My colleagues David Bier and Ryan Radia contributed to this post.
Per the scenario in a previous post, it’s April 2012. You are a conscientious congressional staffer who still takes seriously the need to be a steward of taxpayers’ money. (Yes, I know for a fact, there are more than a few of these folks around on Capitol Hill.) You are watching closely events surrounding an “omnibus” or “minibus” spending bill deemed even by conservative Republican members as “must-pass” because it funds the military as well as other parts of government.
Suddenly, you hear about an outrageous earmark about to be slipped into the bill that would enrich a Fortune 500 company. You decide to alert a network of fiscal watchdogs you’ve met with over the years to wage an instant campaign against this piece of corporate welfare.
You have all the information in the e-mail and are about to hit “send.” But then you remember something from a briefing you attended a couple days ago. The subject was the STOCK (Stop Trading on Congressional Knowledge) Act – aimed at stopping “insider trading” by members and employees of Congress – that your boss and nearly every other member of Congress voted into law in February.
At the time, you didn’t think the law would affect you since the only trading you do is indirect, through your mutual funds and pension. You were surprised to learn, however, that you now have a broad “duty of confidentiality” that encompasses not just trading on “material, nonpublic information,” but disclosing information to those who might.
You sit back and think, “It is indeed possible that someone I send this to could buy stock in the company, or could short the company based on the coming outrage.” You stare at the computer screen wondering how virtually no one noticed how this law could have potentially criminalized an act of whistleblowing as abetting “insider trading.”
Such a scenario is almost certain if House and Senate versions of the STOCK Act are not modified before a final bill is sent to President Obama. The House passed the bill yesterday with a 417-2 vote after a similarly overwhelming 96-3 Senate vote last week. Both bills must go to “conference” to produce a final identical bill to be voted on by both houses, giving members an opportunity for a fix to help make sure that whistleblowing and routine communication with outside groups from being caught in the law’s web.
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“It launched a hundred ‘anti-bullying’ initiatives at all levels of government, but much of what you think you know about” the Tyler Clementi case “is probably wrong,” notes legal commentator Walter Olson at Overlawyered, the world’s oldest law blog. Andrew Sullivan discusses this as well, linking to Ian Parker’s article in The New Yorker.
We wrote earlier about how the current panic over bullying is leading to attacks on free speech, political debate, and free association in the schools; political pandering; dishonest stretching of existing federal laws by federal officials; and violations of basic principles of federalism.
Reason’s Jacob Sullum writes about New Jersey’s massively-long “Anti-Bullying Bill of Rights,” enacted after Clementi’s suicide at New Jersey’s Rutgers University, and how it infringes on free speech and imposes illegal unfunded mandates. When New Jersey passed this incredibly complicated anti-bullying law, which contains 18 pages of “required components,” that gave a huge boost to a burgeoning “anti-bullying” industry that seeks to define bullying as broadly as possible (to include things like “eye-rolling,” or always associating with the same group of friends) in order to create demand for its services. Hundreds of New Jersey schools “snapped up a $1,295 package put together by a consulting firm that includes a 100-page manual.”
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It’s April 2012. You are a conscientious congressional staffer who still takes seriously the need to be a steward of taxpayers’ money. (Yes, I know for a fact, there are more than a few of these folks around on Capitol Hill.) You are watching closely events surrounding an “omnibus” or “minibus” spending bill deemed even by conservative Republican members as “must-pass” because it funds the military as well as other parts of government.
Suddenly, you hear about an outrageous earmark about to be slipped into the bill that would enrich a Fortune 500 company. You know how these things work; once the bill hits the floor, it’s very hard to excise one provision. So you decide to alert a network of fiscal watchdogs you’ve met with over the years to wage an instant campaign against this piece of corporate welfare.
You have all the information in the e-mail and are about to hit “send.” But then you remember something from a briefing you attended a couple days ago. The subject was the STOCK (Stop Trading on Congressional Knowledge) Act – aimed at stopping “insider trading” by members and employees of Congress – that your boss and nearly every other member of Congress voted into law in February.
At the time, you didn’t think the law would affect you since the only trading you do is indirect, through your mutual funds and pension. You were surprised to learn, however, that you now have a broad “duty of confidentiality” that encompasses not just trading on “material, nonpublic information,” but disclosing information to those who might.
You sit back and think, “It is indeed possible that someone I send this to could buy stock in the company, or could short the company based on the coming outrage.” You stare at the computer screen wondering how virtually no one noticed how this law could have potentially criminalized an act of whistleblowing as abetting “insider trading.”
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As a Bloomberg News commentary notes, large numbers of people who are not poor are getting food stamps, due to perverse incentives that encourage states to deliberately classify people as eligible in order to draw federal money to their state. People are eligible in some states even if they are not poor at all, but merely received an “informational brochure” for welfare, or a tiny amount of state money that the state deliberately gave them that they didn’t even need, in order to qualify them for food stamps:
As the article notes, food stamp rolls have risen by 29 million people in recent years:
[A] troubling reason for the increase is that state governments have found it easy to get their constituents federal money — that is, money mostly raised from current and future taxpayers in other states — by making more people eligible for food stamps. According to a mid-2010 report from the Government Accountability Office, 35 states have no limit on the amount of assets a food-stamp recipient can possess. More and more states — the count was 36 at the time of the report — are providing “categorical eligibility” for food stamps to anyone who receives welfare services. Merely getting an informational brochure from the Temporary Assistance for Needy Families program counts as receiving a service.
Another way that states and localities can get federal money flowing to them is by providing token amounts of assistance with home heating bills. Even a dollar of energy subsidies can make someone eligible for food stamps, or increase the benefit level for someone already on SNAP. Vermont, for example, sends $5 checks to public-housing residents, even though their subsidized rent already covers heating, to qualify them for food stamps. Liberal activists call this strategy for getting federal money “heat and eat.”
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In his State of the Union address, President Obama decried skyrocketing college tuition, attempting to take advantage of public anger over the steadily-worsening college tuition bubble. This was ironic, since his own administration has done much to foster rising college tuitions.
For example, it imposed the 90-10 rule, which forced low-cost educational institutions to raise their tuition to comply with a new federal regulation requiring them to charge enough over federal financial aid so that at least 10 percent of education costs don’t come from financial aid. For example, Corinthian College had diploma programs in health care and other fields that can be completed in a year or less. Until 2011, many of those programs had a total cost of about $15,000, which meant that federal grants and loans could cover nearly 100 percent of their cost. In response to the Education Department’s rule, the college raised tuition to comply with the 90/10 rule. The net result of the Obama Education Department’s rule was to “create a perverse, no-win ‘Catch-22’ that could prevent low-income students from attending college,” by encouraging such colleges to raise tuition to outstrip rising financial aid by more than ten percent. Administration allies like Senator Richard Durbin (D-Ill.) are now pushing a new rule, the 85-15 rule, that would require low-cost institutions to further raise tuition so that at least 15 percent of education costs aren’t covered by financial aid. (With this kind of mentality, it is no wonder that college graduation rates have actually “fallen somewhat since the 1970s” “among poor and working-class students.”)
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There has been much waxing in the last few days about how unfair it supposedly is that Mitt Romney was taxed at around 15 percent. And that Warren Buffett supposedly pays a lower tax rate than his beleaguered secretary does.
But as my colleague Trey Kovacs and I pointed out in a Wall Street Journal op-ed this week, these “low” tax rates are a charade. This is because “our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%—which even President Obama acknowledges [he, in fact, did so in the State of the Union] is one of the highest in the world … The law taxes corporations as if they were separate beings from the shareholders who own them and then levies a separate tax on shareholder payouts and gains. This double taxation brings the effective tax rate on investment income to as much as 44.75%.” In fact if you factor in the estate tax or “death tax,” the rate goes to 64 percent on this income. And that doesn’t even include state and local taxation.
As we note in the op-ed, “The most popular tax reforms—from the “9-9-9 plan” of former candidate Herman Cain to flat tax proposals—all have in common the reduction or elimination of double taxation on investment.”
My friend and mentor the late Richard Nadler found a few years back that polling showed that middle-class investors had “internalized their new role as capitalists” and “display favorable attitudes toward programs that reduce taxes on savings and investment.” New research seems to confirm this middle-class savers still retain these views even after the financial crisis.
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Welcome to CEI’s coverage of this year’s State of the Union address. Live coverage will begin at about 8:30 EST, so please check in then. If there’s an issue you’d like us to pay special attention to, please let us know in the comments.
Some things should not be up for a vote. Among those things is whether consenting adults should be required to use condoms when they have sex. For many years, the AIDS Healthcare Foundation (AHF) has called for a mandate on condoms in adult films and recently collected enough signatures to add their legislation to the next city ballot. And last week the LA city council voted in favor of denying permits to adult films that do not abide by the condom requirement. While these efforts may be well-intentioned, a condom mandate violates actors’ rights to free speech, association, and choice—and likely will be counterproductive.
Current national workplace safety standards, as stipulated by the Occupational Safety and Health Administration (OSHA), require employers to provide personal protective equipment (PPE) for workers in hazardous situations—for example, hard hats for construction workers. Notably, OSHA laws provide exemptions for workers who refuse to use the PPE on religious grounds. Unlike many other OSHA protection rules, this condom mandate does not allow for any flexibility in the type of protection workers may use: it requires some form of barrier protection and would not allow actors to voluntarily not use the protection (though I doubt any actor would seek a religious exemption). While sexually transmitted infection is certainly a risk on adult film sets, a condom mandate is a one-size-fits-all solution that certainly doesn’t “fit all”.
As many in and out of adult film industry have noted, the mandate prevents actors and filmmakers from expressing themselves as they wish—a clear violation of the First Amendment. While “obscene” speech is not guaranteed the same constitutional protection as other types of expression, the adult industry as a whole cannot be lumped into the obscenity category. The “Miller Test,” which is used to determine obscenity based on the 1973 Supreme Court case, Miller v California, would have to be applied to every film before the state of California would have the right to restrict their expression.
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With the State of the Union coming up, I’ve been wondering whether, or how, President Obama might address the Plan B fiasco I blogged about here. After all, Obama has addressed science issues in his previous State of the Union addresses. And, in his inaugural address, he pledged to “restore science to its rightful place.” More importantly, he entered office promising the most transparent administration in history and vowing that, unlike previous administrations, he and his appointees would “not suppress or alter scientific or technological findings and conclusions” for political gain. But those promises were forgotten or ignored as soon as they were made.
From Obama’s March 2009 decision to fund only politically favorable types of human embryo research to his administration’s Plan B birth control decision last month, he has shown that he is every bit as willing to politicize science when it’s expedient as earlier presidents have been. The highly politicized December 7 decision by Secretary of Health and Human Services Kathleen Sebelius to over-ride a decision by Food and Drug Administration scientists to approve the Plan B emergency contraceptive for over-the-counter use has gotten plenty of attention. But for science policy experts, that case of politicized science came as no surprise given the administration’s willingness to subvert the advice of scientific experts on any number of critical issues.
Just to give a couple of examples: White House Energy Czar Carol Browner improperly altered a scientific report on oil spill remediation in order to support a ban on off-shore drilling. Then there was the administration’s rejection of Yucca Mountain as a nuclear waste depository as Nuclear Regulatory Commission scientists accused senior administration officials of politicizing their work. And there are scores of other cases — ranging from the significant to the petty — in which the Obama Administration has chosen to subvert scientific integrity for political gain.
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Senate Majority Whip Dick Durbin (D-Ill.) wants banks and credit unions to know that he’s all about transparency and “honesty” in consumer fees.
In his recent letter hectoring the Illinois Bankers Association and the Illinois Credit Union League, Durbin proclaimed that ”consumers in Illinois and across America have made clear their desire for honest information about banking fees.” He urged the banks to “be transparent about fees” by adopting a checking account disclosure form he favors.
Yet when it comes to disclosing to consumers what’s causing these bank fees to rise, Durbin has told these same institutions to just shut up. That’s because honesty and transparency would require that banks and credit unions disclose to consumers the Durbin Amendment to the Dodd-Frank financial “reform.” That measure by Durbin puts price controls on the interchange fees banks can charge merchants for debit card purchases, shifting the costs of debit card processing to consumers.
The contrast is evident in two of Durbin’s interactions with financial firm JPMorgan Chase. Late last week Durbin and many others lauded the firm’s Chase bank unit for adopting a simplified checking account fee disclosure form based on a model developed by the Pew Charitable Trusts’ “Safe Checking” project. The new form contains an upfront three-page schedule of different types of fees. Though there are still lengthy disclosures of terms and conditions — which are effectively mandated by longstanding regulations from laws like the Truth in Lending Act and from excessive litigation — these will now be embedded in Internet links on online copies of the form, a Chase spokesman tells Reuters.
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