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

July 31, 2015, 9:50 AM

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

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

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

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

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

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

July 31, 2015, 8:42 AM

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

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

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

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

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

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

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

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

Maybe she should ask him for it.

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

Ant-Man: A hero for criminal justice reform?

July 31, 2015, 8:00 AM

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

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

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

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

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

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

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

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

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

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

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

Green Scissors Coalition letter to former Gov. Jeb Bush

July 31, 2015, 7:00 AM

Dear Gov. Bush:

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

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

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

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

Kind regards,

The Green Scissors Coalition

Friends of the Earth
Taxpayers for Common Sense
R Street Institute

Proposed changes to California’s Renewable Portfolio Standard

July 31, 2015, 6:00 AM

Hard as it may be to believe, we’re beginning to hear rumblings of sensibility from California’s electricity markets. Pacific Gas & Electric and Southern California Edison both have written to the state’s Assembly Committee on Utilities and Commerce to request a smart and much-needed change to the state’s Renewable Portfolio Standard.

As the rules are currently defined, power generated from so-called distributed resources – smaller, decentralized sources that produce power at the point of use – does not count as “renewable” for meeting state targets set by the California Energy Commission. The petition from PG&E and SCE would enable utilities to forgo a portion of their own obligations by relying on customers’ investments in distributed generation like rooftop solar. The change would ease the massive pressure utilities currently face to scale up renewables use, while also reducing the risk that meeting state targets would destabilize the grid.

The companies’ request comes in the context of S.B. 350. Sponsored by Senate Pro Tempore Kevin De León, D–Los Angeles, the bill is just the latest attempt to unburden California of the practical realities of power markets. Its ambitious goals include a proposal to generate 50 percent of the state’s electricity from renewable sources by 2030.

To reach that target, the state would have to rely on greatly increased generation from wind and solar, which together accounted for less than 12 percent of California’s energy generation in the first quarter. Also problematic is the inconsistent record of hydropower, which over the last decade has contributed as much as 31 percent and as little as 6 percent of the state’s power.

This is a promising avenue for the utilities. According to the latest quarterly report from the Solar Energy Industries Association, California accounted for 53 percent of residential solar installations across the country in the first three months of 2015. The vast majority of those were installed without state incentives beyond the net energy-metering program and the federal investment tax credit.

Distributed generation resources are certainly not without faults and policy pitfalls at the state and federal level, but they absolutely should be regarded as a renewable source of power. The California Energy Commission also runs the New Solar Homes Partnership, which promotes solar and energy-efficiency for newly built homes. In 2012, 27 percent of single-family homes built in Southern California included solar capabilities. It seems a foolish endeavor to exclude this significant and growing renewable resource from the state targets.

The RPS targets remain foolhardy, but granting credit for distributed solar would at least make them incrementally more achievable and less damaging. The state aims to generate 33 percent of its electricity from renewable sources by 2020. But renewable generation will have to be curtailed whenever supply exceeds demand, an outcome that’s even more likely under the new S.B. 350 targets.

Moreover, distributed generation consumed at the source isn’t counted in the generation mix. Leaving it out of the accounting tilts both the numerator and the denominator toward a more fossil-heavy calculus. Not including it among the sources of renewable power generation alters the denominator. And because households hooked up to solar consume a disproportionate amount of their power from distributed sources, not counting their consumption has an even larger effect on the numerator.

Allowing distributed sources to count toward the RPS reduces the risk that the state will overbuild renewable resources. This is no idle risk. Wind and solar – the only renewable sources currently growing in their share of the California power supply – produce electricity only when the wind is blowing and the sun is shining. On still or cloudy days, production will be way down; a windy clear day boosts production way up.

Demand doesn’t work that way and neither does the power system. Yo-yoing production makes keeping the lights on far more difficult. Californians already are all too familiar with rolling blackouts in the summer months.

If California wants to be in the business of increasing renewable power, it should treat distributed sources no differently than the large renewable installations utilities build. Sustainable energy requires energy markets that are sustainable, too.

Google fights France on extending ‘right to be forgotten’

July 30, 2015, 6:00 PM

From USA Today:

Mike Godwin, director of innovation policy and general council at the R Street Institute, a think-tank whose motto is “Free markets. Real Solutions,” said the “right to be forgotten” runs the potential of being misused due to its “broad, potentially unlimited scope.”

“Privacy-focused advocates do have a point about the hazards of links that may be irrelevant to public discussion and public policy,” Godwin said. “But the right to be forgotten, as currently framed, is already a cure that is worse than the ‘disease.’ .

Je ne suis pas Google

July 30, 2015, 4:58 PM

The French government’s privacy-regulation agency decided in June to order Google Inc. to remove (or “delist”) from all Google websites worldwide – not just those in France or the European Union – links that mention EU citizens who have invoked their so-called “right to be forgotten.” In doing so, the CNIL (in French, Commission Nationale de l’Informatique et des Libertés) demonstrates that the primary liberté it seems to care about protecting is the French government’s liberty to order informational takedowns.

Google has now responded, formally requesting today that the CNIL rescind its order, an appeal the French regulator could take up to two months to review. The move marks just the latest, most expansive phase in the ongoing debate – particularly in Europe, but also in Argentina and even the United States – over the degree to which concerns about privacy, including the appearance of citizens’ names in potentially unflattering search engine results, trump rights to free expression.

That debate has been gathering increasing momentum ever since the EU’s Court of Justice ruled last year that a complainant had the right under European privacy law to demand takedown of certain links from search-engine results. You can find a general discussion of that case here and the official English-language version of the court’s decision here.

Google leadership consistently has expressed reservations and criticisms of the right to be forgotten. Notably, Google CEO Larry Page remarked shortly after the decision that the ruling would “be used by other governments that aren’t as forward and progressive as Europe to do bad things.”

While the court tried to express some guidelines for the RTBF —the opinion states that links should come down if they “appear to be inadequate, irrelevant or no longer relevant, or excessive in relation to those purposes and in the light of the time that has elapsed”— it failed to state any principles that limit when takedown demands are appropriate. As a result, Google has been compelled to strike its own balances in determining whether a takedown demand should be honored.

It should be noted that Google’s search engine is even more widely used in France than it is here. In the United States, the desktop market share for Google search is perhaps 68 percent. In France, by contrast, Google commands a market share of more than 90 percent. (You’d get somewhat different numbers if mobile search were included in the tally.) Google’s share of the French market is particularly impressive, given that Yahoo’s French-language search was offered for years before Google got its foot in the door.

While it may have won the market’s popularity contest decisively among francophones, the French government (like many in the EU) is reflexively anti-corporate and suspicious of commercial enterprises, especially those based in the United States. That anti-corporate sentiment has led to somewhat anomalous pro-censorship decisions by a government that, only a few months ago, made a point of showing free-speech solidarity with the journal Charlie Hebdo.

Even if, as some have argued, Google has the human and financial resources to make case-by-case determinations about whether to honor a takedown demand, not every company has Google’s deep pockets. New startups that hope to be the next Microsoft or Apple or Google can’t hire whole teams of lawyers to review a huge volume of RTBF demands. And those lawyers would be in addition to the legal teams they already need to respond to copyright-infringement takedown demands, not to mention all the other legal work, from trademark-infringement claims to defamation claims to reviewing government orders to remove online listings for companies that sell drugs illegally.

In fact, most technology companies don’t hire lawyers at all in their early phases. The most prudent strategy for such startups is just to remove links or other content in response to every demand. Over the long run, it’s not hard to see how this default impulse would constrain freedom of expression and the equally important freedom of inquiry on the Internet.

On the other hand, if you were seeking to cement Google’s pre-eminence as the dominant search engine for all time, you could hardly do better than to impose the RTBF, and other soon-to-be-discovered rights, in precisely the way France now seeks to do.

Despite CNIL’s claim that it is acting in “accordance with the CJEU judgement,” the judgment stopped short of the new territory into which French regulators are seeking to expand. They’re seeking, expressly, to demand content takedown from anyone on the Internet anywhere in the world. Even France’s ancien régime in the age of Louis XIV did not assert its powers that expansively. Properly, France and the other EU nations should be skeptical of claiming worldwide powers—just as, in other contexts, those nations ask the same of the United States.

As it happens, I’ve been dealing with RTBF issues for about six years, ever since I was general counsel at the Wikimedia Foundation (which runs Wikipedia and other free informational resources). The foundation was sued by German ex-convicts (you can find me discussing the case here) who wanted to suppress archived news reports of their guilt in a highly publicized murder case. It turns out to be hard to get a job when a potential employer looks you up online and the first thing he or she finds is the Wikipedia article about your murder conviction.

I understood and, to some extent, sympathized with the ex-convicts’ concerns; I do believe one should have the opportunity to start over, at least to some degree. But I knew Wikipedia could never survive volume of takedown demands I foresaw would follow if we capitulated to this demand. Wikipedia, although hugely popular, is orders of magnitude less rich than Google Inc. is.

What I opted to do back in 2009 was to take the story of their demands to the press. The result? Wolfgang Werlé and Manfred Lauber, the ex-convicts, arguably became more famous as a result of their demands than they would have been if they had focused more on their job hunts than on suing Internet newspapers and encyclopedias.

But that kind of happy outcome can’t be guaranteed all the time. Only a minority of complainants will turn out to be convicted murderers, although some larger number may turn out to have been convicted on other crimes. The public interest in remembering the facts about trials and convictions (and acquittals!) is, in my view, at least as strong as any “right to be forgotten.” Which means that, just as we each should feel free to state “Je Suis Charlie,” each of us should also be empowered to argue, with merit, “I am not Google.”

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

55 orgs to Missouri Legislature: States benefit from right-to-work

July 30, 2015, 1:06 PM

Dear Members of the Missouri State Senate and General Assembly:

We represent organizations from across the country dedicated to promoting worker freedom. Our organizations’ nonpartisan analysis shows that increasing worker freedom produces greater prosperity and growth in state economies, and we urge you to consider these benefits as you contemplate “Right to Work” in Missouri.

The data are clear: Right to Work states outperform their forced-union counterparts. According to the Bureau of Economic Analysis, Right to Work states have experienced greater job growth, population growth, and compensation growth over every significant measured amount of time. Adjusted for cost of living, workers in Right to Work states earn more than workers in non-Right to Work states. And union membership actually grew in many states after they passed Right to Work legislation.

Missouri is surrounded by Right to Work states and continues to lag economically. But it is not just border states benefiting at Missouri’s expense. According to IRS data, from 1992 to 2011, Missouri lost well over $3 billion of income to Florida, Texas, Arizona, and North Carolina – all Right to Work states.

In many of our states, citizens have been fortunate to enjoy the benefits of Right to Work, and our economies have prospered as a result. For those citizens in the states that have not yet passed this crucial reform, we continue to advocate for and explain the benefits of increasing worker freedom.

As part of this effort, many of our organizations are participating in National Employee Freedom Week later this summer, in which we educate union workers about the freedoms available to them – how to opt out of the union entirely in Right to Work states, and how to be freed from certain dues in forced union states.

In years past, hundreds of workers across the country chose to free themselves of union obligations. Undoubtedly, there are many workers right here in Missouri who wish to be freed from union membership and all corresponding obligations. We believe every worker in America should be afforded that basic liberty.

The undersigned coalition of public policy research and grassroots advocacy organizations strongly supports Right to Work. Right to Work would mean freedom for workers, accountability for unions, and an enormous boost for the Missouri economy.

Sincerely,

Patrick Werner, Missouri State Director
Americans for Prosperity

Dan Greenberg, President
Advance Arkansas Institute

Sean Noble, President
American Encore

Lisa B. Nelson, CEO
American Legislative Exchange Council

Coley Jackson, President
Americans for Competitive Enterprise

Richard Manning, President
Americans for Limited Government

Grover Norquist, President
Americans for Tax Reform

John Mielke, President
Associated Builders and Contractors of Wisconsin

Justin Owen, President
Beacon Center of Tennessee

John A. Charles, Jr., President & CEO
Cascade Policy Institute (Oregon)

Jeffrey Mazzella, President
Center for Individual Freedom

Matt Patterson, Executive Director
Center for Worker Freedom

Kim Crockett, Chief Operating Officer, EVP and General Counsel
Center of the American Experiment (Minnesota)

Matthew J. Brouillette, President and CEO
Commonwealth Foundation (Pennsylvania)

Iain Murray, Vice President of Strategy
Competitive Enterprise Institute

Jonathan Haines, Director
Federalism in Action

Brian Minnich, Vice President
Freedom Foundation

Marc Short, President
Freedom Partners

Andrew Clark, President
Generation Opportunity

Louie Hunter, Chair
Georgia Center Right Coalition

Kelly McCutchen, President
Georgia Public Policy Foundation

Burly Cain, Executive Director
GOAL Advocacy (New Mexico)

Wayne Hoffman, President
Idaho Freedom Foundation

John Tillman, CEO
Illinois Policy Institute

Don Racheter, Immediate Past Chairman
Iowans for Right to Work

Sal J. Nuzzo, Vice President of Policy
James Madison Institute (Florida)

Jon Sanders, Director of Regulatory Studies
John Locke Foundation (North Carolina)

Dave Trabert, President
Kansas Policy Institute

Seton Motley, President
Less Government

Tonya Kiper
Liberty Foundation of America (Oklahoma)

Dee Hodges, President
Maryland Taxpayers Association

Pete Sepp, President
National Taxpayers Union

Victor Joecks, Executive Vice President
Nevada Policy Research Institute

Carla J. Sonntag, President and Founder
New Mexico Business Coalition

Jonathon Small, Executive Vice President
Oklahoma Council of Public Affairs

Kevin P. Kane, President
Pelican Institute for Public Policy (Louisiana)

Don Racheter, President
Public Interest Institute (Iowa)

Lori Sanders, Outreach Director & Senior Fellow
R Street Institute

Mike Stenhouse, CEO
Rhode Island Center for Freedom and Prosperity

Paul J. Gessing, President
Rio Grande Foundation (New Mexico)

J. Scott Moody, CEO
State Budget Solutions

Maureen Blum, President
Strategic Coalitions & Initiatives

David Williams, President
Taxpayers Protection Alliance

Judson Phillips, Founder
Tea Party Nation

Joseph Bast, President and CEO
The Heartland Institute

Lisa B. Nelson, CEO
The Jeffersonian Project

Daniel Garza, Executive Director
The LIBRE Initiative

F. Vincent Vernuccio, JD, Director of Labor Policy
The Mackinac Center for Public Policy (Michigan)

Mike Quatrano, Director of Civic Engagement
The Maine Heritage Policy Center

Amy Ridenour, Chairman
The National Center for Public Policy Research

Michael W. Thompson, Chairman and President
Thomas Jefferson Institute for Public Policy (Virginia)

Carl Bearden, Executive Director
United for Missouri

Rose Bogaert, Chair
Wayne County Taxpayers Association (Michigan)

Scott Manley, Vice President of Government Relations
Wisconsin Manufacturers and Commerce

Carol Platt Liebau, President
Yankee Institute (Connecticut)

 

 

Scott Atherley

July 30, 2015, 9:54 AM

Scott Atherley is a Ph.D. candidate in political science at George Mason University and an associate fellow of the R Street Institute.

His research focuses on congressional oversight, bureaucratic decision-making and methods of quantifying the administrative
state.

He has a master’s in political sociology from McGill University and has worked as a professional researcher and data analyst in
Washington for the past several years.

Email: satherle@masonlive.gmu.edu

City of Chicago hits taxpayers with new ‘Netflix Tax’

July 30, 2015, 8:22 AM

From the Heartland Institute:

Steven Titch, a telecommunications policy analyst with the R Street Institute, says Chicago’s expansion of the tax is arbitrary and “an incredible overreach.”

Undefined Terms

“Chicago made the announcement that startups would be exempt from collecting the tax,” Titch said. “Well, that raises [the issue of] equal protection right away. … Which is a small business, which is a startup, and which is an established business? It will have to be legislated.

“We’re getting into arbitrary taxation, and it’s ultimately going to get challenged in court, and there are so many ways that this can get thrown out,” Titch said. “One hopes it will happen soon, but it’s only going to last as long as it’s tolerated, and I think it’s going to be very difficult to collect and enforce because it is so diverse.”

 Titch says the new tax will be nearly unenforceable.

“It’s going to come down to where the address is,” Titch said. “If their mailing address is in Chicago, they will get taxed. Now, that raises all sorts of interesting questions. If your parents live in Schaumburg, and you use their address when you sign up for services, will you get taxed? How are they going to ensure the person being taxed actually lives in Chicago or prove they don’t live in Chicago? It’s another aspect of this that hasn’t been thought out very well.”

‘Gov’ knows best

July 29, 2015, 12:15 PM

No one likes a controlling, overbearing boyfriend. You know the guy I’m talking about. Incessantly checking in, sticking his nose into every and any decision, disapproving of anyone or thing that disagrees with him, and above everything else, claiming he knows what’s best.

While this persona of control and “knowing best” could be attributed to many individuals and organizations, one noted institution stands out: the federal government.

Our friends at the Independent Institute have addressed this issue through a satirical video series titled Love Gov, highlighting the folly, cost and intrusiveness of certain government policies. According to David J. Theroux, the institute’s founder and president:

Love Gov is a way to help anyone, especially millennials, understand the federal government’s ever-expanding reach into personal lives. It’s a lighthearted approach to reach audiences on a personal level, and inspire them to learn more and take action.

The series focuses on a young woman, Alexis, and her relationship with her overbearing, borderline crazy boyfriend, Scott “Gov” Govinsky. “Gov” represents the federal government and continuously introduces havoc into Alexis’ life through his intrusive behavior, which the series uses to allude to federal policies ranging from encouraging student debt to inadequate universal healthcare to privacy violations.

The hilarious (yet frightening) big government sentiments vocalized by “Gov” could not have been more spot on.

‘I love small businesses… but not as much as big business.’

‘I’m massively in debt, massively. Except it’s other people’s debt. It’s complicated.’

‘Education is priceless!’

Although these quotes obviously are used as vehicles to poke fun at big government, all of them possess a staggering ring of truth that have not been given sufficient attention. In a day and age when the rhetoric and agenda of the political left has infiltrated educational institutions and youth opinions around the country, Love Gov brings a long-needed fresh of a breath air.

Having recently graduated from a left-leaning, private university in Washington D.C., this could not have hit any closer to home for me.

If you oppose the Affordable Care Act, you’re viewed as an immoral individual who doesn’t care about the health of those who are less fortunate. If you oppose excessive business regulations aimed to “assist and protect employees,” you’re viewed as ignorant or “privileged.” Unfortunately, opinions like these have transcended beyond liberal educational institutions and have started to become part of the overall millennial mindset.

Nearly all twentysomethings would love if it healthcare were allotted to all citizens and employees could be protected from potential abuse in the workplace. The fact of the matter is, the cost of doing so with healthcare isn’t realistically attainable and a good amount of business regulations are unnecessary and kill the jobs they are designed to protect.

What price are we willing to pay as we continue allowing the federal government to continue to meddle in education, the housing market, business, health care and various other areas of our lives?

Using various examples – ranging from how a twentysomething woman without children has no reason to pay for pediatric dental care to how universities have no incentive to cut costs due to the existence of government-backed student loans – Love Gov breaks through with humor and does what many have tried to do before, but failed. It points out to everyone, and specifically millennials, that the government has been too intrusive and costs Americans too much.

Love Gov may only be a five-part video series, but through its ability to simultaneously provoke both laughter and reflection, it has a role to play in helping ignite America’s youth to start a discussion about the role of big government and what we can do to fix it.

You can see the trailer for the series below:

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

It’s time for dialogue, not demagoguery, on price optimization

July 29, 2015, 9:20 AM

Social activist Saul Alinsky’s “Rules for Radicals: A Pragmatic Primer for Realistic Radicals” was written as a how-to guide for community activists looking to compel political change. Yet its rules are no less applicable to parties already in power, particularly regulators.

From their perch atop a complex and wealthy industry, insurance regulators are well-positioned to take political stands by employing Alinsky’s thirteenth rule: “Pick the target, freeze it…and polarize it.”

Insurance regulators throughout the country have begun to target, freeze and polarize an increasingly visible set of rating practices known as “price optimization.” In authentic Alinsky-ian fashion, regulators have resorted to freezing price optimization practices as impermissible deviations from existing prohibitions against charging rates that are “unfairly discriminatory.” They are doing so without the benefit of a genuine understanding of what such practices actually entail.

In fact, even among the states that have sought to proscribe the use of price optimization, there is no common definition of the practice. For instance, last October, Maryland released a bulletin describing the practice as

[V]arying rates based on factors other than risk of loss, including, but not limited to: (a) the likelihood that a policyholder will engage in activities that result in policy turnover; and (b) the willingness of a policyholder to pay a higher premium compared to other policyholders.

Next up was Ohio, which issued a bulletin in January defining the practice as:

[V]arying premiums based upon factors that are unrelated to risk of loss in order to charge each insured the highest price that the market will bear.

A February notice from California Insurance Commissioner Dave Jones to 750 insurers said price optimization was:

[A]ny method of taking into account an individual’s or class’s willingness to pay a higher premium relative to other individuals or classes.

In May, Florida’s Office of Insurance Regulation issued a memorandum that conceded price optimization simply “does not have a universally recognized definition.” Nonetheless, for the purposes of banning the practice, the OIR defined it as:

A process for modifying the insurance premium that would otherwise be charged to an insured or class of insureds in order to maximize insurer retention, profitability, written premium, market share, or any combination of these while remaining within real world constraints.

Most recently, Indiana released a bulletin earlier this month without a formal definition of price optimization at all! It nonetheless firmly established “that the use of price optimization in establishing rates is not permitted.” Companies that currently employ the undefined practices were given 90 days to correct their errant ways and submit new filings.  The contours of price optimization were described as:

“[U]sing data collection and analysis to predict which consumers will accept higher rates without changing insurers and/or varying premiums based upon factors that are unrelated to the risk of loss so that each insured is charged the highest price that the market will bear.”

When pressed for a definition of the practice at the National Conference of Insurance Legislators meeting earlier this month, Indiana Insurance Commissioner Steve Robertson retreated to Justice Potter Stewart’s subjective formulation for the identification of pornography: I may not know how to define it, but I know it when I see it.”

Such an approach is problematic. The disparate definitional guidance provided by the states may inadvertently proscribe practices which have been, to date, permissible.

Consider a scenario outlined by California attorney Bill Gausewitz, of the increased expenses incurred by an insurer whose strategy is to provide high levels of customer service, compared with one that simply offers the lowest-priced coverage. Gausewitz rightly concludes that such expenses are unrelated to the risk of loss and thus would run afoul of overly-broad formulations of price optimization practices.

On a more fundamental level, such restrictions could encumber the flexible application of crucial actuarial judgement concerning the development of rates.

R Street has discussed price optimization in the past and we, like insurance regulators, are circumspect about embracing the practices encompassed by it. We certainly have concerns about moving away from risk-based pricing. But unlike the regulators, we are loathe to mischaracterize the practices or otherwise inadvertently proscribe otherwise admissible practices in a rush to address price optimization. In their haste, insurance regulators have accomplished both.

The value of price optimization practices should be discussed and considered at length, and the National Association of Insurance Commissioners is doing its best to accomplish just that. But as the states promulgate judgments of their own, doing so will require regulators to un-freeze the very public characterizations that they have made of the practices.

It is time for regulators to leave the combative, unproductive and ultimately political Alinsky-inspired approach in the past and exercise the kind of judgment that the market and consumers require.

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Lowering the drinking age will have some bad effects. We should do it anyway.

July 28, 2015, 8:54 PM

For the first time in decades, the legal drinking age is back in the news, and nearly all the credit for that belongs to the Amethyst Initiative. Signed by 136 college presidents from across the country, the initiative calls on Congress to revisit the 31-year-old Uniform Drinking Age Act, which deducts 10 percent of the federal highway funds from any state that sets its drinking age lower than 21. For more than a quarter-century, no state has dared violate it.

Amethyst is a worthwhile initiative. It’s one I support. And given the proper framing and strategy, I believe it’s one that can prevail. But success will not come without a forthright and realistic assessment of the likely consequences of lowering the drinking age. They won’t all be positive.

The wrong approach, in my view, is the line of argument made by John McCardell, the former Middlebury College president who founded the pro-drinking-age-reform organization Choose Responsibility in 2007. Most advocates for lowering the drinking age repeat some variation of what McCardell told CBS’ 60 Minutes in 2009:

‘This law has been an abysmal failure,’ McCardell told 60 Minutes correspondent Lesley Stahl. ‘It hasn’t reduced or eliminated drinking. It has simply driven it underground, behind closed doors, into the most risky and least manageable of settings.’

Clearly, the analogy McCardell is drawing is to the War on Drugs, and to Prohibition before it. But there are some pretty obvious ways that the analogy is inapt.

The true folly of both Prohibition and the War on Drugs is the ways both enriched the violent criminal gangs who administer the black market. That’s just not true of the national drinking age; today’s alcohol producers and distributors are legitimate and, for the most part, law-abiding. That the barrier between licit and illicit alcohol use is sometimes porous doesn’t render a convenience store into the Medellín Cartel or InBev into Al Capone.

Moreover, the analogy to the War on Drugs breaks down when you consider the nature of the products in question. Those who oppose the War on Drugs favor legalizing marijuana – a popular, but largely benign vice – and decriminalizing harder drugs that are much more destructive, but thankfully, also much less popular. Alcohol has the unfortunate distinction of being both very popular and – for many, though not most, of its consumers – also very destructive.

Alcohol’s more destructive effects, and the role the national drinking age has played in tempering them, have left a rather inconvenient paper trail of data. This data can, has and will continue to be summoned readily by opponents to undermine the credibility of those who would characterize the law as “an abysmal failure.”

It also doesn’t help when some advocates of lowering the drinking age seek to apply the Prohibition analogy in ways that stretch credulity. Writing in Newsweek, Jeffrey Tucker of the Foundation for Economic Education essentially made the claim that lowering the drinking age would help solve the campus rape problem:

People speak of a rape crisis on campus, and whatever the scope of the problem, the fact that women under 21 must retreat to dorm rooms and frat houses to drink puts them all in a vulnerable situation. It’s hard to imagine that consent is really there when people are falling down, passing out and feeling mortified the next day about what happened. In fact, the law represents a true danger to women in particular because it prohibits legal access to safe public places to drink responsibly, and go home to a safe environment afterward.

Tucker is certainly right to highlight the role Greek life appears to play in campus sexual assault, given multiple studies showing that fraternity members are three times more likely to commit rape than other college men, and that sorority members are 74 percent more likely to be victims of rape than other college women. Of course, this was also a problem back in the 1970s, when the drinking age in many states was lower, and it’s not at all clear how lowering the drinking age would address the many issues raised by Greek life. It’s also not clear why “retreat[ing] to dorm rooms,” presumably to drink with friends, would be less safe than the obvious alternative – bars filled with intoxicated strangers.

Ironically, arguments like Tucker’s may actually be overstating alcohol’s role in sexual assaults. While alcohol is not infrequently a tool of rape, that is quite a different thing than being a cause of rape. According to a 2001 study from the National Institute of Alcohol Abuse and Alcoholism, alcohol use by either the perpetrator or the victim was present in about half of all sexual assaults. A sexual predator was present in 100 percent of them.

The problem of rape on campus is not that there are too few legal ways to get alcohol. The problem is that there are too many rapists on campus. They’ll be on campus whether the drinking age is 21 or 18, and alcohol is but one of many tools at their disposal. In any case, making it easier for them to buy alcohol does not seem likely to decrease the incidence of rape.

So, before some other advocate seeks to make a similar counter-intuitive claim that lowering the drinking age would help reduce college suicides or drunk-driving accidents, it’d be useful to recap how we got here and why the original push to lower the drinking age was broadly considered a failed experiment.

In 1971, the 26th Amendment was ratified, extending the right to vote to 18-year-olds. Two years before the amendment’s passage, the drinking age in all but a handful of states was 21. In the spirit of the times – in-line with the slogan “if I’m old enough to die for my country, I should be old enough to vote/drink” – between 1969 and 1973, 26 states reduced their minimum drinking age. Four others would lower their drinking ages in the following years.

In truth, the extent of the change tends to be somewhat exaggerated in the public imagination. There were actually only 21 states, representing about 42 percent of the population, that ever lowered the drinking age to 18 for all forms of alcohol. On the flip side, there were a dozen states, representing 27 percent of the population, that never lowered the drinking age from 21. States where it remained 21 to buy hard liquor covered 47 percent of the population.

But just as Oklahoma was becoming the last state to lower its drinking age, in 1976, there was an almost immediate reversal. Minnesota raised its drinking age in 1976, just three years after lowering it. In 1977, it was Maine that raised the drinking age. In 1978, it was Iowa and Michigan (twice in one year, in the latter case). In 1979, it was Massachusetts, Montana, New Hampshire and Tennessee. In 1980, it was Illinois, Nebraska, New Jersey, Georgia and Rhode Island. In 1981, it was Texas, Virginia and Rhode Island (again). In 1982, it was Maryland, New York, Connecticut and Ohio. In 1983, it was Alaska, Oklahoma, North Carolina, West Virginia, New Jersey (again), Virginia (again) and Connecticut (again).

In 1984, the Uniform Drinking Age Act was passed and, by the end of 1988, every state had a drinking age of 21.

So what happened?

In brief, drunk-driving fatalities by young people skyrocketed. In Arizona, the state Department of Public Safety estimated that traffic fatalities spiked more than 35 percent when the drinking age was lowered. In Michigan, the proportion of 16- to 20-year-old drivers with blood alcohol concentrations over 0.05 more than doubled. A 1984 paper by Philip Cook and George Tauchen estimated that in states that lowered the minimum age to buy beer to 18, overall fatalities among the 18-to-20-year-old age group rose 11 percent.

The trend reached what the Insurance Institute for Highway Safety deemed to be epidemic proportions. By the time it peaked in 1982, 61 percent of 16- to 20-year-old drivers killed in car crashes had illegal blood alcohol levels. A decade after passage of the national 21 minimum drinking age, that had fallen in half, to 31 percent.

Percent of fatally injured passenger vehicle drivers with BACs at or above 0.08 percent by age, 1982-2007

 

To be sure, just as not all of the increase in drunk-driving fatalities was due to the lowered drinking age, nor was all of the decrease due to the national age limit. Harvard University economist Jeffrey Miron found in a 2007 paper that most of the improvement was attributable to states that voluntarily raised their age limits before the federal mandate, and that the effect did not persist for long. The generally accepted realistic figure for the UDAA’s impact comes from a 1999 paper by Georgia Tech’s Thomas Dee, who found that raising the national drinking age reduced traffic fatalities by at least 9 percent.

Of course, these are not the only relevant data. There are studies to support findings that teens from states with higher drinking ages drank less frequently. That states with lower drinking ages had higher rates of vandalism. That the move to lower the drinking age was correlated with a 10 percent increase in the rate of suicide by young people in the relevant age bracket. One can no doubt find quibbles with the data or the methodology of all of these. But there is an impressively thick literature of findings, and attempting to knock them down one by one is simply a losing battle.

Let’s just be honest. Lowering the national drinking age back to its pre-1984 levels will have some bad effects. We should do it anyway.

We should do it because 18-year-olds are adults. They vote. They pay taxes. They serve our country in the military. They sign contracts and testify in court. They get married. They buy property. They start businesses and hold down jobs. There is no moral foundation for the proposition that they can participate in the full panoply of rights and responsibilities that this country provides, except for choosing which beverage they’d like to consume.

We should do it because the Uniform Drinking Age Act violates the principles of federalism. There is no constitutional justification for the federal government to regulate the age at which someone should be legally permitted to consume alcohol. We knew this when we passed Prohibition. It’s why it took a constitutional amendment to enact. The 21st Amendment returned authority over the regulation of alcohol to the states, and that’s where it should have remained. The precedent set by NFIB v. Sebelius, wherein it was ruled unconstitutional for the federal government to withhold funding for states that refused to expand their Medicaid rolls, should be applied to the UDAA. The law demands a fresh challenge.

We should do it because, in short order, self-driving cars will render much of the discussion about drunk-driving fatalities utterly moot.

Finally, we should do it because public policy cannot properly be guided only by an accounting of costs. We must also consider benefits. People like drinking alcohol an awful lot. That counts for something.

Alcohol abuse can cause a variety of harms, but only a relatively small fraction of the people who drink alcohol drink abusively or ever experience such harms. Americans spend $90 billion a year on alcohol, including $5.5 billion spent by students. No market could be so large without producing enormous consumer surplus, and no policy analysis is complete that fails to account for that surplus.

Alcohol provides delicious flavors and aromas in a never-ending diversity of forms. It is a means of social bonding that has been with us since prehistoric times and has been the subject of probably more songs and poetry than any other, save love and death. It is the reason we have agriculture and, thus, the reason we have civilization at all.

We should lower the drinking age because young people deserve to experience the same joy of drinking alcohol that the rest of us do. It is, quite simply, a central part of what it is to be human.

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Patent reform is not a left wing thing

July 28, 2015, 4:40 PM

From the The Beacon:

Over at R Street, Zach Graves has a good piece up looking at the American Conservative Union’s opposition to patent reform pending in the Congress. He points out that the sponsors of the much maligned legislation are not looney leftists, but solid leaders on the right…

…The article is a good read. Graves concludes by noting that “Patent reform has loud detractors of all stripes, but it also enjoys overwhelming support on both the left and right. And if we’re going to be honest, its support has always been stronger on the right.”

Leamer talks Trump on The Big Picture

July 28, 2015, 4:38 PM

R Street Outreach Manager Nathan Leamer participated — along with  Neil Sroka of Democracy for America and Sean Noble of American Encore– in The Big Picture host Thom Hartmann’s July 22 politics panel to discuss why Donald Trump continues to lead polls of the likely 2016 Republican contenders. You can watch the full clip below.

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Cities, states keep piling on the Internet taxes

July 28, 2015, 11:27 AM

The City of Chicago has the dubious distinction of becoming the first jurisdiction to apply a sweeping tax to “cloud-based” services, ranging from streaming video to tax preparation.

Beginning Sept. 1, residents of the Windy City will be dunned a 9 percent levy on entertainment, online applications and data-processing services that depend on the computing, transmission and storage capabilities of the Internet and World Wide Web.

It’s the result of a Chicago Department of Finance decision to extend the city’s Amusement Tax and Personal Property Lease Transaction Tax to Internet downloads. The application of the Amusement Tax means that Chicagoans will be paying 9 percent more for streamed video and music services, such as those from Netflix, Hulu, Amazon and Spotify, whether the purchase is in the form of a monthly subscription or a one-off order. In doing so, Chicago joins the Alabama Department of Revenue, which wants to apply the state’s 1980s-era tax on videocassette rentals to streaming video.

But Chicago went one better with its new reading of the Lease Transaction Tax. This will now cover any paid cloud-based application that provides information or processing services, such as TurboTax’s Web-based tax preparation application, as well as database search services such as Lexis-Nexis, Ancestry.com, and Realtor.com, just to name three.

The “cloud tax” represents yet another government money grab from Internet users. Sales taxes already are applied to nontangible digital purchases such as software, movies, music and games that consumers then permanently store on their own media. Then there are the numerous taxes, surcharges and fees states and cities heap on the broadband wireless phone and cable services that serve as Internet connections. On wireless service alone, these charges averaged 17 percent, according to a 2014 report from the Tax Foundation.

And it’s not stopping. Prince George’s County, Md., recently raised taxes on landline and wireless phone services as part of an overall local tax increase. Meanwhile, Congress is debating once again whether to create a legal framework that would let states collect sales tax from online retailers outside their borders.

It’s no surprise to see jurisdictions targeting cloud-based services. Enough consumers have turned to streaming for entertainment that it’s been dubbed the latest “game-changer” in tech circles. Even the Federal Communications Commission is trying to figure out a way to regulate it. In the past three years, the percentage of viewers watching live television has fallen from 89 percent to 80 percent, while Internet streaming has increased from 4 to 11 percent, according to research by Nielsen Co. and broadcasters. The same research found that over that same three-year period, per-week streaming grew from four hours and 13 minutes to four hours and 17 minutes in a growing market. No doubt governments covet these dollars.

Sadly, it seems that streaming services see taxation as inevitable, “Jurisdictions around the world, including the U.S., are trying to figure out ways to tax online services,” a Netflix representative told The Verge, an online site covering technology, entertainment and science.

Chicago consumers should not despair yet. The law firm Reed Smith LLP, quoted by CBS Chicago, believes the tax may violate the Federal Telecommunications Act and the Internet Tax Freedom Act, which, as one of the few consumer-friendly tax laws pertaining to the Web, prohibits taxation of Internet access.

Legal questions aside, taxing the Internet is just bad policy. Tax a commodity and people will use less of it. Adding a tax to Web-based applications means decreasing utility for users and increasing barriers to success for entrepreneurs who seek to build innovative cloud-based services. Lawmakers in states and communities all say they want to foster digital inclusion and stimulate a robust information-based economy. Rampant taxation is no way to do it.

5 reasons to support the REINS Act

July 28, 2015, 10:37 AM

The House is likely to vote this week on H.R. 427, the Regulations from the Executive In Need of Scrutiny Act, also known as the REINS Act. Introduced by Rep. Todd Young, R-Ind., the bill would require Congress and the president to approve major regulations (those with an economic effect of $100 million or more) before they could take effect. Congress would be granted 70 days to vote affirmatively to adopt such regulations. If it did not, the president temporarily could deem the regulation effective if national security or the public health or safety was imperiled.

Perhaps the third time will be the charm. The House overwhelmingly passed the legislation in 2011 and 2013, only to see it die in the then-majority Democratic Senate. Majority Leader Mitch McConnell, R-Ky., who has complained about ill-conceived regulation, has not yet said whether the Senate would take up its version of the REINS Act (S. 226), introduced by the junior senator from his state, Rand Paul.

There are at least five reasons why Congress should pass the REINS Act.

  1. Democratic accountability. Each year, about 4,000 new regulations take effect. Regulations have the force of law, and agencies that issue regulations usually are empowered to enforce them with fines and other penalties. Individuals who dislike a regulation are without recourse—they cannot vote regulators out of office. The Constitution declares: “All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” The REINS Act would force Congress to take responsibility for the enactment of the largest and most economically significant regulations, thereby restoring some democratic accountability.
  1. Democratic equality. Who participates in federal rulemaking? Mostly, elites do. Regulations are proposed by unelected employees at federal agencies. Their final form is shaped through input from lobbyists and interest groups. Average citizens and their representatives seldom submit their own comments to an agency proposing a rule. The REINS Act would interject democracy into rulemaking by making the people’s representatives participate in regulatory policy.
  1. Oversight. The U.S. Constitution establishes a principal-agent relationship between the first and second branches of government. Congress legislates, and the executive effectuates the laws. The REINS Act would force Congress to spend more time overseeing the work of regulators to ensure they faithfully execute the law (and less time naming post offices and passing feel-good commemorative bills.)
  1. Reducing errors. Regulators do make mistakes. Under the present system, a private party has to file a lawsuit to get the problem fixed. Court challenges, in fact, have invalidated more than a dozen regulations in recent years, issued by agencies ranging from the Department of Health and Human Services to the Securities and Exchange Commission. Subjecting regulations to congressional review before they become law may prevent some errors and the costs thereof.
  1. Improving implementation. Current regulatory policymaking is dysfunctional. Congress delegates authority to agencies to implement a law, then yells when the regulations are not to its liking. Meanwhile, the American public foots the bill. Good policy implementation requires dialogue between lawmakers and agencies. This is why most states conduct legislative review of regulations before they take effect. Connecticut, for example, has a Legislative Regulation Review Committee. Michigan similarly has a Joint Committee on Rules that can disapprove rules.
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Congress’ plan to pass energy bills: Make them boring. But will it work?

July 27, 2015, 4:43 PM

From the Washington Examiner:

“We’ve been waiting for this legislative action to turn into something for a while. On the House side, it’s not the sexiest bill they could have come up with, but it seems like they’ve done a good job of avoiding any pitfalls,” said Catrina Rorke, energy policy director and senior fellow with the free market group R Street Institute and a former adviser to ex-GOP Rep. Bob Inglis of South Carolina…

…And therein lies the difficulty of the Senate.

“My trepidation on the Senate side. Sen. Murkowski has done a pretty tremendous job in terms of leadership … except once it gets to the floor it sort of goes to the zoo of the Senate,” Rorke said. She said other developments, such as the expected August finalization of Environmental Protection Agency carbon emissions limits for power plants, which is opposed by Republicans and centrist Democrats, also could spark amendments that threaten the bill.

Senate still debating transportation bill with last-minute record-secrecy provisions

July 27, 2015, 4:41 PM

From Marketwatch:

In a rare Sunday session, the U.S. Senate considered amendments to a transportation bill, a must-do by Friday before funds run out, without deciding on others related to the Freedom of Information Act (FOIA) slipped in by Senate Majority Leader Mitch McConnell late in the game. Those amendments would allow information to be withheld when certain thresholds are met. According to a report by R Street Institute, a nonprofit, nonpartisan, public policy research organization, none of these amendments went before the Senate Judiciary Committee, which is the committee with jurisdiction on FOIA matters. The Senate will reconsider one version of the bill — more than one with the FOIA amendments are floating around — again Monday night, according to OpenTheGovernment.org.

Coalition to Congress: Support PTC Elimination Act

July 27, 2015, 3:42 PM

Dear Representatives,

On behalf of the millions of members that our organizations represent, we encourage you to support H.R. 1901, the PTC Elimination Act, introduced earlier this year by Reps. Kenny Marchant, R-Texas, and Mike Pompeo, R-Kan. This is a commonsense bill that protects Americans from the large costs of an out-of-control subsidy.

This legislation phases out the Wind Production Tax Credit and includes several other important provisions. In the short term, it reduces the subsidy to make it harder for wind producers to profit while selling electricity at a loss because of the very generous tax benefit (this is called “negative pricing”). It also repeals the entire statutory framework on Dec. 31, 2025 to ensure the subsidies do not drag out beyond the next decade. Lastly, it includes a sense of Congress that the PTC should not be extended and should remain expired. Effectively, this is a true and fair phase-out of this subsidy. Should this legislation be included in the end of the year tax extenders package, it would be a significant improvement over existing law.

Ending the Wind PTC is an important initiative for several reasons. First, it is pro-taxpayer. Since it was created in 1992, taxpayers have sent billions of dollars to large multinational corporations in the wind industry. The last extension alone is estimated to cost taxpayers more than $6 billion over the next 10 years. Second it is pro-consumer. Since wind is an unreliable source of energy, it is often more expensive than other sources of energy. Eliminating the PTC allows the market to decide when wind power makes sense for consumers and when it doesn’t.

The subsidy also kills jobs and stifles innovation. The PTC leads to net destruction of jobs by diverting capital away from projects that make the most financial sense, and because wind is a more expensive form of electricity. For example, one study of Spain’s green-energy subsidies found that for every green job created, 2.2 jobs were eliminated elsewhere.

Finally, the wind PTC is an essential component of the Environmental Protection Agency’s regulatory agenda, including the looming carbon rule. EPA regulations are projected to shutter 90 GW of reliable energy by 2020. The EPA is pursuing aggressive regulations of existing power plants that amount to a federal takeover of the electricity system. One of the goals of this regulation is to shift electricity from reliable, low-cost sources like coal toward renewable energy like wind. Without the wind PTC, mandating renewables is a much more difficult task, because the true cost of wind is not obscured by a large subsidy. Extending the wind PTC helps enable this federal takeover by the EPA.

As Warren Buffett once said, “On wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” Extending the wind PTC further enriches wealthy wind developers at the expense of the American people. Supporting H.R. 1901, which is pro-consumer, pro-free-market and pro-taxpayer, would finally end this costly wind welfare.

Sincerely,

Thomas Pyle, American Energy Alliance
Mike Needham, Heritage Action for America
Brett Gardner, Americans for Prosperity
Grover Norquist, Americans for Tax Reform
Adam Brandon, FreedomWorks
Myron Ebell, Competitive Enterprise Institute
Phil Kerpen, American Commitment
Matthew Kendrach, 60 Plus Association
George Landrith, Frontiers of Freedom
David Williams, Taxpayers Protection Alliance
Sabrina Schaeffer, Independent Women’s Forum
Heather Higgins, Independent Women’s Voice
Judson Phillips, Tea Party Nation
Colin Hanna, Let Freedom Ring
Andrew Moylan, R Street
Marita Noon, Energy Makes America Great
Seton Motley, Less Government
Kristin Fecteau, Campaign to Free America
Horace Cooper, Project 21
Tom Brinkman, Coalition Opposed to Additional Spending and Taxes