Americans recoil at “discrimination.” The word connotes exclusion for not just superficial, but also hateful reasons, which Americans experienced for decades in the form of racial segregation - often government-mandated - from schools to lunch counters. This shameful history is no doubt why Secretary of Education Betsy DeVos set off a firestorm recently when she refused to say that she would prohibit potential federal vouchers from going to private schools that don’t accept all comers.
But we should not let our immediate, understandable feelings keep us from asking: Might there be acceptable, perhaps even good, reasons that schools would not work with some people?
There may be. Pluralism, academic achievement, and authentic, sustainable integration are all important considerations.
First pluralism. Ours is a nation of greatly diverse people - myriad religions, ethnicities, languages, cultures - and we must allow unique communities to educate their children in ways that the political majority, which controls public schools, might not select, and do so without having to sacrifice their education tax dollars. We must enable people to choose schools that share their values, or cultures, or views of history, on a level playing field. If we do not, we doom them to unequal status under the law, and even risk their withering away in a generation or two.
We should not let our revulsion for malevolent discrimination snuff out the ability of the country’s countless, cherished communities to live on by teaching their children as they see fit.
Religion is the most obvious, widespread sticking point. By law, public schools cannot inculcate religious values. But there are millions of people who believe that religion is inseparable from education; that all life and learning is centered on God.
For more than a century public schools were de facto Protestant institutions for this reason, but that marginalized atheists, Roman Catholics, and many others. Schools also must take sides on issues with inescapable religious implications, such as evolution and sex education. These are huge reasons that millions of people enroll their children in private or home schools - Southern Baptists have even debated an “exodus” from public schools - but they must sacrifice their tax dollars to do so.
Of course, it is not just religious communities that are handicapped and rendered unequal under public schooling. Racial, ethnic, and linguistic minorities often are, too. For instance, in Tucson, Ariz., a battle has raged for years over classes for Mexican-American students that focus on the community’s unique history and culture. They were eventually outlawed for advocating, among other things, “ethnic solidarity,” which may just be another way of saying, “trying to sustain their community.”
It now seems clear that equality and pluralism necessitate that communities be able to offer schooling on an equal footing with public schools. But the question remains: Does this also require that private schools be able to exclude some students?
For a school to truly stand for things central to the community it serves, those who enter the community must share those values. For instance, being forced to accept a large influx of families hostile to a community’s views on, say, the role of Mexican-Americans in the United States, or marriage, would threaten the demise of such a school.
It could also smother a school academically. As sociologist James Coleman famously surmised after studying Roman Catholic schools, the key to their success was their high level of social capital; essentially, their internal cohesion from administrators, teachers, and families all voluntarily accepting the same norms and values. That enabled them to teach clear, rigorous curricula, and uphold well-delineated norms of behavior.
There is one last consideration when it comes to communities deciding whom they will and will not accept: freedom of association.
While prohibiting schools from turning some families away is utterly understandable given our history, it may be counterproductive, essentially creating unsustainable tolerance theater. As social psychologist Patricia Devine has noted, coercing prejudiced people to act in unprejudiced ways can fuel “anger and resentment, and sadly, this anger fuels their prejudice and their tendency to show a backlash against the pressure.”
Of course, we should not stand idly by while people cruelly discriminate. We should expose, criticize, and shun bigots. But we should not let our revulsion for malevolent discrimination snuff out the ability of the country’s countless, cherished communities to live on by teaching their children as they see fit.Neal McCluskey (@NealMcCluskey) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the director of the Cato Institute’s Center for Educational Freedom and maintains Cato’s Public Schooling Battle Map.
What is it about leftwingers and overreach? Two weeks ago, Labour’s defeat in the general election was being spun as the “death of neoliberalism”. It even emboldened the party to advocate the requisition (i.e. taking) of people’s private houses and apartments after the Grenfell Tower fire. Now we have the partial reversal of large income tax cuts in the American state of Kansas being heralded as the death of supply-side economics and the idea that lower marginal tax rates can improve growth prospects.
Back in 2012, the Kansas Republican Governor, Sam Brownback, slashed his state’s marginal income tax rates, reducing the top rates from 6.45 per cent and 6.25 per cent to 4.9 per cent and cutting the rates for low earners from 3.5 per cent to 3 per cent. He doubled the personal allowance from $4,500 to $9,000 and, perhaps most significantly, proposed exempting so-called “pass-through” entities from income tax altogether.
As politicians often do, he over-egged the likely positive effects of such measures, describing them as a “real live experiment” in supply-side economics. But left-wing commentators are now using the stubbornness of the state’s budget deficit, and the relatively weak growth performance since, to attempt to discredit the case for cutting marginal tax rates anywhere. Their partial account of what really happened and its lessons deserves correction.
Taxes are not everything, and in many cases may not even be the most important policy lever to improve growth prospects. But there is a much broader theoretical and empirical literature than just the Kansas “experiment” which shows that they really do matter.
First, the impact of the tax cuts on the Kansas budget deficit owed more to politics than the tax reform. In Brownback’s original proposal, almost all of the “cost” of lost revenues was made up for for by broadening the tax base. He wanted to eliminate a number of tax credits and deductions, such that overall there would be little budget impact. But his opponents in the Kansas Senate defeated implementation of these “pay for” measures, meaning the tax cuts alone led to more government borrowing in the absence of significantly cutting spending.
Second, though taxes are important, they aren’t everything. A range of other things have affected the Kansas economy in the time since the tax cut was passed. In particular, the state is strongly affected by what goes on in the agricultural and energy industries. Given the weakness of commodity prices over this period, the state economy has struggled for reasons nothing to do with the tax cuts.
Third, the specific tax package proposed went against good tax practice in one crucial regard, which even most supply-siders would denounce. By completely eliminating the income tax on pass-through businesses, the Governor significantly increased opportunities for tax avoidance for individuals working in certain types of company.
The take up of this provision was much, much higher than expected and one of the key reasons why state revenues were lower than expected. But this type of bad tax policy need not be part of a rate-cutting agenda. In North Carolina, the Tax Foundation has shown how income taxes can be cut in a way that, alongside base-broadening, leads to sharpened incentives and reduced opportunities for avoidance, and so does not lead to large budget shortfalls.
Finally, state income taxes are already very low in America. Few economists would suggest that cutting them would lead to such a huge impact on economic growth that they would be self-financing, especially without the “pay-fors”. But because the economist Art Laffer was associated with drafting this reform, many mistakenly viewed Kansas as a test of whether the Laffer Curve thesis works (i.e. that there is some revenue-maximising rate of tax above which higher tax rates even lower revenues). It was no such thing.
Of course, one can understand why the Left is so keen to highlight Kansas’ failures. For decades, the free-market Right has broadly won the argument on whether low marginal tax rates on income and corporate profits boost growth by increasing incentives to work and invest. With President Trump promising large cuts to marginal rates too, the critics are perhaps right to point out that free-marketeers sometimes overplay the case for tax cuts relative to other areas of policy.
But it is another thing entirely to ignore the specific conditions of Kansas, and the history of how this tax cut occurred, and to extrapolate that it illustrates how supply-side economics does not work. An extensive review on the link between taxation and economic growth published here by the Institute of Economic Affairs last year showed that high marginal taxes, other things given, tend to slow the growth of economic activity.
Taxes are not everything, and in many cases may not even be the most important policy lever to improve growth prospects. But there is a much broader theoretical and empirical literature than just the Kansas “experiment” which shows that they really do matter.Ryan Bourne occupies the R. Evan Scharf Chair for the Public Understanding of Economics at Cato.
Property owners have long suffered under the Supreme Court’s erratic rulings. It got worse last Friday when the court ruled against owners who wanted simply to sell their property.
Both facts and law in Murr v. Wisconsin are complicated. But in a nutshell, the Murrs, four siblings, inherited adjoining lots on the St. Croix River that their parents had purchased at separate times in the 1960s, building a home on one and keeping the other as an investment. Deeded and taxed separately, the two lots remained so to the present.
But in 1975 a local zoning ordinance combined the lots. The effect, as the Murrs discovered in 2004 when they sought to sell the investment lot (valued at $410,000), was to prohibit them from doing so unless they sold the other lot and house with it. So they sued under the Fifth Amendment’s Takings Clause, which prohibits the government from taking private property for public use without just compensation.
In effect, the ordinance had taken their right to sell that lot, one of the basic rights of property. The case is no more complicated than that. Under the Constitution’s Takings Clause they should have been compensated for their loss.
So, why did they lose? Here things get really complicated because the Court’s “regulatory takings” law is a morass. A 1922 decision, for example, held that if a regulation goes “too far” it constitutes a taking. Things haven’t gotten much clearer since, and Friday’s decision, written by Justice Anthony Kennedy, made it only worse.
In brief, to decide Murr the Court turned mainly to a 1978 decision, Penn Central v. New York, which had introduced a three-part “balancing test” to determine whether a taking has occurred. Under it, a court must weigh a regulation’s economic impact on the property, its interference with investment-backed expectations, and the character of the government action. And the crucial point here: Those factors must be applied to “the parcel as a whole.”
No one knows what those factors mean or how to apply them. But hold that last point, because a second precedent has to be considered.
In a 1992 decision, Lucas v. South Carolina Coastal Council, the Court held that an ordinance prohibiting the plaintiff from virtually all rightful uses of his property constituted a taking because it wiped out all of the property’s value. The problem with this “wipeout” rule, of course, is that most regulations leave at least some value in the property. When the dissent objected to the rule, Justice Antonin Scalia, writing for the Court, responded tersely, “Takings law is full of these ‘all or nothing’ situations.”
If the state can wipe out pre-existing rights simply by issuing a later ordinance, and thereby escape the requirements of the Takings Clause, that guarantee is a dead letter.
Go back now to the Murrs. If their lots are treated separately, as the separate deeds and taxes have long implied, then all value in the investment lot has been wiped out by the 1975 ordinance and the Murrs, under Lucas, are entitled to compensation for the taking. But with the two lots combined as one, value remains in “the parcel as a whole,” under Penn Central. So putting the two precedents together, the state can escape paying the Murrs any compensation unless the Penn Central balancing test saves them.
It did not, said Justice Kennedy in an opinion that muddied the waters even further. In his dissent for himself and Justices Clarence Thomas and Samuel Alito (Justice Neil Gorsuch took no part), Chief Justice Roberts dissected Kennedy’s opinion but did little more. In fact, Roberts wrote that the Court’s holding “does not trouble him,” only its reasoning. He would have vacated the judgment below and sent the case back for that court to identify the “relevant property” (the single, or the combined lots) using Wisconsin property law.
But that law is precisely the problem. If the state can wipe out pre-existing rights simply by issuing a later ordinance, and thereby escape the requirements of the Takings Clause, that guarantee is a dead letter.
Only Thomas seemed to appreciate that. He joined the dissent because, as he wrote, “it correctly applies this Court’s regulatory takings precedents.” But he went on to say that the Court should take a fresh look at those.
Only Thomas seemed to appreciate that. He joined the dissent because, as he wrote, “it correctly applies this Court’s regulatory takings precedents.” But he went on to say that the Court should take a fresh look at those.
Therein lies the problem with so many of the Supreme Court’s decisions, and not only in the area of property rights. There is all the difference in the world between modern “constitutional law” and the Constitution itself.Roger Pilon (@Roger_Pilon) is vice president for legal affairs at the Cato Institute and director of Cato’s Center for Constitutional Studies.
Michael F. Cannon
Senate conservatives, and ObamaCare opponents broadly, have panned the Senate healthcare bill as a charade. If conservatives help enact this or any other bill that leaves ObamaCare’s central architecture in place, they will take responsibility for the ongoing harm it causes, squander their one best shot at repeal and imperil other conservative priorities.
For seven years, Republicans have pledged to repeal ObamaCare in full. Donald Trump put it in writing. The Senate bill would instead preserve and even expand ObamaCare. Like the substantially-similar bill that already passed the House, the Senate bill is a snub to all who voted Republican because of that pledge.
Trump and other GOP leaders are intensifying the pressure on Senate conservatives to vote for the bill precisely because their hand is weak. Republican leaders need conservatives more than conservatives need to vote for this bill.
If Republicans fail to repair the damage ObamaCare is causing, pressure to do so would only grow
Let’s game out the scenarios.
The Senate bill could exacerbate what are already likely GOP losses in the 2018 midterm elections. The nonpartisan Congressional Budget Office projects the Senate bill would cause premiums to be 20-percent higher in 2018 and 10-percent higher in 2019 than under ObamaCare alone.
Democrats are already united and energized. If the Senate bill delivers two separate premium hikes leading up to the 2018 midterm elections, deflated GOP voters would stay home while angry consumers turn out to vote Democratic. Republicans would lose even more seats in Congress, jeopardizing the Senate bill’s tax cuts and spending constraints, not to mention other conservative priorities, like Supreme Court nominees.
If conservatives refuse, GOP leaders would have to offer them concessions. The longer they hold out, the larger the concessions. Why?
If Republicans fail to repair the damage ObamaCare is causing, pressure to do so would only grow. ObamaCare’s harmful government regulations would continue to drive premiums skyward, reduce quality and cause insurance to disappear in parts of the country.
Consumers would keep demanding relief. The GOP base would continue to demand its leaders follow through on their most prominent and long-standing campaign promise. Anti-tax conservatives would demand Congress take up ObamaCare again to repeal its tax hikes and facilitate tax reform.
GOP leaders would have little alternative but to work with conservatives. If they work with Democrats to rescue ObamaCare, they would face a rebellion that would also depress GOP turnout on Election Day. If Trump continues to bail out ObamaCare with payments to private insurance companies that two of his cabinet officials- not to mention a federal court - have declared unconstitutional, he would spark a similar revolt.
The conservative House Freedom Caucus won concessions only after showing they were willing to let a phony repeal bill fail. (They quickly decided they preferred losing to winning, though. The concessions did not materially improve the House bill, and most HFC members voted for it anyway.)
What changes would make the Senate bill worth passing?
Conservatives could demand an expansion of tax-free health savings accounts (HSAs) along the lines of legislation by Sen. Jeff Flake (R-Ariz.) and Rep. Dave Brat (R-Va.). Unlike ObamaCare and the Senate bill, which merely subsidize unaffordable care, “Large HSAs” would drive prices down.
Designed properly, Large HSAs could fit within the Senate bill’s revenue-loss figure and even have a tax-cut-multiplier effect. Since they would free workers to control $700 billion dollars of their earnings that employers currently use to choose and purchase their health benefits, they could deliver an effective tax cut larger than all Reagan and Bush tax cuts combined.
Alternatively, conservatives could agree to keep some ObamaCare Medicaid spending in exchange for structural reform and greater spending constraints. A system of block grants where federal outlays would not grow at all would allow Congress to give states greater federal funds in the initial years than they would get under ObamaCare.
If Congress included ObamaCare’s exchange subsidies, which would otherwise go to insurers, states could get far more than under current law, which would allow states to address preexisting conditions themselves. That would free Republicans to repeal ObamaCare’s regulations, as they promised to do, which would instantly stabilize the individual market and could reduce average premiums by an estimated 90 percent.
These options would materially improve on the status quo, even if they fall short of full repeal. The Senate and House bills would do neither. Those bills are not going to get better if Senate conservatives throw away their one best shot to repeal ObamaCare.Michael F. Cannon is “ObamaCare’s single most relentless antagonist” (The New Republic) and director of health policy studies at the libertarian Cato Institute.
The Supreme Court announced Monday that it will review President Trump’s executive order suspending entry of immigrants from six majority-Muslim countries into the United States — or the “travel ban,” as the president prefers to call it. At the same time, the justices announced that they will allow the president to enforce much of the order before they hear the merits of the case.
This decision is a setback for opponents of the ban, implying that the court is skeptical of the argument against parts of it. But the decision may not be a total loss: Because the court allowed the ban to go into effect only against applicants who have few ties to the United States, the court may decide to protect those immigrants with close ties to the country.
In 1965, Congress passed the Immigration and Nationality Act, which was designed to protect certain immigrants — those sponsored by family members in the United States or employers — from the exact type of discrimination in Trump’s executive order. Indeed, the law states that — except in narrow exceptions not relevant here — no person shall “be discriminated against in the issuance of an immigrant visa” due to their “nationality, place of birth or place of residence.”
Because the court allowed the ban to go into effect only against applicants who have few ties to the United States, the court may decide to protect those immigrants with close ties to the country.
The Trump administration argues that the president has the power to bar the entry of foreigners deemed “detrimental” to the United States, as per a law passed in 1952. But Congress subsequently amended that law to rule out this type of discrimination. Indeed, the entire purpose of the 1965 law was, as the committee that wrote the bill said, to amend the 1952 law, which “deliberately discriminates against many of the peoples of the world.” Congress also considered and rejected the notion that restricting the power of the president to discriminate against “detrimental” immigrants would allow poorly vetted people to come to the United States.
The order does create a waiver process for visas for immigrants with U.S. relationships, but the U.S. Court of Appeals for the 9th Circuit struck down those parts of the order because it discriminated against immigrants in violation of the 1965 statute. The Supreme Court’s decision to block those same parts of the order leaves open the possibility that some justices sympathize with this view.
The Supreme Court does, however, appear to question the case against the ban as applied to people without U.S. ties. It should not. The 1952 law requires that the president find that a certain class of aliens “would be detrimental” to the interests of the United States. The president failed this basic task.
As the 9th Circuit also concluded, the president never explained why the entry of these specific nationals “would be” detrimental. The administration claims that the vetting process for these nationals may have “possible weaknesses,” but the president never found that the vetting is in fact failing and, therefore, would allow “detrimental” people to enter the country.
But a hypothetical problem is not good enough under the law. As the appeals court noted, the government never cited any evidence — or claimed any secret evidence — that suggested a threat from these nationals. Given that no national from these countries has carried out a deadly terrorist attack in the United States in four decades, the relevant evidence may simply not exist.
The president needs to issue an actual “finding” that immigrants of these nationalities would be detrimental if allowed to enter. It is not good enough for him simply to recite the law’s words and assert without explanation that certain foreigners are detrimental. Otherwise, the president would be free to rewrite all immigration law as he wished, violating the basic principle that Congress cannot delegate its legislative authority to the executive.
The Supreme Court’s decision implies that the ban’s opponents may have an uphill battle on these points. But they could win a narrower victory for those with U.S. sponsors, and the fact that they have finally made it to the Supreme Court will give them the opportunity to make the justices deal directly with the letter of the law.David Bier is an immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity.
A question no one’s asked out loud with regard to the ongoing Illinois state budget negotiations is what happens if — or when — the state becomes unable or unwilling to pay its bills a few years down the road.
It’s clearly on the minds of investors who own Illinois debt: The price of the state’s bonds has been falling and the rating agencies recently downgraded its debt to just one step above junk. Both of these are proximate responses to the state’s budget impasse, which is entering its third year.
But another reason for the growing wariness of investors toward Illinois debt emanates from developments in Puerto Rico, which asked for and received legislation from the federal government to assist with its debt burden.
The recent budget put together by the island’s government- — with the blessing of the congressionally appointed Fiscal Oversight Board — revealed that the commonwealth’s plan to reform its finances is to simply stiff its bondholders. The island’s pensioners are largely held harmless and all other expenditures actually increase.
While bondholders fear — and Illinois’ pensioners would presumably welcome — a similar resolution should Illinois go bust, the more important precedent established by Puerto Rico is that when the federal government gets involved, the state’s constitution will get tossed aside. And that should worry both pensioners and taxpayers.
Its residents had better hope not.
Puerto Rico’s constitution explicitly declares that its general-obligation bondholders are to be paid ahead of all other obligations. This seemingly iron-clad promise was one reason why it could borrow money for so long at such low rates despite its deteriorating fiscal health. However, more than $2 billion in annual interest payments — 80 percent of what’s due in 2017 — will now be forgone for at least the next five years, constitution be damned.
Illinois’ constitution does not have such a promise to its bondholders, presumably because there is no mechanism for a state to default on its bonds, and none has done so since the Depression. However, Illinois’ constitution does expressly prohibit the state from impairing promised benefits to either current or future pensioners.
If the federal government were to intervene in an Illinois budget crisis, it’s likely that its bondholders will take a hit, but it is also likely that its rigid state pension protections and prohibition of progressive taxation would be on the table as well — both of which the state constitution expressly protects.
Such a scenario may not be too far away: The next recession-cum-stock market correction will cause the state’s tax revenues — as well as its pension fund value — to fall precipitously, the latter probably to a point where no achievable rate of return on the remaining pension funds could achieve solvency. Such a development could make it impossible for the state to borrow money at any rate, and the federal government would be forced to intervene. Should that occur, it’s a safe bet that everyone will share in the pain — taxpayers, bondholders, and public pensioners alike.
The best case for current and former state workers in such a scenario would be the pension reform bill invalidated by the State Supreme Court in 2015, which ended automatic cost of living increases, increased the retirement age and changed the determination of a worker’s final salary for determining pension benefits. But it is easy to see pension adjustments going much further — perhaps via an ex post reduction of benefits of those who spiked their final salaries to boost pensions or a diminution of benefits for those with two or more state pensions.
And once the feds jettison the prohibition on progressive tax rates, Illinois will doubtless come to resemble New Jersey, with top marginal income tax rates approaching 10 percent.
Investors are right to be wary of holding Illinois bonds, but the real lesson from Puerto Rico’s fiscal crisis is that constitutional promises mean nothing once the federal government intercedes. The state’s pensioners and taxpayers should be as worried as the state’s bondholders.Ike Brannon is a visiting fellow at the Cato Institute and president of Capital Policy Analytics.
Even if President Trump manages to get his health reform through Congress, there is no guarantee it will survive the courts. Though the bill is still far from passage, the groundwork is already being laid to challenge its constitutionality. New York attorney general Eric Schneiderman has pledged to challenge the reductions in funding for reproductive-health services. Other Democrats have challenged the constitutionality of the bill’s Medicaid provisions. Some have suggested that the “lapsed coverage” surcharge for the uninsured might be unconstitutional.
If this bill is enacted — and that is a big if — opponents will locate every conceivable basis to contest the law, so it will be held up in litigation, potentially, until after the next election. While no one can predict how the Supreme Court will act, President Trump and Congress can take steps to minimize that uncertainty, and ensure a smoother implementation. Specifically, they can take a page out of President Clinton’s failed health-care reform, and channel all litigation through a single three-judge panel, with a direct appeal to the Supreme Court. This approach would, as a Clinton-administration official noted two decades ago, bring “swift answers to the general constitutional challenges to the plan.”
Today, virtually all federal constitutional litigation begins before a single district-court judge, with an appeal to a three-judge panel. However, for much of the 20th century, Congress let litigants cut to the chase. Under the Three-Judge Court Act of 1910 and other contemporary bills, constitutional challenges would begin before a three-judge panel. As the practice developed, each panel would consist of two district-court judges and a single appeals-court judge. Within this framework, litigants would bypass any intermediate review, and there would be a mandatory review by the Supreme Court. In 1976, however, Congress severely curtailed their usage, retaining them only for challenges to apportionment maps.
If this bill is enacted - and that is a big if - opponents will locate every conceivable basis to contest the law, so it will be held up in litigation, potentially, until after the next election.
This approach nearly made a comeback two decades later. In September 1993, the New York Times reported that the Clinton administration was “just beginning to understand the potential wave of legal challenges” to its soon-to-be introduced health-care bill. Walter Dellinger, who headed the Justice Department’s Office of Legal Counsel, wrote that the Times article was “unnecessarily alarming.” Indeed, the executive branch had already prepared a plan for “channeling attacks on the legislation as a whole” through a narrow path to the Supreme Court. Specifically, the bill would reinvigorate the old model.
Constitutional challenges to the Health Security Act could be filed only in the federal court in the District of Columbia (Section 5241). Critically, this three-judge panel would not be able to issue nationwide injunctions that halted the implementation of the law. Moreover, all challenges to the law from the country would have been consolidated before the same jurists, and must be filed within one year. After the initial trio ruled, the case would be appealed directlyto the high court. This approach allowed a quick, seamless review of the bill, which ensured a smooth implementation during that process. A decade later, the McCain-Feingold Bipartisan Campaign Reform Act employed a similar review process (Section 403), which urged the Supreme Court to “expedite [the appeal] to the greatest possible extent.”
Republicans should adopt the same amendment that was developed by the Clinton administration two decades ago: channel all constitutional challenges to the health-care bill to a three-judge panel, with a mandatory appeal to the Supreme Court. This approach would have three primary benefits. First, consolidating the appeals would eliminate duplicative, time-consuming, and expensive litigation. (These cost savings could allow such an amendment to survive the rules of the budget-reconciliation process.) During debates over the Affordable Care Act in 2009, Senate Democrats rejected a proposed amendment that would have allowed an expedited review of that health-care legislation. As a result of this decision, more than a dozen separate constitutional challenges were litigated in parallel for two years until the Supreme Court interceded. Regardless of what those lower courts did, the case would have ultimately wound its way to the terminus: With the vote of Chief Justice Roberts, the health-care law survived constitutional scrutiny.
Second, restricting the jurisdiction to a three-judge panel would eliminate the latest fad in federal litigation: the nationwide injunction. As illustrated with the travel-ban litigation, when different courts issue different injunctions with different scopes, there is often widespread confusion about what the state of the law is at any given time. Under this proposal, the three-judge panel could quickly resolve any constitutional questions, and allow the Supreme Court to opine on it. Preliminary injunctions, before a final resolution, would be unnecessary.
Third, this approach would eliminate the incentives for forum shopping. It is no coincidence that the constitutional challenges to President Trump’s executive actions have been filed in federal courts with a majority of Democratic-appointed jurists. Rather than dealing with dueling decisions from Hawaii, Seattle, or Brooklyn, litigants under this plan would face only judges in the District of Columbia. (In a twist of fate, the role of appointing two out of the three judges on the panel would fall to none other than Merrick B. Garland, the chief judge of the D.C. Circuit Court of Appeals.) The final call will be made by the Supreme Court — and it is better that we have the answer sooner, rather than later.Josh Blackman is a constitutional-law professor at the South Texas College of Law in Houston, an adjunct scholar at the Cato Institute, and the author of Unraveled: Obamacare, Religious Liberty, and Executive Power.
The Trinity Lutheran case, in which the Supreme Court ruled that a Missouri policy excluding church-run preschools from a particular grant program was unconstitutional, has always seemed like an easy one to me. After all, what happened here sounds awfully un-American: a church was denied a government benefit simply because it’s a church. I’m not sure why a state should subsidize private institutions’ playground resurfacing — the benefit at issue here — but if it does, it has to make such funds available to all on equal terms.One contentious issue that does loom on the horizon, however, is that of exemptions for religious businesses — the opposite of inclusions for churches — from public accommodations laws. Stay tuned next term, when the Court takes up the case of a bakery that declined on religious and free speech grounds to make a cake for a same-sex ceremony. Masterpiece Cakeshop will make Trinity Lutheran look like the justices’ kumbaya moment.Today’s decision makes clear that Trinity Lutheran’s playground improvement is no different than the government provision of police or fire protection to houses of worship and other religious institutions. And it’s quite unlike taxpayer funding of religious instruction or the parade of horribles raised by Trinity Lutheran’s opponents (which no longer include the State of Missouri, whose new administration changed its policy).
oday’s decision makes clear that Trinity Lutheran’s playground improvement is no different than the government provision of police or fire protection to houses of worship and other religious institutions.
And indeed, as I predicted after argument, seven justices made short work of the case, finding that the state violated the First Amendment’s Free Exercise Clause in taking its action based on purely religious status. Chief Justice John Roberts’ majority opinion is a mere 15 pages long and the three concurrences were two, three, and two pages, respectively. It’s telling that Justice Elena Kagan — not exactly a stalwart right-winger — joined the decision in full, and that Justice Breyer concurred in the judgment.Further, Chief Justice Roberts’ attempt, via a curious Footnote 3, to narrow the scope of his ruling to “express discrimination based on religious identity with respect to playground resurfacing,” didn’t command a majority. Justices Clarence Thomas and Neil Gorsuch took issue with the distinction between religious “status” and “use.” And Justice Breyer, always a pragmatist, seems to have been concerned with “a general program designed to secure or to improve the health and safety of children.”
The fate of Footnote 3 will thus turn on whether lower court judges like the Trinity Lutheran result or not. It’s an opportunity for mischief that the Court will have to resolve in future.
Meanwhile, Justice Sonia Sotomayor, joined in her dissenting opinion only by Justice Ruth Bader Ginsburg, seems to think that the ruling dissolves the separation of church and state altogether. One can only hope that her admonition that 31 other states’ restrictions against direct government funding of religion are now in jeopardy is true in the context of school choice. Coincidentally, even before the US Supreme Court released its Trinity Lutheran decision, the Georgia Supreme Court unanimously upheld that state’s tax credit scholarship program despite a provision in that state’s constitution that mirrors the Missouri one at issue.
The so-called Blaine amendments that have been used to stymie these programs were created in the late 19th century not simply to preserve church-state separation, but to harm religious minorities, especially Catholics. But the Supreme Court has rejected Establishment Clause challenges to both vouchers and tax credits; today’s ruling doesn’t change that.Ilya Shapiro is a contributor to the Washington Examiner’s Beltway Confidential blog.
It’s a time of trial and tribulation for America’s allies and adversaries alike. Just what is U.S. policy these days? More fundamentally, who is deciding U.S. policy?
A presidential transition always creates uncertainty. Even when the Oval Office is passed between members of the same party, approaches and emphases differ. Personal connections vary. But today the differences are within a single administration.
Indeed, in virtually no area is policy settled.
President Donald Trump came into office committed to rapprochement with Russia. Yet even before taking office his defense secretary, Jim Mattis, sounded like bombastic Sen. John McCain in calling Moscow the greatest threat facing America. Later, Secretary of State Rex Tillerson demanded Russia’s withdrawal from Crimea — a political impossibility — before bilateral relations could improve. Now the U.S. military has shot down a Syrian plane, fielded by the Assad government, a Moscow ally, triggering Russian threats against U.S. aircraft.
Indeed, the latter threatens to drag America into the Syrian war as an active combatant, fighting not only the Islamic State but also the Assad government, Iran and Russia. In fact, his National Security Council was already pressing for a more active role against both the Assad government and Iranian-backed militias supporting Syrian president Bashar al-Assad, which would turn America into an active combatant in the six-year-old civil war. Yet candidate Trump criticized the Iraq War as well as proposals for entangling the United States in additional Middle Eastern conflicts. When his Republican competitors threatened to shoot down Russian planes, he called ISIS the priority. He later criticized Hillary Clinton as a warmonger, in part for her hawkish approach to the Mideast.
Candidate Trump ran for office threatening China with a trade war: he promised to rule Beijing a currency manipulator and proposed to impose a huge tariff. Secretary Tillerson threatened to blockade the PRC’s Pacific territories, a potential act of war, when testifying at his confirmation hearing. President-elect Trump upended traditional practice by accepting a congratulatory phone call from Taiwanese president Tsai Ing-wen.
The world is paying attention to the Trump team’s foreign-policy fumbles.
But then President Trump swooned after meeting Chinese president Xi Jinping, gushing about their friendship. After demanding that Beijing “solve” the North Korea problem, he accepted the Chinese leader’s explanation why action was much harder than he’d originally thought. Still, to encourage China President Trump dropped talk of trade retaliation and a tough response to South China Sea territorial disputes. He also promised not to talk to President Tsai again without President Xi’s approval. But now, barely five months into his administration, he says relying on the PRC to deal with the North “has not worked out.”
While the president expected Beijing to act against what his defense secretary now says is the most serious threat against America, President Trump has oscillated between negotiation and war with North Korea. During the campaign he offered to negotiate with the North’s Kim Jong-un. A few weeks ago he was breathing fire and brimstone as he declared he was sending an “armada” off the coast of the Korean Peninsula, ready to attack Pyongyang, if necessary. Then, he said he’d be “honored” to meet Kim, who was a “smart cookie.” Now the president is back to looking for U.S. “solutions” to a problem which he believes China has proved either unwilling or unable to solve.
As for South Korea, candidate Trump dismissed the value of the U.S.-South Korean alliance and insisted that the Republic of Korea should spend more on its own defense, causing much well-deserved anxiety in Seoul. Then, Mattis and Tillerson visited the ROK, seeking to ease concerns by reaffirming America’s commitment to the alliance; they convinced the president to mouth some of the same platitudes. But a couple weeks before the South Korean election, Trump announced that Seoul should pay for the THAAD missile defense system, despite the agreement reached with the Obama administration. He also announced that he intended to tear up the Free Trade Agreement, which was negotiated and ratified at great political cost by previous South Korean governments. National Security Adviser H. R. McMaster responded by saying no one should pay any attention to the man in the Oval Office, apparently displeasing the man who at least nominally is McMaster’s boss.
The administration’s attitude toward Europe appears equally equivocal. Donald Trump long accused America’s NATO partners of unfairly relying on the United States, failing to meet their financial commitments and owing America billions. His ire towards Germany, which he also accused of being a currency manipulator, was particularly sharp.
Secretaries Mattis and Tillerson sought to calm troubled waters and convince the president to voice support for NATO and its role in keeping Europe’s peace. In preparation for the recent NATO summit, administration officials sought to pacify the alliance’s European members, who organized among themselves how to best deal with the president. Solution ranged from keeping their comments short and simple, making him think he won political victories, etc. However, the recent summit meeting actually widened the Atlantic gulf. The president behaved boorishly, reiterated his criticism of European free-riding, and refused to repeat the reassuring language penned for him by his aides.
Another target of candidate Trump’s ire was Saudi Arabia, which he blamed for blowing up the World Trade Center and criticized for relying on the United States for its defense. But as president he embraced the Saudi royals more passionately than did President Obama, who was criticized for his half bow when meeting the Saudi king. President Trump did a full policy genuflect. While making his first state visit to Riyadh, he inked another major arms deal and offered even greater support for the kingdom’s murderous war in Yemen.
Also, the president apparently was convinced to act as de facto Saudi lobbyist in backing the Saudi-led jihad against Qatar, which both Saudi Arabia and the United Arab Emirates, long criticized for acting as financial conduits to radical and even terrorist groups, accused of being a conduit to radical groups and terrorist groups. Yet after he tweeted his support for Riyadh, Mattis and Tillerson took steps backing Doha and criticizing the latter’s antagonists. The State Department even proclaimed itself to be “mystified” by Riyadh’s behavior, which had been endorsed by the president.
Of course, administrations often have struggled over contentious issues, with officials split over policy. Moreover, presidents sometimes have overruled their foreign-policy advisers and asserted control over international issues, especially the most contentious ones. The very public spectacle of National Security Adviser Henry Kissinger displacing Secretary of State William Rogers in the Nixon administration was painful to behold. President Barack Obama’s White House held tight control over foreign-policy issues, even with serious personalities like Hillary Clinton and John Kerry serving as secretary of state.
But never before has the United States seen so many clear divisions between the president and his appointees on so many issues. Moreover, never before when divisions were present has the United States seenits presidentso often losing the policy battle. NATO’s European members remain dependent on America. U.S. policy remains hostile to Russia. The United States is edging ever closer to direct involvement in Syria. Washington, DC continues to protect South Korea and threaten North Korea. The United States continues to defend Saudi Arabia while Washington seeks to moderate the intra-Gulf conflict. America so far has avoided trade wars with China, Germany and South Korea.
As a result, today many countries around the globe are in a state of high anxiety, unsure as to the identity of the real American decisionmaker, as well as his or her view of their relationship with Washington. As a result, the traditional warm, fuzzy feeling accompanying the status of an American defense dependent has disappeared. As the president proved on his European visit, his appointees might be able to convince him to acquiesce to policies which he dislikes, but they can’t make him accept them. And sometimes the inner-Trump breaks free.
U.S. adversaries and potential antagonists are little happier. For instance, expectations of an improved relationship were raised in Moscow, only to be dashed by claims of election manipulation by Russia as well as status quo thinking by Mattis and Tillerson. For a time it appeared the administration was heading toward a quasi-Cold War with China, before the president announced his bromance with President Xi. But now the spark appears to have gone out of the relationship, leading to renewed uncertainty.
The Trump administration has turned foreign policy into an embarrassing spectacle. It wouldn’t matter if Bhutan, Slovenia, Chad, Fiji or Chile behaved that way; no one would much care if such nations so ostentatiously mismanaged their foreign policy. But as the globe’s dominant economic, political and military power, America’s actions can transform, for good or ill, countries and regions. Today, no one knows what to expect or even who is the “decider,” in Bush-speak. That’s not good for the United States, and it’s not good for those affected by Washington’s decisions — which means the rest of the world.Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan.
Three decades ago, the People’s Republic of China was an economic backwater. Today, the PRC sports the world’s second largest economy. Shanghai most dramatically illustrates the country’s transformation. The city is filled with stylish office buildings, five-star hotels, luxury stores, and foreign visitors.
Reflecting their success, the Chinese are increasingly confident as well. If not yet a great power, the PRC seems destined to eventually share global leadership with the U.S. And its people know that.
Which means future U.S.-China relations could be rocky.
Ties turned confrontational under the Obama administration, which announced a “pivot” or “rebalance” to Asia. Washington officials unconvincingly claimed that the policy was not directed against Beijing. The Chinese may be many things, but they are not stupid.
Candidate Donald Trump sounded like he intended to pursue an even more truculent course, upgrading relations with Taiwan, launching a trade war, blockading Chinese possessions in the South China Sea, and pressuring the PRC to “solve” the North Korea problem. But then came the bilateral summit and the president’s one-way love-fest with Chinese President Xi Jinping. All suddenly became sweet and light in Trumpland.
However, in the long-term the president’s pleasant words backed by an offer of unspecified trade concessions won’t go far in buffering relations between a unipower determined to preserve its dominance and a rising power equally determined to assert itself. First, the Trump administration yielded Pacific economic leadership to the PRC. Beijing is likely to find new commercial opportunities, limiting Washington’s ability to do trade harm.
The U.S. needs to prioritize its objectives vis-à-vis China.
Second, nationalist passions are not easily cooled. The issue is not just a few obstreperous officials who don’t know their country’s proper place. The real challenge is posed by a population that believes in a much greater China.
So far North Korea has dominated discussions between the two governments. Even if cooperative efforts fail, any damage to the bilateral relationship likely will be contained. At most application of secondary sanctions against Chinese financial institutions would lead to economic turbulence, not military confrontation.
Territorial disputes throughout the Asian-Pacific pose a far tougher test. The Philippines’ unpredictable Rodrigo Duterte has been sparring with Beijing over Scarborough Reef. Tokyo has refused to even acknowledge a dispute over the status of the Senkaku/Diaoyu Islands. But that has not prevented China from using air and naval patrols to challenge Japan’s claim.
America’s primary interest is navigational freedom, which so far the PRC has not attempted to impede. Washington has no territorial claims in the region. But both Manilla and Tokyo are treaty allies, their security guaranteed by America. Which means any confrontation between them and China could draw in the U.S. At his confirmation hearing Secretary of State Rex Tillerson suggested an even more active American role, barring PRC access to its claimed possessions. That would set up a clash at sea, guaranteeing a naval arms race and creating a trigger for war.
As pleasant memories from the Mar-a-Lago summit fade, deep disagreements likely will reappear. And the Chinese aren’t likely to back down. For the U.S. dominance of a region so far from home is a convenience, an added benefit to America’s almost absolute security in its own hemisphere. For the PRC preventing Washington’s encroachments along its border is a “core” interest, similar to what Americans have essentially claimed for their entire hemisphere for two centuries.
Last month I attended a conference on maritime issues in Shanghai. Participants were largely academic and policy, not political. However, the Chinese interlocutors were in no mood to compromise. They defended their government’s claims, advocated active measures to assert them, and disdained criticism of Chinese aggressiveness. No one wanted war, but none of them recommended that their nation back down if Washington chose confrontation.
Indeed, the participants well demonstrated the disparity of interest and intensity which disadvantages America. No one doubts that the U.S. possesses the stronger military. Nor is there any question that Washington would use its superior power if necessary to defend important interests closer to home.
But it would be far harder for America to use force to ensure its control of the waters along China’s borders and oversight of territorial disputes in which America has no serious stake-who gets to raise their flag over one or another set of barren rocks. And the price of doing so will only rise. It costs the PRC far less to threaten a U.S. carrier than America to protect one. Just how much are Americans prepared to spend to assert what amounts to the convenience of empire rather than essentials of security?
Moreover, at a time when North Korea tops Washington’s Asian agenda, how much is the Trump administration willing to pay for Beijing’s assistance? According to President Trump, President Xi already has emphasized the limitations of China’s control. The PRC can hardly be expected to dismantle its one military ally if the U.S. is actively pushing military containment elsewhere in the region.
Indeed, while Americans tend to view themselves as being Vestal Virgins attempting to do good in an evil world, citizens of other nations typically take a more cynical view. In Shanghai, as elsewhere, they see Washington speaking of principle while promoting interest, and refusing to apply to itself norms it seeks to impose on others. The Chinese are prepared to yield before superior force, but are not prepared to concede that America always will possess that edge.
Washington officials should reconsider their approach to China. Military confrontation would be a losing game. No victory would be permanent. An American success would be an invitation for the PRC to rebuild and expand its armed forces for a rematch. And conflict would aid the authoritarian regime in maintaining and expanding its control. A liberal, democratic China would be unlikely to emerge from any war.
The U.S. needs to prioritize its objectives vis-à-vis China. Washington wants Beijing to democratize, respect human rights, reduce trade and investment barriers, forswear cyber-attacks, pressure North Korea, sanction other pariah regimes, abandon territorial claims, and accept permanent U.S. hegemony. No serious state, let alone a nationalistic rising power, could concede such a laundry list. American officials should decide what they most want and how much they are willing to pay.
Washington also should recalculate what is worth defending. For instance, there is a difference between preserving Tokyo’s and Manilla’s control over territories contested by China, and the two nations’ independence, which Beijing does not threaten. Indeed, while resolute backing of the former might deter China from acting, it also would ensure Washington’s involvement should an errant sea captain on one side or the other start shooting. Moreover, issuing a blank defense checks would encourage friends to be more intransigent and prepare less for trouble.
Most important, American officials need to separate the objectives of defending American and containing China. The former is relatively easy and inexpensive. It is likely to be long into the future before the PRC is capable of projecting power against America’s Pacific possessions, let alone homeland.
In contrast, it will grow ever more expensive for the U.S. to overcome the far more modest PRC build-up necessary to deter outside intervention. How much are Americans prepared to spend to ensure that Washington can contest Chinese influence along China’s borders? The issue is not whether doing so has value. The issue is whether a highly indebted liberal republic can afford to continue doing so. Especially when that responsibility more appropriately falls on other nations in the region.
Even after the ongoing campaign against Western influence, the PRC remains a far more open society than in the early days of the Communist revolution. Hope that political liberalization would follow economic liberalization has been stillborn, but Xi Jinping’s China remains very different from Mao Zedong’s China.
As such, the PRC might not be an ally, but there is no reason it should be an enemy. Yet attempting to dominate and contain China risks turning it into an angry and well-armed adversary. Instead, Washington should prepare to share global leadership. Far better to yield thoughtfully while shaping the future than to be forced to concede even more under pressure. Just as Great Britain successfully if not always happily accommodated the emerging United States of America.Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan.
On Sunday, a U.S. Navy fighter jet shot down one of Bashar al-Assad’s warplanes attacking U.S.-allied Syrian forces, drawing the United States deeper into that conflict. Raising tensions with Russia and potentially placing American troops in danger, this action was just another in a long line of tactical decisions which increase U.S. involvement in Syria without any viable long-term strategy for resolving or exiting the civil war.
Much of the criticism has focused on President Donald Trump’s impulsive and pugnacious personality. While Trump has accelerated this process, he is not wholly to blame for the slippery slope that the United States is now sliding down in Syria. The Obama administration resisted large-scale escalation, but their choices nonetheless contributed directly to today’s haphazard Syria strategy. The Trump administration needs to decide what it wants to achieve in Syria now, or the inevitable logic of mission creep may rob them of the ability to choose.
Obama’s Syrian Wars
A common narrative among hawks in Washington is that Barack Obama’s failure to escalate in Syria—most notably his decision not to follow through on his “red line” comments about chemical weapons—reduced U.S. credibility and worsened the conflict there. These criticisms are largely unjustified: the red line comment may have been foolish, but the Russian-brokered chemical weapons deal succeeded in preventing the further use of chemical weapons during Obama’s term, and was likely more effective than air strikes would have been.
The United States has no viable long-term strategy for resolving or exiting the civil war.
Obama does deserve some credit for his willingness to avoid large-scale escalation against the Assad regime in Syria in 2013 and again in response to Russia’s 2015 intervention. Whether he feared a repeat of the 2011 Libya intervention—where narrow humanitarian goals quickly and almost seamlessly transitioned into regime change—or he simply acknowledged the complexity of the Syrian conflict, the former president repeatedly resisted pressure to commit U.S. forces against Damascus.
Yet his administration did get involved in other ways, recognizing the Syrian opposition in 2012, and later supplying arms and training to anti-Assad rebels. Meanwhile, the campaign against ISIS was characterized by mission creep. Initially portrayed as air strikes in support of local forces, Operation Inherent Resolve quickly saw the deployment of troops in both Iraq and Syria: as early as May 2015, U.S. Special Forces were engaging in ground raids against ISIS, and by May 2016, they were fighting alongside Syrian rebels to take the town of al-Shaddadi.
To support these missions, the United States helped to seize and expand an airfield near Kobane in northern Syria, staffing it with civil engineers, intelligence and support personnel. By the time Obama left office, the United States had 500 Special Forces personnel on the ground in Syria in addition to support staff. This gradual escalation went largely unnoticed at the time, with U.S. forces often seemingly “plugged-in” to fill a temporary gap in local partner capacity.
Indeed, Obama never appeared to have a good strategy for the endgame. As long as the fighting in Syria’s civil war stayed geographically segregated from the campaign against ISIS, both could proceed without raising difficult questions about territorial control. Perhaps the biggest problem with the administration’s Syria policy was its failure to more aggressively pursue the diplomatic steps that could have begun the peace process. Rather than admitting America’s limited strategic interests in the Syrian conflict, ambivalence and gradual escalation ultimately laid the groundwork for Trump’s more impulsive escalations.
Trump Hits the Afterburner
If Obama’s involvement in Syria could be characterized as “creeping escalation,” Trump appears to be sprinting towards heavier involvement in the conflict. In his first months in office, the new president authorized substantial new deployments—almost doubling the number of Special Forces in Syria—and has begun to deploy conventional forces too, sending around 400 marines to establish fire bases in northern Syria.
Trump has also proved far less willing to draw a clear line of distinction between ISIS and militias associated with the Assad regime. In April, in response to a chemical-weapons attack, Trump authorized a tomahawk missile strike on a Syrian air base. Since that time, U.S. troops have struck Assad-linked militias several times, bombing convoys and drones that entered into the exclusion zone near the U.S. base at al-Tanf.
This increase in incidents inside Syria is the inevitable result of Trump’s choice to speed up the fight against ISIS. Since weaknesses in local partners can no longer be built-up slowly, U.S. forces are needed instead to provide required capacity (such as recently deployed marine artillery units) in key areas. This then produces new problems for force protection: recent strikes on regime-allied forces are largely aimed at protecting U.S. and allied forces. As U.S.-backed and regime-backed forces come into contact more frequently, these tensions will only grow.
Danger, Will Robinson
Worryingly, unlike the Obama administration, Trump’s approach to Syria does not appear to be driven by a coherent strategy. Though far from perfect, Obama’s slow-and-steady approach to the anti-ISIS campaign, coupled with a concerted international diplomatic effort, had the potential to yield a substantive rollback of ISIS and at least a managed ceasefire process in the rest of Syria. But in rushing the end of the campaign, substituting U.S. forces for local ones, and effectively ignoring diplomacy, the new administration is merely increasing the chaos in Syria.
Worse, the Trump administration is reportedly considering using its involvement in Syria to push back on Iran, a step that will increase the risks to U.S. troops in Syria and Iraq while producing no obvious policy benefits. Aside from ISIS, the United States has never had strong interests in the Syrian conflict; in contrast, Iran, Russia and the Assad regime are all heavily invested in the outcome of the conflict.
Indeed, the recent mission creep in Syria effectively refutes the long-running hawkish position on Syria which argued that targeted strikes would force other actors to take a more conciliatory approach to ending the conflict. Trump’s missile strikes have not stopped the Assad regime’s attacks on civilians, and militias continue to probe U.S.-associated forces on the ground—even after the recent strikes. The recent shootdown is of particular concern, as it highlights that the Trump administration is willing to retaliate for attacks on local partners, not just for direct attacks on U.S. forces.
With neither side willing to back down in Syria, the potential for further escalation is high. Trump is accelerating fast, but with no clear goal in sight. The White House needs a coherent Syria strategy soon, before events spiral even further out of its control.Emma Ashford is a research fellow in defense and foreign policy studies at the Cato Institute.
Senator Bernie Sanders has introduced a bill in Congress that would allow the importation of prescription drugs from Canadian pharmacies, subject to controls aimed at ensuring safety. The goal is to lower prices for Americans, because many drugs sell for far less in Canada.
The U.S. drug lobby, and many other groups, oppose this importation, claiming that consumer savings would be minor and that imported drugs would not meet the same safety standards as those sold in the United States. Furthermore, recent commentary suggests that legalizing Canadian importation would exacerbate the opioid crisis in the U.S. by expanding access and lowering the costs of prescription opioids.
These concerns are unjustified and in some cases just self-interested scare mongering. The crucial question about legalizing importation, implicit in the industry’s opposition, is its possible effect on drug innovation in the United States.
The safety concern is easy to dismiss. Innumerable goods flow across the U.S.-Canada border every day, with little evidence of unsafe imports. U.S. consumers and their doctors have ample incentive to order from reputable Canadian suppliers, who in turn have no incentive to kill off their paying customers. Canadian drugs already flow across the border to some degree, with minimal examples of adverse consequences.
Whether the cost savings from this importation would be large depends on multiple factors, such as how the Canadian government adjusts its price controls, and how U.S. drug makers change their distribution and pricing policies. If safety concerns are minimal, however, any cost savings are valuable even if modest.
The crucial question about legalizing importation, implicit in the industry’s opposition, is its possible effect on drug innovation in the United States.
The fear that importation will exacerbate the U.S. opioid crisis is also misplaced. Prescription opioids are already widely available and usually inexpensive; despite concern over the increasing opioid death rate in the U.S., many doctors still prescribe opioids routinely. And most of the increase in opioid-related deaths over the past six years has involved heroin and fentanyl rather than prescription opioids; these substances are already outlawed or tightly controlled, both in the U.S. and Canada.
Legalizing importation might, however, harm new drug innovation. Private investment in new drugs is potentially less than is socially desirable because, absent patent protection, innovators cannot easily capture a large financial return. Innovation is expensive, and once a company has invented a new drug, rival companies can often reverse engineer it and then offer a competing product.
The standard policy response is patent protection, which provides an innovating firm the exclusive right to sell the patented product for some period of time; this allows the innovator to recoup its research and development expenses by charging a price well above production costs. Some academic research suggests that patent protection does not necessarily increase innovation, but one industry where it appears to matter is drugs.
Importation, however, undercuts patent protection if other countries limit U.S. drug prices (as Canada does), since many consumers will then buy their drugs at low prices in Canada, robbing the innovator of the high-priced sales necessary to pay off their research and development investments. The option to buy at low prices is good for consumers with respect to existing drugs, but bad over the longer haul if lower profit potential discourages new drug innovation.
Determining the right combination of patent and importation policies is thus a messy and difficult empirical exercise; and given available evidence, reasonable people can disagree on whether importation will be beneficial or harmful on balance. But drug innovation is the crucial issue in this debate; not consumer safety or the opioid crisis.Jeffrey Miron is director of economic studies at the Cato Institute and the director of undergraduate studies in the Department of Economics at Harvard University.
India’s Prime Minister Narendra Modi is making a working or “no frills” trip to Washington. It’s a chance for him to meet President Donald Trump as they discuss what the White House calls “common priorities.” And the premier has business to conduct, including expressing his concern over proposals to restrict use of H-1B visas, which have brought many Indian professionals to America.
Some observers have highlighted similarities between the two leaders, including their nationalist/populist message. Both emphasize business and jobs but neither believes in free markets. Both benefited from a surge in support from religious voters, though the faiths differ. Finally, critics tagged both as potential strongmen. However, PM Modi appears measurably stronger politically.
Indeed, the latter is the far more practiced politician. He led the state government of Gujarat and Bharatiya Janata Party before taking over as premier after the BJP’s overwhelming victory in 2014. The party did well last March in state elections, though it won outright only in the super-state of Uttar Pradesh. Still, the BJP far out-classed the once ruling Congress Party with a campaign that transcended caste politics, embraced Hindu nationalism, and relied on grassroots activism. PM Modi appears well-positioned for a repeat national victory when elections are held in two years.
Under him India has become more active internationally. New Delhi gloried in its role as a member of the “nonaligned bloc” during the Cold War. Now the bipolar world is gone and India is wealthier and ready for global leadership. President George W. Bush initiated a significant improvement in U.S.-India relations, hoping to develop New Delhi as a counterweight to China’s growing influence.
Although India has no desire to be the catspaw of Washington or anyone else, it is a natural rival to the People’s Republic of China. Their relationship remains marred by a territorial dispute that sparked a short war a half century ago. Even before the U.S.-New Delhi rapprochement, India was active economically in Burma when Western sanctions had given the PRC a near monopoly and the Indian navy was patrolling waters in Southeast Asia where local forces were dwarfed by China’s forces.
The Obama administration continued to promote good relations, as should the Trump administration, despite some concerns in New Delhi created by the president’s criticisms of the Paris climate change treaty and H-1B visas. Hopefully tonight’s White House dinner will smooth any ruffled feathers. President Trump’s apparent choice for U.S. ambassador to India, Kenneth Juster, currently serving on the National Economic Council, also should be a positive influence given his extensive experience with India. There are several areas for fruitful cooperation, including economic. U.S. officials have suggested the possibility of negotiating a free trade agreement. No formal alliance is needed; a friendly, prosperous, and democratic India naturally serves the balance of power.
It perhaps has become an international cliché, but India should follow China down the path of sustained high economic growth. With a growth rate of 7.9 percent in 2015 India has been growing faster than the PRC. Last year the International Monetary Fund forecast continued expansion above seven percent annually in coming years. Many of India’s fundamentals look solid. Inflation remains modest. India’s population is likely to surpass China’s and the McKinsey Global Institute predicted that India’s “consuming class” will triple in size over the coming decade. Entry of more women into the workforce affords India another important growth opportunity. Moreover, India’s “country risk” is below that of China, according to the Economist Intelligence Unit. Indeed, New Delhi enjoys a clear though hard to quantify advantage from democracy: Indian politics is messy, but offers a critical pressure valve lacking in the Chinese political system.
Yet there are worrisome signs that India may fall short of its potential. Some growth fundamentals remain weak. For instance, government spending rather than private investment has been driving the economy. The drop in oil prices also spurred recent growth; no similar stimulus is likely in the near future. Per capita GDP increases have not kept up. Job creation also has disappointed. HDFC Bank warned of a “growing disconnect between economic growth, education, skills and jobs.”
A number of companies fear the future. Business confidence, along with sales growth and capacity utilization, are down. In March the Economist reported that “firms are busy cutting back investment as if mired in recession. Bank lending to industry, growth in which once reached 30 percent a year, is shrinking for the first time in over two decades.”
India’s Prime Minister Narendra Modi is making a working or ‘no frills’ trip to Washington.
Even the information technology sector is suffering. The Modi government had hoped to expand India’s success in information technology, proposing to wire every village as part of the “Digital India” plan. But layoffs have hit the IT sector, which currently accounts for nearly ten percent of India’s GDP. Kris Lakshmikanth, who runs Head Hunters India, said that “For the first time, companies are touching middle management.” The industry, which provides two-thirds of world IT out-sourcing, also faces foreign pressure. A related threat from President Trump is limiting use of H-1B visas, available for more highly skilled workers.
The national government has a debt to GDP ratio of 67 percent, among the highest in Asia; the 2018 deficit will be about 3.2 percent. State debt also has been increasing sharply, up from two percent of GDP in 2012 to about three percent now. Annual state deficits run about 2.5 percent of GDP. The combined national-state deficit is burdensome 5.7 percent of GDP.
Earlier this year states began writing off agricultural debts. In Uttar Pradesh the victorious BJP promised to waive $5.6 billion in small farmers’ loans. Farmers across the nation then demanded the same treatment. The likely result is a $40 billion write-off, about two percent of GDP. (The then-ruling Congress party took a similar step in 2008, at a cost of 1.8 percent of GDP.)
Still, the most serious barrier to an Indian economic take-off is India’s government, both national and state. Around the world—India’s diaspora numbers some 30 million—ethnic Indians are traders. But not in India. New Delhi and numerous state capitals simply smothered the natural entrepreneurship of the Indian people.
Collectivist, dirigiste economics reigned. The state dominated the economy’s commanding heights, imposed confiscatory tax rates, created a “License Raj” to micro-manage private industry, and enforced its dictates through a bureaucracy rated the worst in Asia. Even as the famed “Tigers” of Japan, Taiwan, South Korea, and eventually China raced ahead, India languished. As late as 1983 the poverty rate was an astounding 60 percent.
Meaningful reform finally came in 1991. Although the changes were sharply limited compared to what needed to be done, they were a dramatic advance over the past. Average incomes doubled within a decade and tens of millions of Indians escaped poverty. But people hoped for so much more while New Delhi again fell behind. For instance, in the 2014 Economic Freedom of the World rating, India had dropped to 112 from 102 the year before. Explained Swaminathan S. Anklesaria Aiyar in a Cato Institute study, “Although many old controls have been abolished, many still continue, and a plethora of new controls have been created.”
Expectations were great when PM Modi took over, given his pro-business rhetoric and positive record in Gujarat. And his government has some solid achievements, despite lacking control of the upper house, which allowed the opposition to block some measures. Modi’s administration streamlined the goods and services tax (GST), implemented a new bankruptcy code, eased restrictions on foreign investment, limited spending, eliminated capital and certification requirements barriers for business, accelerated environmental approvals, and improved public administration and infrastructure. Chandrajit Banerjee, Director General of the Confederation of Indian Industry, praised the “impressive agenda of innovative economic reforms and social programs that have positively impacted growth.”
However, some of the premier’s supporters have been disappointed, given the magnitude of the changes yet needed. For example, Shankar Acharya, a columnist for New Delhi’s Business Standard, worried: “Economic reforms have clearly lost momentum and there is a sense of drift in economic policy.” The Times of India editorialized that “the government hasn’t pressed the pedal hard on reforms” and “implementation of projects” has been slow. The Economist saw a cavalcade of mini-initiatives rather than a serious reform program.
Despite BJP rule, the 2017 Index of Economic Freedom rated India at only 143 of 180 countries. In contrast, China stood at 111. Moreover, New Delhi’s rating fell from the year before. India performed particularly poorly on business freedom, financial freedom, government integrity, investment freedom, judicial effectiveness, and labor freedom.
PM Modi’s ability to effect change will improve as the BJP makes additional gains in parliament’s upper chamber. However, the premier is more like Donald Trump than Ronald Reagan, to whom he was originally compared, in that he believes in managed rather than free markets. In fact, the BJP has, in the words of the Carnegie Endowment’s Milan Vaishnav, a “nationalist, protectionist wing” with which President Trump would be comfortable. Moreover, despite PM Modi’s dominating role, he “seems stuck in the mindset of a provincial executive: he is more interested in projects than in policies; he is a modernizer, not a reformer,” observed Sebastian Mallaby of the Council on Foreign Relations. The Economist similarly termed the premier “a fine administrator but not much of a reformer.”
The government often has manipulated rather than freed the market. For instance, New Delhi imposed agricultural prices controls and criticized “hoarding,” Officials also have discussed recreating state monopolies in “strategic” economic sectors, Particularly harmful was last November’s currency “reform,” by which 86 percent of the nation’s currency was demonetized without an adequate number of new bills available. The result was chaos for all and ruin for some, particularly small, cash-based businesses. Currency shortages in ATMs persisted until last month. Saurabh Mukherjea of Ambit Capital described demonetization “as the economic equivalent of a heart attack.”
PM Modi moderated the political blowback by playing the populist card, arguing that the program was necessary to tame the rich and stop corruption. But whatever the economic justification for moving the economy away from a disproportionate reliance on cash, the government appeared motivated more by the desire to bring the nation’s finances under its control. The botched swap probably accounted at least partly for the lower annualized growth of 6.1 percent during the first quarter of this year, below the rate when PM Modi took office. And the impact could last for some time.
The premier should shift course and use his authority, strengthened by the March elections, to accelerate reforms. Much could be done to liberalize markets, encourage entrepreneurship, ease business creation, and spur employment. For instance, Cornell’s Eswar Prasad of Cornell advocated “reducing labor regulations, unshackling businesses from red tape and bureaucracy, reducing government control of banks and clearing up their bad loans, developing capital markets, revamping the government’s tax and expenditure systems and improving infrastructure.”
Of particular concern, the rules governing business hiring and firing greatly increase costs, discouraging job creation. Employment actually has fallen in these areas, while growth has been limited primarily to uncovered industries. Regulated companies tend to stay small and rely on temporary labor. India hosts only 270 firms with sales above $125 million, compared to 7,680 in China. Nine out of ten jobs come from the informal sector. This system has greatly hindered development of a competitive manufacturing industry, like that in China. India’s abundant human resources are being squandered.
Government enterprises are used to provide jobs. Even in a good economy losses are routine. Firms that make money usually rely on government monopolies or other special privileges. Air India loses more money the more it flies. Overall, parastatals lose billions of dollars a year. They survive only at extraordinary public cost: “soft loans, subsidies, and bail-outs keep them afloat,” observed the Economist.
State banks are loaded with bad debts which McKinsey & Co. figures exceed the banks’ total value. Government “services” are a scandal. Said Aiyar, “With almost no exceptions, the delivery of government services in India is pathetic, from the police and judiciary to education and health.” Many teachers in public schools don’t even bother to come to class. Lawsuits can take decades to resolve: the legal system has a backlog of 31.5 million cases.
PM Modi also should avoid the temptation to inflame Hindu nationalism to win votes. Religious intolerance and persecution have worsened since his 2014 victory. Vigilantism has been rising, especially against Muslims accused of trafficking in beef. Yet after the BJP’s victory in Uttar Pradesh he appointed as chief minister a Hindu priest once jailed for his violent rhetorical attacks on Muslims. Even if such tactics yield short-term political benefits, they risk not only social conflict but economic harm, discouraging foreign investment and trade which would benefit all Indians.
Just as the world spent decades waiting for China to escape Mao Zedong’s communist madness, so, too, has the world spent decades waiting for India to leave behind Jawaharlal Nehru’s socialist nostrums. PM Modi offers competent management and has moved his country closer to economic freedom. But getting the rest of the way requires freeing India’s people from the shackles created by government social and economic engineers. Ethnic Indians have proved their economic prowess around the globe. Now they need the chance to do so at home.
It is good for the prime minister to visit America early during the two leaders’ joint tenure. Although no one knows how two such egos that have climbed the political mountains in their respective nations will get along, Narendra Modi is a worthy partner for Donald Trump. Both have succeeded in tough political systems and overcome harsh opposition. And both have a unique opportunity to transform their respective nations, and ultimately the world. Working together they are more likely to succeed in doing so, and for the better.Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan.
Saudi Arabian King Salman bin Abdulaziz has shaken his nation’s closed political system by making his youngest son his heir. Although heralded as a “modernizer,” 31-year-old Crown Prince Mohammed bin Salman, also known as MBS, is the architect of Riyadh’s disastrous attack on Yemen and disingenuous campaign to turn Qatar into a Saudi satellite. Given President Donald Trump’s warm embrace of the monarchy, Prince Salman’s recklessness is likely to draw the U.S. more deeply into destabilizing regional conflicts.
The Kingdom of Saudi Arabia is an anachronism, an absolute monarchy in a democratic age. A few thousand princes sit atop a society of roughly 32 million, treating the nation’s wealth as their family’s piggy bank. The royals live a generally licentious lifestyle outside of public view, but buy off the KSA’s fundamentalist Muslim clergy by promoting the intolerant Islamic sect of Wahhabism worldwide. The kingdom’s population long has been a generous source of people and money for radical and terrorist groups, including those attacking the West.
What amounts to a totalitarian state-there is no religious or political liberty and only limited social freedom, at least in public-has no popular appeal other than its open checkbook. Which makes political Islam so threatening: a country like Iran is an awful model, but life revolves around something other than money. For that people are willing to fight and die. In contrast, the Saudi royals buy domestic loyalty while hiring foreigners to do the dirty work. With little to fight for, even the Saudi military performs poorly despite the best American weaponry.
The kingdom confronts a multitude of challenges. For years a group of elderly brothers held the kingship and other top positions among themselves. This self-aggrandizing gerontocracy lost what little public appeal it had when oil prices dropped, reducing the financial benefits for the average Saudi. Riyadh’s cash reserves have fallen by almost a third since 2014.
Prince Salman’s recklessness is likely to draw the U.S. more deeply into destabilizing regional conflicts.
In 2015 King Salman succeeded to the throne. He appointed his nephew, Mohammed bin Nayef, as Crown Prince, and his favorite son, MBS, as Deputy Crown Prince. But the king emasculated his nominal successor, merging Prince Nayef’s court with his own and stripping the Crown Prince’s other positions of authority. The 81-year-old king introduced his son to Washington, seeking unofficial blessing for his plans to anoint MBS his successor.
The young prince, whose experience had been limited to serving his father, had the latter’s ear and effectively ruled. MBS won praise for seeking to diversify the economy. Last year he initiated Project 2030, which promotes development beyond oil. He also imposed an austerity program, cutting benefits for the entitlement-minded population-only to restore some of them recently, to quiet discontent. Moreover, he loosened some social strictures and restricted the religious police, to the applause of many younger Saudis.
However, his highly-touted liberalism does not extend to religion or politics. There is not one church, synagogue, or temple in the entire kingdom. No public worship or other activity is allowed any other faith, even though the KSA is filled with contract workers, many of whom are Christians or Hindus. The Shia minority worships only at sufferance, while facing persistent discrimination and repression. Saudi Arabia ranks with North Korea in its extraordinary hostility to religious liberty. MBS has changed nothing.
As for politics, the reigning prince has demonstrated no inclination to allow those not of royal blood to have any say in their own government. Freedom House ranks the KSA as “Not Free,” with the lowest possible rating for both political freedom and civil liberties. The human rights group declared simply: “The Kingdom of Saudi Arabia restricts almost all political rights and civil liberties through a combination of oppressive laws and the use of force.”
The U.S. State Department detailed Riyadh’s manifold crimes in its latest human rights report, explaining: “The most important human rights problems reported included citizens’ lack of the ability and legal means to choose their government; restrictions on universal rights, such as freedom of expression, including on the internet, and the freedoms of assembly, association, movement, and religion; and pervasive gender discrimination and lack of equal rights that affected most aspects of women’s lives.” Other than that, life in the KSA is great.
Indeed, the kingdom’s hated enemy, Iran, looks like a democratic paragon compared to Riyadh. Saudi Arabia does not hold elections. Or allow organized political opposition. Or tolerate media criticism, or criticism of any sort. Dissident blogger Raif Badawi was sentenced to ten years and 1000 lashes for his writing; his attorney then was tossed into jail for 15 years. Observed Maya Foa of the human rights group Reprieve, “The reality is Prince Mohammed has stood alongside and publicly defended the king as young men have been tortured and executed for peacefully protesting.” Where is MBS the reformer?
Of greater concern to the U.S. is the crown prince’s international aggression. He is pushing a quasi-war against Iran, pledging to “work so that the battle for them is in Iran.” Antagonism toward Tehran sparked Riyadh’s destabilizing support for radical jihadists in an attempt to overthrow Syrian President Bashar al-Assad.
MBS orchestrated the invasion of Yemen two years ago to restore to power a friendly autocrat ousted in the latest iteration of that nation’s endless internecine conflict. What was supposed to be a brief cakewalk morphed into a lengthy sectarian struggle in which more than 10,000 civilians have died, most from Saudi bombing-for which the U.S. provided the weapons, refueled the planes, and suggested the targets.
After Riyadh sowed the wind, Iran encouraged the whirlwind, providing modest aid to Riyadh’s Houthi opponents. Tehran seeks not to “win” but to bleed its Saudi antagonist. There is no end in sight to the immoral, counterproductive conflict into which Washington is being ever more deeply drawn. In contrast, Prince Nayef, well regarded as interior minister by foreign governments, was skeptical of MBS’s Yemeni misadventure.
The young ruler-in-waiting also apparently is the driving force behind the Saudi-led assault on neighboring Qatar. Although Saudi Arabia has done more than any other nation to fund and staff anti-Western terrorist organizations, Riyadh accused Doha of supporting terrorism.
The Saudi royals were angered by Qatar’s friendly relations with Iran, growing naturally out of their shared natural gas field. These ties also encourage the world’s most populous Shia nation’s more responsible participation in the international system. The Saudis criticized Qatar for backing the Muslim Brotherhood, the world’s most important exponent of political Islam, a diverse activist (not terrorist) group whose members serve in at least two governments and are well integrated into other Arab nations. Riyadh’s war on the Brotherhood threatens to drive its activities underground and radicalize even more young Muslims, who find no appeal in a discreditable corrupt monarchy.
Finally, Riyadh, which allows no media freedom, targeted Al Jazeera, the Qatar-backed television network which publicized the 2011 Arab Spring and criticized the Saudi royals, among others. MBS is seeking to impose his own nation’s totalitarian controls abroad. No independent state could accept Saudi Arabia’s outlandish demands. Again, Prince Nayef was more cautious, urging a diplomatic resolution. His opposition to MBS’ international thuggery reportedly triggered his ouster as royal heir.
Even Riyadh’s Sunni neighbors are not entirely comfortable with MBS’s outsized ambitions. Warned Chas Freeman, George H.W. Bush’s ambassador to Saudi Arabia: “Some of the neighbors regard it as a drive for Saudi hegemony in the region.” Which could be as unpleasant as Iranian domination.
Despite the good press received by MBS as a dynamic new ruler, so far he has demonstrated an unerring ability to fail upward. Yemenis continue to successfully resist Saudi aggression, Qatar so far has withstood Riyadh’s attempted extortion. The government has had to retreat from last year’s budget cuts. Only the young heir’s modest social reforms have survived. With MBS poised to officially rule, the U.S. should back away from a relationship which has simultaneously undermined American values and security. The Saudi regime is destined to fall. Then Washington will pay a heavy political price for having supported the oppressive royals for so long.
The new Saudi crown prince’s pleasant countenance cannot disguise the brutal character of the system he represents. Even assuming the royal family is truly united-and there likely is greater disquiet than publicly known-anointing a younger, more vibrant ruler in Saudi Arabia is like putting lipstick on a pig. The essential problem remains the dictatorial theocracy’s lack of public legitimacy and appeal. The only question is when the Saudi people will finally free themselves.Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan.
Wednesday, President Trump argued that “those seeking immigration into our country must be able to support themselves financially and should not use welfare for a period of at least five years.” That law is already on the books, but Trump’s instincts are correct on this issue. Congress can do a lot more to restrict access to welfare for immigrants, but it should go even further than Trump recommends — by denying access to welfare for all noncitizens.
Immigrants don’t come to the United States for welfare, they come to work. It’s bad enough that taxpayers have to support bloated, ineffective welfare schemes for U.S. citizens. They should not be forced to do so for recent arrivals.
Preventing non-citizens from accessing welfare will save taxpayers money and calm the concerns of many taxpayers.
Lower-income immigrants are less likely to use means-tested welfare programs than lower-income native-born Americans. When lower-income immigrants do use those programs, the dollar value of the benefits they consume is far below their native-born counterparts with similar income.
If natives consumed Medicaid at the same rate and dollar value as lower-income immigrants do, the program would be 42 percent smaller. Relatedly, immigrant labor force participation rates tend to be higher than for natives and they are about twice as likely to start a business.
Immigrant welfare use is a small problem relative to the size of the welfare state. In addition to their relatively lower use rates and the small value of the benefits they consume, immigrants pay about $14 billion a year more into Medicare Part A than they consume in benefits, compared to the roughly $31 billion a year deficit that natives impose. Medicare needs serious reform, but immigrants are helping to keep the system solvent in the meantime.
Regardless of the truth, polls show that immigrant use of welfare is a very real concern to many Americans. Immigrants clearly don’t need welfare, but the false perception that they consume it in massive quantities dampens public enthusiasm for liberalizing immigration laws. A Cato Institute policy analysis from a few years back described how Congress could end this perception by simply barring non-citizens’ access to large portions of the welfare state, from food stamps to Medicaid.
Ending non-citizen access to welfare can address these concerns. If false public perceptions of immigrant welfare use led to welfare reform that diminished their access then taxpayers, including those who are immigrants, would benefit at a very low cost. Such a proposal would separate those honestly worried about immigrant welfare use from those who use it as an excuse to oppose immigration.
Trump’s statements in favor of restricting welfare access did not include many details. However, there is no shortage of means to restrict non-citizen access to welfare.
For instance, there are some minor reforms, such as enforcing documentation requirements for Medicaid applicants, and improving the accuracy and frequency of use for the Systematic Alien Verification for Entitlements (SAVE) program that checks whether welfare applicants are actually eligible for benefits. Some reform suggestions go further, such as preventing all non-citizens from receiving cash benefits through the Temporary Aid to Needy Families program and food stamps, as well as reforming the Earned Income Tax Credit and Child Tax Credit so only citizens have access.
Current law already bars immigrants from receiving many welfare benefits, but states have the authority to spend their own tax revenue on aid for immigrants ineligible under federal rules. As much as this rightly rankles many voters, principles of federalism and the Constitution make it difficult for Congress to ban that practice, except when federal funds are involved.
Preventing non-citizens from accessing welfare will save taxpayers money and calm the concerns of many taxpayers. Congress can and should expand upon Trump’s idea to further restrict immigrant welfare use by barring all non-citizens from accessing benefits.
Everyone will win under such a policy, and there will be no doubt that immigrants continue to flock to our shores to achieve the American Dream, rather than receive a welfare check.Alex Nowrasteh is an immigration policy analyst at the Cato Institute.
Michael D. Tanner
It is an old joke among health policy wonks that what the American people really want from health care reform is unlimited care, from the doctor of their choice, with no wait, free of charge.
For Republicans, trying to square this circle has led to panic, paralysis, and half-baked policy proposals such as the ObamaCare replacement bill. For Democrats, it has led from simple disasters such as ObamaCare itself to a position somewhere between fantasy and delusion.
The latest effort to fix health care with fairy dust comes from California, whose Senate voted to establish a statewide single-payer system. As ambitious as the California legislation is, encompassing everything from routine checkups to dental and nursing home care, its authors haven’t yet figured out how it will be paid for. The plan includes no co-pays, premiums or deductibles. Perhaps that’s because the legislature’s own estimates suggest it would cost at least $400 billion, more than the state’s entire present-day budget.
Adopting a single-payer system would crush the American economy, lowering wages, destroying jobs and throwing millions into poverty.
In fairness, legislators hope to recoup about half that amount from the federal government and the elimination of existing state and local health programs. But even so, the plan would necessitate a $200 billion tax hike. One suggestion being bandied about is a 15 percent state payroll tax. Ouch.
The cost of California’s plan is right in line with that of other recent single-payer proposals. For example, last fall, Colorado voters rejected a proposal to establish a single-payer system in that state that was projected to cost more than $64 billion per year by 2028. Voters apparently took note of the fact that, even after figuring in savings from existing programs, possible federal funding, and a new 10 percent payroll tax, the plan would have still run a $12 billion deficit within 10 years.
Similarly, last year Vermont was forced to abandon its efforts to set up a single-payer system after it couldn’t find a way to pay for the plan’s nearly $4 trillion price tag. The state had considered a number of financing mechanisms, including an 11.5 percent payroll tax and an income tax hike (disguised as a premium) to 9.5 percent.
On the national level, who could forget Bernie Sanders’ proposed “Medicare for All” system, which would have cost $13.8 trillion over its first decade of operation? Bernie would have paid for his plan by increasing the top US income-tax rate to an astounding 52 percent, raising everyone else’s income taxes by 2.2 percentage points, and raising payroll taxes by 6.2 points.
Of course, it is no surprise that Medicare for All would be so expensive, since our current Medicare program is running $58 trillion in the red going forward. It turns out that “free” health care isn’t really free at all.
How, though, could a single-payer system possibly cost so much? Aren’t we constantly told that other countries spend far less than we do on health care?
It is true that the US spends nearly a third more on health care than the second-highest-spending developed country (Sweden), both in per-capita dollars and as a percentage of GDP. But that reduction in spending can come with a price of its own: The most effective way to hold down health care costs is to limit the availability of care. Some other developed countries ration care directly. Some spend less on facilities, technology or physician incomes, leading to long waits for care.
Such trade-offs are not inherently bad, and not all health care is of equal value, though that would seem to be a determination most appropriately made by patients rather than the government. But the fact remains that no health care system anywhere in the world provides everyone with unlimited care.
Moreover, foreign health care systems rely heavily on the US system to drive medical innovation and technology. There’s a reason why more than half of all new drugs are patented in the United States, and why 80 percent of non-pharmaceutical medical breakthroughs, from transplants to MRIs, were introduced first here. If the US were to reduce its investment in such innovation in order to bring costs into line with international norms, would other countries pick up the slack, or would the next revolutionary cancer drug simply never be developed? In the end, there is still no free lunch.
American single-payer advocates simply ignore these trade-offs. They know that their fellow citizens instinctively resist rationing imposed from outside, so they promise “unlimited” care for all, which is about as realistic as promising personal unicorns for all.
In the process, they also ignore the fact that many of the systems they admire are neither single-payer nor free to patients. Above and beyond the exorbitant taxes that must almost always be levied to fund their single-payer schemes, many of these countries impose other costs on patients. There are frequently co-payments, deductibles and other cost-sharing requirements. In fact, in countries such as Australia, Germany, Japan, the Netherlands and Switzerland, consumers cover a greater portion of health care spending out-of-pocket than do Americans. But American single-payer proposals eliminate most or all such cost-sharing.
Adopting a single-payer system would crush the American economy, lowering wages, destroying jobs and throwing millions into poverty. The Tax Foundation, for instance, estimated that Sanders’ plan would have reduced the US GDP by 9.5 percent and after-tax income for all Americans by an average of 12.8 percent in the long run. That is, simply put, not going to happen. So Americans are likely to end up with a lot less health care than they have been promised.
Santa Claus will always be more popular than the Grinch. But the health care debate needs a bit more Grinch and a lot less Santa Claus. Americans cannot have unlimited care, from the doctor of their choice, with no wait, for free. The politician who tells them as much will not be popular. But he or she may save them from something that will much more likely resemble a nightmare than a utopian dream.Michael Tanner is a senior fellow at the Cato Institute and the author of “Going for Broke: Deficits, Debt, and the Entitlement Crisis.”
Michael F. Cannon
Senate Republicans have released their supposed ObamaCare-repeal bill, the “Better Care Reconciliation Act.” Like its counterpart, the House-passed “American Health Care Act,” the Senate bill would not repeal ObamaCare. Indeed, it’s not even fair to call it a partial repeal or “ObamaCare-lite.”
The Senate bill fails to repeal ObamaCare’s major provisions. Its purported repeal and reform provisions, particularly those tied to Medicaid, are phony. Indeed, the bill would actually expand ObamaCare in significant respects.
Let’s start with what it will do to the cost, quality and stability of private health insurance.
ObamaCare’s “community rating” price controls are causing premiums to rise, coverage to get worse for the sick and insurance markets to collapse across the country. The Senate bill would modify those government price controls somewhat, allowing insurers to charge 64-year-olds five times what they charge 18-year-olds (as opposed to three times, under current law).
But these price controls would continue to make a mess of markets and cause insurers to flee. The bill would also preserve other ObamaCare mandates and regulations that contribute to higher premiums.
On top of that, the Senate bill wouldn’t even repeal the parts of ObamaCare Republicans claim it would. On paper, it would repeal ObamaCare’s expansion of Medicaid — but not until 2024.
There will be three federal election cycles, three new Congresses and potentially a brand new president between now and then. It is almost certain Democrats will control at least one of those Congresses, and could then rescind this “repeal” as if it never happened.
The Senate bill fails to repeal ObamaCare’s major provisions. Its purported repeal and reform provisions, particularly those tied to Medicaid, are phony
The rest of the bill’s supposed Medicaid cuts are no less phony. The bill wouldn’t cut traditional Medicaid by one penny. It would reduce the rate of growth in traditional Medicaid spending, but Medicaid spending would still grow, year after year, forever. Yet even those changes are phony. They would not take effect until 2025, giving four future Congresses the opportunity to rescind them.
Republicans have been promising full ObamaCare repeal for seven years. That means repealing all of ObamaCare’s regulations, mandates, bailouts and subsidies, including the entire Medicaid expansion. Instead, the Senate bill actually expands ObamaCare in at least two ways.
First, it expands eligibility for ObamaCare’s so-called “premium-assistance tax credits” to 2.6 million people in the 19 states that didn’t expand Medicaid, which is effectively a Medicaid expansion by other means.
Second, the bill would fund ObamaCare’s “cost-sharing” subsidies — something not even Democrats ever did. The Democratic Congress that enacted ObamaCare authorized but did not fund those subsidies — which, a federal judge ruled, makes the Obama and Trump administrations’ payment of those subsidies to insurers unconstitutional.
Rather than let those unconstitutional subsidies die, the Republican bill would expand ObamaCare beyond what a Democratic Congress created.
Finally, rather than let Democrats outdo them when it comes to budget gimmicks, Senate Republicans ordered the nonpartisan Congressional Budget Office to “score” their bill against spending and revenue projections that overestimate the number of exchange enrollees and exchange spending. Comparing their bill to inflated spending estimates allows Republicans to spend more ObamaCare money than honest budgeting would.
We may never know for sure, but Senate Republicans could be hiding that their bill would increase federal deficits and/or even increase actual spending on exchange subsidies.
Nevertheless, Senate Republicans will claim that their bill repeals ObamaCare and replaces it with free-market reforms. Perhaps the worst part is that ObamaCare supporters would be able to blame the ongoing harm their law causes on free markets rather than the actual culprit.Michael F. Cannon is director of health policy studies at the Cato Institute.
Steve H. Hanke
For some time, the flavor of the day has been “green.” Indeed, companies around the world are scrambling to go green. Some are so desperate that they engage in “greenwashing.” This practice amounts to little more than the use of public relations campaigns to assert greenness. McDonalds, for example, literally became green by changing the colors on its signature logo. Now, McDonalds’ classic yellow “M” is displayed with a green, not a red, background. That said, many companies are, and have been, engaged in producing products and employing production processes that, by any definition, would qualify as green.
Just how large is the green investment space? Well, it’s large, and it’s growing rapidly. For example, the FTSE4Good, which is a sub-index of London’s FTSE, has the largest market capitalization of any of the green equity indices. At the end of May 2017, the global FTSE4Good’s market capitalization stood at a whopping $20.9 trillion. That’s somewhat larger than the current GDP of the United States &mdashl $19.0 trillion.
With investors favoring green, and investment flows being earmarked as green, an obvious question arises: “How does an investment qualify for the coveted green designation?” The current methods used to measure green and qualify an investment as “green” fail to meet rudimentary standards of measurement. The most basic principal of measurement is replication. But, the current methods are, for the most part, subjective and opaque. They are “black boxes,” yielding results that can’t be replicated. This leaves a multi-trillion dollar green investment house wobbling on stilts, rather than a sound foundation.
In order to firm up the green investment house’s foundation, Dr. Heinz Schimmelbusch, Founder & CEO of the Advanced Metallurgical Group (where I am a member of the Supervisory Board), and I have developed a methodology that is simple, transparent, and replicable. Our metric is determined by starting at the origin of the supply chain. It is from that starting point that we measure the amount of greenness ultimately enabled by the production of a so-called green enabler.
How does an investment qualify for the coveted green designation?
For example, the reduction in CO2 is a green good. If a company produces graphite that enables the production of more efficient insulation, which results in lower demand for energy required for heating and cooling, then the graphite producer is a net supplier of a green good - the net reduction in CO2. In short, the enabler of the production of the green good is the supplier of graphite. So, the source of greenness resides at the very beginning of the supply chain. When it comes to the measurement of greenness, this enabling notion leads to simplicity and transparency, as well as an objective measure of the amount of greenness associated with each supplier that is enabling the production of green goods.
To operationalize the enabling concept in the context of CO2 emissions, the following transparent and replicable formulation for measuring greenness with precision can be used:
The enabling greenness ratio is simply the net CO2 reduced by a company divided by the level of a company’s invested capital. Because this metric is divided by a company’s total assets, it provides net CO2 reduction relative to a company’s size. This is analogous to the traditional accounting measure - return on assets.
Our suggested methodology can be applied with precision. We use the Advanced Metallurgical Group (AMG) to illustrate. The table below contains our results.
Over the past eight years AMG has produced products that have enabled an estimated net CO2 reduction of 157.47 million metric tons. Very green, indeed. And yes, there’s more; due to the cumulative nature of supplying raw materials that enable the production of green goods, AMG’s greenness enabling ratio soars over time - indicating that AMG’s green rate of return is growing rapidly.Steve Hanke is a professor of applied economics at The Johns Hopkins University and senior fellow at the Cato Institute.
In a way, you can’t blame conservatives for thinking the fix is in on impeachment. A broad swathe of the liberal intelligentsia has been hell-bent on removing Donald Trump from office since before Day One of his presidency. The worst among them seem to have taken a cue from Marlon Brando in The Wild One: What are the charges? “Whaddya got?”
Former labor secretary Robert Reich says we should impeach Trump for “abridging the freedom of the press” by … calling the media names and “choosing who he invites to news conferences.” In his rushed-to-publication tome, The Case for Impeachment, American University’s Allan J. Lichtman argues that Trump can be removed for the “crime against humanity” of global-warming skepticism.
Are these really the sorts of offenses that qualify as “high Crimes and Misdemeanors”? To divine the meaning of that phrase, it would help to have the guidance of a preeminent constitutional scholar — someone such as Harvard’s Laurence Tribe, whose treatise American Constitutional Law has been “cited more than any other legal text since 1950.”
Unfortunately, Trump’s election seems to have rattled Tribe hard enough to knock loose both his constitutional standards and his sense of proportion. The dean of con-law professors has spent the administration’s opening months frantically hurling charges at Trump, and managing mainly to impeach his own reputation in the process.
The Harvard Law professor’s arguments for removing President Trump from office have grown increasingly unhinged.
Impeachment “Should Begin On Inauguration Day,” Tribe declared in December; by January 28, he had concluded that Trump “must be impeached for abusing his power and shredding the Constitution more monstrously than any other president in American history” — pretty impressive for a man entering the second week of his presidency.
What’s funny about all this is, when it was Bill Clinton’s political life on the line, Tribe nearly threw his back out trying to raise the constitutional bar for removal. In his November 1998 testimony before the House Judiciary Committee, Tribe insisted that “an impeachable offense must itself severely threaten the system of government or constitute a grievous abuse of official power or both.” Perjury and obstruction to cover up an illicit affair weren’t nearly grave enough.
Hell, back then even murder was a close call in Tribe’s eyes, if the president did the deed himself, for personal reasons. In his testimony, Tribe emphasized the fact that “when Vice President Aaron Burr killed Alexander Hamilton in a duel in July 1804 … Burr served out his term, which ended in early 1805,” without getting impeached. “There may well be room to argue,” Tribe grudgingly conceded, that a contemporary president could be impeached for an extracurricular homicide — but that exception “must not be permitted to swallow [the] rule.” Whack a guy in Weehawken and we might have to let you get away with it; lie about him on Twitter, though, and you’ve got to go.
Charges of “Trump Derangement Syndrome” are often jus a debater’s dodge, used to change the subject from the president’s behavior to his critics’ alleged hang-ups. Spend any time following Laurence Tribe on social media, though, and you’ll begin to think of it as an actual, clinical condition.
It turns out that Donald J. Trump isn’t the only septuagenarian who’s too excitable to be trusted with a Twitter account. Tribe’s feed has become a “vector of misinformation and conspiracy theories on Twitter,” as Dartmouth political scientist Brendan Nyhan puts it. The distinguished professor of constitutional law has become a sucker for crackpot theories about the Trump-Russia connection, and a fan of those who spread them, such as “the incomparable Louise Mensch.” “Incomparable” is right. Mensch, the “paranoid bard of the age of Trump,” claims, among other things, that Vladimir Putin had Andrew Breitbart assassinated, and that “the Marshal of the Supreme Court” has notified President Trump of secret impeachment proceedings that are already underway. (I like to think that the mysterious “Marshal” sports a Stetson and swaggers around like Raylan Givens.)
More conventional grounds for impeachment emerged in May, when the president sacked FBI director James Comey over “this Russia thing.” As that story was breaking, Tribe took to the Washington Post op-ed page to insist that “Trump must be impeached” for obstruction of justice. Trump’s actions, Tribe argued, read like a replay of the charges against Richard Nixon: “making misleading statements to, or withholding material evidence from, federal investigators or other federal employees … [and] dangling carrots in front of people who might otherwise pose trouble for one’s hold on power.” “To say that this does not in itself rise to the level of ‘obstruction of justice,’” Tribe thundered, “is to empty that concept of all meaning.”
Not quite: Reasonable legal minds differ about whether Trump’s behavior rises to that level. Besides, those charges also read like a replay of the rap against Clinton. And as Tribe stressed during that imbroglio, whether obstruction is impeachable depends in part on how serious a thing the president was trying to cover up. It’s entirely possible that further investigation won’t yield evidence of collusion, and the entire episode will end up looking less scandalous than Clinton’s romp with Monica Lewinsky. By Tribe’s own indulgent standard, then, without “the threat of substantial harm to the nation required to establish a high crime or misdemeanor,” Trump should get a pass.
As it happens, the scope of the impeachment power is considerably broader than partisans such as Tribe led people to believe back when they were trying to save Clinton’s hide. But that’s the problem with tailoring your constitutional interpretations to the political needs of the moment: As Tribe put it in 1998, it’s “short-sighted … to approach the task of defining ‘high Crimes and Misdemeanors’ from a narrowly result-oriented perspective,” because you “may live to regret” the standard you’ve set when the presidency changes hands.Gene Healy is a vice-president of the Cato Institute and the author of The Cult of the Presidency.
Ted Galen Carpenter
Relations between Moscow and Washington continue to deteriorate over a variety of issues. Contrary to the expectations of Americans who favor a more conciliatory policy toward Russia (and contrary to the fears of those who believe that a confrontational stance is necessary), the frigid bilateral relationship during Barack Obama’s administration has not warmed under Donald Trump. The new president retreated from indications he gave during the 2016 presidential election campaign that he would reconsider the economic sanctions that his predecessor imposed following Russia’s annexation of Crimea and Moscow’s support for separatist forces in eastern Ukraine.
Beyond the administration’s policy retreat, Congress is in a militant, anti-Russia mood. The Senate just voted 98-2 to impose additional sanctions on Moscow in retaliation to the Putin government’s alleged interference in America’s 2016 elections. An avalanche of vitriolic denunciations of Vladimir Putin and Russian behavior in general preceded that vote and have been a staple of the media for months. Russian officials are reacting with growing resentment and anger to Washington’s mounting displays of hostility.
On one issue, Syria, bilateral tensions especially are flaring to an alarming extent. That animosity has been building for years. Obama administration officials openly backed the Sunni-dominated insurgency that has waged a war for nearly six years to oust Bashar al-Assad’s religious-minority (Alawite, Druze and Christian) regime. Moscow deeply resented the U.S. position, since the Assad family has been a long-time Russian geopolitical client. After seething for more than four years about Washington’s intrusion into a country that the Kremlin regards as part of Russia’s rightful sphere of influence, Putin deployed military forces in 2015 to back the beleaguered Assad government. With U.S. military personnel already operating in Syria to assist selected rebel factions, that move created an inherently dangerous situation.
It is better if Russia incurs the risks and suffers the negative consequences of geopolitical meddling than if the United States does so.
Matters have grown increasingly ominous. The most recent incident occurred just days ago when a U.S plane shot down a Syrian government fighter jet that was attacking U.S.-backed insurgents. Moscow responded with an announcement that it will now track coalition aircraft , including American planes, operating in Syrian airspace. That move was just one step short of threatening to shoot down any planes that seemed to be threatening Russian forces or their Syrian allies. The danger of a direct military clash between the United States and Russia over Syria is no longer the stuff of paranoid fantasies.
There are now two dueling policies regarding the bloody Syrian civil war. Moscow’s agenda is rather straightforward, if somewhat cold-blooded. The decision to send Russian forces into the conflict confirmed a determination to prop up Assad’s government. The Russians are concerned about two dangers if their besieged client falls from power. One risk is that Washington would become the leading outside player in Syria and move to eradicate Russian influence there and throughout the Middle East. The other well-founded worry is that radical Islamic elements will dominate any post-Assad government. That development would enhance the overall terrorist threat and boost hostile Muslim factions in Russia’s near abroad (especially the Caucasus and Central Asia) and even inside Russia itself.
U.S. leaders are—to put it mildly—indifferent to Moscow’s concerns. But while Russia’s Syria policy is straightforward and coherent, U.S. policy is a contradictory, incoherent mess. The Obama administration made it clear that Bashar al-Assad could not be part of any future Syrian government. At first, the Trump administration seemed inclined to reconsider that approach. Secretary of State Rex Tillerson initially indicated that Washington would no longer demand Assad’s removal. But just days later, a chemical attack occurred in rebel-held town. Trump immediately blamed Assad’s forces (despite conflicting evidence ) and ordered cruise-missile strikes against the Syrian air base that Washington alleged was the source of the attack. Tillerson subsequently stated that Assad must leave office before any political settlement could occur (essentially a return to the Obama policy), only to say days later that the Trump administration’s policy had not changed and that regime change was not part of the agenda. By this time, intelligent observers could be excused if they were totally confused.
That is hardly the only manifestation of U.S. policy incoherence regarding Syria. Washington’s attempt to calibrate support so that it strengthens so-called Syrian moderates has led to multiple embarrassing episodes. The Obama administration’s program to identify and train moderate military units was a $500 million fiasco that produced only a handful of fighters—most of whom were promptly captured by or surrendered to their adversaries. Other ventures fared little better. At one point a CIA-backed Syrian faction apparently engaged in combat against another faction that the Pentagon supported. More recently, Washington has been caught in a dilemma as fellow NATO member Turkey attacked Syrian Kurdish units that were battling ISIS with American assistance.
Russia is especially mystified at the U.S. flirtation with factions that are anything but secular moderates. One of those groups is the Nusra Front, at one time Al Qaeda’s affiliate in Syria. Former CIA Director David Petraeus openly advocated U.S. military cooperation with that organization. Other de facto U.S. rebel allies display more than few signs of being Islamists rather than moderates—even given a broad definition of the latter term. Moscow’s fury reached a new level in the past few weeks as the United States has launched air strikes against militias allied with the Assad regime in southeastern Syria. Russia asserts that those forces were battling ISIS and other militant factions, and that Washington’s actions play into the hands of Islamic terrorists.
Both the Kremlin and the White House need to make serious moves to defuse growing tensions before a potentially cataclysmic clash takes place between Russian and American forces in Syria. The bulk of the changes must come from the American side.
The United States should defer to Russia regarding Syria policy. Moscow has far more significant security interests at stake in Syria and the broader Middle East. Northern Syria lies barely 600 miles from the Russian frontier. Syria is some 6,000 miles from America’s homeland. In the process of deferring to Russia, Washington would also off-load the responsibility and risks onto the Kremlin.
It is doubtful that any outside power can truly bring an end to the fighting in Syria, much less restore a stable, united country. Such intervention thus far has bred only resentment and terrorist retaliation. It is better if Russia incurs the risks and suffers the negative consequences of geopolitical meddling than if the United States does so. Syria could well become another Afghanistan for Russia. That would be tragic, but it is preferable to Syria becoming another Vietnam or Iraq for America. And continued U.S. meddling in Syria certainly is not worth triggering a new cold war —and perhaps a hot war—with Russia. Yet that is the perilous path our nation is following.Ted Galen Carpenter, a senior fellow at the Cato Institute and a contributing editor at the National Interest, is the author of ten books, the contributing editor of ten books, and the author of more than 650 articles on international affairs.