Agenda for Congress

Coalition Urges Policymakers to Reform the “Terrible Twelve” of Farm Policy

by Fran Smith on May 15, 2013 · 0 comments

in Agenda for Congress, Agriculture, CEI Projects, Coalitions & Outreach, Features, Politics as Usual

Post image for Coalition Urges Policymakers to Reform the “Terrible Twelve” of Farm Policy

Action is heating up on the next farm bill, as the Senate Agriculture Committee today completed its markup of their bill which will go to the Senate for consideration.  The House is scheduled to release its markup on Wednesday.  No surprise – the Senate bill is replete with subsidies and support programs that cost tens of billions of dollars.

Yesterday, in anticipation of the markup, eleven taxpayer and policy groups sent a letter to the House and the Senate with its listing of the “Terrible Twelve” – the twelve most egregious farm policies.  The groups urged policymakers to reform or eliminate these costly and distorting programs:

    • Direct payments
    • Federal crop insurance
    • Shallow loss program
    • USDA Trade Promotion programs
    • Sugar program
    • Diary Market Stabilization Plan
    • Target prices
    • Rural broadband
    • Mandatory assessments
    • Cotton program
    • Ethanol’s Feedstock Flexibility Program
    • Biomass Crop Assistance Program

Last week, a coalition organized by CEI sent a letter to policymakers urging reform of the U.S. sugar program, which costs consumers an estimated $4 billion a year in extra costs.

Amendments are likely to be introduced on the floor in both the House and the Senate to reform some of  these wasteful programs.  But the farm programs are a classic example of concentrated benefits and dispersed costs.   In addition, because nutrition and food stamp programs make up the majority of the costs of the farm bill, both urban and rural policymakers form an unholy bipartisan alliance to push farm bills through.  Bipartisanship isn’t all it’s cracked up to be.

Transatlantic Speakers Express Strong Support Of U.S.-EU Trade Pact

by Fran Smith on May 1, 2013 · 0 comments

in Agenda for Congress, International, Trade

A high-level panel of experts yesterday pointed out the mutual economic benefits of a broad transatlantic trade pact between the United States and the European Union. At the event, co-sponsored by Meridian International Center, the U.S. Chamber of Commerce, the Spanish think tank Foundation for Analysis and Social Studies (FAES), the Center for the Study of Presidency and Congress, and the Ronald Reagan Building and Trade Center, the speakers emphasized the significant contributions to jobs and growth a trade agreement between the two parties would bring. They noted that the title of the proposed agreement endorsed by both the U.S. and the EU  is  “The Transatlantic Trade and Investment Partnership.”

Leading off the program was the former president of Spain, José María Aznar, who spoke of the need to bring the U.S. and the EU together in a trade partnership to formalize the strong economic and cultural ties that already exist and to remove still existing trade barriers. He noted that such an agreement would not only enhance the competitiveness of these developed countries, but also could help promote the free exchange of goods and services throughout the world.  Aznar pointed to the just-published report by FAES, “TAFTA: The Case for an Open Transatlantic Free Trade Area,” which provides a roadmap for removing tariff and non-tariff barriers.

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6 Ways To Improve The Senate’s Immigration Proposal

by David Bier on January 28, 2013

in Agenda for Congress, Immigration, International

“We will ensure that this is a successful permanent reform to our immigration system that will not need to be revisited.” That’s from a statement released today from Sens. Chuck Schumer (D-N.Y.), John McCain (R-Ariz.), Dick Durbin (D-Ill.), Lindsay Graham (R-S.C.), Robert Menendez (D-N.J.), Marco Rubio (R-Fla.), Michael Bennet (D-Colo.), and Jeff Flake (R-Ariz.). The senators argue that their proposal will provide the permanent fix America’s immigration system needs, but here’s six ways it could be better.

  1. Keep immigration enforcement a government responsibility. The proposal endorses “stiff fines and criminal penalties” for employers who hire unauthorized workers. These penalties conscript American employers to act as de facto immigration agents. They force them to do the job that federal agents were apparently unable to do — identify unauthorized immigrants. The only difference is that employers face the real danger of penalties for failing to fill out forms or properly perform federal surveillance of their workers, including American citizens. Studies have shown that many “foreign-looking” Americans face discrimination based on the fear that they are more likely to be unauthorized.
  2. Don’t impose electronic employment verification on Americans. The senators also endorse “requiring prospective workers to demonstrate both legal status and identity, through non-forgeable electronic means prior to obtaining employment.” This requirement fundamentally changes the nature of employment in the U.S. It creates a “presumption of guilt” that workers must overcome to legally work. This will entrap hundreds of thousands of workers in a federal bureaucracy due to name changes, typos, and other common errors. Worse, it will result in a federal database on every single American, including photos and other biometric information that could be used in any sphere, not just employment. Every American should oppose such surveillance state measures.
  3. Allow businesses to hire workers. The proposal permits employers to hire foreign workers “if it can be demonstrated that they were unsuccessful in recruiting an American to fill an open position.” But current law already requires businesses to demonstrate this, and it is precisely this protectionist policy that prevents farmers and other businesses – particularly small businesses — from hiring the workers they need. Just like E-Verify flips the burden of proof, this requirement assumes that all employers do not need to hire foreign workers — an assumption that must be overcome in order to do so. It forces businessmen to take out advertisements, conduct interviews, and even hire substandard candidates, who often quit after a few days. Employers should be able to hire the workers they want, and immigration enforcement should stop real threats to America’s wellbeing.
  4. Recognize the need for all kinds of workers. For obvious reasons, the senators focus on bringing in more lower-skilled workers and higher-skilled workers. At the high end, Ph.D. or Master’s graduates in science, technology, engineering, or math (STEM) would provide the innovations and new businesses that America’s economy needs to grow. At the low end, workers without college degrees will prevent U.S. agricultural decline and, through specialization, push all Americans upward, increasing wages and boosting GDP. More low-skilled immigration will also drastically cut unauthorized immigration. But immigration policy should not end there. Graduates with bachelor’s degree and others will contribute more to economic growth and federal revenues than low-skilled workers, but no legal path for such workers is mentioned. A visa specifically for entrepreneurs is also not mentioned.
  5. Allow more temporary visa extensions. The first section of the proposal focuses in part on “combating visa overstays,” but just like border security would be enhanced by providing legal avenues for workers to enter legally, the first step toward reducing visa overstays is legal means for temporary migrants to lengthen their residence. Temporary migration is a free market reality, but so is prolonged or permanent migration. Any proposal that allows workers to enter on only a temporary basis is sure to result in some illegal immigration. The best alternative would be to create more green cards and allow easier visa extensions, but short of this, wouldn’t it make sense to prioritize visa applications from workers who have already lived and worked in the United States?
  6. Regulatory reform for businesses and workers. Immigration is a very costly process for everyone involved — employers, workers, and families. Easing the regulatory burden on spouses is long overdue. Employers should be expected to attest that they have not simply fired all Americans and replaced them with foreigners, but not prove definitively that there’s no American in the country who might take the job if the price was raised high enough. Congress should allow temporary workers to change employers to guard against abuse by employers and create greater labor mobility.

Overall, this proposal should be seen as tweaking the current system. It works within the status quo visa and enforcement arrangements and seeks to make them work better. It does not seek a whole-scale change from quotas on the number of immigrants admitted enforced by detention and deportation, and workplace restrictions imposed by increased government surveillance of the workforce. It offers no fundamental change to how visas are issued either, but its increases in the number of available visas and its offer of legalization with heavy civil fines and without a special pathway to citizenship should be embraced by those who want free, rather than black, markets.

Beyond The Fiscal Cliff, Bipartisan Regulatory Reform

by Wayne Crews on December 5, 2012

in Agenda for Congress, Deregulate to Stimulate, Economy, Features

Post image for Beyond The Fiscal Cliff, Bipartisan Regulatory Reform

If I’m reading this right, the Progressive Policy Institute wants to roll back some over-regulation. It’s not clear how much, but it does seem to be a visible amount.

The PPI’s February 2011 policy report, Reviving Jobs and Innovation: a Progressive Approach to Improving Regulation, calls for a Regulatory Improvement Commission to weed out regulations that have accumulated like “barnacles.”

PPI is right that rules that may be beneficial individually can be harmful when accumulated. I’d go further and say bureaucratic regulation can undermine the real thing, but that’s for another day.

The breakthrough is the bipartisan recognition the federal rulemaking process knows how to add but not subtract.

Rules have accumulated at the rate of at least 3,500 annually over the past decade. They averaged even higher before that.

PPI’s idea is similar to a proposal from former U.S. Sen. Phil Gramm, R-Texas. CEI has long urged a regulatory reduction commission framework as well. Hell, even Twitter’s @THEHermanCain favored a version of the idea. Yep, Mr. 9-9-9.

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Groups Urge Boehner To Hold Firm And Not Give In To Agricultural Special Interests

by Fran Smith on July 24, 2012

in Agenda for Congress, Agriculture, CEI Projects, Economy

CEI joined 11 other groups in a letter today to House Speaker John Boehner urging him not to give in to special interest pressure to push through the bloated 2012 farm bill.  Agricultural interests and their cheerleader USDA Secretary Tom Vilsack are using the current drought as a pretext to bring the The Federal Agriculture Reform and Risk Management Act (FARRM) to a quick vote.  The bill, passed by the House Agriculture Committee, has a $957 billion price tag.

The coalition letter noted that most farmers currently can take advantage of a highly subsidized safety net of crop insurance and thus there’s no need to rush through the bloated and flawed FARRM bill.

Agriculture already has a more than adequate safety net in the gold-plated federal crop insurance program in which taxpayers pick up, on average, 62% of the premium costs for crop insurance. These policies allow businesses to guarantee up to 85% of their expected revenue. Crop insurance cost taxpayers more than $11 billion last year.

In the letter, the groups pointed out that the bill should have been used to cut back on outdated and costly programs–not add to them:

The bill should have been used as an opportunity to save taxpayers billions while reducing the manipulative role of the federal government in the business decisions of a vital sector of the American economy. Instead, the Committee bill obligates nearly 60% more than the last Farm Bill, creates three new taxpayer-paid “shallow loss” programs, and does nothing to rein in, and in fact expands, taxpayer-subsidized crop insurance.

WSJ: Senate May Vote on Needed Sugar Reform Amendment

by Fran Smith on June 13, 2012

in Agenda for Congress, Agriculture, CEI Projects, Economy

In today’s Wall Street Journal, an editorial sharply criticizes the U.S. sugar program and urges Congress to vote on amendments that would significantly rein in this complex system that doubles the cost of domestic sugar over the world price.

The sugar producers brag that the program operates at “no net cost to the government.” But the government guarantees prices, restricts domestic supply, and imposes stiff tariffs on imported sugar except for quota-holders.

The WSJ notes that the program provides concentrated benefits to sugar producers and dispersed costs to consumers and sugar-using companies:

The program provides about $1.4 billion each year to fewer than 5,000 large and mostly prosperous beet and sugar cane producers. But according to a 2011 American Enterprise Institute study by North Carolina State economist Michael Wohlgenant, it costs consumers about twice that amount, mostly in higher food prices. It’s a conveniently hidden tax and a regressive one too. When Big Sugar says the program imposes “no net cost” on the budget, they’re not talking about the family budget. Americans pay about 50% more than the world price of sugar.

While attempts to cut back on this program have failed in the past, the time may be now when real reform can occur, the WSJ said, and pointed out the bipartisan sponsorship of the Senate amendment.

CEI has long fought for the elimination of this egregious program — a holdover from the Great Depression. See here and here and here. As CEI noted:

In these tough economic times, with high unemployment levels, consumers deserve a break from the hidden taxes of the U.S. sugar program. At a minimum, policymakers should insist on reforms that will open the sugar market, help save and create jobs in the U.S. food industry and help consumers by keeping food prices down.

Bhagwati: How the Multilateral Trade System Is Being Eroded

by Fran Smith on June 6, 2012 · 1 comment

in Agenda for Congress, International, Trade

Trade economist Jagdish Bhagwati’s latest article points out dangers to the world trading system of bilateral and regional trade agreements between unequal partners that establish rules that could erode the World Trade Organization’s influence and add further roadblocks to progress on multilateral trade negotiations.

Bhagwati notes that, through preferential trade agreements, powerful countries like the U.S. are imposing their standards and rules on countries with smaller economies and introducing non-trade-related issues into trade agreements at the behest of special interests. Issues such as labor rights, environmental standards, the ability to impose capital standards are now being extolled as templates for future agreements, even though emerging economies and less developed countries have resisted such efforts in the WTO.

In discussing how the asymmetry between countries in many bilateral and regional trade agreements erodes the authority of the WTO, Bhagwati points to the WTO’s dispute settlement mechanism (DSM), in which even small and poorer countries can appeal to the WTO to enforce rules agreed upon by the members.  He warns of the negative effects of including alternative mechanisms for settling disputes in bilateral and regional agreements:

The DSM is the pride of the WTO: it is the only impartial and binding mechanism for adjudicating and enforcing contractual obligations defined by the WTO and accepted by its members. It gives every member, big or small, a platform and a voice.

Once PTA [preferential trade agreements]-based DSMs are established, however, adjudication of disputes will reflect asymmetries of power, benefiting the stronger trade partner. Moreover, third countries will have little scope for input into PTA-based DSMs, though their interests may very well be affected by how adjudication is structured.

He urges large emerging economies and other developed countries to resist the inclusion of these new templates in future trade agreements and work to get the WTO negotiations moving again:

Given that the US has abandoned any pretense of leadership on world trade, it is up to major emerging economies and like-minded developed countries to establish their own template, one that adheres to trade objectives and discards what special-interest lobbies in hegemons like the US seek to foist on PTAs. This is exactly what India has done with the EU, which is now stripping such features out of its proposed PTA.

Other countries – Brazil, South Africa, and China among the major emerging economies, and Japan and Australia among the developed countries – should back such “garbage-free” PTAs as well. That just might be an adequate rebuff to the rise of PTAs whose main objective is to serve hegemonic interests alone – perhaps even sufficient to get the multilateral approach back on track.

CEI here, here, and here, has pointed to the influence of special interests in U.S. bilateral and regional trade agreements and the need for the multilateral approach through the WTO.

Farm Bill Needs Real Reform, Not New Entitlements, Say Free-Market Groups

by Fran Smith on May 8, 2012

in Agenda for Congress, Agriculture, CEI Projects, Economy

CEI joined with 10 other free-market groups in a letter today urging Congress to take on real reform of agricultural subsidies in the next farm bill and to resist attempts for new entitlements. The letter noted that farm businesses are doing quite even in this recession, with net income at $98 billion. With negotiations on reauthorization of the farm bill underway, it’s essential that Congress review federal agricultural policies that distort market decisions. The letter pointed out some specific areas that deserve attention:

We believe the nearly $30 billion reduction in federal spending on agriculture agreed to in the House Budget Resolution should be the minimum reduction in the Farm Bill. Eliminating direct payments, as the resolution suggests, is long overdue. Making meaningful reforms to the largest Washington-based support for agriculture, federally subsidized crop insurance, is also a must. The Congressional Budget Office estimates this program—which provided $2.2 million in subsidies for just one agricultural producer’s insurance premiums in 2011—will cost more than $90 billion over the next ten years.

Also, we believe Congress must not create any new potentially budget-busting entitlement programs that would increase Washington’s role in farm business decisions, such as efforts to put taxpayers on the hook for “shallow losses” in annual farm business revenue. And Congress should not use the Farm Bill to undo the responsible cuts to biofuels programs the House achieved in last year’s minibus appropriations bill.

The letter noted that, given the strength of the agricultural sector and the “glaring weakness of the federal budget,” it is essential for Congress to reform agricultural policy. And, the letter urged, there must be “full and open legislative debate on Farm Bill reauthorization.”

Brooks: More Regulations Don’t Have Huge Effect on Economy

by Fran Smith on December 6, 2011

in Agenda for Congress, CEI Projects, Deregulate to Stimulate, Economy, Regulation

David Brooks’ article today in The New York Times belittles the cost of regulation to American businesses and the U.S. economy and praises the Obama administration for its “rigorous cost-benefit analyses” of proposed regulations. While he does note that “the Obama administration has significantly increased the regulatory costs imposed on the economy,” Brooks also says that it’s not clear that those regulations “have had a huge effect on the economy” or indeed on small businesses.

So more and more onerous regulations at higher and higher costs and greater economic uncertainty among businesses don’t have a dampening effect on hiring more workers or on capital investment? As CEI’s Clyde Wayne Crews and Ryan Young noted in a recent article:

There are more than 4,200 new rules at various stages of the federal regulatory pipeline right now. Companies, especially the ones too small to afford a Washington office, don’t know what’s coming next. No wonder they are skittish about making long-term investments, whether in employees or capital.

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At Long Last, Congress Will Vote on Three Trade Pacts that Unions have Held Up

by Fran Smith on October 7, 2011

in Agenda for Congress, International, Labor, Trade

At long last both the House and the Senate are scheduled to vote on the three free trade agreements (FTAs) that have languished for more than four years. Votes on the trade pacts are scheduled for  next Wednesday and will be linked to votes on Trade Adjustment Assistance — a condition that President Obama and Democratic leaders had demanded.

Although there appears to be bipartisan support, the AFL-CIO is still opposed to all of the pending FTAs and brought hundreds of union members to Capitol Hill to tell their congressional cohorts to vote against all three pacts. Their particular focus is on the U.S.-Colombia FTA, even though they demanded — and got — an Action Plan for Colombia to take specific and onerous steps to ostensibly protect union workers in that country.

As CEI has written, trade unions have been largely responsible for holding up the trade pacts, even though the agreements are expected to create many thousands of new jobs. Obviously, appeasing unions by giving in to their demands hasn’t worked.

One can only hope that they won’t have the clout to influence enough Democrats to vote against the pacts.

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