Out of the Storm News
WASHINGTON (Jan. 30, 2014) – The R Street Institute is disappointed by today’s U.S. Senate vote gutting reforms of the National Flood Insurance Program, but expressed optimism that U.S. House leadership will take a more responsible to affordability issues.
The Senate voted 67 to 32 to delay for four years rate increases called for under 2012′s Biggert-Waters Flood Insurance Reform Act. The chamber moved to the vote after waiving a Budget Act point of order and defeating a compromise alternative sponsored by Sen. Pat Toomey, R-Pa.
“We felt Sen. Toomey offered a reasonable alternative and are disappointed by both the final vote and the failure of his amendment,” R Street Senior Fellow R.J. Lehmann said. “However, we’re encouraged that most of the Senate’s Republican caucus supported the Toomey amendment, and feel that, together with other approaches to means-testing, it can serve as the basis for any legislation that might be considered by the House.”
House Speaker John Boehner, R-Ohio has said the House will not take up a four-year delay of Biggert-Waters, but that he is open to more modest changes to address affordability concerns. The White House Office of Management and Budget also has raised concerns with the Senate legislation, noting in a statement of administration policy that the delay would “further erode the financial position of the NFIP, which is already $24 billion in debt.”
In addition, the Consumer Federation of America has illustrated that a continuation of the NFIP’s subsidized rates and inaccurate maps does not actually serve the purpose of consumer protection.
“Consumers are not well served when the government runs an ‘insurance’ program that is not true insurance, but rather, as the NFIP had become, an unwise and untargeted subsidy program that mislead consumers into putting their homes, businesses and lives at risk in areas that are dangerously flood-prone and that often unfairly subsidized affluent individuals and contractors who do this building,” the CFA’s J. Robert Hunter, who served as administrator of the NFIP from 1974 to 1979, wrote in a Jan. 30 letter to the Senate.
LANSING, Mich. (Jan. 30, 2014) – The R Street Institute welcomed yesterday’s vote by the state House Criminal Justice Committee approving legislation to repeal Michigan’s archaic 83-year-old law criminalizing the resale of event tickets by individuals.
Under a 1931 statute, it is illegal in Michigan to sell any ticket above its written face value without the express consent of the event and venue operators, as well as to resell any season ticket that bears the ticket-holder’s name. R Street Midwest Director Alan Smith noted that current law does not even allow resellers to recoup the cost of convenience fees and extra venue charges, which have come to constitute a significant portion of the cost of event tickets.
“I think the committee was impressed by testimony about the arrests, fines and court costs that have been levied against clergy trying to recoup money spent for event tickets for congregation outings and persons who make small businesses out of packaging away game sports events,” Smith said. “People believe that when they have bought a ticket, they have a right to resell it, whether to make themselves whole or sell to a fan who is more eager to attend the event.”
He added that the legislation — H.B. 5108, sponsored by Rep. Tim Kelly, R-Saginaw – would continue to permit venues and promoters to prescribe rights and duties of lessors and lessees using contract law.
“A university wishing to protect its desire to accord a ticket preference to students and alumni would still able to do that,” Smith said.
WASHINGTON (Jan. 30, 2014) – Governors of the five Gulf Coast states – all Republicans – have a unique opportunity to ensure the windfalls those states are set to receive under the federal RESTORE Act are not used to grow the size of government, the R Street Institute and a coalition of eight other free-market groups wrote today.
Under terms of the Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economy Act, passed in 2012, 80 percent of all administrative and civil penalties paid pursuant to the Deepwater Horizon oil spill are dedicated to a trust fund for the purpose of environmental and economic rebuilding, with approximately 65 percent of those funds flowing to state and local governments in Texas, Louisiana, Mississippi, Alabama and Florida.
In the letter to Govs. Rick Perry, Bobby Jindal, Phil Bryant, Robert Bentley and Rick Scott, the groups note the legislation upholds federalism by devolving decision-making authority away from Washington. However, they said it is crucial that, RESTORE Act funds are subject to rigorous transparency requirements, directed toward projects that create broad value for taxpayers and do not create any ongoing liabilities by creating permanent programs that will place unknown burdens on future taxpayers.
“Fortunately, we’re largely seeing the Gulf Coast states take seriously their responsibility to implement the RESTORE Act in a way that maximizes environmental and economic benefits and provides real value for taxpayers,” said R Street State Projects Director Daniel M. Rothschild, co-author of a joint R Street-Pelican Institute paper on RESTORE Act implementation. “In particular, Louisiana has developed a process for RESTORE funding that can be a model for other states.”
Other signatories to the letter include Americans for Tax Reform, National Taxpayers Union, Taxpayers Protection Alliance, Campaign for Liberty, Americans for Prosperity, Council for Citizens Against Government Waste and Taxpayers for Common Sense.
Read the full text of the letter here:
Jan. 30, 2014
Dear Govs. Perry, Jindal, Bryant, Bentley, and Scott -
As you know, Congress passed the Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economy Act, better known as the RESTORE Act, in 2012 as part of the MAP-21 transportation bill. The RESTORE Act dedicates 80 percent of all administrative and civil penalties paid pursuant to the Deepwater Horizon oil spill to a trust fund for the purpose of environmental and economic rebuilding. Approximately 65 percent of the funds will flow directly to your states, counties, and parishes.
Though the legislation was not perfect by any means, it did embrace a number of key conservative values: It devolves decision making from Washington to state and local governments, encourages environmental restoration that is legitimately pro-growth, and does not create any new permanent bureaucracies or claims on taxpayers.
We believe it is critical that the process of implementing the RESTORE Act on the regional, state, and local level reflects the intent of the legislation and avoids spending on projects and programs with few or even negative economic benefits for your states and the Gulf Coast as a whole. For example, using RESTORE Act funds to seed expensive and hugely inefficient so-called “green jobs” programs would threaten to squander a key opportunity to create lasting growth in the region.
Therefore, we write to encourage you to take executive action to the extent practical to ensure that the RESTORE Act is implemented in a way that is consistent with limited government and free markets. Specifically, we encourage you to utilize any executive tools available to ensure that RESTORE Act funding:
- Is subject to rigorous transparency requirements so that taxpayers know exactly how dollars are spent. Your states already make other forms of spending transparent to taxpayers through online portals; RESTORE Act funds should be no different.
- Is directed toward projects that create broad value for taxpayers rather than narrow special interests.
- Does not create any ongoing liabilities by creating permanent programs that will place unknown burdens on future taxpayers. Simply stated, the RESTORE Act should not be used as an excuse to leverage growth in government.
To be sure, many of your states have made important strides in ensuring that RESTORE Act planning is being carried out in a transparent, value-maximizing manner, and we applaud these steps.
The RESTORE Act presents an important opportunity to prove that the principles of federalism are superior to central planning from Washington. Using your executive authority to ensure funds are spent in a transparent fashion, create long-term value for taxpayers, and do not grow the size and scope of government is critical to ensuring the RESTORE Act lives up to its promise.
Daniel M. Rothschild
Senior Fellow and Director of State Projects
R Street Institute
Americans for Tax Reform
Executive Vice President
National Taxpayers Union
Taxpayers Protection Alliance
Campaign for Liberty
Christine Harbin Hanson
Federal Affairs Manager
Americans for Prosperity
Council for Citizens Against Government Waste
Taxpayers for Common Sense
Fifty years ago, U.S. Surgeon General Luther Terry issued a landmark report describing the health risks of cigarette smoking. Tobacco prohibitionists are using the anniversary to promote onerous measures aimed at the tobacco industry and consumers.
American Heart Association president Dr. Mariell Jessup claims that “taxes, strong smoke-free laws and fully funding state tobacco prevention programs…can reduce the number of adult smokers to less than 10 percent of the population in 10 years.”
Similarly unfounded assertions have been made for decades. In 1984, Surgeon General C. Everett Koop declared that the United States could be smoke-free by the year 2000.
NBC reported that “raising the legal age to buy tobacco products to 21 would go a long way to stopping kids from ever getting addicted in the first place,” and it cites the American Heart Association, American Lung Association, American Cancer Society and the Campaign for TobaccoFree Kids for support. Unable to obtain an outright tobacco ban, these groups hope to impose rules similar to those for alcohol.
Dr. Michael Fiore of the University of Wisconsin’s Center for Tobacco Research and Intervention, says tougher tobacco age restrictions make sense: “We do it with booze yet we don’t do it with cigarettes, when cigarettes kill about 10 times more people than alcohol does.” That argument disguises the fact that alcohol has proven far more deadly for teenagers.
The current age requirement for cigarette purchase is 18 years, and the smoking prevalence for high school seniors is 16 percent. In contrast, the requirement for alcohol purchase is 21 years; 39 percent of high school seniors currently drink and 26 percent have been drunk recently.
Dr. Fiore bemoans the lack of physician engagement with smokers; he thinks they should be nagged:
I would never dream of letting a patient with high blood pressure leave my office without treating it. But every day in America, millions of Americans go in and out of a physician’s office and their smoking is not treated.
The past 50 years have witnessed an increasingly aggressive tobacco control movement, with declining returns. Tobacco control may have contributed, as the media suggests, to the saving of eight million smokers lives (abstract here), but tobacco prohibitionists also share responsibility for the 17.7 million smokers who died prematurely because they were denied factual information about safer smoke-free tobacco products.
Instead of exploiting the 50th anniversary, all public health groups should endorse rational, science-based tobacco harm reduction. America’s 45 million smokers deserve nothing less.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
TALLAHASSEE, Fla. (Jan. 29, 2014) – The R Street Institute welcomed this week’s proposal by Florida Gov. Rick Scott that the state enact a 15-day sales tax holiday for hurricane preparedness supplies.
The tax holiday, which would coincide with the state of hurricane season June 1 and run through June 14, would encourage residents to invest in flashlights, batteries, and radios, as well as crucial disaster mitigation items like storm shutters.
“According to FEMA, each dollar spent on mitigation saves society an average of four dollars,” R Street Florida Director Christian Cámara said. “These savings come not only from the decrease in physical damage when the wind blows, but also in meaningful reductions in the cost of insurance coverage both on the individual and the state as a whole.”
From Business Insider:
“One theory is that President Obama’s been in office a long time,” said Reihan Salam, a senior fellow at the R Street Institute and a contributing editor to National Review. ”There’s a sense that his agenda has stalled so there’s interest in some alternatives. If you’re a savvy legislator, you might think, well here’s an opportunity for me to build an identity and build a profile.”
Whatever the reason, the Republican Party has taken a big first step towards a positive policy agenda during the past six months. These proposals may not end with bill signings but the lack of them should not be confused with a lack of development within the party. Change is happening and will continue to happen throughout this year.
“It’s nice to see because there have been a bunch of people who have been working on some of these things for many years and risk-aversion kind of overcame this taste for novelty,” Salam said. “The balance is shifting now and I think that you’re going to see more stuff coming down the pipeline.”
Fifty years after President Lyndon Johnson launched the “War on Poverty” during his first State of the Union address, President Barack Obama is widely expected to revisit that theme in Tuesday night’s address with a major focus on income inequality.
The issue is one Democrats are calculating will be a winning one for them in November, and there is at some evidence to support that view. Polling released Friday by USA Today and the Pew Research Center found 63 percent of Americans extending federal benefits for the long-term unemployed, while 73 percent support raising the minimum wage from $7.25 an hour to $10.10.
The Senate recently voted for cloture to extend unemployment benefits for 1.3 million who lost them at the end of 2013, but a deal to move to vote on that package broke down, and the odds a similar bill passes the Republican-controlled House are slim. When it comes to raising the minimum wage, conservatives have stuck to an even harder line. Even if the GOP is able to avoid electoral consequences for what the polls currently suggest are unpopular stances, the party’s failure to put forward an alternative to these sorts of policies helps reinforce the impression that conservatives don’t care about the poor.
It is a failure of policy-making that the debate over poverty and unemployment has hit this point. In the throes of the crisis, a benefits extension was a quick, easy, and smart way to deal with growing joblessness. However, absent other pro-work incentives, continuing such extensions, or raising the cost to employers by raising the minimum wage, are simply not wise long-term policy choices.
Thankfully, some Republicans are now stepping forward with new plans to address the issue that focus on incentives to work and enticements to form and maintain stable families. Sen. Mike Lee (R-Utah), has put forward a plan to significantly increase the child tax credit. Sen. Marco Rubio, R-Fla., has offered plans to block grant aid to the states and to restructure the Earned Income Tax Credit as a periodic wage subsidy.
Another approach is to encourage the unemployed to relocate for work by allowing them to cash out a portion of their benefits to offset moving expenses. Traditionally, America has been an incredibly mobile society, with 3.5 percent of the population moving annually when record keeping began in the 1950s. But since 1980, the proportion of Americans moving for opportunity has declined dramatically. Over the last few years, it has declined to less than 2 percent. There is some evidence this is leading to a spatial mismatch between the ranks of the unemployed and underemployed, and jobs that could actually utilize their skills.
Numerous factors are to blame for Americans’ new-found lack of willingness to move in search of opportunity. One of the leading reasons appears to be the rising cost of living in the country’s more productive areas. Restrictions on the size and cost of housing has turned areas like New York, Washington and San Francisco into bubbles, keeping the wealthy in but the rest out. In just one example cited in a recent article in Washington Monthly, Los Angeles is experiencing significant out-migration to neighboring San Bernardino, despite the latter having higher unemployment and higher crime. The reason most commonly cited for the move: lower housing costs.
But the welfare state also provides powerful incentives to stay put. State-based relief – ranging from food stamps to Medicaid – has the unfortunate side effect of decreasing mobility, given that moving to a new location often requires signing up again under different rules. This problem is even more acute with housing assistance programs like Section 8, which typically have long waiting lists to qualify.
Obviously the aim of taking work in a new location is to no longer need such benefits, but for some, dealing with the potential for even a temporary loss could be too risky. These programs may have kept the poverty rate from rising, but they certainly haven’t been moving large numbers of individuals into better opportunities.
In addition, just as we’ve poured money into failing schools for little gain, the federal government has poured money into failing cities through Empowerment Zones and other programs aimed at attracting jobs and investment to specific depressed areas. Most studies have found these zones to be terrible failures, doing little to alleviate poverty and often bringing in mechanized jobs rather than opportunity for locals.
All of this is particularly troubling, given the recent Harvard study demonstrating the lack of income mobility for individuals born into certain areas. Completely counter-intuitive to Americans’ perceptions of themselves, it would appear that, more than ever in recent history, our American cake is baked, with communities continuing along their upward or downward trajectories, wages stagnating, and too many children becoming casualties of their home zip codes.
There’s reason to believe a well-structured relocation voucher could be successful, though only partial, response to these challenges. In a limited experiment in the 1970s, unemployment offices in the South offered such assistance, as well as help in finding work in other states. The program worked particularly well for the young, the less educated and African-American males, the demographics most likely to live in areas with low social capital, as well as most likely to drop out of the labor force.
Allowing individuals to “cash out” a portion of their expected future unemployment benefits could even save money, as it offers hope of returning individuals to becoming contributors to the tax rolls, rather than benefit recipients. Additionally, firms will benefit from a larger pool of appropriate workers, and those individuals who self-select to move will be rewarded with better opportunities, while those who stay behind will have less competition for local jobs.
Beyond the fiscal benefits, however, there is a huge human upside as well. Simply put, alienation from the workforce has a huge emotional and mental toll. Work is one of the defining characteristics for most Americans, allowing them to express their ingenuity, to support their families, and to contribute to their communities. And access to work and opportunity both fulfills the American dream and keeps it alive, creating a binding moral fiber that helps make America exceptional.
“There are real things he needs to work on that can’t be done by executive order,” said Lori Sanders, a policy analyst at the libertarian R Street Institute. “If he starts using more executive orders in places that he can, I think it makes him less likely to accomplish other aspects of his agenda.”
WASHINGTON (Jan. 28, 2014) – As the Senate prepares to vote on a measure that would gut reforms of the deeply indebted National Flood Insurance Program, the R Street Institute and a coalition of a dozen other free-market, taxpayer and budget watchdog groups are calling for serious consideration of an alternative approach introduced by Sen. Pat Toomey, R-Pa.
The Senate voted 86-13 Jan. 27 to open debate on S. 1926, which would delay for four years rate increases required by the Biggert-Waters Flood Insurance Reform Act of 2012. The two-year-old law phases out premium subsidies for roughly 400,000 businesses, second homes and repetitive loss properties; eliminates subsidies for about 700,000 more primary homes when they are resold; and phases in rate changes to reflect updates to flood insurance rate maps kept by FEMA.
S. 1926 would effectively repeal Biggert-Waters by delaying the increases until after the NFIP’s statutory authorization is set to expire in 2017. Though it appears to have strong support in the Senate, both the White House and House Speaker John Boehner, R-Ohio, have declared opposition to the measure as written.
By contrast, Sen. Toomey’s proposed amendment would look to address affordability concerns raised by some NFIP policyholders, while still preserving reforms to the program, which is nearly $25 billion in debt to U.S. taxpayers and hasn’t made any payments against its principle in four years.
“This amendment also includes a vital offset to ensure that it does not add any net burdens for taxpayers,” the free-market groups wrote in a letter to members of the Senate. “By adding a modest surcharge to NFIP policyholders, the Toomey provision would protect taxpayers by keeping the costs of lengthened subsidy phase-outs confined within the program.”
As drafted, the non-partisan Congressional Budget Office estimates S. 1926 would increase the federal budget deficit by $900 million over the next five years, decrease revenues to the NFIP by $2.1 billion over the next decade and cause the program to exhaust its $30 billion borrowing cap. Sen. Toomey’s amendment would offset any lost revenue to the program with a $40 surcharge on NFIP policies, or $80 for those held by high-income policyholders.
In addition to R Street, other signatories to the letter include the American Consumer Institute, Americans for Prosperity, Americans for Tax Reform, the Coalition to Reduce Spending, ConservAmerica, the Cost of Government Center, Council for Citizens Against Government Waste, FreedomWorks, Less Government, National Taxpayers Union, Taxpayers for Common Sense and the Taxpayers Protection Alliance.
Read the full letter here:
WASHINGTON (Jan. 28, 2014) – The R Street Institute expressed deep disappointment at the five-year conference committee farm bill that cuts just 0.11 percent in projected federal spending over the next decade.
While the 949-page conference agreement does include some positive developments – such as ending the $5 billion a year “direct payments” program and requiring recipients of crop insurance subsidies to avoid depleting prairies and wetlands – it leaves on the table a host of thoughtful reforms, even as it authorizes $1 trillion in spending on food stamps and corporate welfare for big agri-business.
Particularly disappointing, according to R Street Senior Fellow and Outreach Director Andrew Moylan, is that the conference report drops language from the Senate-passed bill that would reduce federal crop insurance premium support by 15 percentage points for recipients with adjusted gross incomes of more than $750,000. Though the change would have affected less than 1 percent of farmers nationwide and would still have left taxpayers on the hook for 47 percent of wealthy farmers’ insurance premiums, it was projected to save taxpayers more than $900 million over ten years.
“In addition to its inclusion in the Senate farm bill, this sort of means test also was endorsed in a ‘sense of the House’ resolution passed in October 2013,” Moylan said. “Thus, even when both chambers agreed that something must be done to scale back these wasteful subsidies, the conference report ignores that sentiment to keep the taps of corporate welfare flowing.”
While the federal government subsidizes roughly 62 percent of farmers’ crop insurance premiums, at a cost of $9 billion annually, small farmers receive only about 27 percent of the subsidies.
The conference report, which the House is expected to vote on as early as Jan. 29, also replaces the direct payments program with several new “shallow loss” insurance programs that look to lock in record commodity prices. In fact, given recent drops in the price of corn, the shallow loss program would be triggered on day one for the nation’s largest commodity crop.
“Given the Congressional Budget Office’s history of underestimating the cost of prior farm bills, we take it as given that much, if not all, of the $23 billion in projected savings in this bill will never materialize,” Moylan said. “The shallow loss programs alone could prove catastrophically expensive, and no one should be surprised if, five years from now, this farm bill ends up proving more expensive than if Congress simply extended existing law.”
Today saw the release of the Washington Post‘s January poll of registered voters on a singularly interesting question: “Which political party, the (Democrats) or the (Republicans), do you trust to do a better job handling the economy?”
The results are a bright spot of hope for Republicans after what was an otherwise frustrating 2013, though mostly in exceedingly unexpected ways. In fact, the results of the poll so thoroughly contradict inside-the-Beltway assumptions about the GOP’s base that they should prompt a debate not merely about the party’s resurgence, but a very vigorous one over what form that insurgence will take.
The poll’s top-line results alone would be encouraging for Republicans, as 44 percent of all respondents preferred the GOP to the Democrats as stewards of the economy, compared with 37 percent for the Democrats. Yet if you drill down into the data, some surprising asymmetries emerge.
Conventional wisdom holds that the GOP does best with elderly, white, affluent and religious voters. In short, in the tea party base they have courted since 2010. By contrast, conventional wisdom also holds the party is weakest with younger voters and racial minorities, especially the better educated.
The Washington Post poll complicates these assumptions, at bare minimum.
Take the assumption about age. Of those surveyed, voters aged 65 and older preferred GOP handling of the economy by nine percentage points, whereas those between the ages of 40 and 60 preferred it by only three. Yet when you look at the 18 –to-39-year-old demographic, you find a massive 12 point advantage for Republicans, who are preferred 48 percent to 36 percent. This is, in fact, the closest the GOP gets to outright majority support among the various age brackets.
But that’s not all. The assumption that the GOP does better with less-educated members of society also crashes headlong into a wall of contrary data. True, the GOP is preferred by six percentage points among those with a high school education or less. But among college graduates, that balloons to 13 points. Contrary to the view that college renders its attendees liberal, the groups most likely to believe Republicans are superior handlers of the economy are either college graduates or people who have attended some college.
Finally, the story of a massive GOP gender gap is complicated by this data, as women prefer Republicans by four percentage points over Democrats.
That’s not to say the GOP is out of the woods. A persistent mistrust is still very much recorded among racial minorities, who prefer Democrats over Republicans by a daunting 18 points, giving Dems a narrow outright majority of 50 percent. What’s more, among those with “no religion,” Democrats receive a nine point edge over Republicans. Future demographic trends suggest that these two groups are likely to grow, given the increasingly diverse and secular composition of the millennial generation.
And the GOP does enjoy its widest margins among the tried-and-true base of white evangelical Protestants, people making more than $100,000 a year and self-described conservatives. This is not in and of itself a problem, but it should not be read by party leaders as an excuse to double down on those messages that appeal solely to these groups. What’s more, while trust over the economy clearly is a positive sign for the GOP, not every voter counts pocketbook issues as the deciding ones.
Still, the fact that the GOP is drawing proportionally more support from the college educated and the young than it is from the elderly and the non-college educated is a sign of a vibrant new base that the GOP could court with policy dexterity and recalibrated messaging.
Ironically, it is also a sign that, whatever else he might have done wrong, Mitt Romney’s vision of the GOP as an educated, comfortably middle-class, suburban party, remains its most plausible way forward toward a new base. Whether a more competent set of candidates than Romney can turn this one poll into a decisive status quo remains to be seen.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
Tuesday’s State of the Union address affords President Barack Obama another opportunity to address the government’s massive overreach in collecting data about ordinary Americans in the name of protecting us.
Although Obama, a constitutional scholar, spoke at length in a January 17th address to the nation about balancing individual privacy and national security, even conceding that there is a “bias” within government to amass as much information as it can, he offered no guidance or framework to Congress as to how existing law can be strengthened to protect Americans from wholesale government intrusion into their online lives.
Fortunately, bipartisan efforts on Capitol Hill have been gaining ground. And while the scope of NSA and other government abuses defy a single solution, strengthening existing laws, particularly the Electronic Communications Privacy Act, is a great place to start.
Even before news of the NSA’s surveillance programs broke last June, Sens. Patrick Leahy, D-Vt., and Mike Lee, R-Utah, had co-sponsored revisions of ECPA to extend Fourth Amendment protections to private data stored on servers on the Internet, or as it’s called current nomenclature, the “cloud.”
ECPA sets out rules for law enforcement agencies that want to tap phone lines. When it was enacted nearly 30 years ago, there was no concept of cloud computing. Cloud computing makes it possible for users to, for example, access playlists and movies from multiple devices, because that content is stored on servers in data centers that could be anywhere in the world.
But there’s much more to it than that. Cloud computing is driving the so-called “Internet of things.” The latest tech buzzwords that shout from covers of Wired and Popular Science — smart homes, driverless cars, wearable computers — will all be possible because of cloud computing.
But to work efficiently, cloud computing needs large amounts of personal data. Much of it is anonymized in the process, such as when a GPS system can access highway location data about automobile speeds and car density, determine there is an accident three miles ahead and route you around the traffic. Still, it would be wrong to say systems always purge personal information.
That means companies involved in cloud technology will require a high degree of trust and goodwill from the marketplace if consumers are going to feel comfortable sharing data. One way the government can help increase this trust is to extend legal protections to data in the cloud, because it is where most of our data will inevitably reside.The lack of specific Fourth Amendment protection is partly responsible for the massive scope of government intrusion into the Internet. NSA programs such as MUSCULAR and “Tailored Access Operations” were specifically aimed at defeating the encryption and firewalls that Internet companies use to safeguard user data. The NSA hopes to hide behind judicial interpretations that cloud data has no explicit legal protection. But this is a technicality to evade the principle. The intent of ECPA always was to prevent law enforcement agencies from the very sort of fishing expeditions the NSA has been doing.
Stronger legal safeguards would help repair the damage the government spying has done to the U.S. technology sector, the global leader in cloud computing. The Information Technology and Innovation Foundation (ITIF), a research institute that aims to promote public policies that advance technological innovation and productivity, estimates international concern and mistrust of U.S. tech companies could cost the industry between $21.5 billion and $35 billion through 2016. Forrester Research, which provides analysis for financial firms and investors, believes the potential global industry cost could be much more — $180 billion worldwide over the same period.
A number of European banks no longer want to store data in the United States. Salesforce.com, which provides highly sensitive cloud-based sales leads and customer information, reportedly has lost a major European client. Both Salesforce.com and Amazon, perhaps fearing “guilt by association,” have felt the need to publicly state that they were not part of the these spying programs.
While real NSA reform may be a ways off, it would not require much political capital for President Obama to endorse ECPA revision. It would certainly accelerate action on the legislation and signal that the president understands the constitutional problems that government spying activities raise.
The organizations, including Action Aid USA, the Competitive Enterprise Institute, the National Turkey Federation and R Street Institute, called on Reps. Fred Upton, R-Mich., and Henry Waxman, D-Calif., to correct the “numerous wrongs” of the ethanol mandate through legislation.
Last year, you embarked on a bipartisan effort to review the Renewable Fuel Standard (RFS) and consider the many unintended consequences that have resulted from the RFS mandate since its inception. Your effort included a series of white papers to gather stakeholder input on the various impacts of the RFS, as well as two hearings to receive testimony from the agencies involved in administering the policy and everyday Americans who’ve been affected. This deliberate and transparent process has been a tremendous success and we commend you for undertaking it in a spirit of bipartisan cooperation.
As you know, the Environmental Protection Agency has proposed a small reduction in the RFS’ volume mandate for 2014. Some have portrayed the agency’s proposal as a major retreat from the statutory volume requirements. However, we submit that the proposed reduction is small in percentage terms and would do little to decrease pressure on corn demand or lower ethanol’s share of U.S. annual corn production. If the EPA promulgates a final rule in line with what was proposed, some 13.01 billion gallons of corn ethanol will still be required, which is less than a 6 percent reduction from this year’s 13.8 billion gallon mandate. At these volumes corn ethanol will continue to provide perverse incentives to overplant corn, distort commodity and energy markets and wreak economic and environmental havoc.
The RFS is ultimately unworkable in its current form, and recognition of this reality continues to grow. The process you started last year has created a unique and timely opportunity to consider legislation to correct the numerous wrongs that have unintentionally resulted from a policy that was instituted with good intentions. Your leadership on this issue, which recognizes that only Congress can solve this problem, is refreshing and we commend you for your efforts so far. The EPA is restricted by the underlying statute and cannot effectively address the myriad of RFS related impacts. We urge you to continue to build on the process you started and to press forward with legislative action in your committee as soon as possible. We continue to stand ready to work with you in this endeavor.
Action Aid USA
American Bakers Association
American Beverage Association
American Frozen Food Institute
American Meat Institute
Association of Kentucky Fried Chicken Franchisees
California Dairy Campaign
Clean Air Task Force
Competitive Enterprise Institute
Council for Citizens Against Government Waste
Dairy Producers of New Mexico
Idaho Dairymen’s Association
International Dairy Foods Association
International Foodservice Distributors Association
International Pizza Hut Franchise Holders Association
Marine Retailers Association of the Americas
Milk Producers Council
National Council of Chain Restaurants
National Frozen Pizza Institute
National Grocers Association
National Marine Manufacturers Association
National Restaurant Association
National Taxpayers Union
National Turkey Federation
North American Meat Association
R Street Institute
Southeast Milk, Inc.
Specialty Equipment Market Association
Taco Bell Franchise Management Advisory Council
Taxpayers for Common Sense
Taxpayers Protection Alliance
Cc: House Committee on Energy & Commerce
From the Washington Post:
Conservative policy analyst Reihan Salam has an interesting column on on conservatives who are reconsidering their movement’s traditional support for mass incarceration and the War on Drugs…
…As Salam notes, Christie’s speech could be motivated at least in part by a desire to divert attention away from the recent scandals plaguing his administration. But the very fact that a likely GOP presidential contender might think that denouncing the War on Drugs and mass incarceration is a politically effective diversion is itself an indication of changing attitudes on the right. Moreover, Christie is not the only conservative to shift positions on these issues in recent years. Political scientists David Dagan and Steve Teles give other examples in this 2012 article. As they point out, growing conservative skepticism about mass incarceration and the War on Drugs is driven in part by a realization that prisons have many of the same flaws as other large government bureaucracies that “submit to the temptations of monopoly, inflating costs and providing shoddy service.” In addition, they note that many social conservatives have gradually come to realize that the War on Drugs is bad for family values. Some GOP-controlled state governments are seeking to reduce imprisonment in order to save money in difficult fiscal times.
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WASHINGTON (Jan. 27, 2014) – As the nation awaits President Barack Obama’s State of the Union address tomorrow evening, a new paper from the R Street Institute makes the case that the president owes the nation a plan to undo the damage federal spying programs are causing America’s most vibrant industry – the high-technology sector.
In the study, R Street Associate Fellow Steven Titch argues that it could take years to determine the full extent of the “brand damage” inflicted on the U.S. technology industry by recent revelations about such National Security Agency programs as PRISM and MUSCULAR. Early estimates suggest international concern and mistrust of U.S. tech companies could cause the industry to lose 20 percent of its current foreign market share, with some even projecting the global industry cost will hit $180 billion by 2016.
“Ironically, the NSA turned the competitive edge U.S. companies have in cloud computing into a liability, especially in Europe,” Titch writes. “Commercially, it will give European competitors an opportunity to promote their own systems as more secure and as safe from U.S. law enforcement. Second, on the regulatory front, it provides impetus for the privacy measures the European Union wants on certain cloud-based services.”
While President Obama sought to stem public mistrust in a Jan. 17 address to the nation, in which he announced the government would no longer maintain the exhaustive database of Americans’ telephone records collected under Section 215 of the Patriot Act, Titch argues this tepid response is unlikely to undo the damage.
“President Obama’s response falls short,” Titch writes. “Although he said the government will stop storing phone records, he nonetheless implied that phone companies would continue to do so on the government’s behalf. The appointment of John Podesta to review privacy concerns appears cosmetic. For one, what metrics will determine Mr. Podesta’s effectiveness? The fact that Obama did not call for judicial review of National Security Letters, nor a halt to NSA efforts to break encryption, remains troubling.”
Titch lays out a three-step plan for reform, including dismantling PRISM and rebuilding a surveillance program in accordance with specific defense and homeland security goals; enacting legislation that recognizes that expectation of privacy in the cloud; and ensuring greater transparency and accountability across the board, including the right of companies to be notified when their infrastructure is used for surveillance, to disclose instances when they’ve been asked to assist with surveillance and to demand that due process be followed.
One major step the president could take tomorrow night to reassure the public is to throw the administration’s full weight behind legislation to update the 28-year-old Electronic Communications Privacy Act to clarify that government seizure of any data stored by third parties requires consent or a search warrant.
“Congress should be encouraged to move forward,” Titch wrote. “This would go a long way toward reining in collection of Internet data through clandestine use of wiretapping, back doors or decryption codes.”
Read full paper here:
The U.S. technology industry enters 2014 facing a backlash to its perceived role as accomplice to a series of National Security Agency surveillance programs, each making extensive use of data mining to parse billions of consumer telephone, Internet and computer records in what now appears to have been an ineffective effort to track international terrorists.
Recent analysis projects the caution and mistrust engendered by the NSA’s programs could cost U.S. technology industry between $35 billion and $180 billion over the next three years. Widespread NSA spying is unsettling because it hits at the current focal point of communications and computer innovation—cloud computing. Effective protection of privacy and security is best managed by regulating the activities of government, as opposed to the utility of Internet services.