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OpenMarket: February 2014

  • Bad Highway Policy Is a Bipartisan Affair

    February 28, 2014 11:18 AM

    Two major pieces of surface transportation policy news dropped this week. President Obama is readying the release of his budget, which will contain over $300 billion in transportation funding. Across the aisle, Rep. David Camp, R-Mich., the powerful chairman of the House Committee on Ways and Means, released a sweeping proposal to overhaul the U.S. tax code, which includes a component that would direct $120 billion in tax savings into the Highway Trust Fund.


    The president's latest budget is far from surprising, as it differs very little from his previous surface transportation proposals. Of the combined highways and transit spending ($278 billion), he proposes to allocate 25 percent ($72 billion) to mass transit -- a mode that makes up about 5 percent of trips.


    Thankfully, neither proposal has any chance of being enacted, at least as standalone comprehensive packages. Unfortunately, most of Congress's "business" is recycling and repackaging previous proposals, which means some aspects might well find their ways rolled into future legislation. With the current highway bill, MAP-21, expiring at the end of September 2014, Congress will begin the reauthorization process in the coming months. It is likely that some of these bad ideas will pop up again.


    First, the president's budget. He wants a $302 billion, four-year transportation bill. Half of that would supposedly come from tax reform, amounting to a massive bailout of the Highway Trust Fund. This is par for the course for President Obama, who has long advocated eliminating the Highway Trust Fund in favor of a slush fund that would enable additional gimmicky projects such as high-speed rail and urban streetcars.


  • CEI Files Comments against IRS Proposed Rules That Would Illegally Restrict 501(C)(4) Speech

    February 27, 2014 5:48 PM

    Today, CEI filed comments against the IRS's proposed rules restricting speech by 501(c)(4) groups (which the IRS has suggested could be expanded in the future to also restrict speech by 501(c)(3) groups like think-tanks).  Our comments focus on the Treasury Department’s improper attempt to redefine non-partisan criticism of non-elected government officials, including communications with lawmakers about executive-branch and judicial nominations, as “candidate-related political activity,” in order to restrict such activity by 501(c)(4) groups. We also discuss how the proposed rule would also unconstitutionally restrict non-profits’ advice to the executive branch about nominations. CEI also agrees with the Heritage Foundation that the Treasury Department lacks statutory authority to impose the proposed rules.


    As I earlier noted in The Wall Street Journal,

  • CEI Podcast for February 27, 2014: Can the EPA Regulate Greenhouse Gas Emissions?

    February 27, 2014 5:41 PM

    The Supreme Court heard oral arguments this week in a case that could determine whether or not the EPA has the authority to regulate greenhouse gas emissions. CEI Senior Fellow Marlo Lewis has written about the case for Forbes.


  • The Bizarre, Slanted Coverage of Arizona's SB 1062

    February 27, 2014 2:55 PM

    Yesterday, Arizona Governor Jan Brewer vetoed a bill that would have made clear that the state's Religious Freedom Restoration Act (RFRA) applied not just as a defense to a lawsuit brought by a government entity, but also as a defense to lawsuits brought by a private party under a state statute, or using a cause of action created by state law. Under RFRA, no government action (including a damage award in a lawsuit) can “substantially burden” religious freedom unless it is “the least restrictive means” to further a “compelling interest.” The bill hardly seems like a radical change, since damage awards in private lawsuits already constitute "state action" for purposes of the First Amendment, under the Supreme Court's decisions in Snyder v. Phelps and New York Times v. Sullivan. The bill just applies the same principle to RFRA, and, indeed, the bill's enactment might merely have given the state's RFRA the same meaning that other jurisdictions' RFRA's already have by judicial construction. The bill did not even mention sexual orientation, did not single out gays, and probably would have had its greatest effect in other areas.


    The media, including the Washington Post and the New York Times, have fundamentally distorted what that bill, SB 1062, vetoed by Gov. Brewer, would have done, by claiming that it would have "allowed" a broad range of discrimination. It was written narrowly enough (and did not even mention gays) that it conceivably might not have legalized any additional discrimination against gays at all. It might have had more effect as to refusals to serve other groups disapproved of by religious fundamentalists, like cohabiting unmarried couples, although even that is not guaranteed. (Disclosure: I support both gay marriage and religious liberty, and CEI did not take any position on the bill.)


  • Reining in the Executive Branch Bureaucracy, Part 9: Congress Must Affirm Final Agency Rules before They Are Law

    February 26, 2014 12:15 PM

    Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.


    When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.


    Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.


    To improve regulatory cost accountability, the 104th Congress passed the Congressional Review Act (CRA). That law sets up a 60-day period following agency publication of a regulation during which the rule will not take effect. That 60-day pause affords Congress an opportunity, should it desire, to pass a resolution of disapproval to halt the regulation.


    It rarely has that desire. The CRA was a symbolic nod toward congressional accountability for regulations. But it amounts to a 2/3 supermajority requirement to strike a law that Congress never made in the first place when the president vetoes a disapproval resolution. And since Congress benefits from delegation and no rollback reaches the president’s desk anyway, the law doesn’t work. (Well, OK, the CRA did halt an “ergonomics” rule, on repetitive motion injuries.)


    The superior approach to ensuring congressional accountability is to require that no major or economically significant agency rule (or controversial rule) becomes law until it receives an affirmative vote by Congress. An expedited approval process along with en bloc voting on regulations could suffice.


  • Reining in the Executive Branch Bureaucracy, Part 8: Create a Culture of Repealing Regulations

    February 24, 2014 3:48 PM

    Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.


    When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.


    Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.


    Agencies and the OMB review process should face a higher burden of proof regarding rules’ value.


    What bureaucracies do has become untethered from economic efficiency and public safety. Their "regulation" does not necessarily make people safer, environments cleaner, or markets efficient.


    One mild attempt at dealing with Rules Gone Wild was the January 2011 Executive Order 13563 on "Improving Regulation and Regulatory Review. It called for agencies to develop and execute plans to:


    [P]periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome.


    Mild doesn't work anymore, and modification and streamlining doesn't happen. When agency analyses appear not to justify a rule or simply don't exist, which is the normal case, reviewers at OMB should be more forthright about say so, and make doubts plain. Yet even as over 3,500 rules and regulations accumulate annually, Congress, agencies, the president and the Office of Management and Budget stand by idly, reluctant to recommend legacy regulations to eliminate.


  • CEI’s Battered Business Bureau: The Week in Regulation

    February 24, 2014 7:31 AM

    35 new regulations, from helicopter ambulances to infant formula.


  • GW's Entrepreneurship and Crowdfunding Barriers to Today's Revolutionary Entrepreneurs

    February 21, 2014 6:13 PM

    george-washingtonHappy Washington’s birthday, everyone! Although the holiday was on Monday, George Washington’s actual date of birth is tomorrow, February 22, in the year 1732.


    And one of the many ways to celebrate Washington is to reflect on his pioneering entrepreneurship. That’s right, the father of our country was also one of the first of America’s many visionary entrepreneurs who was largely self-made. As I write in National Review, “Washington’s background wasn’t exactly poor, but he was not as wealthy as many of his contemporaries among the Founders. His father died when he was eleven, and the family lacked money to give him a formal education.”


    But Washington learned not only the value of perseverance but of innovation. He abandoned Mount Vernon’s main cash crop of tobacco to cultivate wheat. Then, “pioneering the integration of related enterprises, he became a manufacturer of two products from his crop: flour and distilled whiskey.” As I note, Mount Vernon has reconstructed Washington’s flour mill and whiskey distillery, and they are definitely worth a visit!


    Today, we are still a nation of entrepreneurs, but entrepreneurs have much red tape to deal with. One area of bipartisan agreement for barriers that need to be eased is in the area of equity crowdfunding. It is legal to raise funds for music, movies or other ventures on crowdfunding sites such as Kickstarter and IndieGoGo, but only if funders of these projects are offered nothing of real value. Any promise of profit sharing or potential return on investment trigger the same securities laws that apply to Fortune 500 companies.

  • CEI Podcast for February 20, 2014: The Expanding Regulatory State

    February 20, 2014 10:59 AM

    CEI Fellow Ryan Young discusses the large stock of existing regulations and the rapid flow of new regulations.


  • The “Cooperative” Enterprise Institute?

    February 20, 2014 8:39 AM

    In a sense, companies compete with each other to be the better cooperator.


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