EARN Act takes important steps toward curbing the recognized problem of improper payments, which is an essential part of making the credit work for more Americans. We applaud Rep. Gardner’s willingness to address this issue and encourage his colleagues to both support these reforms and to think creatively with regard to protecting and expanding this crucial anti-poverty tool for those who need it most.”

Sanders cautioned that the bill is only a first step and that more should be done to simplify the EITC and increase oversight to ensure accuracy in payments.

“We need to make it simpler to ensure that everyone who deserves the tax credit is able to understand and access it, but curtailing willful abuse is crucial to ensuring that its impact isn’t undermined by fraudulent claims. By reducing improper payments, we will be able to expand the credit to reach a larger population, particularly working noncustodial parents in need of additional help,” she said.

R Street’s Moylan to participate in Manhattan Institute panel on lessons of Detroit

July 11, 2014, 9:18 AM

DETROIT, Mich. (July 14, 2014) - On Friday, July 18, the Manhattan Institute and State Budget Solutions are partnering to host a panel discussion about how other cities on the brink of bankruptcy can learn from Detroit’s experience and build upon its work engaging with citizens, entrepreneurs and other partners. The panel will be moderated by Michael Allegretti, vice president for programs at the Manhattan Institute.

Panelists will include:

  • Andrew Moylan, R Street Institute
  • Ted Dabrowski, Illinois Policy Institute
  • Stephen Eide, Manhattan Institute
  • James Hohman, Mackinac Center


The panel will take place Friday, July 18, from 8:30am to 10:00am and can be livestreamed or viewed later at: http://youtu.be/zHCJ3hLskII

Interested parties can also attend in person at:
Firebird Tavern
419 Monroe Street
Detroit, MI 48226


Re: The gay war on smoking

July 11, 2014, 8:00 AM

Spencer Case does good work in making the case that the LGBT community in America has to pay more attention to smoking than it does. That said, I’m a bit doubtful that many of the programs from the American Legacy Foundation, CDC and others will do that much good. Most them involve “doubling down” on efforts that don’t seem to be working now for gay Americans or anyone else.

The facts first: The first 40 or so years of stern public-health warnings about cigarettes resulted in a 50 percent decline in smoking amongst adult Americans (from over 40 percent to just about 20 percent.) But the declines have more-or-less stopped in the last 10 years. Meanwhile, smoking rates amongst LGBT Americans remain just about where they were for the population as a whole 50 years ago. Doing more anti-tobacco advertising and expanding already broad smoking bans hasn’t done much to reduce overall smoking; adding rainbow flags to the same messages probably won’t either. This makes me think that some different approaches are worth trying. Three stand out in my mind.

First, gay teenagers — and even 18-to-21 year olds who can buy cigarettes legally but can’t drink — need special public-health attention to discourage them from picking up smoking in the first place. A lot of aspects of gay culture, the bar and club scene in particular, seem to encourage smoking. Directing anti-smoking messages to this group may work even if it doesn’t for the population as a whole.

Second, the simplest and cheapest approach to quitting smoking — going cold turkey — should get more attention from gay organizations. Most gay-community health centers were founded in response to the AIDS epidemic and, for both political and medical reasons, came to rely (correctly) on complex pharmaceutical approaches as a key tool in fighting that public-health threat. They often take the same approach towards smoking. The problem is that all “quit smoking” drugs have enormous failure rates over a period of a few years. While “abrupt cessation” (as medical professionals call it) works best when a doctor is involved, it’s also simpler and cheaper than using drugs and may have a higher success rate.

Third, harm reduction approaches that encourage “switching” for those who can’t quit should get some attention, given the urgent public-health need to reduce LGBT smoking rates. Nicotine is very, very addictive and, as a stimulant, almost certainly can cause heart disease. That said, inhaling smoke does a lot more damage to one’s body and causes many more diseases than chewing tobacco or puffing on an e-cigarette. Switching should never be a first effort, but it’s worth looking at when all else fails.

The current smoking rate amongst gay Americans is a public-health crisis. Confronting it requires new approaches.

Dishonoring Tony Gwynn

July 10, 2014, 3:08 PM

The loss of American sports heroes is often accompanied by an outpouring of grief. But the death of San Diego Padre star Tony Gwynn from salivary gland cancer was dishonored by a federal official and other uneducated or unprincipled opportunists, who used it to further an irresponsible campaign against smokeless tobacco.

The fact is that salivary gland cancer is extremely rare, about 23 cases per million men each year. Epidemiologic studies have not established a definitive cause, but they show that radiation therapy, alcohol and hair dyes are possible risk factors. Tobacco use is NOT.

Stretching the facts to demonize smokeless products, Brian King, scientific advisor in the U.S. Center for Disease Control’s office of smoking and health, told Fox News, “with smokeless use, it’s primarily in the oral region, [which is] why we’re seeing a lot of cancers associated with smokeless tobacco around the oral cavity.”

This is completely false. King surely knows that the vast majority of mouth cancers are associated with smoking, alcohol abuse and/or human papillomavirus infection. Numerous epidemiologic studies have documented that there is no mouth cancer risk associated with American moist snuff, chewing tobacco or Swedish snus.

In another attack on smokeless tied to Mr. Gwynn’s untimely death, periodontist Dr. Sanda Moldovan took to The Huffington Post with total disregard for science and fact. “Nicotine is a silent killer with any number of different kinds of cancers,” she wailed. Decades of scientific studies have established that nicotine does not cause cancer at all. In fact, nicotine is not the cause of any disease related to smoking.

Moldovan claimed that, “as an oral health professional, I see the initial stages of oral, gum, throat and salivary gland cancers all too often,” but this is near impossible unless she defines “all too often” as twice in her entire career. In a published study using data from the National Cancer Institute’s Surveillance, Epidemiology, and End Results (SEER) Program, I calculated that “if every oral cancer was detected by 1 of the 128,000 general dentists in the United States, then on average each dentist would make 1 diagnosis every 12 years.”

Moldovan is grossly wrong in claiming that “there are even studies that show that smokeless tobacco is more carcinogenic than smoked tobacco!” A 2004 National Cancer Institute-funded study concluded:

[Smokeless] products pose a substantially lower risk to the user than do conventional cigarettes. This finding raises ethical questions concerning whether it is inappropriate and misleading for government officials or public health experts to characterize smokeless tobacco products as comparably dangerous with cigarette smoking.

I don’t blame Tony Gwynn for desperately trying to find a cause for the cancer that took his life. In blaming smokeless tobacco, he was wrong, but that doesn’t attenuate the sense of loss all of us feel when a legend’s life comes to a close. However, Gwynn’s life and last struggle are dishonored when extremists torture the truth and disrespect science.

R Street’s Adams on flood insurance in Sacramento

July 10, 2014, 11:57 AM

R Street Associate Policy Analyst Ian Adams joined host Bruce Maiman yesterday on KFBK radio in  Sacramento, Calif. to discuss the National Flood Insurance Program. In particular, Ian focused on the issues raised in his June 17 Word on the Street post that looked at recent NFIP decisions that could enable significant development in Sacramento’s massively flood-prone Natomas neighborhood.

You can visit KFBK’s page here or hear the whole segment below.

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

Rand Paul and Cory Booker take a step in the right direction on criminal-justice reform

July 10, 2014, 11:43 AM

Sens. Rand Paul, R-Ky., and Cory Booker, D-N.J., deserve a lot of credit for the REDEEM Act they’re putting forward in the Senate. The proposed law, which would encourage states to stop trying those under 18 years old in adult courts, make it easier for non-violent adult offenders to get their criminal records sealed, lift bans on providing some social assistance to low-level offenders and limit solitary confinement for juveniles is, overall, a good piece of work full of modest common-sense reforms. That said, once the full legislative text is available — I still haven’t been able to read it — there are two provisions that members of Congress may want to look at more closely

First, what may be the most obviously sympathetic part of the bill — a limit on the use of solitary confinement for juveniles — might actually serve to continue the problematic practice of having legislative bodies micro-manage correctional facilities. For at least 30 years, Congress and legislatures around the country have passed laws that limit prisoners’’ access to certain types of exercise equipment, describe what types of food can be served in prison and even dictate what can be shown on TV. While inmates certainly do not have any entitlement to weights, good food, TV shows or any other particular comfort, these practices have largely served to tie the hands of wardens. Prisoners have to be given some privileges if only so that officials can take them away if they misbehave.

The same logic applies to putative tools such as solitary confinement: Prison administrators need a range of punishments so they can appropriately deal with their charges. This doesn’t mean legislatures should be totally hands off about the specifics of prison management. In this particular case, social-science research suggests that solitary confinement of juveniles probably should be banned or at least discouraged. Nonetheless, members of Congress should be careful about how specifically they try to manage prisons and should make sure that the final provision does as little as possible to set a bad precedent.

Second, the idea of encouraging states to allow lower-level offenders to seal their criminal records is a good one that deserves expansion. Indeed, it’s tempting to think of ways that a federally encouraged “sealing” process might be used as a stepping stone towards a full “spending” process for some lower-level offenses. Under the spending process that exists in the United Kingdom, people who commit certain categories of minor offenses can have their offenses considered “spent” after a certain period of exemplary behavior. The process is, in some respects, less forgiving than most “sealing” in the United States in that it has reasonably broad exceptions for national security, homeland security, transportation and child-care positions. Unlike what Paul and Booker are proposing, however, spending is automatic and requires no affirmative effort on the ex-offenders’ part.

Like any complicated proposal, there are probably other things in Paul and Booker’s plan that deserve a closer look. But, on the whole, it’s a good piece of work.

Hobby Lobby and the hobbling law

July 09, 2014, 1:20 PM

Last week’s Supreme Court decision in Hobby Lobby v. Burwell predictably unleashed a firestorm of controversy that has burned through every sector of the press. If nothing else, part of that controversy has to land at the feet of the Roberts court’s almost timid approach to controversial cases, in many cases ruling so narrowly as to satisfy neither party. That’s certainly the case with Justice Samuel Alito’s opinion in Hobby Lobby, which takes almost superhuman pains to avoid any troubling implications that might be drawn from the decision. For example:

HHS and the principal dissent argue that a ruling in favor of the objecting party in these cases will lead to a flood of religious objections regarding a wide variety of medical procedures and drugs, such as vaccinations or blood transfusions, but HHS has made no effort to substantiate this prediction. HHS points to no evidence that insurance plans in existence prior to the enactment of ACA excluded coverage for such items. Nor has HHS provided evidence that any significant number of employers sought exemption, on religious grounds, from any of ACA’s coverage requirements other than the contraceptive mandate.[…]

In any event, our decision in these cases is concerned solely with the contraceptive mandate. Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fail if it conflicts with an employer’s religious beliefs. Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.

One doesn’t have to be a lawyer to see the gigantic question that’s left lingering over these two paragraphs of analysis: What interests and arguments would make you rule the other way? On this, at least, Justice Ginsburg’s otherwise intemperate and hyperbolic dissent is quite right to observe:

Would the exemption the Court holds [the Religious Freedom Restoration Act] demands for employers with religiously grounded objections to the use of certain contraceptives extend to employers with religiously grounded objections to blood transfusions (Jehovah’s Witnesses); antidepressants (scientologists); medications derived from pigs, including aenesthesia, intravenous fluids and pills coated in gelatin (certain Muslims, Jews and Hindus); and vaccinations (Christian Scientists, among others)? According to counsel for Hobby Lobby, “each one of these cases…would have to be evaluated on its own…apply[ing] the compelling interest-least restrictive alternative test.” Not much help for the lower courts bound by today’s decision.

Note that, of the above-listed items, Alito only addresses vaccinations. Why? Because it’s the only one where the court has already ruled against at least one respondent, and where the public health needs are clearly, undeniably different from this case. Alito’s strict avoidance of weighing in on the other questions leaves open a troubling implication – that the court would not actually see a difference, if similar lawsuits were brought, however unlikely that may be.

Where Ginsburg (and her many, many partisans) are wrong, however, is in entirely blaming the court for this anarchic implication. Alito’s opinion analyzes Hobby Lobby’s claims not through the lens of the First Amendment, but rather solely by questioning whether the contraceptive mandate violates the Religious Freedom Restoration Act, a statute written by then Rep. Charles Schumer. The law passed by a Democratic Congress in the early 1990s in response to another case, Employment Division v. Smith, which held that laws banning the use of peyote could be applied to Native American tribes because anti-drug laws were neutral in intent, if not in application. In one of his many prescient moments, in the majority opinion in Smith, Justice Antonin Scalia justified this decision by quoting from the much older, 19th century case of Reynolds v. Sims, which held that Mormons could not exempt themselves from federal laws against polygamy:

Laws are made for the government of actions, and while they cannot interfere with mere religious belief and opinions, they may with practices.[…]Can a man excuse his practices to the contrary because of his religious belief? To permit this would be to make the professed doctrines of religious belief superior to the law of the land, and in effect to permit every citizen to become a law unto himself.

The idea of this doctrine being applied to Native American tribes, however, apparently so offended Congress that it passed RFRA by an overwhelming margin. And while, as Megan McCardle rightly notes, RFRA does not “permit every citizen to become a law unto himself,” it does make the enforcement of laws that conflict with religious practices much harder to justify by requiring that courts apply what is known as the “strict scrutiny test” to any laws that govern religious practice, however incidental this is to their purpose. In other words, it requires the courts to ask whether those laws 1) serve a compelling state interest and 2) do so by the least restrictive means possible. In theory, this test is passable. In practice, Supreme Court history shows that it is where most laws go to die.

So it’s no surprise that when RFRA first came before the court, after a church official sued to have building codes overturned so that he could expand his church in City of Bourne v. Flores, Justice Kennedy struck it down as applied to state law, writing:

RFRA is so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior. It appears, instead, to attempt a substantive change in constitutional protections.[…]Sweeping coverage ensures its intrusion at every level of government, displacing laws and prohibiting official actions of almost every description and regardless of subject matter.

In response to this decision, Congress passed an amendment, the RLUIPA, restricting RFRA’s protections only to entities receiving federal funds.

Which brings us, at last, to Hobby Lobby. Unless the Supreme Court had decided to follow its decision in Bourne and overturn the law wholesale, there was practically no way around the decision it inevitably reached. Indeed, it is to Justice Alito’s credit that he tried to narrow the ruling, given the “sweeping coverage” that RFRA has already been ruled to provide. There is a good case that the contraceptive mandate is unconstitutional, even according to the jurisprudence laid out before RFRA, but to behave as though the contraceptive mandate being invalidated is sufficient justification for RFRA is about as reasonable as suggesting amputation as a remedy for a paper cut. If Bourne didn’t do the job the first time, then Hobby Lobby exposed RFRA for what it is – a broken law that can exempt massive numbers of religious practices from regulation, and therefore acts as a de facto subsidy to those religions.

Hobby Lobby‘s supporters are right to celebrate the consistent application of the law, but they ought to bemoan this law’s existence. And if Hobby Lobby’s discontents truly wish to prevent future rulings, then the focus of their ire should not be the court that is obligated to rule within the confines of the often -boneheaded laws that Congress passes, but rather to repeal the boneheaded laws that produce such rulings in the first place.

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

Family Business Coalition letter on the death tax

July 09, 2014, 8:00 AM



Chairman Dave Camp
H-208 U.S. Capitol
Washington, D.C. 20515

Congressman Kevin Brady
301 Cannon House Office Building
Washington, D.C. 20515

CC: Speaker John Boehner, Majority Leader Eric Cantor, Congressman Kevin McCarthy, Congresswoman Cathy McMorris Rodgers, Congressman Steve Scalise

Chairman Camp and Congressman Brady:

The undersigned organizations are encouraged by your recent statements in Forbes regarding the need for the House of Representative to vote on the Death Tax Repeal Act, H.R. 2429 this year. We believe that full repeal of the death tax is the only permanent solution for America’s family businesses and farms and applaud your efforts to bring this important issue to the floor for the first time in over nine years. Our member family business owners across the country deserve to see where their elected representatives stand on death tax repeal. As it stands now, the majority of House members (236) have never had the opportunity to vote on full repeal of the death tax.

Congressman Brady’s Death Tax Repeal Act recently amassed over 220 bipartisan cosponsors, giving the bill enough support to pass the House with cosponsors alone. Your call for the first vote since 2005 on death tax repeal legislation is encouraging to our members who want to see consistent action in Congress on this issue.

We appreciate your work to lead the country towards a common sense tax code that does not impose a destructive double or triple tax at death and look forward to working with you to achieve a floor vote before the November elections. We support full and permanent repeal of the federal estate tax for the following reasons:

Repealing the death tax would spur job creation. According to a study by Douglas Holtz-Eakin, Ph.D, former Director of the Congressional Budget Office, repealing the death tax would add nearly one million additional small business jobs. Job creation at that level would shave almost a percentage point off our high unemployment rate. A 2012 Joint Economic Committee found that the death tax has prevented $1.3 trillion in capital formation, which could have been used to increase employment and expand GDP.

The death tax contributes a very small portion of federal revenues. The death tax currently accounts for only half of one percent of federal revenue. There is a good argument that not collecting the death tax would lead to higher economic growth and thereby increase federal revenue from other taxes. Former undersecretary of the Treasury, Steve Entin, found that repealing the death tax would increase tax revenues by nearly $89 billion over 10 years using a more realistic “dynamic” economic analysis. The death tax imposes burdensome compliance costs and forces family businesses to divert productive capital into large life insurance policies and expensive estate planning.

The death tax falls particularly hard on minorities. African-Americans have increasingly in the last generation started accumulating generational capital, but the death tax threatens to confiscate it. Death tax liabilities bankrupted the Chicago Daily Defender – the oldest black-owned daily newspaper in the United States and will reduce net African-American wealth by 13 percent, according to a study conducted by Boston College professors John Haven and Paul Schervish. According to a 2004 Impacto Group poll, 50 percent of Hispanic business owners know someone who sold their business to pay the death tax and a quarter expect to sell their business because of the death tax.

A super-majority of likely voters support eliminating the death tax. Poll after poll has indicated that a super-majority of likely voters support repealing the death tax. Typically, two thirds of likely voters support full and permanent repeal of the death tax. People instinctively feel that the death tax is not fair.

The death tax is unfair. It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s nest egg. Often, this tax is paid by selling family assets like farms and businesses. Other times, employees of the family business must be laid off and payrolls slashed. No one should be punished for fulfilling the American dream.

The negative effects of the death tax make permanent repeal the only solution for family businesses and farms. Passing H.R. 2429, Congressman Brady’s Death Tax Repeal Act, will help America’s family businesses create jobs, expand operations, and grow the economy. We thank you for your continued leadership on this important issue.


Jim Martin
60 Plus Association

Douglas K. Woods
AMT – The Association For Manufacturing Technology

Jim Rowland
Executive Vice President
Wine & Spirits Wholesalers of America

Ed Orlet
Vice President of Government Affairs
National Association of Electrical Distributors

Ben Gann
Director of Legislative Affairs & Grassroots Activities
National Lumber and Building Material Dealers Association

Jonathan Melchi
Director of Government Affairs
Heating, Air-Conditioning & Refrigeration Distributors International (HARDI)

Michael Graham
Senior Vice President, Government and Public Affairs
American Dental Association

Rob Underwood
Manager of Congressional Relations
The Petroleum Marketers Association of America

Liam Donovan
Director of Legislative Affairs
Associated Builders and Contractors, Inc.

Christian A. Klein
Vice President of Government Affairs
Associated Equipment Distributors

Dan Hilton
Director of Government Relations
American Supply Association

Paul Fiore
Director, Government Affairs
Autocare Association

Dana Lee Cole
Executive Director
Hardwood Federation

Lee Fuller
Vice President of Government Relations
Independent Petroleum Association of America

Daniel Fisher
Vice President Legislative Affairs
Aeronautical Repair Station Association

Roy Littlefield
Executive Vice President
The Tire Industry Association

Kirk McCauley
Service Station Dealers of America and Allied Trades (SSDA-AT)

Marta Gates
Director of Operations
WMDA Service Station & Automotive Repair Association

J. Barry Epperson
General Counsel
Associated Wire Rope Fabricators

Frank Stewart
Executive Director
Forest Landowners Tax Council

Danny Dructor
Executive Director
American Loggers Council

Grover Norquist
Americans for Tax Reform

Harry Alford
President, CEO
National Black Chamber of Commerce

Chris Chocola
Club for Growth

Brent Wm. Gardner
Director of Federal Affairs
Americans for Prosperity

Michael Needham
Chief Executive Officer
Heritage Action for America

Andrew Moylan
Senior Fellow
R Street Institute

Brandon Arnold
Vice President of Government Affairs
National Taxpayers Union

Colin Hanna
Let Freedom Ring

John Berlau
Senior Fellow for Finance and Access to Capital
Competitive Enterprise Institute

Matt Schlapp
American Conservative Union

Phil Kerpen
American Commitment

Lew Uhler
National Tax Limitation Committee

Mario H. Lopez
Hispanic Leadership Fund

Andrew Quinlan
Center for Freedom and Prosperity

John Tate
Campaign for Liberty

Palmer Schoening
Executive Director
Family Business Coalition

E-cigarettes: A life-saving technology or a way for tobacco companies to re-normalize smoking in American society?

July 09, 2014, 7:00 AM


The attached study appeared in the June 30, 2014 edition of the Food and Drug Law Institute’s Food and Drug Policy Forum.

Electronic cigarettes, commonly referred to as “e-cigarettes,” are devices that enable the user to inhale nicotine-containing vapor without the witches’ brew of toxic chemicals found in cigarette smoke. They have proven to be extremely popular among smokers who have been unable or unwilling to quit smoking and appear to be very effective in enabling users to cut down or quit cigarettes entirely. They are seen by tobacco control advocates as an unproven and unregulated gimmick developed by tobacco companies to addict another generation of children, teens and young adults and, by that means, to unravel the progress we have made in tobacco control over the past half century.

The so-called e-cigarette debate is based on advocates promoting the benefits of e-cigarettes and opponents arguing either that no such benefits exist, or that, even if they do, that harms are sure to outweigh benefits given the corrupting influence of the tobacco industry. The major potential harm referenced by almost all tobacco control advocates is the potential that e-cigarettes will recruit large numbers of teen non-smokers to nicotine use and eventually, many will transition to tobacco cigarettes.

In this policy forum I assert that the case in favor of e-cigarettes is so substantial that a tobacco harm reduction (THR) initiative using e-cigarettes is the only feasible policy alternative that would enable us to substantially reduce tobacco-attributable illness and death in the United States over the next 20 years. This could be done while further reducing teen initiation of nicotine use. I find much of the case against e-cigarettes to be biologically implausible, biased, deeply flawed and frequently in conflict with scientific evidence.

An open letter to the U.S. Congress: Protect taxpayers and empower the states by reforming transportation spending

July 08, 2014, 3:50 PM

Dear House Ways and Means Committee Chairman Dave Camp and Senate Finance Committee Chairman Ron Wyden:

With the Highway Trust Fund (HTF) on track to run out this summer, Congress is poised to consider a transportation spending measure. On behalf of our organizations and the millions of people we represent, we encourage you to seek ways to protect taxpayers and empower the states by reforming transportation spending. Please consider the following principles as you consider transportation legislation:

  • Oppose increases in federal fuel taxes or fees. Transportation funding should be reformed on the spending side, not the revenue side. Until Congress takes steps to reduce wasteful spending, it is not fair to ask motorists, truckers, and bus operators for another dime on top of the billions they already pay every year. Similarly, non-germane policy changes like Postal Service savings and corporate tax holidays do nothing to correct the systemic problems with current transportation spending.
  • Move funding responsibility for non-road programs to the General Fund. So long as there is a federal role in surface transportation, federal fuel tax revenue should be used to fund federal road and bridge priorities—namely, the interstate highway system—as it was originally intended to do. Congress should reject efforts to allocate these funds to parochial projects that do not benefit the motorists and truckers who pay them.
  • Return control of non-federal priorities to the states. States, localities, and the private sector know their needs best and should have more control over addressing them. Congress should allow them the flexibility to fund and manage transportation projects within their borders, especially those that are truly local in nature. Current federal barriers to state-based funding and financing should be removed.
  • Reduce regulation that increases project costs and delays transportation projects. Reducing or repealing bureaucratic and regulatory hurdles such as the Davis-Bacon requirement, lengthy and often duplicative environmental impact studies, and highway beautification initiatives would help reduce construction time and save millions of dollars that could go toward road and bridge improvement, helping to alleviate the congestion that plagues America’s highways.
  • Consider transportation spending in standalone legislation. Transportation legislation should not be tied into a larger spending package. Recent omnibus spending bills have been rife with waste and pet project procurements. Standalone transportation legislation will help keep spending levels in check and provide crucial transparency.
  • Consider transportation spending outside of a “lameduck” session. Legislation to extend surface transportation programs should be considered before the November election. Retiring and outgoing legislators should not be voting on significant legislation because they are less accountable to their constituents.

Congress must act responsibly in any surface transportation program extension measure. We urge you to keep these principles in mind, and we look forward to working with you and your colleagues.


Brent Gardner, Director of Federal Affairs
Americans for Prosperity

Phil Kerpen, President
American Commitment

Larry Hart, Director of Government Relations
American Conservative Union

Dee Stewart, President
Americans for a Balanced Budget

Grover Norquist, President
Americans for Tax Reform

Brian Garst, Director of Government Affairs
Center for Freedom and Prosperity

Chris Chocola, President
Club for Growth

Tom Brinkman Jr., Chairman
Coalition Opposed to Additional Spending and Taxes (COAST)

Marc Scribner, Fellow, Center for Technology and Innovation
Competitive Enterprise Institute

Mattie Duppler, Executive Director
Cost of Government Center

Matt Kibbe, President and CEO

Seton Motley, President
Less Government

Pete Sepp, Executive Vice President
National Taxpayers Union

Andrew Moylan, Executive Director and Senior Fellow
R Street Institute

Paul Gessing, President
Rio Grande Foundation

David Williams, President
Taxpayers Protection Alliance

Judson Phillips, Founder
Tea Party Nation

Some San Franciscans hopping mad over ReservationHop

July 08, 2014, 10:29 AM

ReservationHop is a start-up caught in the horns of controversy. Its business model places it at the intersection of San Francisco’s built-in techno-libertarianism and urban third-estate populism. Is a pile-up unavoidable?

The idea behind ReservationHop is simple: demand for tables at San Francisco’s booming restaurant scene is high. People are willing to pay for reservations to accommodate their temporally flexible culinary desires. ReservationHop’s platform allows would-be diners to sell their reservations to other would-be diners.

This novel service commoditizes a hitherto valuable but complimentary restaurant convenience – so, the distaste for ReservationHop’s model is easy to understand.

Complaints about the new market and demands that it be shut-down are coming from patrons and restaurateurs alike. Patrons dislike that free reservations are becoming scarce. Restaurateurs understandably dislike that some reservations, made to realize a profit on ReservationHop, are being made with no intent to honor them. Thus, when a reservation-maker does not make a sale on ReservationHop and also does not cancel, the reserved table may go unfilled, with the restaurant perhaps unable to accommodate other diners to make up the loss. These complaints are sensible, but likely will not be sufficient to stifle the impacts of the new service.

It goes without saying that a prohibition on businesses like ReservationHop would be slow to develop and institute, clumsy to effect and likely to fail. Fortunately, there are market-friendly answers that do not require the ritual murder of a disruptive technology. Here are a few (although, undoubtedly, creative minds could think of more):

  • Restaurants could seize upon this model themselves. Now that it is apparent that selling or auctioning off reservations is a viable business model ripe for commoditization, restaurateurs are in an excellent position to add to their slim profit margins.
  • Inversely, restaurants that choose to adhere to an egalitarian approach to reservations could take recourse of their own by requiring that prospective diners present some form of identification when they arrive, for use in matching identities. If that does not prove a sufficiently robust deterrent, restaurants could require the submission of a form of payment with the reservation (a practice not uncommon in Canada and Europe).
  • Restaurant reservations could borrow the form of medical office reservations by requiring an appropriate liquidated damage if the reservation is not honored.

Any of these options are preferable to clumsy and stifling prohibition. After all, it’s not the end of the world, it’s just a change.

Outside of the policy objections, some commentators have gone so far as to suggest that making a reservation without an intent to honor it is an actionable form of fraud. Without jumping into picayune details, one would need a unique set of facts to prevail on such a claim.

To avoid problems associated with its disruptive technology, ReservationHop would do well to make nice with local restaurants. Unlike other parties that are involved in the new reservation-making process, restaurants are not opting-in to the use of its service and view it with hostility. So, to allay concerns within the restaurant industry that they will be left with unfilled seats, ReservationHop should make an effort to solicit restaurant involvement by, for instance, demonstrating that the service it offers concretely translates into a lower no-show rate.

At bottom, ReservationHop is an ingenious and perfectly legitimate effort to both create wealth and better allocate scarce resources, given San Francisco’s current market for culinary excellence. That restaurants and diners should adjust the way they function in response only makes sense and will yield a sensible and viable result.

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

R Street to host extreme weather event with Rep. Cartwright

July 08, 2014, 10:20 AM

Come see R Street’s president Eli Lehrer on extreme weather events and disaster policy Wednesday at noon. Full details below. No RSVP required.

Washington, DC –On Wednesday, U.S. Representative Matt Cartwright, in conjunction with the R Street Institute and the American Sustainable Business Council will host “Saving Taxpayer Dollars:  Planning and Preparing for Extreme Weather Events.”

Cartwright will moderate the event that starts at 12:00 pm on Wednesday, July 9, in room 121 Cannon House Office Building.

Panelists will include: Eli Lehrer, R Street Institute; Richard Eidlin, American Sustainable Business Council; Shannon Sly, Senior Counsel, Marstel-Day, formerly Naval Sea Systems Command; and Sam Ricketts, Governor’s Office, State of Washington

In the past two years, extreme weather events resulted in 109 presidential major disaster declarations, 20 events that each inflicted at least $1 billion in damage, and 409 fatalities and $130 billion in economic losses in 44 states caused by these 20 events

The panel will discuss how the private sector is preparing for extreme weather events and how the federal government can partner with businesses and municipalities to save money and lives by improving preparedness, resiliency, and response.

The panel will also discuss Rep. Cartwright’s PREPARE Act (Preparedness and Risk management for Extreme weather Patterns Assuring Resilience).  This soon to be introduced legislation will address the need to protect our nation’s assets and citizens from the enormous risks posed by extreme weather by increasing government effectiveness at no cost to the taxpayer.  The Act builds off the recommendations listed in GAO’s high risk report and institutionalizes executive orders which seek to address agency planning and preparedness.

Rep. Matt Cartwright represents Pennsylvania’s 17th Congressional District, which includes Schuylkill County and portions of Carbon, Lackawanna, Luzerne, Monroe, and Northampton Counties.  Cartwright serves on the House Committee on Natural Resources and the House Committee on Oversight and Government Reform.

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Rep. Cartwright to host extreme weather event with R Street, American Sustainable Business Council

July 08, 2014, 8:56 AM

WASHINGTON (July 8, 2014) – On Wednesday, July 9, U.S. Rep. Matt Cartwright, in conjunction with the R Street Institute and the American Sustainable Business Council will host “Saving Taxpayer Dollars:  Planning and Preparing for Extreme Weather Events.”

Cartwright will moderate the event that starts at 12:00 pm on Wednesday, July 9, in room 121 Cannon House Office Building.

Panelists will include:

  • Eli Lehrer, President of the R Street Institute
  • Richard Eidlin, American Sustainable Business Council
  • Shannon Sly, Senior Counsel, Marstel-Day, formerly Naval Sea Systems Command
  • Sam Ricketts, Governor’s Office, State of Washington

In the past two years, extreme weather events resulted in 109 presidential major disaster declarations, 20 events that each inflicted at least $1 billion in damage, and 409 fatalities and $130 billion in economic losses in 44 states caused by these 20 events

The panel will discuss how the private sector is preparing for extreme weather events and how the federal government can partner with businesses and municipalities to save money and lives by improving preparedness, resiliency, and response.

The panel will also discuss Rep. Cartwright’s PREPARE Act (Preparedness and Risk management for Extreme weather Patterns Assuring Resilience).  This soon to be introduced legislation will address the need to protect our nation’s assets and citizens from the enormous risks posed by extreme weather by increasing government effectiveness at no cost to the taxpayer.  The Act builds off the recommendations listed in GAO’s high risk report and institutionalizes executive orders which seek to address agency planning and preparedness.


The gap in conservative climate policy

July 07, 2014, 2:31 PM

From Bloomberg View:

There’s a lot to like about Eli Lehrer’s argument for National Review that conservatives should stop downplaying global warming and instead try to take advantage of it.

Prop 45: An internecine fight on the regulatory left

July 07, 2014, 9:43 AM

Ominously, Proposition 45, the “Insurance Rate Public Justification and Accountability Act,” is heading for California’s November ballot. If voters approve the Consumer Watchdog-sponsored initiative, health insurers would be bound to submit their rates to the California Department of Insurance for “prior approval.” Such a system already exists in the property and casualty market as a result of the infamous and lamentable Proposition 103.

Currently, health insurers in California are subject to a “file-and-use” system, under which they file proposed rate changes with one of two regulators (the CDI or the Department of Managed Health Care) 60 days before they plan to put them into effect. These regulators review the proposed rates to determine whether or not they are excessive, after an independent actuary has evaluated the rate information submitted to determine whether it is reasonable and sound.

Consumer Watchdog growls that nearly 1 million Californians have been subject to rates deemed “unreasonable” by a regulator. This is not a particularly compelling argument, since what’s reasonable to an insurer trying to cover claims may not be reasonable to a regulator not unwisely considering what’s in the regulator’s political interest. The regulatory review process at best represents a second opinion about reasonability. Operationally, though regulators cannot currently prevent the use of rates deemed unreasonable, the CDI is not shy about exerting pressure on insurers. Bad publicity and a sour regulatory relationship are a high price to pay for a momentary rating victory.

The value of a file-and-use system is that insurers are able to respond to market conditions in a timely manner. The significance of such flexibility is thrown into relief by even a cursory inspection of Prop 103′s prior approval process. There is little question that Prop 103 has had a stultifying impact on market flexibility and innovation. Remarkably, non-traditional allies of the free market have come to that very conclusion.

For example, at a July 2 hearing, a joint legislative committee listened to testimony from advocates and opponents of the measure. Covered California, the organ responsible for administering the state’s healthcare exchange, expressed strong concerns about the impact of introducing another layer of rate review. Their representative opined that insurers would be unlikely to present their best and final rates to Covered California were they aware that they would be compelled to take further rate-reductions when subsequently presenting to the CDI.

Covered California does not go far enough. Like Prop 103, Prop 45 includes a provision by which private intervenors may challenge rate changes of 7 percent or more. The involvement of an intervenor dramatically increases the amount of time necessary for a rate to gain approval and is a serious obstacle to sound business judgment. The good news, for intervenors, is that they can get rich through their efforts.

The greatest failure of Prop 103 is that merely changing insurers’ pricing behavior does not address the foundational drivers of insurance costs. Thus, while realizing no meaningful benefit, Prop 45 could force market stagnation and, in the worst case, force some carriers out of the exchange due to rate inadequacy. Given that only 13 providers participate on the Covered California exchange, of which only four providers service the majority of the market, any departure from the exchange would be a significant competitive loss to the state-run system.

It is ironic that market concerns are being trumpeted by a state agency fearing that its bailiwick may shrink by the interference of a left-leaning “public interest” group. Ironic, but not funny.

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The European right to be forgotten might be a Pandora’s box

July 04, 2014, 2:11 PM

From Intellectual Property Watch:

“While the Canadian case [deals] with the sale of counterfeit products, rather than privacy, it embraces on the same logic to make its sweeping censorship demands,” Zachary Graves, director of digital marketing and a policy analyst at the R Street Institute, a non-profit public policy research organisation based in Washington D.C., said in a recent post.

It’s time for a conservative global-warming agenda

July 03, 2014, 3:06 PM

Conservatives should adopt a new strategy in the battle over global warming. Rather than falling back on the claim that global warming isn’t a problem, conservatives should take a page from liberals’ playbook and use the issue to pursue policies they already favor. What we need is a conservative climate-change agenda that shrinks the size of government and uses a small portion of those savings to help do a few things better.

While many on the environmental left tend to overstate their case, there’s little doubt that the climate is changing and that human activity plays a major role in this shift. In fact, not even those conservatives whom the left unfairly tars as “deniers” dispute that the Earth has gotten warmer or that a buildup of greenhouse gases traps heat energy.

It’s not inconceivable that climate change could have some positive impacts, like fewer deaths from cold. But negative consequences likely will outweigh positive ones by a large margin.

However, many current government programs are downright counterproductive in dealing with climate change. The National Flood Insurance Program encourages development in areas likely to be impacted by sea-level rise, while many Army Corps of Engineers projects exacerbate the problem by starving river deltas of the silt they need to remain in place.

Other government programs subsidize the use of coal and the opening of new oil wells. Ending all subsidies should be a high priority for conservatives. Broad efforts could include creation of “subsidy-free zones” in areas likely to be impacted by climate change. One version of this idea was signed into law by Ronald Reagan with 1984′s Coastal Barrier Resources Act, which bars federal subsidies to new development over thousands of miles of coastal barrier islands. Such policies promote adaptation to a changing climate, and they save taxpayer money.

Conservatives also should press the federal government, the largest employer in the United States, to do a better job preparing its own facilities for the potential consequences of severe weather. Rep. Matt Cartwright, D-Pa., has proposed doing exactly that. His pending legislation, the ponderously named Preparedness and Risk Management for Extreme Weather Patterns Assuring Resilience (PREPARE) Act, makes sense and should draw conservative co-sponsors.

What’s more, conservatives need to more consistently condemn corporate-welfare programs for energy industries, whether it’s solar, wind, oil, gas, or any other. Any subsidies such industries receive should be limited to research efforts the private sector can’t carry out on its own. A stronger, better research establishment could help us better understand climate change and develop breakthrough technologies. This would cost taxpayers far less than the current stew of corporate welfare programs that produced Solyndra and other costly failures.

There are other, broader changes — including outright repeal of the EPA’s burdensome, ill-advised greenhouse-gas-control regulations — that conservatives ought to consider as well.

For decades, progressives have used the battle over climate change as a proxy for a broader war about culture and ideology. Whether they’re demanding cap-and-trade schemes, plotting ways to plan the entire energy economy, or trying to order entire classes of power plants out of existence by government fiat, progressives consistently forward schemes designed to enlarge the size of government and squelch the freedoms of private enterprise. It’s time to respond.

Conservatives should address climate change. And they can do it without giving up a single conservative principle.

Public voices opposition to Internet sales taxes

July 03, 2014, 12:53 PM

From Somewhat Reasonable:

This week, the National Taxpayers Union (NTU) and the R Street Institute launched a 20-state tour to announce new poll results that demonstrate the publics near complete lack of support for the MFA and the detrimental the tax plan would be. The first stop was in South Carolina, where R Street Executive Director Andrew Moylan and NTU Executive Vice President Pete Sepp hosted a press conference annoying the results. Voters in South Carolina rejected Internet sales taxes by a significant margin of 51-36….

…”New Internet sales tax laws are bad policy, but this polling proves that they’re terrible politics as well,” said R Street’s Andrew Moylan in a press statement. “It shows that strong majorities across the country seek an Internet that enriches their lives, not out-of-state revenue agents.”

News from the front desk: Issue No 198

July 03, 2014, 12:13 PM

From The Fifth Estate:

The thinking echoed what the conservative think tank the R Street Institute said last year after it broke away from the Heartland Institute that has dominated – and some say controlled and funded – anti climate action around the world.

See one of our articles last year reporting the R Street Institute arguing for a carbon tax and saying it would be possible to get one in the US by 2015.

See this most recent post from the R Street folk, R Street disappointed by EPA greenhouse gas rules

Why is it disappointed?

Because the new carbon emissions regulations are likely to “prove expensive and damaging to a still-fragile economic recovery”.

Instead, it said, the Obama administration should move to a carbon tax and “kill two birds with one stone” – slow climate change and free up the tax burden for the economy.

“R Street has instead urged officials to embrace the power of the free market by utilising revenue-neutral carbon pricing as a complete substitute for command-and-control regulation.

“Carbon pricing could allow states to kill two birds with one stone.

“They could achieve mandated emissions reductions through a price signal instead of complicated regulation, while utilising all resulting revenue to eliminate or reduce taxes that are damaging to the economy. This could get EPA off their backs while securing real pro-growth tax reform.”

Conservatives debate IP: A right or a privilege?

July 02, 2014, 5:14 PM

Can copyrights and other intellectual property be treated the same as physical property rights, and just how far should that analogy be taken?

Those were among the key issues during a lively 90-minute roundtable hosted by the American Enterprise Institute yesterday, featuring references that ranged from the Copyright Act of 1790, to the Berne Convention, to Milton Friedman and Emmanuel Kant

Moderator Jeff Eisenach, director of AEI’s Center for Internet, Communications and Technology, opened the discussion by referencing a 2010 report from Chicago-based intellectual property merchant bank Ocean Tomo, which found that intangible assets like patents and copyrights now represent more than 80 percent of the value of firms listed in the S&P 500 index.

Mark Schultz, cofounder and co-director of academic programs at the Center for the Protection of Intellectual Property at George Mason University School of Law, further distinguished copyrights as a “narrow property right.”

“Property rights,” Schultz said, “support self governance as an engine of free expression.”

Other panelists pointed to the protection of property rights as one of the main stabilizing effects government can provide, giving examples of poor and unstable societies abroad where the rule of law with respect to property is not respected.

“A lot of the difficulty in the copyrights debate is because we fundamentally see it as a property right,” concluded Stan Liebowitz, head of the University of Texas at Dallas’ Center for the Analysis of Property Rights and Innovation.

But other panelists argued copyrights should be seen more as a privilege than a right.

“The contours of the rights we create matter,” said Jerry Brito, senior research fellow at the Mercatus Center at George Mason University. “There is a schizophrenia in the current conservative debate over copyrights … copyrights are a privilege. It’s a government-created statutory property and it is a privilege.”

Shultz argued the relevant concern is the degree to which copyrights infringe on the liberty of others, noting “if you install a fence, that infringes on my right to roam freely.”

“If our only understanding of liberty is if I get to do whatever I darn well please, it is a five-year-old’s understanding,” he continued. “A grown-up understanding of liberty is ordered liberty, competing claims that need to be reconciled through a system.”

Tom Palmer, senior fellow at the Cato Institute, countered that “property rights allow us to live together in peace.”

“That is what liberty is very much about, but it doesn’t carry over into some guy singing my song,” Palmer said.

Panelists disagreed fundamentally on the role of government in maintaining “ordered liberty,” with some arguing copyright enforcement isn’t stringent enough and while others feel it is too stringent, in a way that had inhibited free markets.

“When the founding fathers created the first copyrights act in 1790, they were thinking about creating professional authors and professional artists,” said Jay Rosenthal, senior vice president and general counsel for the National Music Publishers of America. However, citing the economic disparity licensing fees have created, Rosenthal pointed out “the reason we don’t know how everything works out is because we’ve never had a free market.”

Palmer expressed skepticism about just how much copyright’s actually functioned to promote innovation. Palmer repeated several times, “the burden of proof is on those who would claim it spurs innovation.”


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