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

    March 2, 2015 12:27 PM

    The FCC, inspired by a law passed in 1934, unveiled its controversial plan to regulate the Internet as a public utility. Beyond that it was a week like any other, with new regulations covering everything from biomass crops to walk-in freezers.

    On to the data:

    • Last week, 65 new final regulations were published in the Federal Register, after 40 new regulations the previous week.
    • That’s the equivalent of a new regulation every two hours and 28 minutes.
    • So far in 2015, 416 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,667 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
    • Last week, 1,715 new pages were added to the Federal Register, after 1,118 pages the previous week.
    • Currently at 11,068 pages, the 2015 Federal Register is on pace for 70,949 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five such rules have been published so far this year, one in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations ranges from $647 million to $700 million for the current year.
    • Forty-two final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 97 new rules affect small businesses; 15 of them are classified as significant. 
  • Another Illegal Rule from the Education Department

    March 2, 2015 8:19 AM

    Recently, I wrote about a report to the Senate by a task force of college presidents, on how the Education Department is illegally dumping an avalanche of new rules and regulations on America’s schools, without even complying with the Administrative Procedure Act’s notice-and-comment requirements.

    Yet another example of such mischief is the 2014 sexual harassment guidance issued by the Education Department’s Office for Civil Rights. That guidance radically expanded liability for harassment under Title IX from OCR’s past 1997 and 2001 harassment guidance, and deviated sharply from principles of harassment liability developed by the courts. And it imposed new obligations on colleges without any notice or opportunity to comment.

    (The Administrative Procedure Act requires notice and comment before an agency imposes new obligations on regulated entities. In addition, the D.C. Circuit Court of Appeals’ Paralyzed Veterans decision also requires notice and comment for changes to many interpretive rules. The Education Department ignores these requirements.)

    OCR’s 2014 harassment guidance generally imposes liability on institutions even if they correctly discipline those who engage in sexual harassment or sexual assault, if they do not also “prevent its recurrence” and “remedy its effects,” and it warns that even punishing the harasser “likely will not be sufficient” to comply with Title IX. See Office for Civil Rights, “Questions and Answers on Title IX and Sexual Violence“ (April 29, 2014), at pg. 25 (“imposing sanctions against the perpetrator, without additional remedies, likely will not be sufficient to eliminate the hostile environment and prevent recurrence as required by Title IX,” since the school must not just “end the sexual violence,” but also “eliminate the hostile environment, and prevent its recurrence”), and at pg. 1, Question A-2 (institution must “eliminate the hostile environment, prevent its recurrence, and, as appropriate, remedy its effects”).

  • 3 Things You Should Know About King v. Burwell

    March 1, 2015 6:06 PM

    On March 4, the Supreme Court will hear oral argument in King v. Burwell, which challenges an IRS regulation imposed under the Affordable Care Act, better known as Obamacare. The regulation violates the law and illegally provides subsidies on both state and federally-established health insurance exchanges after more than 30 states chose to stay out of the program. Here’s what you need to know:

    1.  The plaintiffs in King v. Burwell represent millions of Americans harmed by Obamacare, including those who lost their health plans, doctors or jobs, and those whom the law forces to pay higher insurance premiums and taxes.

    King v. Burwell is about choice, freedom, and fairness. A win for the King plaintiffs could free millions of Americans from Obamacare mandates and penalties in more than 30 states. Many of these Americans, like the plaintiffs, could gain the freedom to choose the best health plan for them and their families without the government forcing them to either enroll in health coverage or pay an unfair tax penalty.

    2. King v. Burwell could pave the way for more healthcare alternatives that would give people the freedom to choose more affordable plans, improve transparency, and offer states more flexibility.

  • Net Neutrality Vote Shows Congress Must Rein In and Replace the FCC

    February 26, 2015 4:45 PM

    The separation of powers doctrine demands that Congress not tolerate unelected federal agencies going it alone and making binding law. 

    The Federal Communications Commission (FCC), on a party line vote, has elected to impose so-called net neutrality regulation via a reclassification of the formerly lightly regulated Internet under Title II of the Communications Act. 

    Somehow, we suddenly need government force to protect the freedom we’ve known online, with a 332-page set of rules no one outside the agency has seen. 

    Thursday's Federal Communications Commission (FCC) net neutrality conceit should trigger the Congress’ replacement of this rogue agency with something that recognize  boundaries, something attuned to the future and reality. 

    Airwave scarcity and public interest concerns are the causes that long presumably justified telecommunications regulation. But thanks to Thursday's FCC vote, the FCC bureaucracy itself undermined those values with a new regime that will inhibit new infrastructure development and ultimately freedom of speech itself. 

    Under utility-style micromanagement of the Internet, which is what Title II would allow, the agency will be reenergized as a magnet for political cronyism. The “bad guys” or villainous “gatekeepers” according to net neutrality partisans are the Internet service providers. 

    But ironically, with net neutrality, there's a much greater chance of there still being an AT&T and Comcast 100 years from now since upstart competing and overlapping infrastructures can scarcely cope with the likes of Title II. (Here’s Comcast’s highly promoted advertisement in support of enforceable net neutrality rules.) 

  • CEI Statement on Today's Net Neutrality Vote

    February 26, 2015 1:08 PM

    Competitive Enterprise Institute associate director of technology studies Ryan Radia issued the following statement on Thursday's Federal Communications Commission (FCC) vote to implement new net neutrality rules: 

    "Today, the FCC voted on party lines to reverse its successful policy of keeping the government’s hands off the Internet. Thanks to three unelected bureaucrats, Internet providers will now be governed by an 81-year old law written for the Ma Bell telephone monopoly. Although big broadband businesses dislike the FCC’s decision, they aren’t the ones who will suffer the most. Instead, the innovators who will build tomorrow’s networks—and the American consumers who will benefit from them—are the real losers today. Any company, big or small, that wants to offer Internet access to Americans’ homes or smartphones must now navigate through the arcana of a federal regulatory agency—the three words an entrepreneur least wants to hear.

    "This vote also makes a mockery of the notion that the FCC is an “expert” agency that carefully examines the facts and makes decisions based on hard evidence. What in the world has changed that merits the rush to regulate Internet companies? As FCC Chairman Tom Wheeler tells it, a few “gatekeepers” control the Internet—but in reality, Americans enjoy plenty of competition and choice when it comes to speedy Internet services. Yet the FCC denies this reality, pulling facts and figures out of thin air to justify its decision to regulate the Internet.

    "Most Internet users can see through this charade. Hopefully, so will federal courts."

  • Education Department Floods Schools with New Uncodified Bureaucratic Mandates

    February 25, 2015 3:17 PM

    Recently, a task force of college presidents chronicled massive regulatory overreaching by the U.S. Department of Education, which, on a daily basis, floods the nation’s schools with new, uncodified agency requirements that have never even been vetted through the formal rulemaking process. “The Report of the Task Force on Federal Regulation of Higher Education: Recalibrating Regulation of Colleges and Universities,” correctly notes that:

    “According to the basic tenets of administrative law, Congress passes laws, and it is up to the agencies to implement them. However, in recent years, the Department has increasingly used the regulatory process not in response to any specific legislative change enacted by Congress, but rather as a means to achieve its own policy objectives.” (Pg. 35)

    “The compliance problem is exacerbated by the sheer volume of mandates—approximately 2,000 pages of text—and the reality that the Department of Education issues official guidance to amend or clarify its rules at a rate of more than one document per work day. As a result, colleges and universities find themselves enmeshed in a jungle of red tape, facing rules that are often confusing and difficult to comply with.”

    (Executive Summary, pg. 2).

    The report, issued by a task force set up by a bipartisan group of U.S. Senators, cites examples such as a needlessly expensive distance-education regulation imposed on colleges without the notice and comment required by the Administrative Procedure Act. It carries an enormous price tag for schools that provide online learning, discouraging cheap and innovative forms of learning: 

    “A public institution with a well-established online program estimated the costs at nearly $800,000. One private institution has estimated that it will cost $290,000 and take up to 2,000 hours annually to deal with the changes. . . . In 2012, a federal appellate court upheld the original decision to vacate the regulation due to the Department’s failure to properly give notice of this issue in its pending notice of proposed rulemaking and provide stakeholders with a meaningful opportunity to comment on the policy. Despite the court’s ruling, the Department continues to pursue this policy.” (Pg. 24)

  • Capitalism Makes a Comeback on Campus

    February 25, 2015 12:15 PM

    There’s exciting stuff going on in the world of higher education these days for fans of free markets. Just last week, the University of Arizona’s Center for the Philosophy of Freedom received a $2.9 million grant from the John Templeton Foundation to help build a network of philosophy, politics and economics (PPE) programs at several universities around the world.

    Closer to home here in Washington, D.C., the new Ed Snider Center for Enterprise and Markets at the University of Maryland is making a strong showing out of the gate. Earlier this month the Center hosted a debate over income inequality and public policy including current Executive MBA students and outside speakers Yaron Brook and Paul Vaaler. The video content from that event is well worth re-visiting for anyone who was unable to attend in person.

  • There Are No “Neutral Taxes” in Politics

    February 25, 2015 10:24 AM

    Those favoring larger government are finding it harder to finance them by raising taxes. Proponents have sought to reduce opposition by claiming that they’re not really raising taxes at all—their taxes will be “neutral.” Sure, we’ll take $50 billion or so in taxes from the economy, but we’ll then put it back again in the form of tax reductions or rebates. From a macro-economic perspective, they argue, there will be no impact at all! Why bother, you might ask? 

    The prime candidate advanced by those seeking to better plan our economy is the carbon tax. We’ll tax carbon and use the revenues to offset its impact. People will use less energy but retain the same income. We’ll change prices without changing income—a highly targeted incentive package! To tax energy users is feasible, although complicated—simply tax all energy materials. But farmers have traditionally escaped gas and diesel taxes for on-farm use—will this exemption be repealed? 

    In many regions, people use natural gas, oil, and electricity (which in turn uses coal, natural gas, and some hydro and nuclear). The prices of some of these energy types is market driven, while others are regulated. The income impact on specific consumers is not easily ascertained nor is the appropriate rebate. The result is that the micro-impact of energy taxes is never neutral. Individuals in areas dependent on coal or oil will lose; individuals in areas where climate or policy has shifted to solar or other renewable energy will gain relatively. And this critique fails to note another problem: the tendency of politicians to use new tax revenues to gain support for the measure.  Since different groups have different priorities, the result is often to “spend” the new tax revenues many times over. Rebates, being complicated and having no strong political champion, are likely to receive low priority.

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

    February 23, 2015 7:26 AM

    In a very cold, holiday-shortened week, federal agencies issued 40 final and 33 proposed regulations covering everything from lithium-ion batteries to small fish in Oregon.

    On to the data:

    • Last week, 40 new final regulations were published in the Federal Register, after 57 new regulations the previous week.
    • That’s the equivalent of a new regulation every four hours and 12 minutes.
    • So far in 2015, 351 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,581 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
    • Last week, 1,118 new pages were added to the Federal Register, after 1,341 pages the previous week.
    • Currently at 9,353 pages, the 2015 Federal Register is on pace for 68,772 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $630 million for the current year.
    • Twenty-nine final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 75 new rules affect small businesses; nine of them are classified as significant. 
  • Brussels Meeting Ends with White Smoke

    February 20, 2015 5:05 PM

    To surprise of many, Friday’s meeting in Brussels ended with white smoke, like Greek Finance Minister Yanis Varoufakis has hoped when he was referring to the signaling system used by the Vatican. The meeting, which was scheduled to discuss Greece’s proposal for a six-month extension of its loan agreement with the Eurozone lenders, was sealed with a deal to extend the current bailout by four months.

    The Greek government formally submitted their request on Thursday, following pressure from the ECB, which decided to raise a cap of Emergency Liquidity Assistance to Greek banks to 68.3 billion euros. The modest increase of 3.3 billion euros of cash offered by the ECB was significantly smaller than the 10 billion euros that the Greek Central Bank had been requesting.

    Even though the decision to ask for an extension was welcomed by the markets, Germany’s early reaction suggested a pessimistic outcome on Friday. A German document, prepared for the Euro Working Group meeting in Brussels on Thursday, called Greek proposal a “Trojan horse,” as it did not include any clear commitment to successfully conclude the current program and it fell short of a clear freeze of proposed Greek spending measures.

    Additional pressure was applied by Donald Tusk, President of the European Council, who rejected Greek prime minister’s calls to convene a summit of Eurozone leaders on Sunday, in case there was no deal today. Moreover, SKAI TV also reported that Spanish and Portuguese ministers, who also have leftist parties gaining support in their countries, tried to block any deal favorable to Greece.

    According to the Greek Mega TV, the temporary agreement includes a four month extension of Greece’s bailout program, with no austerity measures. However, Greece had to commit not to make any unilateral decisions regarding its plans to reverse reforms made by the previous Greek government, including increasing pensions and wages. Eurogroup President Jeroen Dijsselbloem added that Greek government will also have to present a list of reforms to the Eurozone by Monday.

    Even though Jeroen Dijsselbloem announced that Greece has committed to honour the previous government’s financial obligations, today’s agreement does not mean that Europe’s problems are finally over. The extension was made only for four months and both sides will have to engage in another round of discussions over the permanent deal.

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