Filter | only charts

How Should Uber Be Regulated?

Sophie Quinton, Stateline - November 24, 2015

For two days this month, taxi drivers didn't pick up any weary travelers leaving Mineta San Jose Airport. Instead they drove past, honking, and hoping their strike would persuade city leaders to make ride-hailing companies such as Uber and Lyft follow the same rules as taxi companies at the airport.

"Either the city should deregulate us completely, like them … or regulate them at least closer to us, and let there be fair business competition," said Kirpal Bajwa, a taxi driver and union leader.

Ride-hailing companies, which connect paying passengers and drivers through a mobile app, deliver rides like a taxi service. But they're not taxi companies, and states and cities are beginning to regulate them differently.

California created permitting and public safety rules for ride-hailing companies in 2013. Over half the states now have regulations in place, according to the National Conference of State Legislatures (NCSL).

But as San Jose's experience shows, the debate over how to govern Uber and others is far from over.

Nationwide, some state and local lawmakers worry ride-hailing companies don't run sufficient background checks on drivers. Taxi drivers say current regulations aren't fair to them. Cities and states are starting to figure out what taxes and fees the companies might pay. And ride-hailing companies are still testing new ways to move people around town, testing government regulations.

The Ride So Far
Ride-hailing companies have become very popular very quickly. Uber, the largest of them, was founded in 2009 and now operates in over 300 cities all over the world. Through its app, riders can digitally hail a number of services, including professionally driven limousines, taxis or what Uber calls UberX—a personal vehicle, driven by someone who typically works for Uber in her spare time.

The California Public Utilities Commission regulates Uber, Lyft and others as transportation network companies. The state requires TNCs to get a permit and commercial insurance coverage for drivers while they're working for them and to run criminal background checks on drivers.

That's the basic structure other states have adopted, according to Uber, although details vary by state. Since the California regulation, Uber and Lyft have started insuring all drivers nationwide at different levels for when they are looking for passengers, on their way to pick them up or transporting them. California passed additional legislation last year to make sure drivers have sufficient insurance coverage. 

But some lawmakers, such as San Jose Mayor Sam Liccardo, a Democrat, say the background checks that California requires don't go far enough: "I am very concerned about safety in this industry."

News reports keep surfacing of crimes perpetrated by ride-hailing drivers. The Taxi, Limousine & Paratransit Association, an industry group, keeps a running list of incidents worldwide. This summer, San Francisco and Los Angeles district attorneys found that 25 Uber drivers in the two cities had criminal records.

San Jose requires taxi drivers to pass a fingerprint-based background check before they can accept passengers. But the state only requires TNCs to run drivers' names and Social Security numbers through criminal databases.

Uber spokeswoman Laura Zapata argues that Uber's current procedures are sufficient because "no background check is 100 percent accurate." Uber and Lyft also track every ride through GPS and encourage drivers and riders to rate each other's performance, features that help the company monitor drivers, she said.   

California's regulations prevent cities from making their own TNC laws. But cities do have jurisdiction over airports, so this summer San Jose decided to try requiring such drivers to pass fingerprint-based background checks to pick up airport passengers.

No drivers signed up for the pilot program. And when the city started to reconsider, taxi drivers went on strike. The strike was about fairness, Bajwa said. "We do so much," he explained, and listed city procedures taxi drivers must follow but ride-hailing drivers don't, from renewing their driver's permit every two years to passing additional driver safety tests.

San Jose ultimately decided not to require ride-hailing company drivers to pass a fingerprint-based background check. Instead, drivers who get permits to pick passengers up at the airport will be subject to random, additional checks by airport officials, including background checks and fingerprint tests to confirm their identities.

Liccardo said that's better than nothing, but city leaders also plan to lobby the state to institute tougher screenings.

The debate over ride-hailing also pushed the city to reconsider its taxi regulations. San Jose's City Council voted last week to scale back some requirements for taxi drivers, including allowing drivers to work on a temporary basis while they await the results of their fingerprint-based background check.

Future Debates
State lawmakers haven't focused yet on taxation, but ride-hailing companies could be a source of tax revenue down the line, said Douglas Shinkle, a transportation policy expert for NCSL. "Transportation funding has been a persistent thorn in the side of states," he said, and the services could emerge as a tempting target for governments.

Taxes and fees paid by taxi companies, drivers and riders—like the cost of a business license—typically aren't big moneymakers for cities. But they can matter to airports. In San Jose, for example, taxi and door-to-door shuttle fees, which are paid by riders and passed on to the airport, make up about 1 percent of the airport's operating revenue.

Cities like San Jose are extending airport pickup fees to TNCs. A few cities and at least one state have gone farther and started taxing rides.

When Nevada legalized ride-hailing this summer, a 3-percent excise tax per ride was part of the deal. The tax could raise up to $100 million over two years, according to The Associated Press, which would go to fund the University of Nevada School of Medicine in Las Vegas and other state projects.

Chicago Mayor Rahm Emanuel, a Democrat, bumped the city's 30-cent surcharge on ride-hailing company rides to 52 cents in the city's latest budget. The revenue will partly go to the city, and partly to lower the cost of taxi driver licenses, according to the Chicago Tribune.

New York City is a special case. The city—famous for its yellow cabs—regulates TNCs like black car services. That means that all Uber and Lyft passengers pay an 8.8-percent combined state and local sales tax on their rides. Taxi cabs pay a 50-cent surcharge per ride, which funds city transit, as well as paying other assorted local taxes and fees.

The sales tax is set to raise $159 million for the city and state in 2015, while the taxicab surcharge will likely raise $87 million, according to a study from the Citizens Budget Commission, a nonprofit that studies government finances. That's partly because the companies have grown so much.

The biggest challenge cities and states have to face as they create new regulations, however, is that Uber and its competitors keep creating new services.

Last year, Uber and Lyft debuted a new feature that allows multiple riders headed for multiple destinations to hop in the same vehicle—like a car pool. This month, Uber announced a feature Lyft pioneered, which allows a driver on an incidental trip across town to turn on his or her app and pick up riders heading in the same direction.

"We're moving closer to what purists would call ride-sharing," said Susan Shaheen, a professor at the University of California, Berkeley who studies ride-hailing companies.  

TNC laws are being written with Uber's business model in mind, said Matthew Mitchell, of George Mason University's libertarian-leaning Mercatus Center. "They're setting the rules to favor themselves," he said of the services.

Uber and Lyft have lobbied hard to make sure state and local rules suit their businesses. Earlier this year, for example, Kansas legislators passed a law that required additional insurance coverage and stricter background checks for drivers. Uber stopped operating in the state. Lawmakers quickly passed a less onerous law.

But just as strict rules that once kept competitors out of the taxi industry have become a straitjacket for taxi companies, so may today's ride-hailing laws create a problem for future business models. In 15 years, Mitchell said, lawmakers may be going through a similar battle to legalize Google's self-driving cars.

This piece originally appeared at Stateline, an initiative of the Pew Charitable Trusts, where Sophie Quinton is a staff writer.

Who Turned My Blue State Red?

Alec MacGillis, ProPublica - November 23, 2015

It is one of the central political puzzles of our time: Parts of the country that depend on the safety-net programs supported by Democrats are increasingly voting for Republicans who favor shredding that net.

In his successful bid for the Senate in 2010, the libertarian Rand Paul railed against "intergenerational welfare" and said that "the culture of dependency on government destroys people's spirits," yet racked up winning margins in eastern Kentucky, a former Democratic stronghold that is heavily dependent on public benefits. Last year, Paul R. LePage, the fiercely anti-welfare Republican governor of Maine, was re-elected despite a highly erratic first term — with strong support in struggling towns where many rely on public assistance. And earlier this month, Kentucky elected as governor a conservative Republican who had vowed to largely undo the Medicaid expansion that had given the state the country's largest decrease in the uninsured under Obamacare, with roughly one in 10 residents gaining coverage.

It's enough to give Democrats the willies as they contemplate a map where the red keeps seeping outward, confining them to ever narrower redoubts of blue. The temptation for coastal liberals is to shake their heads over those godforsaken white-working-class provincials who are voting against their own interests.

But this reaction misses the complexity of the political dynamic that's taken hold in these parts of the country. It misdiagnoses the Democratic Party's growing conundrum with working-class white voters. And it also keeps us from fully grasping what's going on in communities where conditions have deteriorated to the point where researchers have detected alarming trends in their mortality rates.

In eastern Kentucky and other former Democratic bastions that have swung Republican in the past several decades, the people who most rely on the safety-net programs secured by Democrats are, by and large, not voting against their own interests by electing Republicans. Rather, they are not voting, period. They have, as voting data, surveys and my own reporting suggest, become profoundly disconnected from the political process.

The people in these communities who are voting Republican in larger proportions are those who are a notch or two up the economic ladder — the sheriff's deputy, the teacher, the highway worker, the motel clerk, the gas station owner and the coal miner. And their growing allegiance to the Republicans is, in part, a reaction against what they perceive, among those below them on the economic ladder, as a growing dependency on the safety net, the most visible manifestation of downward mobility in their declining towns.

These are voters like Pamela Dougherty, a 43-year-old nurse I encountered at a restaurant across from a Walmart in Marshalltown, Iowa, where she'd come to hear Rick Santorum, the conservative former Pennsylvania senator with a working-class pitch, just before the 2012 Iowa caucuses. In a lengthy conversation, Dougherty talked candidly about how she had benefited from government support. After having her first child as a teenager, marrying young and divorcing, Dougherty had faced bleak prospects. But she had gotten safety-net support — most crucially, taxpayer-funded tuition breaks to attend community college, where she'd earned her nursing degree.

She landed a steady job at a nearby dialysis center and remarried. But this didn't make her a lasting supporter of safety-net programs like those that helped her. Instead, Dougherty had become a staunch opponent of them. She was reacting, she said, against the sense of entitlement she saw on display at the dialysis center. The federal government has for years covered kidney dialysis treatment in outpatient centers through Medicare, regardless of patients' age, partly on the logic that treatment allows people with kidney disease to remain productive. But, Dougherty said, only a small fraction of the 54 people getting dialysis at her center had regular jobs.

"People waltz in when they want to," she said, explaining that, in her opinion, there was too little asked of patients. There was nothing that said "'You're getting a great benefit here, why not put in a little bit yourself.'" At least when she got her tuition help, she said, she had to keep up her grades. "When you're getting assistance, there should be hoops to jump through so that you're paying a price for your behavior," she said. "What's wrong with that?"

Yes, citizens like Dougherty are at one level voting against their own economic self-interest, to the extent that the Republican approach on taxes is slanted more to the wealthy than that of the Democrats. This was the thesis of Thomas Frank's 2004 best seller, "What's the Matter With Kansas," which argued that these voters had been distracted by social issues like guns and abortion. But on another level, these voters are consciously opting against a Democratic economic agenda that they see as bad for them and good for other people — specifically, those undeserving benefit-recipients in their midst.

I've heard variations on this theme all over the country: people railing against the guy across the street who is collecting disability payments but is well enough to go fishing, the families using their food assistance to indulge in steaks. In Pineville, W.Va., in the state's deeply depressed southern end, I watched in 2013 as a discussion with Senator Joe Manchin, a Democrat, quickly turned from gun control to the area's reliance on government benefits, its high rate of opiate addiction, and whether people on assistance should be tested for drugs. Playing to the room, Senator Manchin declared, "If you're on a public check, you should be subjected to a random check."

It's much the same across the border in eastern Kentucky, which, like southern West Virginia, has been devastated by the collapse of the area's coal industry. Eastern Kentucky now shows up on maps as the most benefit-dependent region in the country. The welfare reforms of the 1990s have made cash assistance hard to come by, but food-stamp use in the state rose to more than 18 percent of households in 2012 from under 10 percent in 2001.

With reliance on government benefits so prevalent, it creates constant moments of friction, on very intimate terms, said Jim Cauley, a Democratic political consultant from Pike County, a former Democratic bastion in eastern Kentucky that has flipped Republican in the past decade. "There are a lot of people on the draw," he said. Where opposition to the social safety net has long been fed by the specter of undeserving inner-city African-Americans — think of Ronald Reagan's notorious "welfare queen" — in places like Pike County it's fueled, more and more, by people's resentment over rising dependency they see among their own neighbors, even their own families. "It's Cousin Bobby — 'he's on Oxy and he's on the draw and we're paying for him,'" Cauley said. "If you need help, no one begrudges you taking the program — they're good-hearted people. It's when you're able-bodied and making choices not to be able-bodied." The political upshot is plain, Cauley added. "It's not the people on the draw that's voting against" the Democrats, he said. "It's everyone else."

This month, Pike County went 55 percent for the Republican candidate for governor, Matt Bevin. That's the opposite of how the county voted a dozen years ago. In that election, Kentucky still sent a Republican to the governor's mansion — but Pike County went for the Democratic candidate. And 30 percent fewer people voted in the county this month than did in 2003 — 11,223 voters in a county of 63,000, far below the county's tally of food-stamp recipients, which was more than 17,000 in 2012.

In Maine, LePage was elected governor in 2010 by running on an anti-welfare platform in a state that has also grown more reliant on public programs — in 2013, the state ranked third in the nation for food-stamp use, just ahead of Kentucky. LePage, who grew up poor in a large family, has gone at safety-net programs with a vengeance. He slashed welfare rolls by more than half after imposing a five-year limit, reinstituted a work requirement for food-stamp recipients and refused to expand Medicaid under Obamacare to cover 60,000 people. He is now seeking to bar anyone with more than $5,000 in certain assets from receiving food stamps. "I'm not going to help anybody just for the sake of helping," the governor said in September. "I am not that compassionate."

His crusade has resonated with many in the state, who re-elected him last year.

That pattern is right in line with surveys, which show a decades-long decline in support for redistributive policies and an increase in conservatism in the electorate even as inequality worsens. There has been a particularly sharp drop in support for redistribution among older Americans, who perhaps see it as a threat to their own Social Security and Medicare. Meanwhile, researchers such as Kathryn Edin, of Johns Hopkins University, have pinpointed a tendency by Americans in the second lowest quintile of the income ladder — the working or lower-middle class — to dissociate themselves from those at the bottom, where many once resided. "There's this virulent social distancing — suddenly, you're a worker and anyone who is not a worker is a bad person," said Edin. "They're playing to the middle fifth and saying, 'I'm not those people.'"

Meanwhile, many people who in fact most use and need social benefits are simply not voting at all. Voter participation is low among the poorest Americans, and in many parts of the country that have moved red, the rates have fallen off the charts. West Virginia ranked 50th for turnout in 2012; also in the bottom 10 were other states that have shifted sharply red in recent years, including Kentucky, Arkansas and Tennessee.

In the spring of 2012, I visited a free weekend medical and dental clinic run by the organization Remote Area Medical in the foothills of southern Tennessee. I wanted to ask the hundreds of uninsured people flocking to the clinic what they thought of President Obama and the Affordable Care Act, whose fate was about to be decided by the Supreme Court. I was expecting a "What's the Matter With Kansas" reaction — anger at the president who had signed the law geared to help them. Instead, I found sympathy for Obama. But had they voted for him? Of course not — almost no one I spoke with voted, in local, state or national elections. Not only that, but they had barely heard of the health care law.

This political disconnect among lower-income Americans has huge ramifications — polls find nonvoters are far more likely to favor spending on the poor and on government services than are voters, and the gap grows even larger among poor nonvoters. In the early 1990s, Senator Mitch McConnell of Kentucky freely cited the desirability of having a more select electorate when he opposed an effort to expand voter registration. And this fall, Scott Jennings, a longtime McConnell adviser, reportedly said low turnout by poor Kentuckians explained why the state's Obamacare gains wouldn't help Democrats. "I remember being in the room when Jennings was asked whether or not Republicans were afraid of the electoral consequences of displacing 400,000–500,000 people who have insurance," State Auditor Adam Edelen, a Democrat who lost his re-election bid this year, told Joe Sonka, a Louisville journalist. "And he simply said, 'People on Medicaid don't vote.'"

Republicans would argue that the shift in their direction among voters slightly higher up the ladder is the natural progression of things — people recognize that government programs are prolonging the economic doldrums and that Republicans have a better economic program.

So where does this leave Democrats and anyone seeking to expand and build lasting support for safety-net programs such as Obamacare?

For starters, it means redoubling efforts to mobilize the people who benefit from the programs. This is no easy task with the rural poor, who are much more geographically scattered than their urban counterparts. Not helping matters in this regard is the decline of local institutions like labor unions — while the United Mine Workers of America once drove turnout in coal country, today there is not a single unionized mine still operating in Kentucky.

But it also means reckoning with the other half of the dynamic — finding ways to reduce the resentment that those slightly higher on the income ladder feel toward dependency in their midst. One way to do this is to make sure the programs are as tightly administered as possible. Instances of fraud and abuse are far rarer than welfare opponents would have one believe, but it only takes a few glaring instances to create a lasting impression. Edin, the Hopkins researcher, suggests going further and making it easier for those collecting disability to do part-time work over the table, not just to make them seem less shiftless in the eyes of their neighbors, but to reduce the recipients' own sense of social isolation.

The best way to reduce resentment, though, would be to bring about true economic growth in the areas where the use of government benefits is on the rise, the sort of improvement that is now belatedly being discussed for coal country, including on the presidential campaign trail. If fewer people need the safety net to get by, the stigma will fade, and low-income citizens will be more likely to re-engage in their communities — not least by turning out to vote.

ProPublica, where Alec MacGillis covers politics, is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletterThis story was co-published with The New York Times' Sunday ReviewFor more coverage of politics, read ProPublica's previous reporting on Hillary Clinton's mixed record on Wall Street, how the gas tax impasse explains Washington and how Congress explains its absences.

How Jeb Bush Reformed Medicaid

Alan Levine - November 23, 2015

What if, knowing the biggest federal entitlement program in his state — Medicaid — was broken, a governor decided to challenge the status quo and do something about it? What if a Medicaid program used consumer choice, provider competition, and market forces to get better value for patients and taxpayers? What if it worked and the new Medicaid program saved money while giving patients higher-quality care and more choices?

You don't need to wonder. It happened in Florida. When a governor led.

I know how hard it was. I was Governor Jeb Bush's health-care secretary. I, with a committed team, was tasked with convincing a skeptical legislature and federal bureaucracy that this was a good idea. I remember when Governor Bush asked the simple question: If you could design this program from scratch, what would it look like, both to the consumer and to the taxpayer paying for it?

In 2006, Florida began implementing its reforms. The state created real consumer choices for the first time, with flexible benefit designs and transparent provider networks. Insurance plans responded to the competitive environment by offering additional benefits, like adult dental care, vision care, over-the-counter medications, and other benefits — without adding any cost.

For the first time, the state measured quality outcomes and held managed-care plans accountable for them. Florida paid the plans risk-adjusted rates, to incentivize plans to improve outcomes for the sickest patients rather than cherry-pick the well ones.

It worked: When the Heritage Foundation looked at areas of Florida where the pilot program took place, and compared them with the rest of the state, they found that areas with the program saw greater improvement on more than two-thirds of health-care quality measures (drawn from the Healthcare Effectiveness Data and Information Set, or HEDIS). Improvement was made with well-child visits, control of high blood pressure, frequency of prenatal care, diabetes control, and frequency of certain screening services.

It worked for taxpayers, too. Medicaid's cost per member decreased, according to multiple reports, including an independent evaluation by the University of Florida. Let me repeat: While medical-care inflation has grown by at least 3 percent annually for all consumers, Florida's per-member Medicaid costs have actually decreased.

This was a sweeping transformation of this federal program for the poor — the biggest change to Medicaid since 1965. It was anything but easy, and there were people hoping it would fail.

But it didn't. The reforms were so successful, Florida expanded them statewide in 2014. The result? Quality improved again. Florida recently announced that in 2014, its reformed Medicaid plans performed as well as, or better than, the national Medicaid average on 65 percent of HEDIS measures, an improvement over 2013 results. Prenatal care, diabetes management, and breast-cancer screenings — all better.

Because of obsolete federal limitations that did not respect the uniqueness of our state, we could not redesign Medicaid from scratch. But we did the best we could, and the results are unassailable.

If elected, Governor Bush will use this experience —challenging the status quo, making tough proposals, and fighting to implement them — to disrupt Washington, D.C., and restore freedom to states to develop health-care systems that work for their citizens. No federalist could dream of a better proposal: Move power closer to the people and unleash the innovation and entrepreneurship in each state.

Governor Bush's proposals include investment in research and technology, something he believed in as governor. Research is the key to finding cures and improving the human condition. Federal sequestration, done only because our federal leaders could not even accomplish a budget, cut billions of dollars of National Institutes of Health-funded research.

Governor Bush's proposals attest to his belief in the power of consumers to make choices in a marketplace minimally encumbered by one-size-fits-all federal rules. His proposals respect job creators and unleash reinvestment into growing employment opportunities. He knows a key to better health-care access is a secure, well-paying job.

Governor Bush's health-care reforms produced results no one else can claim. These reforms, properly replicated nationally, can unleash our economy and provide opportunities for the next generations that don't exist today.

To those who care about federalism and state authority, I ask this question: If you could design a health-care funding system for the poor from scratch, what would it look like?

Governor Bush wants to give you the chance to explore the answer.

Alan Levine is the former secretary of health-care administration for the State of Florida and the State of Louisiana, and also serves on the Board of Governors for the State University System of Florida. He currently serves as president and CEO of Mountain States Health Alliance, the largest not-for-profit health-care system in Northeast Tennessee and Southwest Virginia.

Robert VerBruggen - November 23, 2015

Forty percent of Millennials think the government should be able to censor speech that's "offensive to minority groups," Pew reports. Older Americans are much less likely to be okay with that.

This is a stunning result in a country that prides itself on fighting bad speech with better speech, not with censorship. But perhaps it's not as surprising as it seems. For four decades now, the General Social Survey (GSS) has been asking a different but related question: whether "a person who believes that blacks are genetically inferior" should "be allowed" to "make a speech in your community." Consistently, about 40 percent of the general population has said no:

What may be increasing, however, is a zeal for censorship among the young specifically, at least when it comes to racially offensive speech. Historically, across a range of issues, Americans have tended to be strongest in their support for free speech in their youth. But that tendency doesn't show up in the Pew data, and here's what happened when I broke the above GSS question down by age and the decade of the interview:

Few would say that young people in the '70s were more racist than their elders, but they were still much more likely to say the speech should be allowed — the pattern we normally see with free-speech questions. That pattern has broken down over the years. This is partly the result of a rising Hispanic population (nonwhites are more likely to support the censorship of racist views), but that doesn't seem to be the whole explanation.

My first instinct was to blame PC universities, especially given recent events — but those without college are less likely to support free speech, both in the GSS and in Pew's survey. (According to a recent GSS study, this applies less to racist speech than it applies to other types of offensive speech, but it still applies.) When I looked at those age 23-32, roughly the decade after college for those who attend, I found declining support for letting a racist give a speech for all levels of education since the '70s.

An interesting complication: One study of 15 different GSS free-speech questions (including the one spotlighted above) claims that Americans are becoming more tolerant, largely because tolerance isn't fading out with age as much as it used to. But there's one group whose free-speech rights we're not tolerating more: racists. Judging by the charts above and Pew's findings, the young are playing a strong role in that. It's as if older people are holding on to their youthful civil libertarianism, while young people aren't developing it to begin with.

I wouldn't sign on to any theory yet. And again, support for censorship isn't new, even in the U.S. But something is going on with young people, and those dedicated to free speech should take note.

Thanks to Jason Willick of The American Interest; a Twitter conversation with him over the weekend prompted this post.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Robert VerBruggen - November 19, 2015

Everyone knows how progressive taxes work: You pay a low rate on the first dollar you earn, but as your income goes up, you have to pay a higher and higher percentage of the additional money. This taxes the rich more heavily than the poor.

Too often ignored, though, is that poverty programs also function as a tax. When you earn more on your own, your benefits are cut. The prospect of losing benefits can discourage people from taking on additional work, and can cancel out the advantage of being in a low tax bracket.

The CBO has a new report nicely illustrating this phenomenon, looking at the combined effects of state and federal income taxes, federal payroll taxes, food stamps, and Affordable Care Act subsidies. Eye-popping chart of 2016 marginal tax rates:

In general, once you hit the poverty line, you'll face a flat tax of a bit above 30 percent — at least until you reach 450 percent of poverty, which is where the data here end. (Roughly two-thirds of the population falls below that mark, which this year is about $109,000 for a family of four.)

And the situation will be very bad for some. Between 50 and 150 percent of the poverty level, more than 10 percent of workers will pay a marginal rate above 50 percent. Why will they pay more than others who are similarly situated? As the CBO explains, "Much of that variation is due to differences in family characteristics, which affect eligibility for refundable tax credits and assistance programs and the extent to which people take up those benefits."

Restructuring these programs so they phase out more gradually is a way to address this. I suggested one idea along those lines here.

The full details on the data behind the chart can be found on page 8 of CBO's report.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Put the Community Back Into Community Policing

Liya Palagashvili - November 19, 2015

Police abuse has captured media attention throughout the past year — from the case of Mike Brown in Ferguson, to those of Eric Garner in New York, Zachary Hammond in South Carolina, and Samuel Dubose in Cincinnati, among many others. The notion is that police are failing our communities.

There's a perception that, instead of aiming to keep residents safe, police are militarizing, engaging in trigger-happy tactics, and taking the lives of innocent individuals — and are quick to defend their actions with the "I felt threatened" excuse. In some cases this explanation does seem reasonable. In other cases, video evidence shows that it is not.

The question for many is: Why are police failing us? One hypothesis that stems from a long line of research argues that police are more likely to become unaccountable when they are divorced from their communities. This research suggests that police departments should adopt what is referred to as "community policing," which encourages police to build a relationship with residents and to view them as partners in combating crime as opposed to having an "us versus them" mentality.

When departments use community-policing strategies, they move away from the "maximizing arrests" approach and divert their hours toward proactive, problem-oriented activities. This means police learn about why crime is occurring and employ strategies that may prevent crime from happening. Furthermore, police are less likely to "just shoot" someone they recognize as a member of their community. And on the residents' side, getting to know the officers helps them trust the police. If people trust the police, they are more likely to discuss information about potential suspects and other emerging problems in the community.

Take, for example, the recent community-policing-inspired program in Los Angeles. LAPD officers started coaching a football team, the Watts Bears, which comprises young boys from crime-ridden housing projects. While no formal research has evaluated the program yet, there are early signs of success. First, families are reporting that they trust the police more and that this program is helping to breakdown the "us vs. them" mentality. Second, reports show that homicides in this area have significantly fallen. And third, by coaching the young boys through this football program, the police are potentially keeping them from joining gangs. This program is also illustrative of what it means for officers to be proactive in their approaches.

LAPD officer Keith Mott explains this new program: "It's not like the old LAPD that is just looking to arrest people. As we have built relationships, people are letting us know when shootings are occurring, or before gang activity happens, we're getting phone calls, which allows us to be more proactive. We talk to people, so they begin to trust us."

But this ray of community-policing hope may have little chance of success throughout the nation if the federal government continues to reward police departments for focusing on War on Terror and War on Drugs initiatives. This includes supplying departments with paramilitary units (i.e., SWAT teams) and equipment such as body armor, aircraft, armed vehicles, weapons, riot gas, watercraft, and surveillance equipment, all coming from Department of Defense's 1033 program.

The truth is, it's quite difficult for police departments to build community-police partnerships when the police look like they're about to go to war with the community. These federally funded initiatives create the reality of the "warrior cop."

Federal programs don't just exacerbate the hostility between communities and the police; they also incentivize the police officers to prioritize federal needs over community needs.

For example, police departments that cooperate with federal drug investigations receive a share of any associated asset forfeitures. This means that local police are able to generate increases in their budgets by confiscating assets (cash, homes, cars) during the process of investigating drug-related crime. Thus, any department choosing not to place a greater emphasis on drug-related crime forgoes income, regardless of the community's actual public-safety needs. Also, notoriously, police often outright abuse these asset-forfeiture policies, which cultivates more community resentment.

If the goal is to help police become more accountable to their residents and to develop community policing initiatives, then the federal government needs to stop funding local police departments with military equipment and distorting their incentives to prioritize federal initiatives over community needs. A giant step toward putting "community" back into community policing starts with recognizing how the federal government creates the warrior cop.

Liya Palagashvili is an assistant professor of economics at SUNY-Purchase, an affiliated scholar with the Mercatus Center at George Mason University, and coauthor (with Peter J. Boettke and Jayme Lemke) of "Re-Evaluating Community Policing in a Polycentric System" in the Journal of Institutional Economics

Jesse Cross-Call - November 18, 2015

In the two years since health reform's major coverage provisions took effect, a clear divide has opened between states that have expanded Medicaid and those that have not. Expansion states have experienced greater gains in insurance coverage, net budget savings that are expected to grow over time, and a drop in the amount of uncompensated care hospitals are providing.

These are likely among the reasons why, in recent weeks, the Republican governors of Alabama and South Dakota have softened their opposition to Medicaid expansion, expressing a willingness to push for expansion during their states' respective upcoming legislative sessions. And this Saturday, Louisiana residents will choose a new governor from two candidates who both support expansion in some form.

The data from the 30 states (plus the District of Columbia) that have expanded Medicaid to non-elderly adults with incomes below 138 percent of the poverty line show expansion has produced:

Large gains in health coverage. An Urban Institute survey finds uninsurance among non-elderly adults has been cut in half in expansion states (from 14.9 percent to 7.3 percent) since the end of 2013. By comparison, non-expansion states have experienced a 30 percent drop, from 21.7 percent to 15.3 percent.

More use of preventive services. A state report in Kentucky found that tens of thousands of the residents who gained Medicaid coverage there received preventive dental services and cholesterol, diabetes, and cancer screenings in 2014. And despite critics' fears that there wouldn't be enough doctors to care for the new enrollees, a University of Michigan study found appointment availability for Medicaid beneficiaries in that state actually increased after expansion.

State budget savings. The federal government is paying the entire cost of the expansion through 2016, and no less than 90 percent of the cost in subsequent years. Expansion states have been able to move people who received health services through targeted Medicaid programs, such as those providing family-planning services and care for certain women with breast and cervical cancers, at the state's regular matching rate into the new eligibility group for which the federal government is now paying the entire cost. And as more people have gained health coverage, spending on uninsured, low-income people that states fund entirely, such as funding for hospitals to offset their uncompensated-care costs and behavioral health services, has fallen.

The combination of these factors has produced net budget savings in many states. For example, through June 2015, expansion had saved Kentucky nearly $110 million and Arkansas nearly $120 million. In these and other states, expansion is expected to be a net saver even when states begin paying a modest amount of the cost in 2017.

Less uncompensated care. A recent Department of Health and Human Services report estimated that hospital uncompensated-care costs fell by $7.4 billion in 2014, due in part to health reform's coverage expansions, with a greater share of this drop in states that expanded Medicaid.

Low-income uninsured adults have nowhere to turn for coverage in states that haven't expanded. More than 3 million uninsured adults are caught in a "coverage gap" in these states, with incomes too high for Medicaid but too low to qualify for federal subsidies to buy marketplace coverage. Medicaid eligibility for adults in these states remains extremely limited — the cutoff is typically an income above 44 percent of poverty for parents (about $8,800 a year for a family of three), and there's no coverage available for adults without dependent children.

The evidence is clear: Policymakers can best address their low-income residents' health needs by expanding Medicaid.

Jesse Cross-Call is a health-policy analyst at the Center on Budget and Policy Priorities.

FCC Regulations: Putting Consumers Last

Alan Daley - November 17, 2015

Regulators are busy slogging through the old, familiar territory of speed and price regulatory proceedings. These proceedings maximize the use of hideously expensive regulatory processes, and they ossify what should be nimble deployments of new technology. The themes of controlling prices and controlling speed are woven into many of the proceedings, sometimes inconsistently.

Some examples:

• The 5G wireless service is anticipated to deliver speeds ten times higher than those available from 4G service. The FCC has identified some blocks of 5G spectrum that will go for auction in 2016. Also expected in 2016 are auctions for additional 4G spectrum. The rules for the 2016 auctions are unknown, but the pattern for prior auctions includes set-asides (deep price discounts) for "designated entities" — that is, bidders deemed more equal than others. Rules should be settled as soon as possible, because carriers are already developing the software and hardware for 5G service rollouts as early as 2018 and large scale rollouts are expected in the US, Japan, Korea, Europe and China by 2020.

• In October 2014, the FCC issued a guide on what speeds are considered "broadband" — an important distinction because the FCC's ultimate goal is universal broadband access — but then announced in January 2015 that broadband speed must be six times faster than it needed to be three months earlier. The October 2014 guide, which defined "broadband" as 4 Mbps or better, suggested that two users, one doing basic tasks and one using HD streaming video, would need a combined bandwidth of 1-2 Mbps. Netflix recommended an Internet access speed of 3 Mbps for standard definition video and 5 Mbps for HD video.

When the FCC vaulted to the new minimum definition for broadband, 25 Mbps, it was clearly out of touch with regulatory and industry recommendations. The FCC had decided that the label could be used to lure service providers into upping the prevailing competitive speed.

• A month later, in February 2015, the FCC declared Internet access to be a Title II service under the Telecommunications Act of 1934. That subjects ISPs to the full range of excruciatingly slow and expensive regulatory proceedings that can dictate all aspects of a service, including pricing. The FCC chose a Title II classification because it allowed them to prohibit paid prioritization of Internet access into fast-lanes and slow-lanes, the so-called "net neutrality" populist objective. One speed to fit all does not fit everyone’s needs because some need faster access and some do not. A unitary price will subsidize some and overcharge others. Net neutrality is not even good enough for government work.

• Another FCC proceeding investigates the transition from slower copper-based to faster fiber-optic-based circuitry. The FCC sometimes wants higher speeds and should applaud the transition, but some of the carriers’ competitors have been reliant on leasing business broadband connections that use the old copper-based infrastructure, rather than moving to an all-IP network that uses optical fiber. Competitors do not want the transition to fiber optics unless it also grants a significant price advantage. Of course they could and do build their own circuits, but in many cases, renting some circuits provides a cheaper overall result.

If the FCC accedes to competitor wishes, they will be delaying the transition. The Marie Antoinette outcome would be a command to keep the copper and build the fiber-optics. For providers, maintaining two networks means less investment in an all-IP network. That means less for consumers, but competitors renting copper-based facilities are fine with that.

The proliferation of price-related proceedings at the FCC are reminiscent of the plain old telephone service days, and they belie the radically different technologies, the aggressively competitive marketplace, and the much higher value that consumers receive for their communications dollar. Instead of effective cheerleading for innovations that will delight consumers, the FCC has reverted to the regulatory dark matter of price-policing from an era that should have gone by.

Alan Daley writes for the American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization. For more information about the Institute, visit .

Robert VerBruggen - November 16, 2015

On Friday, the New York Times released a big analysis of interstate gun trafficking, based on gun-trace data from the Bureau of Alcohol, Tobacco, Firearms and Explosives. It's a good read, and the lead graphic — a map of the U.S. showing how crime guns move from states with lax gun laws to states with strict ones — is especially neat.

As the story came out, I was in the process of crunching the numbers myself, but with a focus on several other variables. State gun laws do seem to affect the flow of weapons, which is important as we debate the merits of stricter federal laws. But other factors also play a strong role and complicate the picture. To a certain extent, crime guns simply come from states with lots of guns, and are found at crime scenes in states with lots of crime scenes.

Here, for example, is the relationship between crime-gun exports and gun-ownership rates — with the states color-coded to reflect whether they require background checks for private handgun sales, the restriction that seems most likely to affect trafficking. (See the note at the end for the gory data details. Short version of the biggest limitation: I rely on a gun-ownership survey from 2004 because it's the best available; the results don't change much if you swap in newer but less precise measures.)

There's a cluster of states with low ownership, background checks on private handgun sales (and often other gun laws), and low exports, making it hard to say whether the low ownership or the laws should get credit for the low exports. But among the states with higher ownership, Delaware aside, the background-check states do seem to have pretty low export rates.

And here is the connection between murder rates and crime-gun imports. The result isn't surprising; not only does more crime translate to more crime-gun traces, but high-crime states are more likely to have organized gangs to traffic weapons. Here the trend with background checks is less clear, but states that couple moderate-to-high crime with background checks often have serious gun-trafficking problems.

We can get a different look at the import question by analyzing the percentage of traced guns in each state that are imported. With this measure, a relationship with gun ownership emerges, though it takes an interesting shape.

We again face the frustrating fact that all the states with low gun ownership also have background checks on private handgun sales, but it's hard to look at the left-hand side of this chart and not think policy plays a role in the trend. Also, an interesting test case is Missouri, which has high gun ownership and repealed its permit-to-purchase law in 2007. As the Times notes, since then, the proportion of crime guns coming from inside the state has risen, from less than 60 percent to almost 75 percent. And here's a more complicated analysis of trafficking (albeit from a group of anti-gun public-health researchers) that tries to account for geography and more types of state gun laws; it also finds that background checks make a difference.

So, background checks seem to work — at least in the sense of forcing criminals to turn elsewhere — even if they're far from the only driver of gun trafficking. The big question is what would happen if we required these checks nationwide. Would some criminals fail to get guns entirely? Or would they come up with some new evasion strategy?

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Notes: I started with the ATF's trace numbers for 2014 (which admittedly are not comprehensive because not all crime guns are traced) and calculated per capita rates with Census dataMurder rates are from the FBI. For background checks, I used this list from the anti-gun group Everytown, but I didn't include Washington because its law didn't go into effect until toward the end of 2014. For the record, there's also a case to be made that Minnesota, whose policy is incredibly convoluted, should be considered a background-check state.

The gun-ownership numbers come from a 2004 survey by the Centers for Disease Control. The same question was asked in 2001 and 2002 as well, with remarkably stable results. For Hawaii, whose 2004 data point is missing, I used the 2002 number instead — though gun ownership seems to have risen quite a bit in the state since then, and obviously as an island it's not the best state to be dwelling on in terms of gun trafficking.

There's also a 2013 survey from YouGov, but frankly I find several of the numbers suspect. It's unlikely that Massachusetts has a far higher rate than New Hampshire, and I doubt Hawaii's rate has risen all the way to 45 percent from about 10 percent in the in the 2001 and 2002 CDC surveys. Some researchers also use the percentage of suicides committed with a gun as a proxy for gun ownership, but there are various issues with this. My spreadsheet includes the other two ownership measures if you'd like to experiment (suicide data from 2013, the most recent I could find from the CDC). The picture presented above stays pretty consistent when you use the other measures anyhow.

You can see my spreadsheet here and my R code here. The R code also includes some statistical models I experimented with. (Standard disclaimer: I'm a journalism major, so the fancy models are just me playing around. Please let me know if you have ideas for me.)

A Victory Over ACA's Auto-Enrollment Mandate

Justin Haskins - November 13, 2015

Just in time for Halloween, Congress and President Barack Obama reached a budget agreement that some experts, such as the Urban Institute's Richard Johnson, are calling "an unexpected bit of sanity coming out of Washington," according to a report by CNBC.

I'm not sure how "sane" it is to continue kicking the we're-just-going-to-let-someone-else-deal-with-the-looming-debt-crisis can down the road, but one of the budget deal's negotiated provisions dealing with Obamacare has many large employers breathing a sigh of relief. After much negotiating, an onerous requirement has been permanently eliminated: the one that would have forced all employers with 200 or more full-time employees to automatically enroll new full-time hires in a health-insurance plan and automatically re-enroll employees.

The requirement for large employers was added to the Fair Labor Standards Act when the Affordable Care Act was passed in March 2010. The provision was set to go into effect in 2017, although the Department of Labor had delayed the effective date of the requirement until it could release regulations, which never occurred.

Under the automatic-enrollment provision, employees would have been given an opportunity to voluntarily choose a health-insurance plan or decline having a plan. Large employers would have had to create large, complex reporting systems for their employees to ensure they weren't automatically enrolling in a plan someone who didn't want one.

The requirement to automatically enroll employees would not have cost employers any additional direct costs related to providing health insurance, but it would have been incredibly difficult and costly to implement from a human resources perspective. According to the Health Affairs blog, the Congressional Budget Office reports that ending auto-enrollment for large businesses will "reduce the budget deficit by $7.9 billion over the 2016–2025 period because employees would receive more taxable income rather than health benefits, which are not taxable, and because of increased individual responsibility penalty payments."

Writing in The National Law Review, Damian A. Myers, an associate in the Employee Benefits, Executive Compensation, and ERISA Litigation Practice Center, says the lack of details regarding the auto-enrollment mandate created a number of questions that were never fully answered.

"Given the nature of most employer health benefit programs, the statute left open a large number of questions," wrote Myers. "For instance, who constitutes a full-time employee for this purpose? Would dependents also need to be enrolled? Which benefit option must an employee be enrolled in? Is a refund necessary for an employee who opts-out?"

Numerous business associations applauded the decision to remove this costly and unnecessary provision that was slipped into ACA without much media attention more than five years ago. The Retail Industry Leaders Association, National Restaurant Association, Food Marketing Institute, Associated General Contractors, American Hotel & Lodging Association, National Association of Health Underwriters, and National Retail Federation all praised the removal of the auto-enrollment requirement.

"Without this change, the auto-enrollment requirement would have had a damaging impact on both restaurant owners and their employees — creating additional administrative burdens for employers," said Angelo Amador, senior vice president and regulatory counsel at the National Restaurant Association, in a press release. "This fix helps alleviate the potential financial burden placed on employees who inadvertently miss opt-out deadlines and free restaurant owners from additional unnecessary paperwork."

Most of the Obamacare-related budget negotiations focused on eliminating the so-called "Cadillac tax," a new 40 percent excise tax on health insurance plans that exceed $10,200 annually for one person or $27,500 annually for family coverage. The Cadillac tax is set to take effect in 2018 and has been a major source of contention between congressional Republicans and Democrats.

Republicans, echoing the concerns of many businesses, say the tax will likely lead to higher premiums for employees and will punish employers for offering higher-quality health insurance plans.

One of the major problems related to the Cadillac tax that has already emerged is the so-called "spousal surcharge," an extra cost added to health insurance plans provided for employee spouses. Many companies are adding $100 or more per month to premiums in the hope spouses will seek coverage elsewhere.

Republicans failed to negotiate a deal that would eliminate the Cadillac tax, which many Democrats say will be an important source of revenue in future years, but defeating the auto-enrollment requirement is still a significant win for countless businesses and their employees. By forever removing this onerous provision, many businesses will be able to save millions in future regulatory and human-resources costs, which means more money will be available to invest in employees, research, business expansion, advertising, and product development.

Justin Haskins is editor of the Heartland Institute's Consumer Power Report.

'Tariff Cliff' Puts Jobs at Risk

John Murphy - November 11, 2015

In late 2012, Americans stood on a fiscal cliff, staring into the abyss. This year, the United States faces a tariff cliff, thanks to a six-year-old trade dispute over its Country of Origin Labeling (COOL) rule for meat. As its name implies, the rule requires retailers to note the country of origin of the meat they sell.

The World Trade Organization (WTO) has found the rule to be in violation of the U.S.'s trade obligations, and on December 7, it will give Canada and Mexico the green light to slap steep tariffs on American products as punishment. Up to $3 billion in exports could be approved as fair game for retaliation, and Canada and Mexico will reportedly impose tariffs on these goods beginning December 18.

To avert this scenario — which could cost tens of thousands of American jobs — Congress must repeal the COOL rule for meat. Two rival proposals to do so have been introduced in Congress.

The first proposal, advanced by Senate Agriculture Committee chairman Pat Roberts (R., Kan.), would bring the dispute to a definitive end by repealing the offensive portion of the law, terminating the possibility of WTO-authorized retaliation by Canada and Mexico. Roberts's proposal is identical to a repeal bill approved by the House in June with 300 votes in support.

The second proposal, authored by Sen. Debbie Stabenow (D., Mich.), would also repeal the COOL rule for meat. However, the bill introduces a successor program. While promoted as a voluntary labeling system, the program would continue to require the segregation of livestock based on where they are born, raised, and slaughtered.

Canada and Mexico have firmly rejected the Stabenow bill. Critically, because they have already won the dispute before the WTO, Canada and Mexico have the “whip hand” and are fully empowered to proceed with retaliation if Congress approves the Stabenow bill. The United States could request a compliance panel at the WTO, but it may take years for such a panel to produce a ruling, which most analysts believe the United States would lose yet again.

In the meantime, American workers, farmers, and ranchers would suffer the painful effects of trade retaliation. The U.S. business and agriculture communities regard this as intolerable even in the short term. The COOL Reform Coalition — which represents the nation's business and agriculture groups and is co-chaired by the U.S. Chamber of Commerce (where I am the senior vice president for international policy) and the National Association of Manufacturers — has created an interactive mapshowing the potential impact of retaliation for each state.

In all likelihood, sourcing managers planning future purchases are already considering vendors in other jurisdictions in response to the threat of higher tariff costs. Once this happens, it could take years for American farmers, ranchers, and companies to recover lost market share.

When our elected leaders faced the fiscal cliff in late 2012, they took action, and the crisis was averted. By the same token, the Chamber hopes the Senate will take up and approve Senator Roberts's proposal — and spare American workers, farmers, and ranchers the pain of a fall off this year's tariff cliff.

John Murphy is senior vice president for international policy at the U.S. Chamber of Commerce.

Police With Military Gear: Better Training Needed

Gregory T. Kiley - November 11, 2015

Admittedly, I laughed when I saw — on a comedy show — that a rural police department had made a video showing off its huge new armored vehicle. That vehicle came from the Department of Defense's 1033 program, through which the Pentagon transfers excess military equipment to civilian law-enforcement agencies. The program, authorized by the 1997 National Defense Authorization Act, was in part a response to criticisms of the U.S. leaving behind mountains of equipment after the first Gulf War.

The 1033 program is valuable — but there are also problems with it, largely stemming from a lack of training. In fact, there are no national training standards at all for the SWAT teams that participate. This is why I agree with the decision by President Barack Obama and Congress to review the 1033 program, and why I strongly urge the adoption of training standards for all tactical officers. Thankfully, the National Tactical Officers Association (NTOA), in partnership with the International Academy of Public Safety, appears to be stepping up to the challenge.

Some critics express doubt that domestic police can benefit from military equipment. But as a congressional staffer, and later as a think-tank analyst, I've traveled to Iraq and Afghanistan multiple times over the past decade — and I can attest that the military's high-tech gear, from sensors to flying unmanned aerial vehicles, is astounding. And in fact, this technology can be incredibly useful for domestic law enforcement, which is forced to deal with threats ranging from well-armed criminals, to school shooters, to even terrorists. From improved situational awareness to improved safety gear, the applications are numerous.

Further, this gear is often used here by the very same people who used it overseas, because members of the military sometimes become SWAT officers upon returning home. We are lucky to have such brave and well-trained officers protecting our streets.

But critics of the 1033 program have a point. Even former military members need training before they can apply their knowledge to domestic situations. As our Marines heroically displayed during the Second Battle of Fallujah, our military personnel have been well trained to clear a city door-to-door during combat operations. In a similar fashion, our U.S. Air Force and Army brethren have become extremely adept at surveillance and delivering effects overseas. These are valuable skills, but an entirely different set of policies and procedures apply when they are used on our own shores.

That's where the NTOA Academy comes in. Scheduled to launch next year, the academy will train tactical officers both online and in person. After addressing the key concepts, the academy will teach officers to use those skills to resolve some of the most complex, challenging, and high-risk incidents they could face in their own communities.

The new academy will also be developing national certifications for operators, instructors, and command-staff personnel. In other words, it will ensure that all tactical officers who complete the courses meet the highest levels of training on military equipment, with domestic law-enforcement applications in mind.

Over the past 15 years, our nation has invested trillions in military personnel and equipment. As taxpayers, we have a right to expect these expenditures not to go to waste when they are no longer needed abroad. But we also have a right to insist on rigorous training for those who will be policing us here at home — a duty that differs substantially from what the military does overseas. With proper training and oversight, our nation's police forces can use this equipment to keep us better protected, safe, and secure.

Gregory T. Kiley is a former senior associate at the Center for Strategic and International Studies, a former senior professional staff member of the Senate Armed Services Committee, and a former U.S. Air Force officer.

Will 27 States Rain on EPA's Parade?

Thomas K. Lindsay - November 10, 2015

The Environmental Protection Agency published the final version of its latest rule, called the Clean Power Plan, this past August. The CPP's stated aim is to reduce America's dependency on fossil fuels in order to arrest climate change. On presenting the finalized version, the agency declared that the revisions contained therein should assuage states' concerns over an earlier version of the rule. Were the states thus mollified? In fact, state resistance to the rule appears to be only beginning.

In late October, immediately after the EPA published the final plan in the Federal Register, 26 states filed suits to block it. One more filed suit late last week. In addition, private industry and labor groups filed at least 17 petitions for review in the D.C. Circuit on the first day the court had jurisdiction. It appears that additional suits will be filed before the late-December deadline for filing is reached.

Among those that have filed petitions already are West Virginia et al., a 24-state coalition. Oklahoma, North Dakota, and Mississippi have each filed separate suits, as have the International Brotherhood of Boilermakers, the United Mine Workers of America, various utility companies, and the United States Chamber of Commerce.

Why has the CPP provoked no less than a majority of states to challenge its legality? First and foremost, these states regard the rule to be unabashedly unconstitutional. The means that the CPP looks to adopt to reduce carbon dioxide emissions, argues Harvard law professor Laurence Tribe, are "constitutionally reckless ... usurp[ing] the prerogatives of the States, Congress, and the Federal Courts — all at once."

Consider what the CPP would do and how it proposes to go about doing it. Under the rule, each state is "allowed" to compose its own carbon-dioxide-reduction plan. EPA found itself forced to take this tack because the agency itself admits that, under current law, it lacks the authority to impose the regimen that it is asking states to adopt. But if a state refuses to submit a plan (as Oklahoma's governor, Mary Fallin, announced her state would do) — or if the EPA should find a state's plan to be inadequate — EPA will impose its own plan.

Critics find this approach to be in violation of the Tenth Amendment. EPA's claimed power to impose a federal plan on any state refusing to submit its own plan smacks of a practice already declared unconstitutional by the Supreme Court. In the 1992 case New York v. United States, the Court ruled that when the federal government offers states "a ‘choice' between two unconstitutionally coercive regulatory techniques," the states in reality have "no choice at all, which is "inconsistent with the Tenth Amendment."

Writing for the Court in the New York case, Justice O'Connor declared that "the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress's instructions." Still worse, argue the CPP's critics, Congress has not provided the authority for the CPP claimed by the EPA.

Relying on the New York case's reasoning, the Court, in Printz v. United States (1997), struck down as unconstitutional a provision of the Brady gun law requiring county sheriffs to administer background checks. Writing for the Court, Justice Scalia declared that New York v. United States' prohibition on federal compulsion of states "to enact or enforce a federal regulatory program" may not be "circumvent[ed]. ... The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program."

Because New York v. U.S. addresses state executive and legislative action, whereas Printz addresses the commandeering of state agents, the former case is more directly relevant than is the latter to the question of the CPP's constitutionality. Nevertheless, the two cases together, argue the CPP's critics, should form a constitutional firewall against what they perceive as the rule's attack on the Tenth Amendment.

Additional support for the prohibition on federal commandeering of states comes from NFIB v. Sebelius. Although this 2012 Supreme Court case upheld the bulk of the Affordable Care Act, it struck down a provision threatening to withhold all federal Medicaid funds from states that didn't expand their programs.

Writing for the Court in Sebelius, Chief Justice Roberts found it unconstitutional for the federal government to claim such control over the states. "Otherwise the two-government system established by the Framers would give way to a system that vests power in one central government, and individual liberty would suffer," he wrote.

Although it could take years, it is hard to imagine that the issue of the CPP's constitutionality will not eventually reach the Supreme Court. If and when that occurs, will at least five of the nine justices agree with these 27 states that the CPP is an unconstitutional violation of the anti-commandeering doctrine?

If they do not, warns Tribe, the justices risk saving the EPA's plan at the expense of "burning the Constitution."

Thomas K. Lindsay directs the Centers for Tenth Amendment Action and Higher Education at the Texas Public Policy Foundation and is editor of He was deputy chairman of the National Endowment for the Humanities under George W. Bush.

Getting Kids Out of Dangerous Schools

Lewis M. Andrews - November 9, 2015

Imagine a national law stating that students who have been victims of a violent crime at school, or who are simply attending classes in a building considered "persistently dangerous," are automatically entitled to a safer placement — and that states that fail to provide this option will lose federal education funding.

As it turns out, such a statute was actually passed by Congress 14 years ago as part of President George W. Bush's No Child Left Behind (NCLB) Act. According to Section 9532, any state receiving federal dollars under NCLB must define for itself what constitutes a "persistently dangerous" school and establish written procedures delineating how endangered children will be transferred elsewhere.

Unfortunately for America's most vulnerable children, almost every state education department has to date been more inclined to skirt the intent of Section 9532 than to implement it. With what sadly appears to be a greater concern for protecting the jobs of failing teachers and administrators than for providing security to students, state officials have allowed local boards of education to aggregate the data on violent incidents within their districts, effectively masking the identities of the worst schools.

Principals have also been permitted to define violence by criteria more characteristic of adult offenders, such as kidnapping and murder, and to skip reporting instances where student bullies were let off with a warning. Indiana has allowed the designation of "persistently dangerous" school to be overturned by a panel of outside safety experts, while Florida has permitted the label to be revoked by a vote of parents, students, and district personnel.

As a result of such watered-down policies, fewer than 100 of the nation's 92,000 public schools were labeled "persistently dangerous" when NCLB was first passed. For the 2012-2013 school year, the most recent period for which the U.S. Department of Education has cumulative data, just 45 were thus tagged.

As depressing as these statistics first sound, there is a hopeful exception to the near-universal evasion of Section 9532 — and a surprising one given the power of public-employee unions in this very blue state. A lopsided 31 (or 69 percent) of the schools in the 2012-2013 period cited above were in New York State. And while even that number likely represents but a small fraction of the truly troubled schools in Albany, Rochester, Buffalo, Syracuse, and of course New York City, the Empire State has nonetheless accounted for the majority of persistently violent schools reported to the federal government over the last decade — this in spite of continuing protests by local teachers and administrators.

Much of the credit for New York State's above-average compliance goes to its Board of Regents — a supervising committee for the state department of education — which developed its own violence-detection system even before Congress passed NCLB. Because the regents had insisted from the outset that state data on dangerous schools be reviewed regularly for reliability and that superintendents promptly adopt any needed improvements, the board simply used its own school assessments to satisfy the federal reporting requirements in Section 9532.

The important lesson to be learned from New York is that, once a state's education authority does begin to take seriously the task of identifying unsafe schools, there is little that public-employee unions can do to dilute enforcement by lobbying their legislatures. According to an analysis by the Education Commission of the States, all but two state departments of education have felt free to both interpret and implement the persistently-dangerous-school provision without statehouse approval.

What all this means is that any governor seriously interested in reducing the number of unsafe schools in his state already has the ability to do so by instructing the state department of education, a part of the executive branch, to adopt measurements that accurately identify dangerous settings. The CDC's estimate of 749,200 annual violent incidents in American schools — with 7 percent of public-school students victimized annually — could, in theory, be dramatically reduced through unilateral administrative action.

If this sounds too good to be true, it must be added that having the power to remove vulnerable children from dangerous placements and knowing one has that power are not the same thing. By simply keeping their mouths shut, risk-averse bureaucrats in departments of education across the country have thus far managed to keep their governors in the dark while quietly diluting the criteria for identifying unsafe schools.

One person who does understand what the governors could potentially do on their own is John B. King Jr., President Obama's recently designated replacement for Education Secretary Arne Duncan, who steps down in December. A longtime school reformer, King served as New York State's Commissioner of Education until 2011 and worked closely with its Board of Regents to make public schools more accountable.

Very soon, then, someone intimately familiar with Section 9235 will have sufficient visibility to both educate the nation's governors on the extent of their veiled prerogatives and to prod them into action. It will be interesting to see how aggressively King decides to exercise this leverage.

Lewis M. Andrews was executive director of the Yankee Institute for Public Policy from 1999 to 2009. He is the author of To Thine Own Self Be True: The Relationship between Spiritual Values and Emotional Health (Doubleday).

Jeb Bush's Plan to Reform Medicare

John R. Graham - November 9, 2015

Jeb Bush's Medicare reform contains two proposals — premium support and Health Savings Accounts — that will have a significant, positive effect on seniors' access to care and Medicare's finances. In particular, the proposals will address four flaws in Medicare Advantage, an alternative to traditional Medicare in which seniors choose a plan from a private insurer.

Although Obamacare tried to cut seniors' access to private plans, the use of these plans continues to grow. Before Obama took office, one-quarter of beneficiaries chose Medicare Advantage plans. Today, about one-third do. But despite their popularity, private Medicare plans do not live up to their potential for cost-effectiveness.

The first major flaw of Medicare Advantage is that its costs are deliberately hidden from seniors. Their premiums pay a small share of costs, while federal taxpayers shoulder the rest behind the scenes. In Bush's premium-support plan, by contrast, all seniors are given a fixed amount of taxpayer money up front, which they can put toward a plan (including traditional Medicare if they desire). This means that seniors will know how much taxpayers are supporting them.

President Obama has mocked this as "some kind of voucher." However, disclosing Medicare's full costs to seniors when they make their coverage choices will help them understand how important it is to future generations that we get its costs under control.

Second, Medicare Advantage plans compete by submitting bids to Medicare, and if a bid is higher than a government-set benchmark for the area, enrollees must pay the difference. But incredibly, insurers are paid according to the benchmark, even if the typical bid is much lower. Abolishing the benchmark and setting premium support based on the average bids, as Bush's plan would do, will save taxpayers money without harming beneficiaries' access.

Private plans will not like this. However, Bush's proposal also addresses a third flaw that limits private plans' opportunities: Because he would set premium support based on private bids, and since seniors would get the same amount of support whether they chose a private plan or traditional Medicare, private plans would have an advantage in places where they provided better service at lower cost than the government-run alternative. In other words, private plans would genuinely compete with traditional Medicare, in which the government hires contractors to pay hospitals, doctors, and other providers according to Soviet-style, fixed-fee schedules.

Experts estimate that premium support will cut 4 percent to 6 percent from Medicare spending, and that this will compound over the years. Further, this is a campaign promise that is likely to be kept if Bush is elected. Paul Ryan, the newly elected speaker of the House of Representatives, has championed premium support for years, and it has the support of the House majority.

Bush's second proposal is to increase the use of Health Savings Accounts by seniors. HSAs are tax-free accounts that have existed for a decade and have proven to reduce the rate of growth of health spending. According to consultants at Devenir Health, 14 million people had HSAs last year, which had aggregate assets of $24 billion.

Medicare beneficiaries cannot contribute to HSAs, and Bush would change that. However, his proposal goes further, allowing health plans to fund beneficiaries' HSAs. This addresses Medicare Advantage's fourth flaw: Health plans are unable to enlist beneficiaries' interest in reducing Medicare's costs by rewarding them for doing so. Because Medicare Advantage plans cannot rebate money into seniors' HSAs, they compete to enroll members through enticements such as fitness-club memberships. This is not a good use of taxpayers' money.

Allowing health plans to put Medicare dollars under patients' direct control will cause costs to plummet. For example, Medicare has been paying over $4,000 for power wheelchairs. They can be purchased for around $3,000, or even less in some parts of the country. A senior with Medicare money in his HSA has an obvious interest in saving a thousand dollars or more on his power wheelchair. This reform will cut costs faster than does Medicare's current method, which relies on bureaucratic price fixing.

Bush also recognizes seniors are ready to take advantage of fast-growing innovation in health information technology, especially telehealth and mobile health. Most of these innovative services are not covered by Medicare. Bush would fix this, and seniors would be able to use their HSAs to choose lower-cost telehealth services instead of frequent office visits.

Kicking necessary Medicare reform down the road has been a tactic employed by too many politicians who are afraid of the challenge. Jeb Bush's Medicare-reform plan embraces changes that will protect and improve the program for current and future beneficiaries.

John R. Graham is a senior fellow at the Independent Institute and a senior fellow at the National Center for Policy Analysis.

Blog Archives