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You’ll never guess who’s targeting federal disaster spending

February 12, 2016, 8:58 AM

Politicians of both parties have learned in recent decades the perils of being seen handling a disaster poorly — as was the case with George W. Bush following Hurricane Katrina — as well as the potential dividends that come from handling a disaster well. Bill Clinton, after all, helped turn around his presidency with a resolute response to the Oklahoma City bombing.

But the politics of disaster are almost always bad news for taxpayers. After all, few leaders suffer at the polls for spendingtoo much on disaster recovery, and the regular budget-vetting process tends to break down when it comes to emergency appropriations. After natural catastrophes or terrorist attacks, the incentive is to keep the largess flowing. The problem with disaster costs isn’t just that they’re wasteful; they also reduce incentives for communities to prepare for the next big storm or other calamity.

But two recent initiatives by the Obama administration could actually help put the brakes on out-of-control federal disaster spending. The first — an executive order handed down last year ordering agencies to adopt more stringent building and siting standards in flood-prone areas — received a cool reception from some on Capitol Hill, who complained that it would kill some federal projects. Meanwhile, a new disaster “deductible” proposal for the Federal Emergency Management Agency’s public assistance program could save taxpayers billions by encouraging states to invest in appropriate disaster planning and risk mitigation. Whether it faces similar pushback may depend on how skillfully it is framed.

According to the Center for American Progress, between 2011 and 2013, federal disaster spending totaled nearly $140 billion. While CAP’s number includes some expenses, like drought costs, that may stretch the definition of “disaster,” it is a good ballpark estimate. And many expenses are off the books. For example, the National Flood Insurance Program owes the Treasury more than $22 billion — including more than $8 billion rung up during 2012’s Superstorm Sandy— that every expert believes Congress eventually will have to forgive.

This growth in disaster costs is likely to accelerate, as Americans continue to move to disaster-prone areas. To take just one example, before World War II, hurricane- and flood-prone Florida was the least-populated state in the South, with just 1.9 million people. Last year, it crossed the 20 million mark, passing New York to become the third-most-populous state.

Floods account for roughly half of all disaster costs and 80 percent of all disaster declarations. Obama’s building standards order could thus save a big chunk of the $260 billion the federal government has spent on flooding over the past 30 years. It would have no impact on private property or even on local governments’ own spending. It would simply require that federal building projects meet certain flood-control benchmarks. Eight Gulf Coast Republican senators signed letters opposing the new standards, but they went forward, more-or-less intact, as part of the recent budget deal.

The more recent FEMA proposal, published in the January 20 edition of the Federal Register, would go further still in stemming the tide of federal aid by giving local governments a stronger incentive to prepare. While details remain to be worked out, the proposed program changes would ask that states, territories, and tribes do things like set aside their own disaster funds, improve building standards, or purchase privately backed insurance if they hope to receive full levels of federal aid in the wake of a disaster. Those local governments that fail to prepare adequately would be subject to a “deductible.” If properly implemented, the plan would create strong incentives for underprepared localities to get their affairs in order, as they no longer would enjoy the certainty of a generous federal bailout in the event of a disaster.

But it certainly does not help the prospects for this sensible plan that, as with the earlier building standard order, the Obama administration has sought to sell it as a “climate change” measure. While there’s little doubt that such initiatives would help to deal with climate change arising from human activity, that’s far from the only, or even the most pressing, reason to support them.

In fact, a review of the literature conducted by the Berkeley Earth Group makes it clear that the jury is still out on the link between greenhouse gas emissions and most natural disasters. Obviously, there’s no causal link between climate change and earthquakes (although some environmentalists have actually tried to claim there is). And even when it comes to more common events, like tornadoes, evidence of a direct link is close to nonexistent.

There is ample evidence that increased coastal floods have resulted from sea-level rise and that official heat waves would almost certainly be less common if there were no greenhouse gas emissions. But linkages between other disasters and climate change are harder to tease out. For example, while climate models do provide reason to speculate that hurricane formations and/or intensity might increase in the future as temperatures rise, there’s much less certainty about the frequency of storms making landfall. (Florida is now in the midst of one of its longest-ever periods without a direct strike from a major storm.) Meanwhile, analysis by the National Oceanic and Atmospheric Administration found the 2011-2014 California droughts — which environmentalists largely blamed on climate change — were “dominated by natural variability.”

If the link between climate change and natural disasters is often overstated, the fiscal case for addressing runaway disaster spending is compelling. More people will almost certainly continue to move into disaster-prone areas no matter what happens. The new building standards and proposed disaster deductibles would cut federal spending and create incentives to prepare. To be sure, they’re “tough love” measures that an administration seeking a second term probably wouldn’t risk politically. But they should be embraced as a rare outbreak of fiscal common sense from an administration that will go down in history mostly for its profligacy.

Is privacy possible in the Internet of Things?

February 11, 2016, 1:02 PM

In past policy reports, I’ve supported the right of private-sector companies to collect personal information on individuals who voluntarily agree to disclose it. Whether it was Google, Facebook, Amazon or the local brick-and-mortar supermarket, it was my choice to tell a third party more about myself in exchange for better prices, better service or more convenience. My answer to those who raised privacy concerns was to note there was always the choice to opt out.

But opting out isn’t easy anymore. In many areas of private-sector commerce – such as banking, air travel and health care – the government now requires private-sector companies to collect certain personal information. Dealing directly with the government usually requires it, too. Other times, the government just takes it, as with the National Security Agency’s warrantless bulk-data collection under the Patriot Act.

Beyond that, we are nearing a point where sharing of all manner of personal data will be necessary to accomplish the tasks of everyday life. All that data are stored in third-party servers, in the figurative Internet cloud. With each new technology cycle, that data becomes easier and cheaper to find, search, cross-reference and analyze. At the same time, the line separating data collected by industry and data collected by the government has been blurred, if not erased altogether.

A recent Fox News report offered a disquieting preview. Vigilant Solutions, a supplier of license-plate-reading technology, is providing local police in two Texas jurisdictions access to its database of license plates gathered from red-light cameras. The police cross-reference this data against license plates of vehicles with outstanding speeding tickets or other traffic fines. Officers are then given a list of vehicles and plate numbers to watch out for, and instructions to stop those vehicles when spotted. Police are even given credit-card processing terminals to collect fines during a roadside stop. Vigilant, for its part, takes a 25 percent cut on all fines recouped using its data.

What’s troubling here is that the police are using data collected by a private company for one specific purpose—traffic-light enforcement—and combining it with data collected by separate agencies to isolate individuals who may or may not be guilty of another, unrelated offense. Remember: license-plate readers identify vehicles, not drivers.

This is different from using license-plate readers and traffic cameras for forensic investigation; for instance, to track a vehicle used in a bank robbery or assault. When the police use cameras and other tracking devices to collect information on all citizens with intent to use that information against them in the future, it’s called surveillance.

Police and lawmakers may argue that catching scofflaws—and the fines they owe— is important to the community. Still, the end does not always justify the means, particularly when we consider the proliferation of laws and ordinances that legislatures and government agencies seem bent on creating.

For example, if the Department of Housing and Urban Development gets its way and bans smoking in public housing, will the surveillance cameras that are supposed to be keeping residents safe be used to see who is buying cigarettes at the local bodega and taking them home? Will analytics kick in and dispatch an officer to come knocking and catch the resident puffing, simply for the chance to write a citation and collect a fine?

The so-called Internet of Things really kicks things up a notch. Anyone who attended January’s Winter Consumer Electronics Show can appreciate how close we are to having everything from our cars to our home appliances connected to the Internet. We aren’t quite to the point where, just as you leave your office, your refrigerator can prepare a shopping list and send it to your phone, which can then link to Google Maps to find the nearest grocery store, then link to another app and generate an electronic coupon for your favorite brand. But very soon, you’ll be able to buy a refrigerator with an interior camera that you can access on your smartphone to see if you’re short on milk or beer.

Cool, yes, but the buzz is tempered when you remember that all this information about you—where you go, what you buy, what you eat, what media you stream—is now out there in the cloud. Think of all the data you and your devices transmit or access over the Internet every day. At the moment, there are no laws that protect it from search or seizure by any inquisitive government agency. Think no one in the government cares what’s in your refrigerator? Look at how intrusive child protective services departments have become. CPS will write you up if you let your children play unsupervised in your own front yard. Next thing you know, a nosy agent will be demanding third-party cloud data to see what you’re feeding your children or how much beer you’re drinking every weekend.

During the presidential debates in the current election cycle, candidates in both parties, when asked about improving homeland security, have said they would seek to work with private-sector technology companies. Beyond that, they offer few specifics.

Certainly the private sector has much to teach the government, particularly in areas of cybersecurity. But I would hate to see the government deputize companies that engage in cloud-services management—Google and Amazon are the two biggest—to provide personal information about the habits of individual citizens without explicit constitutional safeguards in place.

The counterargument that law enforcement likes to use, that there is no expectation of privacy, has limits. While there’s no right of privacy for activities done in public, neither is there an expectation of constant surveillance. On a societal level, the law recognizes this as stalking and allows court-ordered redress.

The Fourth Amendment protects our property and documents from warrantless search. The Fifth Amendment protects against self-incrimination. If an individual can’t go anywhere, meet anyone or transact any business without the government either recording that event or using its power to demand a third party to surrender that record, it can be interpreted as a way to compel testimony  against oneself.

The majority of Americans believe it is important that they be able to maintain privacy and confidentiality in commonplace activities of their lives, according to a recent study by the Pew Research Center for Internet, Science and Tech. In the study, 93 percent of adults said that being in control of who can get information about them is important; 90 percent said that controlling what information is collected about them is important.

The Pew report found these views are especially pronounced when it comes to individuals knowing what information about them is collected and who does the collecting. Those feelings extend to Americans’ desire to maintain privacy in their homes, at work, during social gatherings, at times when they want to be alone and when they are moving around in public.

As we become more dependent on the Internet of Things, to ensure our privacy and right to due process, we need more than mere guidelines and best practices. We need the legal protections stated outright in the Bill of Rights. Here are three ideas to get thinking started:

  • We need a comprehensive rewrite of the Electronic Communications Privacy Act to extend explicitly the Fourth and Fifth Amendment protections to personal data stored in the cloud. Private companies should not be required to turn over customer data without a warrant.
  • Without specific legislation and limits, no government agency should be permitted to collect and perform data correlation, analytics or other processing from two or more independent sources unless it pertains to a specific suspect or the target of an investigation. Government agencies should not be able to create databases for non-specific sifting and search for random violators of various laws, ordinances and regulations.
  • Personal data collected for one specific purpose, such as toll collection, should not be used ad hoc for other purposes.

The Internet of Things has terrific potential, but much of it will go unfulfilled if people sense that data they share will be used against them. Vigilant Solutions’ license-plate-sharing program isn’t going down well with the populations affected, and it’s not just the stereotypical crotchety grandpas who see the problems.

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

The e-cigarette barn door is open

February 10, 2016, 2:31 PM

The health of America’s 42 million smokers, whose lives will be cut short an average of ten years by their continued use of combusted cigarettes, is being held hostage by government inaction.

Public-health officials agree that e-cigarettes have a role in reducing the burden of illness; while e-cigarettes are not safe, they are a much less harmful way of delivering the nicotine to which smokers are dependent. They can help smokers quit — even, sometimes, smokers who didn’t take them up with that intention. Failing that, they reduce the harm of continued nicotine consumption.

Both the Food and Drug Administration and the Centers for Disease Control know this, yet have done precious little to address the new technology — either to encourage smokers to switch, or even to regulate e-cigarettes in a serious and reasonable manner. They have been preoccupied by their war on nicotine, regardless of the source.

Television ad campaigns against smoking are a prime example of how federal agencies approach the subject. While these advertisements are effective, especially with young people, they leave millions who could be helped to quit smoking untreated.

These agencies express concern that positive messages about e-cigarettes could encourage young people to try them. This is a reasonable worry. But although some young people have taken up e-cigarettes in recent years, this is largely due to an absence of regulation — while some states have banned sales to minors, many have not yet formally taken action.

Better regulations could address this concern, but that does not seem to be a priority for policymakers. The government has spent the last five years, for example, developing protocols to evaluate and regulate the safety of e-cigarettes. The draft guidelines are so onerous that it would take several years and millions of dollars for any e-cigarette product to be approved. And after many years of reports of children being poisoned after accessing their parents’ nicotine, it was only this year that Congress passed legislation requiring that e-cigarettes and the devices used to refill them be made childproof.

Fortunately, smokers who want to reduce their risk of tobacco-related disease are not waiting. Reuters reports that 10 percent of adults now use electronic cigarettes. One prominent health activist has attributed the recent decline in cigarette smoking, which has reached a new low of 15.3 percent, to this increased use of e-cigarettes. Two recent surveys of physicians find that half report their smoking patients ask about e-cigarettes; one in three doctors recommend them for harm reduction or cessation.

Progress on controlling smoking has been more substantial in the United Kingdom. In 2015, Public Health England published a systematic review of the available literature on the health and safety implications of electronic cigarettes, concluding their use is about 95 percent safer than smoking. The authors recommend that smokers who have tried other methods of quitting without success be encouraged to switch to e-cigarettes. In addition to helping with cessation, switching could reduce smoking-related disease, death, and health inequalities. The report added that there is no evidence so far that e-cigarettes act as a route to smoking for children or non-smokers.

These conclusions were based on several well-designed studies that show e-cigarettes to be as effective as nicotine patches as a cessation tool. In addition, one in seven e-cigarette users reduce their daily cigarette consumption by 50 percent or more.

England’s National Health Service now dispenses select electronic cigarettes as part of routine smoking-cessation interventions. A 2015 article published in Addiction Research and Therapy describes how adding e-cigarettes has increased the program’s appeal, cost-effectiveness, and efficacy.

Here in the U.S., the FDA and CDC’s concerns about the impact of e-cigarettes on young people certainly is appropriate, but that does not excuse the agencies’ failure to promote evidence-based interventions for adult smokers.

A tale of two Internet tax bills

February 10, 2016, 2:11 PM

Poll after poll demonstrates clearly that Americans oppose Internet taxes. Yet even as Congress is poised to act on a wildly popular bill to bar states from imposing Internet-access taxes, the measure has been held up by those who want to tie it to a deeply unpopular plan to expand states’ taxing powers online.

The Permanent Internet Tax Freedom Act — before the U.S. Senate this week as part of deliberations on the Trade Facilitation and Trade Enforcement Act conference report — would protect consumers by proscribing states from taxing Internet access. According to a new poll conducted by Harris Interactive on behalf of the National Taxpayers Union, fully 83 percent of Americans support a permanent ban on Internet access taxes, as consumers are tired of the sorts of double-digit tax burdens they often face with other communications technologies, like wireless service.

This clear message has not fallen on deaf ears in Congress, where support is similarly quite broad. PITFA has passed the U.S. House on a simple voice vote twice in the past two years, indicating no significant opposition from either side of the partisan aisle. However, perhaps precisely because it is considered a “must-pass” measure, PITFA has drawn interest from lawmakers who want to attach it to the completely unrelated Marketplace Fairness Act.

Unfortunately for taxpayers, the MFA is neither good policy nor popular, so it has served as a poison pill preventing the smooth passage of PITFA. The MFA would allow states to impose sales-tax-collection obligations on businesses outside their borders. This would give aggressive states like California, New York and Illinois the power to tax and audit businesses all across the country, even if the business has no physical presence whatsoever in their jurisdiction.

This system of “taxes without borders” would impose huge compliance costs on businesses and upend the bedrock principle that state power ends at the state border. The U.S. Constitution’s Interstate Commerce Clause gives Congress the power – one might say the duty – to prevent states from imposing significant damage to interstate economic activity. PITFA represents the proper balance of federal and state power, as it would keep aggressive states from undermining the Internet. The MFA does the exact opposite.

Unsurprisingly, the MFA is almost as unpopular as PITFA is popular. Polling conducted by Mercury on behalf of the R Street Institute and NTU has found broad and deep opposition to such a bill. Likely voters disapproved of the scheme by a 22-point margin overall. Self-identified Republicans opposed it by a 38-point margin, independents by a 20-point margin and even self-identified Democrats by a five-point margin.

As is common in Washington, this misguided and unpopular legislation can only become law if it finds a popular, must-pass bill from which it can extract leverage. And so some senators, led by Senate Minority Whip Richard Durbin, D-Ill., have taken the Internet-access-tax ban hostage to their desires to vote on an Internet-sales-tax bill. They have cut a deal with Senate leadership to secure a future vote on MFA in return for laying down arms on PITFA.

Luckily, Senators wishing to defend the Internet from the long arm of tax law can begin heading off this strategy this week. By passing the trade bill with the Permanent Internet Tax Freedom Act intact and rejecting the Marketplace Fairness Act, they can protect consumers and businesses from the ever-expanding reach of the tax man.

Leamer talks FISA Section 702

February 10, 2016, 1:45 PM

R Street Outreach Manager Nathan Leamer sat down with Evan Swarztrauber, the host of TechFreedom’s Tech Policy Podcast, to discuss Section 702 of the Foreign Intelligence Surveillance Act, which is set to expire at year-end 2017. The full discussion on the prospects to reform America’s foreign surveillance program is embedded below. 

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

Taxpayer advocates and industry to Congress: Oppose the president’s proposal to alter reinsurance tax provisions

February 10, 2016, 11:53 AM

February 9, 2016

Dear Chairmen Brady and Hatch and Ranking Members Levin and Wyden:

The undersigned members of the Coalition for Competitive Insurance Rates and others are writing to express our concern about a proposal within President Obama’s FY 2017 budget which seeks to deny a tax deduction for certain reinsurance premiums paid to foreign-based affiliates by domestic insurers. These domestic insurers are examples of the foreign direct investment that our government’s economic policies encourage.

The President’s budget proposal closely resembles legislation from the 113th Congress (H.R. 2054 and S. 991) introduced by Reps. Richard Neal (D-MA) and Bill Pascrell (D-NJ) and Sen. Robert Menendez (D-NJ) that would limit US insurance capacity and drive up the cost of insurance, compelling homeowners and small businesses, particularly those in disaster-prone states, to shoulder the burden of this anti- competitive tax. The proposal has remained under active consideration in the Congress, having been included in former Ways and Means Committee Chairman Dave Camp’s tax reform legislation (H.R. 1) in 2014. We would note that it was not proposed by the Senate Finance Committee’s International Tax Reform Working Group in 2015.

A growing, bipartisan chorus of state and federal officials has consistently and vocally opposed the discriminatory measures found in these legislative proposals. In recent years insurance commissioners representing Florida, Georgia, Louisiana, Mississippi, Nevada, North Carolina, Pennsylvania and South Carolina have all publicly rejected the proposals, as have agriculture commissioners from Florida, North Carolina and Tennessee, and Florida Governor Rick Scott.

A robust insurance market open to as many competitors as possible is essential to consumers. Global reinsurers are financially strong and have substantial capacity to support US insurance companies. For example: losses from Hurricane Sandy reached nearly $19 billion; international insurance companies covered close to 50 percent of the losses.

In a 2015 report issued by the Tax Foundation on the consequences of a tax on the foreign reinsurance industry found that United States’ GDP would experience $1.35 billion in losses over the long term, which is approximately twice the revenue it would collect. In an economic impact study of previously introduced related legislation by Rep. Neal and Sen. Menendez, the Brattle Group, a leading economic consulting firm, found such legislation would have reduced the net supply of reinsurance in the US by 20 percent, forcing American consumers to have paid a total of $11 to $13 billion a year more for their same coverage.

A tax on foreign affiliate reinsurance would only serve to limit US insurance capacity and drive up the cost of insurance, a major threat to homeowners and businesses. The only potential winners are the select few firms that stand to profit from decreased market competition.

This budget proposal would deny a deduction for certain reinsurance premiums paid by a US insurer to an international affiliate, or effectively delay it where there are payments of the associated losses. In effect, this is designed to punish international insurers by imposing additional taxes on their US operations. It essentially imposes an isolationist tariff on international insurance companies conducting business in the US, ultimately denying them a key risk management tool everyone else uses. They would have to either replace affiliate reinsurance with non-affiliate reinsurance or raise more capital. One final alternative would be for individual insurers to reduce the size and scope of their US offerings to fit with their existing subsidiary capital bases. Above all, any of the options would increase the cost of reinsurance, making the underlying insurance coverage more expensive for the companies and consumers that depend on it the most.

The Administration’s budget proposal also violates longstanding US tax policy that calls for the application of an arm’s-length standard for related party, cross border dealings. In the insurance business, related party transactions are well documented; they are subject to mandatory approvals by state insurance regulators. Abundant comparative market regulatory information is available to enforce the so-called transfer pricing rules. The IRS has broad authority to enforce these laws as they relate to reinsurance transactions. The changes proposed are contrary to decades of US tax and trade policy and inconsistent with existing US tax treaty obligations. They could spur retaliatory actions by other countries and possibly damage relationships with important US trading partners.

A 2015 study published by Arthur Laffer, “Do We Want Special Interest Trade Protectionism in the Tax Code?” warns that the reinsurance tax “involves trade protectionism implemented through the tax system, done at the behest of domestic insurers and reinsurers seeking protection from foreign competition,” in violation of several US trade agreements and international tax treaties. As Laffer points out, this tariff would violate World Trade Organization (WTO) commitments. One of the basic principles of the WTO is that a country cannot treat a foreign company worse than it treats its own companies; these proposals clearly single out foreign reinsurers for treatment worse than US reinsurers. Specifically, they subject foreign reinsurers – but not US reinsurers – to an arbitrary test to limit the tax deductibility of reinsurance premiums paid to them by their US-based affiliates. Just as foreign countries cannot protect their insurance markets for their domestic insurance companies and treat US companies unfairly, the US cannot protect the US market for domestic insurance companies and treat foreign companies unfairly. The European Union and individual countries like the United Kingdom, Switzerland and Germany have asserted that this tax would violate WTO commitments and tax treaties.

We ask you to weigh the unintended consequences of a tax on foreign reinsurers. These proposals are isolationist measures aimed at benefiting some competitors in the market at the expense of American consumers and business owners.


American Consumer Institute
Americans for Tax Reform
Florida Consumer Action Network (FCAN)
Risk and Insurance Management Society (RIMS)
Organization for International Investment (OFII)
Competitive Enterprise Institute (CEI)
Associated Industries of Florida
Florida Chamber of Commerce
Dublin (Ireland) International Insurance and Management Association (DIMA)
Insurance Europe
National Risk Retention Association (NRRA)
National Taxpayers Union
Munich Reinsurance America
Captive Insurance Council of the District of Columbia
Captive Insurance Companies Association (CICA)
Coalition for Competitive Insurance Rates
Florida Insurance Council
R Street Institute
Association of Bermuda Insurers and Reinsurers
Montana Captive Insurance Association
Vermont Captive Insurance Association
XL Catlin America
Arch Capital Group Ltd.
Argo Group
Allianz of America
International Underwriting Association of London Ltd.
Swiss Re America
Policyholders of Florida
Taxpayers Protection Alliance
Consumer Federation of the Southeast

Conservative groups, legislators square off over online sales tax

February 10, 2016, 11:27 AM

From Salt Lake Tribune

“Utah lawmakers would do well to listen to the loud and clear message and mountain of evidence that voters oppose misguided Internet sales-tax bills,” said Andrew Moylan, executive director of the conservative R Street Institute.

He added that the poll shows “conclusively that, among ordinary Utahns, such proposals are viewed as little more than a power and money grab.”


Alabama pays 14 workers more for mileage than cost of a car

February 10, 2016, 8:00 AM

In Fiscal Year 2015, Alabama paid 14 individuals enough in-state mileage reimbursement to literally buy each of them a new car.

Nobody pays much attention to the details of Alabama’s finances. Even the most politically engaged talk in broad strokes. We wax poetic about the General Fund and the Education Trust Fund. When pressed, we’ll talk about the Alcoholic Beverage Control Board, Medicaid or Corrections. But beyond that, the details start to fade.  All the spending information is available online but, truthfully, the sheer volume is intimidating.

Reviewing the state’s ammo purchases got me thinking. Does the state have any other spending practices that should raise eyebrows?

Did you know that Alabama paid out almost $21 million for in-state mileage reimbursements in 2015? As a point of reference, that amount is more than the state government’s postage bill for the entire year and about half of the state’s annual electricity bill.

While most of the major mileage expenditures were to county health departments, 14 individuals cleared between $20,000 and $30,000 in mileage reimbursements for their in-state travel. Many are inspectors or other state employees where significant travel is simply part of the job. Let’s just assume for the sake of argument that every mile reimbursed in 2015 was a necessary business expense incurred by the State of Alabama.

Could we perhaps get a better deal?

For example, $25,000 in mileage reimbursement translates to about 44,000 miles traveled at 57 cents per mile.

I checked out Enterprise, because I’ve heard they’ll pick you up.

A Toyota Corolla with unlimited miles picked up in Montgomery would cost me $743.32 per month without any discounts. That translates to $8,919.84 per year. Think about that for a minute. Alabama reimbursed one individual $27,719.41 in 2015. Simply renting at the individual retail rate could have saved the state almost 70 percent.

The truth is that the state could save considerably more by negotiating a volume rate, reducing administrative time and expenses related to tracking mileage and avoiding the costly overhead of actually owning yet another vehicle.

What do these precise reforms really mean? Imagine the state only saved 25 percent on its in-state mileage. We’ve heard repeatedly about public schools without the funds to buy enough toilet paper to last the year. Think we could fix that with $5 million?

The devil is in the details when it comes to state spending, and it’s relatively easy to see areas like mileage policies where small changes could turn into big savings. But it’s $5 million here, $3 million there, and smaller savings that help ease budget pressures. They’re about as sexy as a pair of old sweats, but do they make a difference? You bet.

U.S. Supreme Court blocks implementation of Obama’s carbon rule

February 10, 2016, 7:28 AM

In a 5-4 order, the conservative wing of the U.S. Supreme Court stayed implementation of President Barack Obama’s carbon rule while litigation is ongoing.

The court issued the order less than a month after the U.S. Court of Appeals for the D.C. Circuit denied a request made by Alabama and 28 other states to halt implementation of the Clean Power Plan as the lawsuit proceeds.

The text of the order is strikingly simple:

The application for a stay submitted to The Chief Justice and by him referred to the Court is granted. The Environmental Protection Agency’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” 80 Fed. Reg. 64,662 (October 23, 2015), is stayed pending disposition of the applicants’ petitions for review in the United States Court of Appeals for the District of Columbia Circuit and disposition of the applicants’ petition for a writ of certiorari, if such writ is sought. If a writ of certiorari is sought and the Court denies the petition, this order shall terminate automatically. If the Court grants the petition for a writ of certiorari, this order shall terminate when the Court enters its judgment.

Justice Ginsburg, Justice Breyer, Justice Sotomayor, and Justice Kagan would deny the application.

This a big deal. The order will remain in effect until the Supreme Court weighs in on the case, even if a lower court upholds the rule in the meantime. In all likelihood, the Supreme Court’s order means the ultimate fate of President Obama’s Clean Power Plan won’t be determined until someone else is sitting in the White House.

Perhaps more significant is how unprecedented this is. According to The New York Times, the Supreme Court has never before stopped the implementation of a regulation before a ruling by a federal appeals court. As such, the order sends an ominous signal that the rule may well be invalidated when the court finally hears the rule. If Obama’s carbon rule fails to pass legal muster, the debate over carbon emissions shifts back to Congress, where it rightly belongs.

The order also changes the playing field for the states, which faced a September deadline either to submit a carbon-reduction plan consistent with the rule or request an extension. Absent the deadline, states without carbon-emission restraints have precious little motivation to develop them outside of political pressure from state voters.

The EPA’s arrogant reaction to the court’s 2015 opinion in Michigan v. EPA may be partially to blame for the order. Before the Supreme Court’s decision in that case, EPA Administrator Gina McCarthy noted that, even if the court ruled against the agency: “Most of [the power plants] are already in compliance, investments have been made, and we’ll catch up.”

Those remarks clearly demonstrated the risks the court faced in allowing an EPA rule of questionable validity to take effect before its legality could be ascertained. In the Michigan case, even though the rule was rejected and sent back to the lower courts, the damage already had been done. The court here made sure the EPA couldn’t get away with that again.

EPA’s Renewable Fuel Standard deceit

February 10, 2016, 7:00 AM

The Environmental Protection Agency (EPA) wants Americans to pay more for their groceries. That’s the only way to explain the agency’s decision to mandate the use of corn-based ethanol in our gas supply.

The decision comes as part of the EPA’s adherence to the Renewable Fuel Standard, a law that requires U.S. transportation fuels to be blended with biofuels, the most common of which is ethanol. The new rule calls for refiners to add more of these renewable fuels this year — 18 billion gallons more.

Like much of the RFS’ history, this is a mistake. The RFS has plagued the country for years by jacking up food and fuel costs. What’s more, it’s outdated and offers zero environmental benefits. Congress should nix this standard before it wreaks more havoc on the country.

Congress passed the RFS in 2005. The goal was to decrease America’s dependence on foreign oil by mixing biofuels, such as ethanol, into our nation’s gasoline supply. Their inclusion would allow the United States to import less oil from abroad.

But the United States no longer depends on oil from foreign producers. Thanks to an explosion in shale exploration, the country recently passed Russia as the world’s top oil and natural-gas producer. In 2014, the nation produced more oil than ever before, increasing its output by 1.6 million barrels a day.

There’s no evidence that the use of ethanol actually lowers oil imports.

Between 2008 and 2014, net oil imports dropped by more than 6 million barrels a day. But that’s largely because domestic production increased by more than 3.5 million barrels a day. Meanwhile, ethanol production increased by a negligible 328,500 barrels a day over that same period — comparatively, a drop in the bucket.

Ethanol has also caused domestic food prices to skyrocket. To meet the growing demand for ethanol, farmers have chosen to produce corn over pork, beef, poultry and other agricultural products.

That’s costing American families dearly. In 2012 alone, the average American family spent an additional $2,000 on groceries thanks to the RFS.

This price spike is also hurting businesses. So far, the RFS has cost chain restaurants an additional $3.2 billion per year — about $18,000 per restaurant — according to a study by the National Council of Chain Restaurants.

Drivers have fallen victim to the RFS as well. Ethanol is less efficient than regular gasoline, so motorists must purchase more to go the same distance. In fact, from 2007 to 2014, motorists spent an extra $10 billion each year — a total of $83 billion — than they would have with non-mixed gasoline.

Some argue that these costs are worth it for ethanol’s environmental advantages. But research shows there’s hardly anything “green” about it.

To get a full sense of environmental effects of ethanol production, it’s necessary to take into account not just tailpipe emissions, but all emissions associated with growing corn for fuel. That includes those from farm equipment used to clear land, plant seeds, irrigate and harvest crops. Don’t forget the pollution emitted hauling ethanol from factories to refineries to gas stations.

In short, ethanol isn’t nearly as clean as its proponents suggest. Indeed, a study by the Texas-based Baker Institute discovered that the greenhouse gases produced during a fuel cycle for ethanol are roughly the same as that produced by petroleum-based fuels.

These emissions add up. A recent study published in Science magazine estimated that “corn-based ethanol nearly doubles greenhouse emissions across the world over a 30-year period.”

The RFS has lost support from even those who benefit from it. My own organization recently commissioned a poll in Iowa — the state that produced the most corn in 2015. The poll found that half of the state’s voters either don’t care much or at all about the law. Six in 10 Iowans don’t want presidential candidates to talk about it, period.

Clearly, the EPA’s new rule is a step in the wrong direction. To stop this from happening again, Congress should finally trash the outdated Renewable Fuel Standard.

R Street Institute statement on Supreme Court’s delay of Clean Power Plan

February 09, 2016, 8:25 PM

The following statement can be attributed to Catrina Rorke, director of energy policy for the R Street Institute:

While it’s unclear how the legal challenge will pan out, the Supreme Court should be commended for ensuring that states aren’t forced to spend money, time and manpower to comply with a rule that ultimately may be found illegal. Both state and federal officials should use this time to craft more effective and efficient legislative responses to address climate change, as merely delaying action will not solve the problem. The CPP is a dramatic overreach by an activist administration and it deserves thorough legal examination.

Congress should clarify intent of U.S. Postal Service’s “ghost ship” board

February 09, 2016, 9:11 AM

WASHINGTON (Feb. 9, 2016) – Congressional inaction on nominees to the U.S. Postal Service’s Board of Governors has left the agency under the control of a Temporary Emergency Committee (TEC) for more than a year, a troubling precedent that could have wide-ranging impacts across the federal government, according to a new study from the R Street Institute.

Federal statute dictates that the Postal Service board needs a quorum of six members to exercise its authority. But the U.S. Senate has refused to act on any of five nominations submitted by President Barack Obama to fill members’ expiring terms, leaving the board with just one governor serving alongside the postmaster general (PMG) and deputy postmaster general (DPMG).

“On the one hand, the TEC solution can be understood as an effort by well-meaning governors to maintain operations in an unprecedented environment,” authors Kevin R. Kosar and Daniel J. Richardson write. “Nevertheless, there are aspects of this action that could prove challenging and set a troubling precedent for agencies that face similar challenges.”

To date, the TEC’s functions appear very similar to those of the full board that preceded and created it. But the emergency action also blurs the distinction between the commission and single-administrator models of agency governance in important ways. The authors cite the USPS as a case study in how breakdowns in the appointment process can create instability for agencies and undermine congressional prerogatives.

“Instead of the Senate’s failure to confirm leading either to new nominees or policy victories, the result has been an administrative solution that centralizes executive functions in fewer hands,” Kosar and Richardson write. “The danger is that this solution provides a blueprint to other agencies faced with similar pressures.”

Unless Congress passes sweeping legislation, these issues will have to be resolved on a case-by-case basis, creating more upheaval in the agencies and potentially introducing incentives for a president to withhold making appointments.

“This leaves Congress on uncertain footing in negotiations with the executive branch over the impact of appointment decisions and forces agencies to make contentious choices just to maintain their operations,” the authors write.

Kosar and Richardson recommend that Congress clarify the intent of the board’s statutory quorum requirements and delegation provisions. They note that lawmakers previously have provided such clarity in other cases, such as the statute governing the Consumer Product Safety Commission.


The U.S. Postal Service’s ghost ship board

February 09, 2016, 9:00 AM

The attached policy study was co-authored by Daniel J. Richardson. 


To appreciate democratic dysfunction, one need look no further than the U.S. Postal Service. That single agency is home to all of the defining fights of modern politics, with all of the usual symptoms.

Postal policy currently is embroiled in disputes over how to define the agency’s role with respect to private industry; how to adjust public services to an evolving market; how to provide retirement security to postal employees; and how to manage the USPS’ long-term operating deficit. The service’s day-to-day operations are “off budget,” meaning the perennial deficits that result from these policy stalemates cannot be hidden in the broader federal budget. Despite years of media coverage highlighting the USPS’ financial crisis and other challenges, Congress remains divided on how to reform the Postal Service for the future.

Given this reality, perhaps it’s not surprising the USPS has become another front in the lasting conflict between the White House and Congress over the appointment process. The recent gridlock in the confirmation of both judicial and executive-branch appointments is well-documented. In most cases, the outcome of this gridlock is predictable. Judges take on heavier caseloads or hear cases outside their judicial district. Agencies function with acting executives and delegate authority to officers further down the organizational chart. Boards and commissions can conduct business absent a member or two, often for years at a time. The machinery of government goes on, if a little slower. The agencies and their advocates complain about the inefficiencies and unsustainable burdens, but a crisis sufficient to change the status quo rarely comes to fruition.

However, there does come a point beyond which congressional inaction to seat officers truly becomes paralyzing. For boards of directors, this point is the quorum requirement. If a multimember board cannot gather enough members to form a quorum, it cannot exercise its legitimate authority. Such currently is the case with the U.S. Postal Service.

Greens tangled in the Evergreen State’s political thicket

February 09, 2016, 8:00 AM

Washington state’s environmental community continues to fail to escape the tangle of its own political allegiances, even when it comes to addressing a crisis that, by its own account, presents an existential threat to humanity’s existence.

Late last month, the state Democratic Party moved to oppose I-732, a carbon-pricing initiative on November’s ballot that’s backed by Carbon Washington. The internal machinations leading up to the party’s decision to oppose the measure likely are the stuff of backroom intrigue, but the political dynamics are pretty clear.

Three separate but related pillars of the Washington Democratic establishment – labor unions, civil rights activists and social progressives – have loudly rejected the notion that a revenue-neutral carbon tax could be implemented without harming the state’s poor. These factions further maintain that such a tax would harm minorities, specifically.

Neither of these claims has much empirical support. Washington’s tax system already is the most regressive in the nation and I-732 actually would reduce the burdens of those on the lower rungs of the income ladder. The concerns are further belied by fiscal analysis from the state’s Department of Revenue that concluded I-732 actually is revenue-negative.

But that’s precisely the point. The concern isn’t actually that poorer Washingtonians would be made to pay more, but that anyone would be allowed to pay less. For some on the left, the idea that fewer tax dollars might flow into public coffers is anathema. Ultimately, their calls for “climate justice” are nothing more than poorly disguised pleas for centrally planned redistribution to certain interest groups’ pockets.

A group with the misleadingly anodyne moniker the Alliance for Jobs and Clean Energy announced in October 2015 that it intends to “direct investments to accelerate the transition to clean energy and reduce the impacts of global warming pollution on the people, industries and lands hardest hit by climate impacts.” What that means, specifically, is anybody’s guess. The Alliance has yet to offer a concrete vision of how it plans to divvy up the spoils, but such things take time.

Economically literate environmentalists, like those with CarbonWA, can see the shortcomings of such an approach, but have only just begun to grapple with the fact that the priorities of their traditional allies on the left are, in many cases, outcomes other than a carbon-free future. CarbonWA correctly surmises that support from the right will be needed to pass the initiative but, as some left-wing detractors also have noticed, that support has yet to materialize.

In its effort to build a coalition to support I-732, CarbonWA has, in the words of director Yoram  Bauman, “tried very hard to get support from conservatives for I-732, but we don’t have much to show for it despite offering a simple, efficient, market-based, revenue-neutral policy.”

So far as the group’s “efforts” are concerned, that claim may well be correct. But effort is a poor substitute for meaningful engagement. For our part, R Street spent quite some time making the conservative case for a carbon tax in Washington and elsewhere. CarbonWA hasn’t shown itself to be terribly interested in the kinds of arguments groups like ours make. At least, not nearly as interested as they have been in collaborating with a rock star.

Sometimes, the best ideas – even the most “simple, efficient, market-based” ideas – can be subverted by simple mismanagement. CarbonWA’s lukewarm reception on the right is its own doing. It says it wants free-market allies, but it appears that’s true only so long as they aren’t actually free market. This is a symptom of its struggle to accept that its proposal, as it stands, will not enjoy a favorable reception on the left, either.

Now that the state Democratic Party has turned its back on I-732, perhaps CarbonWA will actually commit itself working across the aisle. That work could start as soon as today, as I-732 will be the subject of a public hearing in Olympia in front of the Senate Energy, Environment & Telecommunications Committee.

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Insurance differences stall progress on ride-hail regulation

February 08, 2016, 12:27 PM

From Tampa Tribune

Instead, they support the House version by Rep. Matt Gaetz, HB 509, which passed out of the House with a supermajority vote of 108-10 and vast bipartisan support. It follows recommendations made by a coalition of insurance companies and transportation network companies as a compromise after years of fighting each other, and is being promoted by conservative, free market groups like R Street and the American Legislative Exchange Council.

Seven years ago today, WikiLeaks published 6,700 CRS reports…and nobody was hurt

February 08, 2016, 7:00 AM

Feb. 8, 2009 began like any other Sunday for me. I was up early taking care of a young child, gulping coffee and scanning the news. The New York Times turned my stomach with its report that a Polish engineer had been beheaded by the Taliban. The Grey Lady also gleefully described the tribulations of Republican Party Chairman Michael Steele. A happier bit of news came from The Washington Post. Its sports section reminded me that my Cleveland Cavs were playing the Los Angeles Lakers on television at 3:30 that afternoon.

At some point that morning, I managed to get online. (I did not have a smartphone back then.) The Internet was abuzz with speculation about the 51st Grammy Awards, which were that night. (Robert Plant and Alison Krauss would fare well.) And there sat an email from a colleague of mine at the Congressional Research Service, asking if I had heard that WikiLeaks had published a trove of our reports.

I hadn’t.

Julian Assange’s outfit announced its work online with relish:

Change you can download. WikiLeaks has released nearly a billion dollars worth of quasi-secret reports commissioned by the United States Congress. The 6,780 reports, current as of this month, comprise over 127,000 pages of material on some of the most contentious issues in the nation, from the U.S. relationship with Israel to the financial collapse. Nearly 2,300 of the reports were updated in the last 12 months, while the oldest report goes back to 1990. The release represents the total output of the Congressional Research Service (CRS) electronically available to Congressional offices. The CRS is Congress’s analytical agency and has a budget in excess of $100M per year.

My stomach fell, and various thoughts ran through my mind. What would happen at the office? Were my reports in the trove? (Answer: yes.) My email address and 5-digit phone extension were on our reports. Would lobbyists and angry members of the public start contacting us to complain about our work?

That week at the office, I and many other CRS employees jabbered anxiously in the hallways and over coffee about how this could have happened and what it meant for the agency.

As it happened, the WikiLeaks massive report dump had no effect on us. In my succeeding six years at the agency not once did I hear any employee report any harm had resulted. The reason was not difficult to discern: many, if not most, of the CRS reports already had been put online by the Federation of American Scientists and various agencies of the U.S. government itself. Lobbyists and other hyperpolitical sorts inclined to pressure CRS already had our reports, often acquired via pricy subscription services.

This bit of history is important to keep in mind as Congress considers legislation to expand public access to CRS reports. There are individuals on Capitol Hill who claim bad things will happen if this commonsensical reform is enacted. The WikiLeaks report dump demonstrates that posting CRS reports to a central public repository (like GPO.gov) will do no harm to either CRS or its employees.

Today, more than 27,000 copies of CRS reports are scattered about the Internet. The average citizen, however, does not know where to look for them or what keywords will bring them up in Google. (Compare this search versus this search.) It’s way past time for Congress to give the public some value for the $100 million it spends on CRS each year.

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Video of panel ‘The Financial Crisis Inquiry Commission Report: Five Years Later’

February 05, 2016, 3:14 PM

To mark the fifth anniversary of the Financial Crisis Inquiry Commission report, R Street hosted a Feb. 4 panel featuring commission members Peter Wallison of the American Enterprise Institute and Douglas Holtz-Eakin of the American Action Forum, along with Edward Murphy of the Congressional Research Service, Tom Stanton of Johns Hopkins University and Philip Wallach of the Brookings Institution. R Street’s Alex J. Pollock served as moderator. You can watch video of the full panel below.

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A tale of two sovereigns

February 05, 2016, 1:49 PM

Canute was a king of Denmark who ruled over an empire that included large parts of Sweden, all of Norway and almost all of England. He ruled over person and property alike. He ruled over the land and sought to expand his direct control over the activities of the sea, as well.

Legend has it that, one fine 11th century day, resplendent in royal finery as he stood by the shore, he remarkably issued a command to the tide. He said:

I command you therefore not to rise onto my land.

But, the tide did not heed Canute. Disobediently, the sea disregarded Canute’s admonition, did as it would and rose anyway. Canute responded by announcing to those present:

Let all men know how empty and worthless is the power of kings…

Nine centuries later, the voters of California, invested with collective sovereignty, decided that they would, as much as possible, take direct control over automobile-insurance pricing. Toward that end, through the power of Proposition 103, they commanded insurance rates not to rise in their land. Bolder than King Canute, they even commanded insurance rates to go down! Unlike Canute, however, they set up a huge engineering organization and a system of regulatory dams and dykes to control the flow and rise of prices.

Nearly 30 years later, has the power of the second sovereign been any more noteworthy than the power of the first? No, not really. As outlined in my study entitled “The troublesome legacy of Prop 103,” the measure has expanded the regulatory bureaucracy and associated costs of doing business in California, while doing nothing to reduce insurance fraud or insurance rates. Instead of saving California consumers money, it has yielded only dramatic growth in the regulatory purview of the California Department of Insurance, at immense cost to taxpayers and premium-payers alike.

Yet, the legacy of Prop 103 remains confused. The initiative was passed Nov. 8, 1988. By coincidence, it so happens that Nov. 6 marks the feast of St. Illtyd, the 5th century Welsh abbot who is celebrated for accomplishing what King Canute could not.

Illtyd marched to the shore, drew a line in the sand and prayed for the tide not to wash across his line. Through what has been recorded by church officials as a miracle, Illtyd’s prayer was answered and the tide never crossed the line.

Advocates of Prop 103 have declared the law’s value based upon a similar premise. They claim the mantle of Illtyd, instead of their earned status as inheritors of the legacy of Canute. Like the tide, the underlying activity of markets, the costs that drive them, are immured to the pronouncements of kings and regulators alike. That Canute was frustrated and Illtyd exalted had everything to do with the tide and nothing to do with their pronouncements. But where luck failed to smile upon Canute, it elevated Illtyd to sainthood.

So, too, has it been with the authors of Prop 103. They passed their ballot initiative at a time when insurance cost drivers were ebbing from a high tide and have been able to claim with considerable success the credit for stabilized and reduced auto insurance premiums, in spite of no clear academic consensus to support that claim.

Ultimately, between sovereigns, has the power of the people of California been any more noteworthy in its ability to control insurance rates than was King Canute in his effort to command the tide to stop rising? Yes, but only insofar as the lesson learned by King Canute was less time-consuming and less expensive than the second sovereign’s ongoing effort.

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David Bowie’s legacy on copyright and the future of music

February 05, 2016, 1:13 PM

The following was co-authored by R Street Innovation Policy Director Mike Godwin.

Amid the steady stream of “hot takes” the past few weeks on the legacy of the late great David Bowie, The Washington Post’s Robert Gebelhoff dug up some of the rock legend’s contrarian views on copyright, if only to rebuke them thoroughly.

Gebelhoff’s piece cited a 2002 interview Bowie gave to The New York Times in which he prophesied: “I’m fully confident that copyright…will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing…It’s terribly exciting.”

Exciting though it may have been, Bowie’s prediction obviously has not come to pass, for which Gebelhoff says we should be thankful. In his piece, he notes that strong copyright laws “play an essential role in our creative economy – and have done so for centuries.” He cites as evidence a recent Stanford University/NBER study on how differing laws in Italian city-states led to more operas being produced where copyright was protected.

Bowie has long been an innovator and music visionary, experimenting with early ways to use the Internet to “cybercast” concerts and connect with fans. But it’s important that Bowie wasn’t necessarily seeking the death of copyright (after all, he used it to make a living). Instead, he was paying heed to what digital media already had done to revolutionize copyright-centered industries.

What he got right was detecting traditional copyright industry’s anxiety – the same anxiety that has led them to push successfully for copyright terms to be extended by nearly 580 percent over the last 200 years. Mickey Mouse famously has enjoyed several retroactive copyright term extensions since Walt Disney’s death, though Walt has yet to take advantage of this added incentive.

So why would Bowie, whose fortune and fame owed so much to the music industry, be excited about the end of copyright? The answer is straightforward: as a working, successful musician and producer, he knew as well as anyone that unlimited copyright protection could hinder creation, as well as remunerate it. If you’re a fan of Bowie’s “Young Americans,” you know that part of its power as a song derives directly from its unembarrassed quotation of the Beatles song “A Day in the Life.”

While copyright didn’t disappear in the decade since Bowie’s interview, Bowie was in many ways right about the impending shakeup of the industry. More and more consumers, particularly millennials, are listening to their music on demand through a streaming subscription, rather than purchasing copies a la carte. Remix has become a central technique for new creativity. And heavy-handed copyright can get in its way. Look, for instance, at what future presidential candidate Kanye West did with Ray Charles’ “I Got a Woman.” Bowie’s vision that “music itself is going to become like running water or electricity” turned out to be pretty accurate.

This trend has led to sharply declining revenues from physical sales (except for vinyl, which isdoing fine, thanks to hipsters) and a steadily increasing share for streaming. Digital downloads are still popular and continue to represent a major revenue source for now. As physical formats have fallen out of favor, as Bowie perhaps foresaw, the industry experienced a period of sharp disruption.

The result has been not just depressed global revenues, but also a whole apparatus of production, distribution and retail falling away. As a 2015 study by Midia observed, the narrative of “music industry decline is a label phenomenon.” Which echoes what Bowie saw coming in 2002: “I don’t even know why I would want to be on a label in a few years, because I don’t think it’s going to work by labels and by distribution systems in the same way.”

Of course, the role of our copyright system is not to protect established industries from disruption. Policymakers shouldn’t protect the record store from Apple or the bookstore from Amazon. Our nation’s founders gave Congress a mandate to use copyright to “promote the Progress of Science and useful Arts.” That is, to provide the carrot to spur artistic creation. If we take copyright “incentives” too far, they can undermine artistic freedom by imposing limits on other forms of creative expression and uses of tangible property.

Even the opera study Gebelhoff cites in his piece acknowledges this, as its authors write that “there is no clear evidence” that copyright extension beyond the author’s life span creates meaningful incentives. In fact, they suggest it has little effect “beyond the first five years.” In anarticle about the study, New York University law professor Christopher Jon Sprigman notes that: “[this] conclusion is particularly important because our contemporary debate is usually not whether to have copyright at all, but rather whether to extend already very long copyright terms.”

Bowie was wrong that copyright would end, but he was right that copyright as we know it is under threat. Its foundation, built for an analog age, increasingly struggles to function in the digital one. And its market, warped by decades of heavy-handed government intervention and industry carve-outs, doesn’t know how to operate freely anymore.

That’s why substantial reforms will be inevitable. As Congress slowly moves in that direction, it should be mindful of this lesson: stronger copyright laws don’t automatically incentivize more creative freedom. In fact, they often come at its expense.

Bill legalizing ridesharing moving through West Virginia House

February 05, 2016, 12:45 PM

What a difference a year makes in the world of ridesharing. Just 18 months ago, only one state (Colorado) had passed comprehensive legislation legalizing and regulating the emerging market of transportation network companies like Uber and Lyft. Now we’re down to just a handful of states that have yet to act.

Joining Florida, Pennsylvania, Missouri and New Mexico among states that are seeing renewed legislative pushes in 2016, the majority leader of West Virginia’s House of Delegates has introduced legislation that would authorize the state Department of Motor Vehicles to license TNC drivers and enforce minimum basic requirements for insurance criminal background checks.

H.B. 4228 – the bill from Del. Daryl Cowles, R-Morgan – cleared the House Roads and Transportation Committee earlier this week and now will be sent on to the House Finance Committee. Like other recent bills crafted in the wake of last year’s major inter-industry compromise, the measure provides that insurance requirements can be satisfied either by the driver or the TNC, and sets minimum levels of $50,000 per person and $100,000 per accident for bodily injury, as well as $25,000 for physical damage.

The measure also would clarify that TNC drivers are considered independent contractors under state law, provided both parties agree by contract and the TNC does not prescribe the driver’s hours, territory or forbid drivers from doing other work or driving for rival TNCs. As a result, the law would stipulated that TNCs are not responsible to provide workers’ compensation coverage to drivers.

The West Virginia Legislature came within a hair of passing a similar bill, S.B. 585, during last year’s session. Differing versions of the measure did manage to pass both houses, but the chambers ultimately could not reach a compromise on language prohibiting drivers from discriminating against passengers on the basis of sexual orientation or gender presentation.

Gov. Earl Ray Tomblin, a Democrat, separately introduced a bill during this session, H.B. 4305, that would require TNCs to have a nondiscrimination policy and comply with nondiscrimination laws. Similar generic anti-discrimination language also is included in the Cowles bill, which states:

(a) The transportation network company shall adopt a policy of nondiscrimination with respect to riders and potential riders and notify transportation network company drivers of such policy.

(b) Transportation network company drivers shall comply with all applicable laws regarding nondiscrimination against riders or potential riders.

(c) Transportation network company drivers shall comply with all applicable laws relating to accommodation of service animals.

(d) A transportation network company may not impose additional charges for providing services to persons with physical disabilities because of those disabilities.



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