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Orrin Hatch's campus free speech bill is sorely needed

Nicole Kurokawa Neily — Wed, 21 Feb 2018 08:02:00 CST

Two weeks ago, Sen. Orrin Hatch, R-Utah, introduced a bill in the U.S. Senate to protect free speech on campus: the Free Right to Expression in Education Act. To Washingtonians, it seemed to be yet another symbolic bill that staked out a position on an issue important to constituents yet unlikely to pass. One warning sign was the bill’s clever acronym: FREE. Legislative puns are a favorite tactic for buzzy-yet-impotent bills like Democratic New Jersey Sen. Bob Menendez’s CECIL Act (introduced in the wake of the Cecil the lion scandal,) and Texas Republican Rep. Blake Farenthold’s JAWS Act (the Justice Attributed to Wounded Sharks Act, in case you were wondering).

However, the bigger flag to most cynical Washingtonians was the fact that the topic itself seemed irrelevant. Obviously, public universities protect expressive activities in outdoor areas on campus — it’s college, after all, the place where students go to expand their minds and develop into adults!

Yet, therein lies the rub.

Unfortunately, many universities don't protect such a fundamental right for students — despite the fact that public universities, being taxpayer-funded, are actually required to uphold the First Amendment. And that includes the freedom of speech.

Schools trample students’ rights both directly and indirectly. Speech codes, which typically use civility requirements to create “safe spaces,” are one tool that universities use to restrict speech, while free speech zones restrict the places on campus where students may speak freely. In addition, the way in which colleges regulate outside speakers can also be problematic, giving opponents of the speech a “heckler’s veto” and imposing burdensome security and financial requirements — especially when disproportionately imposed on outside speakers from one side of the ideological spectrum.

Indirectly, “bias reporting” protocols encourage students who overhear “offensive” or “biased” speech to report it anonymously to the university. University officials then may investigate the incident and meet with the student in question. These investigations by university officials create a chilling effect on students’ willingness to exercise their right to free speech and curtail the free exchange of ideas that is supposed to be a hallmark of the academic setting.

Over the past several years, a number of colleges with flagrantly unconstitutional speech policies have been challenged by groups, like the Foundation for Individual Rights in Education and the Alliance Defending Freedom, who have sued schools on behalf of students whose rights have been violated — and they’ve won.

You’d think the victories that FIRE and ADF have stacked up would send a clear signal to college administrators that it’s time to roll back their well-intentioned, but wrong, policies — sadly, not nearly enough appear to have received the message.

Thanks to efforts by the Goldwater Institute and the American Legislative Exchange Council, several state legislatures across the country have stepped in to remind universities what their obligations are under the law. As FIRE notes, “Colorado, Virginia, Missouri, Arizona, and Utah have already passed legislation banning public colleges and universities from relegating student expression to free speech zones, with North Carolina and Tennessee prohibiting their use in more comprehensive legislation protecting student expression.” It's unfortunate that such a restatement of basic principles needs to take place at all. For decades, colleges have been places of inquiry and debate where conventional wisdom was challenged and new ideas were tested. If that era ends, then the country’s minds will be poorer for it.

As Hatch noted in a recent National Review article, “Students’ speech ... should not be dependent on the state in which they reside.” The fact that 43 states and the District of Columbia haven’t yet reaffirmed the importance of the First Amendment on campus means that there is now an opportunity for Congress to do so in what should be a non-controversial bipartisan effort.

Members of Congress swear an oath of office to “support and defend the Constitution of the United States against all enemies, foreign and domestic.” At a time when the country is wracked with division, now is the time for both parties to come together in order to send a clear message to America’s students that their rights matter and that the world’s greatest deliberative body stands with them in solidarity.

Nicole Neily is a senior fellow at the Independent Women's Forum. Most recently, she was the president of the Franklin Center for Government and Public Integrity, an investigative journalism nonprofit focused on highlighting abuses of power, cronyism, and government overreach in the state.

The Download on Internet Taxation

Nicole Kurokawa Neily — Fri, 22 Jan 2016 05:01:00 CST

A coalition of unlikely bedfellows across the political spectrum – including the Independent Women’s Forum – sent a letter to the Hill today on the issue of internet taxation (full coalition letter & organization names here, if you’re interested).

Opposing internet taxation is just common sense. After all, there’s a very good reason that people say “tax the things you want less of” – taxes add to the total cost, and the more expensive things are, the less people are likely to use them. Unfortunately, a handful of Senators – looking at you, Dick Durbin! – seem to have skipped that day of Econ 101, and are taking steps that would open the door to future taxation by states and municipalities.

(Sen. Durbin has been a longtime supporter of the misleadingly-titled Marketplace Fairness Act, and has asserted over the years that he believes that local retailers are at a competitive disadvantage to their online counterparts.)

Without a doubt, women would be hurt by an internet tax because on a number of levels, we use the internet to achieve a better work-life balance. If policymakers are considering collateral damage, they should take these aspects into account:

• Online businesses. The internet has opened up new worlds of opportunity for people to work from home – many of whom are women. A July 2015 report by Etsy (the online craft retail clearinghouse) revealed that 86% of their sellers are women, noting “They are twice as likely to be young adults (under age 35) as other US business owners. Many are parents with children at home and 17% have household income under $25,000 annually. Nearly half (45%) had never sold their goods until they sold them on Etsy. By making it easy to buy and sell goods, Etsy makes entrepreneurship lower-risk and accessible for these populations.”

• Students. A July 2015 survey of online students showed that the population skews heavily female; according to an article in US News & World Report, “At the undergraduate level, 70 percent of students were women. Among graduate students, 72 percent of students were female.” For women trying to balance the demands of raising a family, the flexibility that an online degree offers means that women no longer have to make an either/or choice, but rather that they can do both on a timeframe (and in a location) that works for them. In addition, homeschooling families have additional resources like the Khan Academy at their fingertips. Universities like Yale, Harvard, and even my beloved University of Illinois offer free online courses, making more education more available to more people than ever before. Pretty amazing!

• Consumers of online purchases. As a working mother of two children under 3, the ability to order goods like diapers, groceries, and birthday presents has made life so much easier. No late-night convenience store runs… a few taps on my phone and I’m all set with a delivery the next day! And for people with mobility issues or the elderly, the ability to have goods delivered is a lifesaver.

A December 2015 consumer survey found that 56% of people had less than $1000 combined in their savings and checking accounts. Millions of Americans live paycheck-to-paycheck, and increasing a utility bill by a few dollars means that something else has to be cut from the monthly budget. As we at IWF have noted for years, women manage family budgets, and are acutely aware of the sacrifices that must be made.

A permanent ban on internet access taxes is a bipartisan issue, because it’s good politics and good policy.

Breaking: Another Politicized Government Agency!

Nicole Kurokawa Neily — Tue, 1 May 2012 13:05:00 CST

The Founding Fathers originally conceived a government of limited power – one that would establish a framework for private citizens to operate without choosing winners or losers. Alas, it seems that Washington has lost sight of this last point (a few recent examples include an EPA official’s recent “crucify them” remarks on the oil and gas industry, green energy venture capital grants by the Department of Energy, and the National Labor Relations Board’s attempted intimidation of Boeing with regards to the location of a plant.)

Let’s add another agency that’s become more concerned with advancing an agenda than impartially arbitrating an industry: the Center for Disease Control.

To address society’s alcohol-related woes, the CDC has recommended against privatization of state-run liquor monopolies, such as Virginia’s ABC stores (the third revision of its opinion on this subject). The first time that the CDC’s Task Force reviewed privatization studies, they focused on whether or not privatization actually did any harm – namely, did alcohol-related harms increase after private sector operators were allowed to enter into the alcohol business? The Task Force found that: “consistent evidence that privatization of retail alcohol sales is associated with an increase in total alcohol consumption. However, there is insufficient evidence to determine the effects of privatization on excessive alcohol consumption and related harms, because there are too few studies that directly evaluate these outcomes.”

So there’s not enough research in this area – and not all research unilaterally suggests that state control of liquor stores provides the best possible outcomes. So what’s a nanny state government to do? Why, selectively discount those inconvenient studies that don’t advance the correct storyline, of course!

It’s unsurprising, on some level, that this has taken so long – after all, with the federal government’s takeover of health care, it actually IS the government’s business what people consume, how much they exercise, and any other decision that may influence their health outcomes. At the end of the day, the government (with your tax dollars!) will arbitrate health decisions – so it’s in their interest to be overly cautious. However, just because a decision is logical doesn’t make it right – and the CDC’s manipulation of studies on this topic to advance an agenda is wholly inappropriate.

Unless alcohol is actually causing harm, the Center for Disease Control should have no opinion. Expressing an opinion on any aspect of consumption that is not causing harm is a political statement.

The Asians 'Set Me Up’

Nicole Kurokawa Neily — Sat, 28 Apr 2012 15:04:00 CST

Earlier this month, Ward 8 D.C. Council member Marion Barry denigrated Washington’s Asian business owners, insisting, “They ought to go. I’m going to say that right now.” He later attempted to clarify those comments in a Reason TV interview, explaining that his remarks were not racial - he was merely motivated because “95 percent of the carryouts in Ward 8 are owned or managed by Asians.” After a public meeting with local restaurateur Tony Cheng (look, he has an Asian-American friend) the gaffe was swept under the rug. But alas, Mr. Barry just can’t help blaming ethnic groups for the District’s woes.

On Monday, he complained about foreign nurses - specifically Filipino nurses - staffing the District’s hospitals. As one newspaper reported, “Barry told the president and board members of the University of the District of Columbia that the school should be supplying D.C. residents to serve in the ‘lucrative’ posts of nurses and teachers.”

If blame is to be assigned for the shortage of homegrown talent, however, Mr. Barry might pause to reflect on the role that he and his political allies have played in this crisis. After all, the scarcity of native nursing graduates is merely a symptom of a deeper problem - poor preparation in the District’s school system.

District schools spend more than $16,000 per pupil - one of the highest rates in the country. Adam B. Schaeffer of the Cato Institute places this figure closer to $28,000 once costs such as transportation, capital expenses and debt service are factored in. With such a hefty price tag, one would expect phenomenal outcomes. But, unfortunately, D.C. taxpayers don’t earn a very good return on their investment.

National Assessment of Educational Progress (NAEP) statistics from 2011 show that the District has the highest proportion of students scoring “below basic” - often by a wide margin. For math, 40 percent of fourth-graders and 52 percent of eighth-graders fall below basic, while for reading, 56 percent of fourth-graders and 49 percent of eighth-graders do. This means those students are functionally illiterate and will have difficulty catching up to their grade level.

Not surprisingly, this poor early education carries over to high school. A recent study by the Office of the State Superintendent of Education found that just 58.6 percent of D.C. public high school students graduate within four years, well below the national average of 75.5 percent.

In the face of these sobering statistics, congressional Democrats and the White House have attempted to terminate the D.C. Opportunity Scholarship Program, a program that has helped more than 1,600 low-income students escape dangerous, underperforming public schools and attend private schools of their choice. Mayor Vincent C. Gray has shortchanged the city’s charter schools while doling out supplemental funds to the city’s public schools. Eighty percent of D.C. charter school students graduated on time, in case you were curious. Teacher tenure reforms begun under former schools Chancellor Michelle Rhee appear to have been shelved, which means substandard teachers will be allowed to keep their jobs and continue to fail students.

This means the public school system - in dire shape now - likely will get worse in the future as government officials roll back choice programs and protect the status quo at dismal government-run public schools.

This is a travesty. The District’s young residents deserve access to quality schooling options, and Mr. Barry, who was elected as a member of the city’s first school board in 1971, is well-positioned to advocate for change.

However inarticulately stated, Mr. Barry obviously is committed to encouraging local residents to become white-collar professionals and entrepreneurs. But to achieve this goal, he needs to stand up to members of the Democratic Party on education reform - not attack other ethnicities.

Our Growing Seed Patent Problem

Nicole Kurokawa Neily — Tue, 10 Apr 2012 07:04:00 CST

Children learn that April showers bring May flowers. For farmers around the world, however, May flowers are affected by other factors as well, such as weather, disease, and insects. In 2008 (the last year that statistics were published), the United Nations’ Food and Agricultural Organization estimated that 13 percent of the world’s population – a full 850 million people – were undernourished.

Fortunately, scientists have created new generations of plants that are less vulnerable to these variables, decreasing the risks associated with farming. New seed varietals incorporate features such as drought and pest resistance, higher nutritional content, and higher crop yields. A 2010 article in the journal Nature Biotechnology compared 49 peer-reviewed studies reporting on farmer surveys from 12 countries both in the developing and the developed world, and concluded “74 percent of results comparing yields of biotech and conventional crops showed positive results for adopters of biotech technology versus non-adopters.”

Such innovation, however, comes at a price. A September 2011 study by CropLife International found that the cost of discovery, development and authorization of a new plant biotechnology trait is approximately $136 million, and it takes, on average, 13.1 years from conception to launch date. Just as pharmaceutical companies need patents so they can pay the cost of developing and bringing to market new drugs and other treatments, agricultural companies hope to recoup that substantial investment through seed patents. Having a clear patent process, as well as a clear process for what happens after a patent expires, is critical to continued development and progress in this vital field.

Yet the field of seed biotechnology is relatively new – so new, in fact, that the first U.S. seed patents issued aren’t even set to expire until 2014. As such, there isn’t a framework in place to address how agricultural researchers should transition their products to the generic market. With many seeds now incorporating multiple traits, it’s unclear what happens to seeds that contain some protected components and some generic components. Furthermore, how can – or should – newly generic traits be incorporated into future products? When generic traits are combined with other proprietary traits that have already been approved, does that necessitate a new regulatory approval process, or is it considered a natural extension of the already approved product? Nobody knows.

Unsurprisingly, this uncertainty poses a danger to the industry’s vitality. Today, farmers can choose from a number of seed types to determine the mix of traits that work best for their specific situations – but in the future, will there be more choices, or fewer? Will new seeds be brought to market, or will regulatory burdens slow the process? And will companies continue to innovate, creating new traits, or will they find their profit margins too narrow to merit further research and development?

It’s crucial that we establish a clear framework for using these seed traits after their patents expire – not only for American farmers and seed companies, but also for the world’s farmers and consumers. As the Nature Biotechnology article notes, “The benefits (of genetically modified crops), especially in terms of increased yields, are greatest for the mostly small farmers in developing countries, who have benefitted from the spillover of technologies originally targeted at farmers in industrialized countries.” At a February 2012 USDA conference, seven former U.S. secretaries of agriculture unanimously agreed that feeding the world’s growing population is a challenge that must be addressed.

America’s farmers feed the world, thanks to a combination of hard work and a broad array of innovative products at their disposal. Clearly defining the rules governing seed patents will help make sure that farmers everywhere will have even more products and seed types to use in the future so that there is enough available for people around the globe.

Giving Credit During Earth Month

Nicole Kurokawa Neily — Thu, 5 Apr 2012 21:04:00 CST

One of April’s many honorifics is “Earth Month,” when we’re supposed to celebrate all things environmentally friendly (Recycling! Composting! Government intervention!) and lambast those things that hurt mother nature (SUVs! Coal! REPUBLICANS!) Partisan bickering can be such an ugly thing, can’t it?

Lost in the sound and fury of ideological warfare, however, is evidence of one thing that’s actually helped the planet in a big way: genetically modified crops.

A 2010 article in the journal Nature Biotechnology compared 49 peer-reviewed studies reporting on farmer surveys from 12 countries both in the developing and the developed world found that farmers who used genetically modified seeds achieve higher crop yields (meaning more food for consumers) using less insecticide.

From the study:

For insect-resistant crops, 45 results show decreases in the amount of insecticide or number of insecticide applications, or both, used on Bt crops compared with conventional crops in Argentina, Australia, China, India and the United States. The reductions range from 14% to 75% in terms of amount of active ingredient and from 14% to 76% for the number of insecticide applications. A small sample survey in South Africa found a reduction in the number of insecticide sprays in one of two years studied and an insignificant difference in the other year. There are no results indicating an increase in insecticide use for adopters of GM insect-resistant crops.

One characteristic – drought-resistance – empowers farmers to do more with less, allowing them to use less water to achieve better outcomes. Monsanto’s goal to “help farmers apply 1/3 less water per unit of output produced — while effectively doubling yields” will help feed countless people who might otherwise have starved because of adverse weather. And obviously, conserving resources like water by using less is a good thing too!

If we’re going to dole out blame or kudos for environmental efforts, we should look at the facts. As far as genetically modified seeds are concerned, they come out smelling like roses.

Unemployment Extension – Version 2

Nicole Kurokawa Neily — Tue, 28 Feb 2012 07:02:00 CST

Here we are, in the last week of February, discussing the extension of unemployment benefits. Again. Wasn’t Groundhog Day supposed to be on February 2?

Passed last week as part of a comprehensive payroll tax cut/doc fix/general handout bill, Congress also moved to extend unemployment benefits. That's hardly a surprise, given the reluctance of fiscal conservatives to take any stand that could be construed as incentives to out-of-work voters.

While extending the enhanced federal unemployment program, the bill will scale back the length of time that out-of-work individuals can receive unemployment benefits, from the previously outrageous 99 weeks (that’s nearly two years, for people keeping score at home) to a slightly more modest 69 weeks (that’s still over one year and four months). In addition, two measures were added in order to require recipients to actively look for jobs (that wasn’t mandatory before?!) and enables states to drug test some applicants. After all, we don’t want to make it too easy to receive free money, do we?

This whole debate brings to mind the old adage “tax what you want less of, and subsidize what you want more of?” Based on our unemployment insurance policy, it seems as a nation, we want… more unemployed. Brilliant.

Bear in mind, of course, that although the January 2012 unemployment report that came out a few weeks ago was a slight improvement over the past few months, the news isn’t all good. According to the Bureau of Labor Statistics, 2.8 million “marginally attached” workers – defined as those who wanted and were available for work, and had searched for a job in the past 12 months – were not counted in unemployment figures, as they hadn’t looked for work in the past four weeks. Add those people to the statistics, and suddenly, the unemployment rate jumps above 10 percent. Not so hot now, are we?

In addition, the underemployed rate – defined as workers who are working fewer hours than they’d like, or who are overqualified for their current position – remains at 15.1 percent. Sure, that’s down from 16.1 percent in January 2011… but bear in mind that the underemployment rate was 8 percent in 2007. We’re not out of the woods yet by a long shot.

Keynesian economists insist that the unemployed need this money because they quickly spend it.... and that stimulates the economy. This theory overlooks one small problem:

The money has to come from somewhere.

As the Cato Institute’s Alan Reynolds notes:

"Whether the government pays people to work or to stay on the dole, it has to get the money by taxing, borrowing or printing money — all of which reduce real income and employment opportunities in the private sector. To imagine that borrowing from Peter to pay Paul is a way to create or save Paul’s job is to forget that Peter expects his money back with interest."

Aside from the “how do we pay for it” dilemma, the unseen consequences of paying people to not work are numerous – including the loss of marketable skills, damage to long-term job prospects (quite honestly, it looks really bad to be out of work for two years), and diminished self-esteem. And dependency begets further dependency, as individuals often end up on other government assistance programs like food stamps and Medicaid, while collecting unemployment benefits. With that much cash coming in from the government, suddenly an entry-level job where you have to pay for those things out of your paycheck starts to look a lot less palatable.

Although it seems like a “kind” thing to do, extending unemployment benefits will lead to a host of new problems that our country can’t handle right now.

The best way to help the unemployed is through creating jobs for them – real, sustainable jobs, not temporary seasonal hiring. With businesses paralyzed by fear over what new regulations will be placed on them, and what the tax code will look like (after all, someone’s going to have to pay the bill for all this government spending!), it’s no wonder that American companies aren’t hiring. Let’s provide some economic certainty – not feel-good gimmickry.

The Farm Bill’s “Growing” Problem

Nicole Kurokawa Neily — Thu, 23 Feb 2012 07:02:00 CST

There was an interesting discussion over at The New York Times’ “Room for Debate” feature yesterday on reauthorization of the Farm Bill. Three scholars who I like very much – the Cato Institute’s Walter Olson, the Mercatus Center’s Tyler Cowan, and Public Notice’s Gretchen Hamel – weighed in for the good guys, arguing that we must scale back (in fact, Tyler calls for terminating!) the program as a first step on our nation’s road to fiscal responsibility.

Related to this discussion, I came across the infographic below, which was created by the Physicians Committee for Responsible Medicine in 2007 (during an earlier round of debate over Farm Bill reauthorization.) It provides an excellent visualization of where subsidies go – and how that affects the food we eat. Companies aren't stupid - in most cases, they're going to buy the cheapest products possible to produce a quality product. So when we oversubsidize meat, dairy, and grains, we get... a lot more meat, dairy, and grains!

Obviously, my libertarian fantasy of simply ending the Farm Bill is politically difficult… but fortunately, my friends Sallie James and Dan Griswold (also of the Cato Institute) have thought through how best to address this problem. In the briefing paper “Freeing the Farm: A Farm Bill for All Americans,” James and Griswold detail a process to gradually phase out subsidies and tariffs – eventually leading to an agricultural system with far less government intervention than our current model. The paper is well worth a read, as it addresses the political reality of an entrenched, vocal interest group.

Winding down federal programs is a challenge… but as James and Griswold show, it’s not impossible. As the nation continues to careen towards fiscal Armageddon, it’s certainly necessary to terminate programs altogether – not just to freeze spending or to slow the growth thereof. Of the programs that should be on the chopping block, the Farm Bill is certainly a fine place to start.

The GOP’s Lost the Plot

Nicole Kurokawa Neily — Wed, 22 Feb 2012 02:02:00 CST

From the headlines, it seems like there are problems with contraception, the Girl Scouts, and even prenatal testing… really, everything except for the economy. What a relief we’ve taken care of the budget deficit and that scary $15 trillion debt that’s been hanging over our heads!

What’s that you say? Those problems haven’t been addressed? Yet we’re not talking about them? How strange… and how very, very foolish.

As the graph below – an aggregation of public polls collected by the Huffington Post’s Pollster project – shows, Americans feel that the country is on the wrong track by an almost two-to-one margin. Doesn’t that seem like it might be a pretty good target if one were in the business of, say, unseating a sitting President?

But please… don’t go after the topic on everyone’s mind! Certainly, a wiser political strategy would be to play to a tiny segment of the population. How tiny? Well, a recent Economist/ YouGov poll found that only 2 percent of respondents said that abortion was the MOST important issue to them – compared to 38 percent who said the economy, 13 percent who said Social Security, and 12 percent who said health care.

Regardless of your views on the issue, it’s unwise for the GOP to focus solely on such a divisive issue – particularly when the Administration’s economic missteps are so painfully obvious. I understand my colleagues’ concerns over the birth control mandate and its symbolism… but at the same time, I’d prefer that candidates keep their eyes on the prize.

One of the main reasons the GOP took the House in 2010 was their decision to focus on the economy (“where are the jobs” is one of the all-time greatest political slogans ever). To give up the goat when the economy remains so bleak – and when the public still trusts Republicans more than Democrats on this issue – is insane. It demonstrates extremely poor judgment that Republicans are focusing on birth control and so flagrantly overlooking the electorate's priorities. I’m an independent, and quite honestly I’m disinclined to vote for a party that’s so out of touch.

Pain at the Pump

Nicole Kurokawa Neily — Tue, 21 Feb 2012 16:02:00 CST

Most people have begun to notice gas prices creeping upwards (for a great analysis of why this is, check out Carrie’s great post from last week.) If you’d prefer a visual explanation of the problem, I can’t recommend this video by our friends at MomThink.org highly enough:

I’m not 100% sold on the energy independence argument – my friend Jerry Taylor at the Cato Institute has a good explanation as to why energy security is a misnomer. However, it’s abundantly clear that government intervention (red tape, restrictions on drilling, and refining capacity) has created havoc in the energy market.

Of course, let’s not forget those pesky subsidies to “green” industries, which has further distorted the price of energy by interfering with price signaling. Until last month, ethanol blenders were receiving a tax credit of 45 cents per gallon, at the same time the U.S. had a 54 cent per gallon tariff on ethanol imports from other countries (you know, to keep out those foreign competitors.) Was adding ethanol to gasoline ever really a wise business decision, or did companies just use it for the tax write-offs and to hit their renewable energy mandates on paper?

I’d love to see the government back off its intervention in the energy market – both from direct intervention as well as from the tax carve-outs the oil and gas industry have received. No more picking favorites – PERIOD. When companies are under economic pressure to only bring technologies to market that are financially viable, we’ll all be better off.

Payroll Tax Déjà Vu

Nicole Kurokawa Neily — Thu, 16 Feb 2012 10:02:00 CST

Well, Congress just passed a payroll tax cut extension. That’s funny… it feels like we were just talking about the payroll tax cut a few months ago! Oh right – that’s because we WERE.

Yet here we are again, a scant two months later, having the same discussion again. Hmmm… wasn’t Groundhog Day two weeks ago?

The facts remain the same – a temporary extension (in this case, 10 months, compared to the two month extension we got in December) that doesn’t give businesses the regulatory certainty they need to make long-term business decisions.

What’s interesting about this round of negotiations, however, is that the debate was far less acrimonious – both sides wanted the extension, and were willing to make significant concessions to do so. Why is that?

Republicans seemed to determine that it was easier (and, ahem, more politically expedient) to cave than to explain the underlying economic principle – or to push for Americans to have the option of putting this temporary $40 per paycheck into personal retirement accounts (for a full explanation of why this would be a better option, click here). In other words… cowardice.

Democrats, on the other hand, may get a brief political bump – however, as they’ve claimed for so long that they’re the party that will preserve Social Security (and this move actually undermines the program’s funding), it might blow up in their face. Is there something else going on?

Consider what happens every year when the Social Security Trustees Report comes out… or when the budget does, like this week. Dire predictions of the specific year that the government stops being able to pay out full benefits (2036, in case you’re wondering) are terrifying for the American people – and embarrassing for politicians. Wouldn’t it be so much EASIER for Democrats if we could just circumvent this nasty little exercise?

If the nation were to drop the charade of Social Security as a separate entity – eliminating specific taxes and the illusion of a “lockbox,” the government would be able to instead directly fund the program through the traditional budget process. Accordingly, when (not “if”) Social Security runs out of money, the government’s hand is strengthened when it comes to raising taxes – permanently.

Social Security needs to be phased out – but into a private system, not a fully government-funded one. The payroll tax cut fight might seem like a small fight, but it’s a proxy battle in the larger battle over the size and scope of government. Let’s hope our elected officials keep that in mind when they have this discussion again at the end of the year.

Tax? Not a Tax?

Nicole Kurokawa Neily — Wed, 15 Feb 2012 12:02:00 CST

This morning, Jeff Zients – acting director of the Office of Management and Budget – testified on the Hill before the House Budget Committee (full testimony here). His remarks weren’t anything special… but the question and answer period definitely provided a major surprise!

The Weekly Standard has a transcript and video of an interesting exchange during which Zients acknowledges that the individual mandate is not a tax.

Why is this is a big deal? Well, because calling the mandate a tax – and the government’s authority to “lay and collect taxes” (Article I, Section 8) is a central premise of the Department of Justice’s defense of the law. The DoJ brief purports to answer the question “whether the minimum coverage provision is a valid exercise of Congress’s powers under Article I of the Constitution.” Beginning on page 52, the DoJ explains precisely why “the minimum coverage provision is independently authorized by Congress’ taxing power.”

Zients’ assertion today that the mandate is NOT a tax is embarrassing – and serves to further underline how desperate the government is to legitimize the law after the fact. When your own side can’t even agree on what authority the law stands, you’re in real trouble! Were they on solid constitutional footing, there wouldn’t be any disagreement… because it would be apparent to all parties involved.

Given this latest mea culpa by a government representative, it seems like the oral arguments in March will be interesting, indeed. (In case you haven’t read IWF’s amicus brief in the case yet, check it out here!)

$26B Foreclosure Pact to Create Problems

Nicole Kurokawa Neily — Tue, 14 Feb 2012 09:02:00 CST

I’m a bit late on this, but I think last week’s $26 billion foreclosure “deal” with the banks deserves some scrutiny (check out Charlotte’s take here!)

From the Wall Street Journal:

Government officials have finalized an agreement worth as much as $26 billion with five major banks, capping a yearlong push to settle federal and state probes of alleged foreclosure abuses by lenders.

…

The planned pact would involve around $5 billion in cash penalties, payable to borrowers, states and the federal government. That includes $1.5 billion in cash payments to borrowers who went through foreclosure between September 2008 and December 2011. Borrowers could receive $1,500 to $2,000 each, with the actual amount paid depending on the number of borrowers filing a claim.

The agreement is expected to call on the banks to provide $20 billion in other aid—by cutting loan balances for tens of thousands of homeowners and by refinancing thousands of borrowers who are current on their loans but owe more than their homes are worth.

To restate: the government is trying to give homeowners – who were already underwater on their mortgages – a chance to refinance and start again. That’s a nice objective… but it’s not the right thing to do.

Sure, there are a number of sad stories… but frankly, these people weren’t coerced into their home loans. They knew the terms of the contracts and signed anyway - because they made an (erroneous) assumption that their homes would always appreciate in value. Essentially, we’re bailing out irresponsible citizens at the expense of responsible ones – and that’s called moral hazard. Think about the message that’s being sent to Americans - "if you mess up, Uncle Sam will be here to set things right." That’s awful!

Furthermore, in forcing banks to foot the bill for this scheme, they're reducing banks’ reserves – which are funds that would be used to provide loans to future, qualified borrowers. This is redistributing from one constituency (future homeowners) to another (existing homeowners).

To date, the government’s modification programs have been ineffective in reaching people. Alas, there’s no chance that their efforts will be more efficient this time – because we're not addressing the underlying problem of an overinflated market where risk is subsidized - i.e. ENCOURAGED - by government-sponsored enterprises. To truly fix the problem, we need to get the government out of the mortgage-guarantee business, so that banks are forced to honestly assess the riskiness of loans – and only extend loans when it makes business sense.

Missing from the Budget: Quality Education Options

Nicole Kurokawa Neily — Mon, 13 Feb 2012 17:02:00 CST

It’s been said that you can tell a nation’s priorities by the things that it spends money on. Earlier today, the White House released President Obama’s 2013 budget– and a cursory glance at the proposal tells us that in 2013, we’ll be prioritizing nation-building, infrastructure projects like high-speed rail that people won’t use, and propping up dying-yet-politically well-connected industries. Oh… and we’ll be paying for these things through taxing success and ambition. Remember, kids: tax what you want less of, and subsidize what you want more of!

As expected, President Obama wants the federal government to fund everything but the kitchen sink… well, that and the DC Opportunity Scholarship Program, that is. Vicki’s written a number of great articles about the program’s successes… and Sabrina’s written about how the DC OSP actually costs far less per pupil than DC is currently spending on public school tuition. But hey, let’s not let a few pesky statistics and facts get in the way of ideology, right?

Just who are the kids who will be deprived of a quality education? Check out Let me Rise, a short film produced by the Heritage Foundation in 2009:

Full video here.

Shame on the White House.

Senior Fellow Nicole Kurokawa Neily on "Freedom Watch with Judge Napolitano"

Nicole Kurokawa Neily — Fri, 10 Feb 2012 11:02:00 CST

2/9/2012