The Heritage Insider: Court reins in Obama admin, what's up at IRS and Ex-Im? Howard Baker remembered, and more
Updated daily, InsiderOnline (insideronline.org) is a compilation of publication abstracts, how-to essays, events, news, and analysis from around the conservative movement. The current edition of The INSIDER quarterly magazine is also on the site.
June 28, 2014
Latest Studies: 40 new studies, including a report from the Mercatus Center on how the economy is hurting younger workers, and a book from PERC on helping the environment with property rights
Notes on the Week: Supreme Court reins in the Obama administration on recess appointments and greenhouse gas plan, what’s up at the IRS and the Ex-Im Bank? Howard Baker remembered
To Do: Celebrate America!
Budget & Taxation
• The Hidden Costs of Alabama’s State and Local Workforce – Alabama Policy Institute
• Congress Should be Cautious About Expanding the Child Tax Credit – The Heritage Foundation
• Reforming the Mortgage Interest Deduction – Mercatus Center
• The US Export-Import Bank – Mercatus Center
• Benefits to the Poor of Texas Franchise Tax Repeal – National Center for Policy Analysis
• A Comparison of the Tax Burden on Labor in the OECD – Tax Foundation
Crime, Justice & the Law
• Obama’s Enforcer: Eric Holder’s Justice Department – HarperCollins
• The Dangerous Incentive Structures of Nonprosecution and Deferred Prosecution Agreements – The Heritage Foundation
• Reforming Mandatory Minimum Sentences: The Smarter Sentencing Act, S. 1410 – The Heritage Foundation
• Reining in Unnecessary Criminal Law – Texas Public Policy Foundation
Economic Growth
• Shrinking Workweeks: A Sign of Unequal Recovery from the Great Recession – The Heritage Foundation
• Strengthening Property Rights and the U.S. Economy Through Federal Trade Secret Protection – The Heritage Foundation
• Empowering Working Women – Manhattan Institute
• Dreams Deferred: Young Workers and Recent Graduates in the US Economy – Mercatus Center
• Free Markets, Monopolies, and Copyright – Phoenix Center for Advanced Legal and Economic Public Policy Studies
Education
• The “Consensus”—or Else! – Capital Research Center
• Better Pay, Fairer Pensions II: Modeling Preferences Between Defined-Benefit Teacher Compensation Plans – Manhattan Institute
• Excellent Educators: A Wise Giver’s Guide to Cultivating Great Teachers and Principals – Philanthropy Roundtable
• Are Education and Economic Growth Related? Some Evidence from the States – Show-Me Institute
Foreign Policy/International Affairs
• A Hard Look at Soft Power in East Asia – American Enterprise Institute
• China’s Frail Historical Claims to the South China and East China Seas – American Enterprise Institute
• Accession to Convention on the Law of the Sea Unnecessary to Advance Arctic Interests – The Heritage Foundation
Health Care
• The Benefits of Incremental Innovation: Focus on the Pharmaceutical Industry – Fraser Institute
Information Technology
• Compelled Disclosure of Internet Interconnection Agreements Creates Anticompetitive Risks – Free State Foundation
• Net Neutrality: Is Antitrust Law More Effective Than Regulation in Protecting Consumers and Innovation? – Hudson Institute
Monetary Policy/Financial Regulation
• Why FSOC Should Not Designate Mutual Funds as SIFIs – American Enterprise Institute
• Reducing the Burden on Small Public Companies Would Promote Innovation, Job Creation, and Economic Growth – The Heritage Foundation
National Security
• The Regional Implications of an Iranian Nuclear Deal – American Enterprise Institute
• Improving Regional Security in Central America’s Northern Triangle – The Heritage Foundation
Natural Resources, Energy, Environment, & Science
• Greenhouse Gas Emissions Reduction: EPA’s Questionable Baseline Figures – American Action Forum
• Log Export Policy for British Columbia – Fraser Institute
• The Three Faces of Sustainability – Heartland Institute
• Game Changers: Energy on the Move – Hoover Institution
• The Benefits of Natural Gas Exports – Manhattan Institute
• Environmental Markets: A Property Rights Approach – Property & Environment Research Center
• How Green Is that Grocery Bag Ban? An Assessment of the Environmental and Economic Effects of Grocery Bag Bans and Taxes – Reason Foundation
• Fossil Fuels: The Moral Case – Texas Public Policy Foundation
The Constitution/Civil Liberties
• Filming the Watchmen: Why the First Amendment Protects Your Right to Film the Police in Public Places – The Heritage Foundation
Welfare
• International Disability Programs: Recent Reform – American Action Forum
• Policy Solutions for the Disability Insurance Program – American Action Forum
What we learned this week about the Internal Revenue Service:
• Lois Lerner had a trigger finger for investigating—even activities that weren’t violations of the tax code. In one of the emails that the IRS did turn over to Congress, the head of the unit that investigated conservative non-profits during the last election cycle wondered whether an investigation should be launched over an invitation for Sen. Charles Grassley (R-Iowa) to speak at an event. The offer raised Lerner’s antennae because it included attendance for Grassley’s wife, too. Lerner knew of the invitation to Grassley only because it had been mistakenly sent to Lerner instead. In the email chain, one of Lerner’s subordinates had to explain to her that there was no violation unless the Senator actually accepted the invitation and then failed to report the ticket for his wife as income. [Human Events, June 25]
• Lack of funding doesn’t explain why the IRS lost Lerner’s emails: “The IRS under the Obama Administration has spent over $4 billion on contracts labeled under information technology and software despite IRS Commissioner John Koskinen testifying this week that budgetary restraints prevented the agency from spending $10 million to save and store emails.” [Washington Free Beacon, June 26]
• The IRS terminated data storage contracts in the months following the “crash” of Lois Lerner’s hard drive:
The IRS, which spent $44.1 million in information technology (IT) hardware maintenance in fiscal year 2011 and $47.8 million in fiscal year 2012, closed out its six-year business relationship with the email archiving-and-recovery company Sonasoft in September 2011. Meanwhile, sophisticated data storage devices were being thrown away in the agency’s national IT offices in Maryland, even though the IRS was still paying for maintenance on the devices.
The IRS prematurely “retired” data-storage devices and filled out “disposal” documents for hardware that still existed and was supposed to still be in use, according to a Sept. 24, 2013 Treasury Inspector General (TIGTA) report entitled “Increased Oversight of Information Technology Hardware Maintenance Contracts Is Necessary To Ensure Against Paying for Unnecessary Services.” [Daily Caller, June 25]
• According to the nation’s archivist, David Ferriero, federal agencies are supposed to notify the national archives when they become aware of a loss or destruction of official records. “They did not follow the law,” Ferriero told the House Oversight and Government Reform Committee on Monday. [Fox News, June 24]
• The IRS agreed to pay the National Organization for Marriage $50,000 in damages for illegally releasing NOM’s form 990, which revealed the identity of the organization’s donors. An IRS official sent the document to the Human Rights Campaign, a pro-gay marriage organization, in 2012 as the president campaign was under way. No punitive damages were awarded as NOM was unable to prove the release was deliberate. [Politico, June 24]
• The IRS jokes pretty much write themselves this week, but Jon Stewart’s were especially good:
[Abridgement by Media Research Center]
The President doesn’t get to decide when the Senate is in session. The President’s constitutional authority to make recess appointments is not nearly as broad as he thought it was in January 2012 when he made three recess appointments to the National Labor Relations Board. The Senate was actually in session at that time, but the Obama administration said it could make the recess appointments because the sessions were only “pro forma”—sessions during which the Senate conducted no business and did not formally recess.
On Thursday, in National Labor Relations Board v. Noel Canning, the Supreme Court reversed those appointments in a 9-0 ruling. While the result bolsters the constitutional separation of powers—because it means the President can’t simply decide when the Senate is in session—it does so only slightly. Ilya Shapiro explains:
The only “rule” that emerges from Justice Breyer’s controlling opinion is that a three-day recess, the longest the Senate can adjourn without the House’s consent, isn’t long enough to enable recess appointments. That’s a very pragmatic decision and seems to confirm executive practice prior to recent years. It also happens to lack any connection to constitutional text (as Justice Scalia points out for four justices in concurrence), whose best reading indicates that only recesses between Senate sessions – not when, e.g., the Senate takes two weeks off around Christmas – count for purposes of activating the recess-appointment power. Moreover, that power is only textually justified to fill vacancies that arise during the recess itself, not for openings that the president didn’t happen to fill while the Senate was sitting. In other words, Justice Breyer’s unprincipled opinion, while limiting recent presidential practice, cements a much more expansive reading of that power than the Constitution allows. For practical purposes, we’ll see many more “pro forma” Senate sessions and also the empowerment of those who control the House – because, again, the Senate can’t recess without the House’s consent. Speaker Boehner, call your office. [Cato Institute, June 26]
Justice Antonin Scalia concurred with the result but finds the reasoning very flawed:
The real tragedy of today's decision is not simply the abolition of the Constitution's limits on the recess appointment power and the substitution of a novel framework invented by this Court. It is the damage done to our separation-of-powers jurisprudence more generally. It is not every day that we encounter a proper case or controversy requiring interpretation of the Constitution's structural provisions. Most of the time, the interpretation of those provisions is left to the political branches—which, in deciding how much respect to afford the constitutional text, often take their cues from this Court. We should therefore take every opportunity to affirm the primacy of the Constitution's enduring principles over the politics of the moment. Our failure to do so today will resonate well beyond the particular dispute at hand. Sad, but true: The Court's embrace of the adverse-possession theory of executive power (a characterization the majority resists but does not refute) will be cited in diverse contexts, including those presently unimagined, and will have the effect of aggrandizing the Presidency beyond its constitutional bounds and undermining respect for the separation of powers.
Elizabeth Slattery reports that up to 800 cases decided by the appointees may need to be reheard:
Richard Cordray, the head of the Consumer Financial Protection Bureau, was appointed the same day and under the same circumstances as the NLRB appointees. But Cordray later was later confirmed by the Senate, and he subsequently ratified the agency’s actions taken while he served as a recess appointee.
But the NLRB did not ratify its past actions, even after the Senate approved four new members, giving the board a quorum as of August 2013. Now, it may have to reconsider every case that was appealed to the federal appellate courts on the basis of the lack of a quorum, as well as an unknown number of other cases decided by the board in which the unconstitutional recess appointees participated.
Moreover, parties that lost their cases during this time but had yet to appeal to a federal appellate court still may be able to appeal because the National Labor Relations Act does not include a statute of limitations for appeals […] . [Daily Signal, June 27]
9-0: This week the Supreme Court ruled unanimously against the Obama administration’s arguments in NLRB v. Canning (limiting the recess appointment power) as well as Riley v. California (requiring police to have a warrant before searching seized cell phones). As Ilya Somin notes, these are just two of many unanimous losses the administration has suffered at the Supreme Court in recent years. “President Obama,” writes Somin, “has managed to create a measure of unity in one often-divided institution: the Supreme Court.”
The administration’s unanimous defeats in significant constitutional cases cover a wide range of issues, including freedom of religion, property rights, executive power, and the Fourth Amendment. What these otherwise disparate cases have in common is a strong reluctance to accept even modest limits on federal authority.
Unanimous defeats do not in and of themselves prove that the administration’s position was wrong in all these cases. Sometimes, even a unanimous Court can be wrong. Still, when the president’s position in multiple major constitutional cases cannot secure even one vote on an ideologically and methodologically diverse Court that includes two of his own appointees, it is likely there is something wrong with the administration’s constitutional worldview. [Washington Post, June 26]
Fellow Volokh conspirator David Bernstein sees a pattern, too:
Noel Canning, rearranging the ranking of creditors in the Chrysler bankruptcy, appointing “czars” with real policy-making authority to avoid confirmation hearings (see Sollenberger and Rozell, The President’s Czars), DOJ votings rights division lawyers acting on the belief that the Voting Rights Act either doesn’t or shouldn’t be construed to protect white voters from discrimination in majority-minority districts, the president ordering his underlings not to implement immigration laws to try to accomplish much of what the failed Dream Act was meant to achieve—one can go on and on about the extreme, sometimes truly lawless, “legal positions” this administration has taken. I don’t think this is merely a difference in degree from prior administrations, Democratic and Republican, but of kind. [Washington Post, June 26]
Your favorite coffee shop is safe from the Environmental Protection Agency—for now. On Monday, the Supreme Court limited the Environmental Protection Agency’s attempt to “tailor” the Clean Air Act to fit its plans to regulate greenhouse gasses. The decision, in Utility Air Regulatory Group v. Environmental Protection Agency, is a win for the separation of powers and a likely prelude to other rulings against Obama administration attempts to bypass the legislative process, explains Andrew Grossman:
The Clean Air Act’s 1970’s-era “Prevention of Significant Deterioration” and “Title V” programs are aimed at the few hundred largest industrial sources of pollution in the country and impose what the Court correctly identified as “heavy substantive and procedural burdens,” far beyond the red tape that most businesses are able to shoulder. To that end, the statute limits regulation to sources that emit more than 100 or 250 tons per year of certain “air pollutants.”
EPA’s trick was to redefine “air pollutant,” as used in those programs, to include carbon-dioxide emissions. Because carbon-dioxide is emitted in large quantities even by smaller sources, that interpretation expanded the number of sources subject to regulation from a few hundred to millions altogether. Regulations that had previously been confined to major power plants, chemical factories, and the like would now apply to retail stores, offices, apartment buildings, shopping centers, schools, and churches. To avoid what even EPA recognized to be an “absurd result,” the agency went on to claim authority to decide exactly which sources have to comply—in other words, the power to choose winners and losers by exempting the vast majority of sources from compliance, for the time being at least. It called this approach “tailoring.”
The Court, in a lead opinion by Justice Scalia, called it “patently unreasonable—not to say outrageous.” EPA, it held, must abide by the statute: “An agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.” And if such tailoring is required to avoid a plainly “absurd result” at odds with congressional intentions, then obviously there is obviously something wrong with the agency’s interpretation of the statute. To hold otherwise, the Court recognized, “would deal a severe blow to the Constitution’s separation of powers” by allowing the executive to revise Congress’s handiwork. [Cato Institute, June 23]
What the Veterans Health Administration scandal should teach us: Glenn Harlan Reynolds:
There’s a naive tendency to believe that whatever a government agency’s mission is supposed to be, is really the mission that its people pursue. That’s seldom the case for long.
Science fiction writer Jerry Pournelle, observing such things, has formulated what he calls the Iron Law of Bureaucracy: In every organization there are two kinds of people: those committed to the mission of the organization, and those committed to the organization itself. While the mission-committed people pursue the mission, the organization-committed people take over the organization. Then the mission-committed people tend to become discouraged and leave.
As a result, the strongest priority of most bureaucracies is the welfare of the bureaucracy and the bureaucrats it employs, not whatever the bureaucracy is actually supposed to be doing. That’s worth remembering, whenever someone says they’ve found something else that we should “choose to do together.” [USA Today, June 23]
Howard Baker, R.I.P. Former Senator Howard Baker died Thursday at the age of 88. Baker represented Tennessee in the U.S. Senate from 1967 to 1985. In 1973, during the Watergate scandal, Baker famously asked: “What did the President know and when did he know it?” In 1987, a different scandal was threatening to engulf a President and his agenda: Iran-Contra. At that moment, President Ronald Reagan asked Baker to become his Chief of Staff. As James Carafano notes, Reagan’s choice helped get his presidency back on track:
In the Senate, Baker honed his reputation as a listener, a conciliator and a consensus-seeker. In the White House, he matched those skills with a commitment to serve his president and Reagan’s vision for a free, safe and prosperous nation.
When Baker came on board, President Ronalad Reagan wrote in his private diary, “He’s going to be fine & there was a great feeling in the West Wing of improved morale.”
Reagan was right.
Later, Edwin Feulner, the president of The Heritage Foundation, declared “a lot of my conservative brethren who were skeptical of Baker 15 months ago have got to eat a little crow right now.”
By the time Baker was preparing to step down, Reagan was back on track crafting an historic agenda to change the course of the Cold War, launching a campaign in a speech as the Heritage Foundation for the Intermediate Nuclear Forces treaty with the Soviets and negotiating a $76 billion compromise to cut the budget deficit. [Daily Signal, June 27]
Video of the Week: Liberal policies are hurting blacks. Jason Riley talks about his new book Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed:
Corruption at the Export-Import Bank: Reports Diane Katz:
On Monday, The Wall Street Journal reported that four employees of the Export-Import Bank have been removed in recent months amid allegations of kickbacks and other corruption. But the Journal article tells only part of the story.
Based on a review of government documents, The Heritage Foundation has determined that there have been at least 74 cases since April 2009 in which bank officials were forced to act on the basis of “integrity” investigations by the Office of Inspector General. Dozens of other fraud cases involving Ex-Im beneficiaries have been referred to the Department of Justice for prosecution. […]
Meanwhile, dozens of other cases of wrongdoing involving Ex-Im beneficiaries were under IG investigation as of March 31, and 47 criminal judgments and 42 pleas were obtained in the preceding six months.
An examination of Ex-Im fraud cases reveals a disturbing pattern of carelessness in doling out taxpayer subsidies. For example, the bank approved 96 loan transactions in a two-year period for Gangland, USA, which purported to export electronics from Miami to South America. According to prosecutors, company owner Jose L. Quijano received more than $3.6 million in fraudulent loans from the bank.
Similarly, the bank approved 18 loans involving $13.6 million to Leopoldo Parra, who pleaded guilty in 2012 to wire fraud and conspiracy to commit money laundering. According to prosecutors, Parra and his co-conspirators fraudulently obtained the loan proceeds and used them for personal gain. [Daily Signal, June 24]
In developing countries, the middle class has grown—thanks to capitalism: Thomas Piketty’s argument that capitalism produces ever greater economic inequality “runs against the evidence coming out of up-and-coming economies,” writes Alvaro Vargas Llosa:
Three decades ago half the world population was living on less than $1.25 a day; today only one-fifth finds itself in that condition. About 12 percent of the population of Latin America and the Caribbean were extremely poor at the end of the 1990s; the percentage is half of that today. The key is to be found in the rise of the so-called middle classes. Thanks to Latin America’s increasing role in the world economy (though still rather modest), the number of people who fill the space between the rich and the poor has grown impressively—according to some estimates, by as much as 50 percent in the new millennium.
Part of this was due to economic growth and part an effect of income redistribution. We don’t need the many studies that place the main responsibility on the former to conclude that investments seeking a return were crucial. The countries that invested less and redistributed more, such as Venezuela, are the ones where the middle classes have been hurt the most in recent years. In Chile, Peru, and Colombia, where the rate of private investment has reached 20 to 25 percent as a percentage of GDP, they have expanded. Only 14 percent of Chileans are poor, and the percentage of poor Peruvians has dropped almost by half since 2001. The capital invested produced value, which generated jobs and better incomes for millions, which led to an expansion of the middle classes. And what did they do? They got their hands on capital, of course, to create even more value. [The Independent Institute, June 16]
• Celebrate the United States of America’s 238th birthday! And when making your plans for the Fourth, don’t forget to put the Leadership Institute’s National Fourth of July Conservative Soiree on your schedule. They’ll have barbeque, face painting, and bluegrass—plus some inspiring speeches. The gathering will take place from 11 a.m. to 3 p.m. at the Bull Run Regional Park.
• Get your Think Tank MBA applications in. Executive directors, directors, and program managers at established think tanks can learn the essentials of strategic planning, evaluation, branding and communications, leadership, personnel management, and fundraising in a 10-day course offered by the Atlas Economic Research Foundation. The program runs October 31 – November 11 in Fairfax, Virginia. But you’d better get your application in soon: The deadline is June 30.
• Figure out copyrights: Are they like property rights—essential for rewarding creativity—or do they inhibit innovation? Jerry Brito of the Mercatus Center, Stan Liebowitz of the University of Texas at Dallas, Tom Palmer of the Atlas Economic Research Foundation, and Mark Schultz of the George Mason University School of Law will examine the topic at an American Enterprise Institute panel discussion. The event will begin at 11:45 a.m. on July 1.
• Have drinks with National Review correspondent Jim Geraghty. And read his new book, too. It sounds like a hoot: The Weed Agency: A Comic Tale of Federal Bureaucracy “demonstrates that life inside the federal Agency of Invasive Species may sound suspiciously similar to your reality, and could hardly be funnier.” You can get a free copy (and a drink) at the restaurant Mission in Washington, D.C. Mr. Geraghty, hosted by the America’s Future Foundation, will be there signing books starting at 6 p.m. on July 1.
• Make sure you spend your money in ways that reflect your values. Get the 2nd Vote App, which tells you what causes the sellers and makers of stuff like to support.
• Find out what pressures, levers, and tactics have proven successful in the effort to reform the United Nations. The Heritage Foundation will host a panel discussion with Christopher Bancroft Burnham, former Under Secretary General of the United Nations for Management; Joseph M. Torsella, former U.S. Representative to the United Nations for Management and Reform; and Kim R. Holmes, former State Department Assistant Secretary for International Organizations. The event will begin at 11 a.m. on June 30.
(Want more stuff to do? Check out InsiderOnline’s Conservative Calendar.)
Have a tip for InsiderOnline? Send us an e-mail at insider@heritage.org with “For Insider” in the subject line.
Follow us on Twitter: http://twitter.com/InsiderOnline.
Looking for an expert? Visit PolicyExperts.org.
The Heritage Foundation
214 Massachusetts Avenue, NE
Washington, DC 20002-4999
phone 202.546.4400 | fax 202.546.8328
Comments
Post a Comment