January 21, 2015 4:21 PM
The debate over the chemical Bisphenol A (BPA) has raged for years, with environmental activists continually hyping the risks associated with it. Used to make hard-clear plastics and resins that line food containers such as soda cans or canned fruits and veggies, humans have been exposed to trace levels of the chemical for decades without evidence of any ill effects. And a recent review of the science by the European Food Safety Authority (EFSA) confirms this reality. It concludes:
EFSA’s comprehensive re-evaluation of bisphenol A (BPA) exposure and toxicity concludes that BPA poses no health risk to consumers of any age group (including unborn children, infants and adolescents) at current exposure levels. Exposure from the diet or from a combination of sources (diet, dust, cosmetics and thermal paper) is considerably under the safe level (the “tolerable daily intake” or TDI).
That’s a pretty strong assurance of safety coming from a government agency that is usually extremely cautious.
January 21, 2015 3:04 PM
In his State of the Union Address, President Obama called for tax increases on the wealthy, such as by increasing the top tax rate on capital gains and dividends, and by imposing what is effectively double taxation on inheritances (by imposing both estate taxes and capital gains taxes on the very same asset). Obama also wants to tax the not-so-wealthy, such as taxing many college savings plans.
Double taxation would also increase due to the tax increases on dividends proposed by Obama, since companies pay income taxes on their earnings before paying them out to investors as dividends. The new tax rate on capital gains and dividends would be 13 percent higher than when Obama took office (the rate had previously increased due to new taxes included in the 2010 Obamacare law).
If the new tax increases go into effect, America will be going in the opposite direction from the rest of the world, as other countries have reduced capital gains taxes to encourage investment and create jobs. As Chris Edwards of the Cato Institute notes:
January 20, 2015 10:08 PM
Lawson Bader, president of the Competitive Enterprise Institute (CEI), offered the following response to the State of the Union address this evening:
“Whenever a president starts talking about economic inequality and more ways the government can help, keep one eye on your wallet and the other on your liberty. This especially rings true after President Obama laid out his policy agenda tonight, which continues to drive up costs, increase burdensome regulations, and weaken our economy. It’s clear the need for regulatory restraint and reform has never been greater, and Congress must stem the ever-increasing overreach of executive branch power. All of his plans for programs and benefits under the guise of a free price tag only place heavier costs on Americans. The President did teach us the new concept of ‘middle class economics,’ forgetting an older concept called ‘theft.’"
Read more from Lawson Bader on the State of the Union in Human Events: “Please, stop breaking windows.”
For information about the solutions CEI offers on energy, labor, finance, and other regulatory issues facing the nation, check out the preview to CEI’s forthcoming Agenda for the 114th Congress here.
CEI’s Wayne Crews on Regulation -- SOTU in 5 Words
CEI’s Ryan Radia on Cybersecurity -- On Cybersecurity, President Obama Offers Mixed Bag
January 20, 2015 8:51 PM
Standing high at the rostrum in the House of Representatives during his State of the Union speech, President Obama acts like he’s throwing free trinkets off a tall Mardi Gras parade float. The problem is that the shiny doubloons he throws are not free but rather surreptitiously billed to taxpayers. And so it is with the President’s proposal to mandate paid leave.
On January 14, 2015, on a blog post on the business networking site LinkedIn, Senior Obama adviser Valerie Jarrett unveiled the President’s “Healthy Families Act.” She said she strategically targeted LinkedIn as “the world's largest online audience of professionals” for the announcement, because, Jarrett claimed, “These are the policies that will attract the best new talent. They are the policies that will make the employees you hire more productive—and encourage them to stay longer.”
Jarrett announced that, “the President will sign a Presidential Memorandum that will ensure federal employees have access to at least 6 weeks of paid sick leave when a new child arrives…” The Guardian reports that this is part of a strategy “by the White House to kick-start legislative efforts…” President Obama is expected to challenge Congress to apply the same six weeks of paid sick leave to its own staff.
Financially, the biggest part of the President’s proposal is $2 billion of federal tax dollars to be appropriated to states for establishing paid leave mandates. The President is looking at a total of $1 million in existing funds for grants to states and municipalities to conduct feasibility studies for paid-leave mandates.
January 20, 2015 5:16 PM
Today, the Supreme Court lifted a cloud of uncertainty that had been hanging over consumers, community banks, and credit unions by refusing to take a case that threatened to make the stifling Dodd-Frank pseudo-financial reform legislation even more draconian than it already is.
The Court let stand a unanimous ruling from a three-judge D.C. Circuit Court of Appeals panel that overturned district Judge Richard Leon’s 2013 ruling that the Federal Reserve had not made the price controls stemming from Dodd-Frank’s Durbin Amendment were not stringent enough. Today’s decision, authored by Clinton-appointed Judge David Tatel, found that the Federal Reserve “reasonably construct[ed]” the law in considering costs in setting the price caps.
In the wake of cybersecurity attacks on credit and debit cards, this ruling may have come in the nick of time. In a show of incredible chutzpah, the trade associations for some of the nation’s largest retailers argued in federal court—even after the Target breach—that retailers should pay even less for fraud prevention and cleanup after fraud losses than they currently are under a federally imposed limit.
That would mean that innovation would continue to lag behind and even more of the costs of payment processing would be shifted to consumers—as they have since the passage of this amendment, which was inserted into the 2010 Dodd-Frank financial overhaul by Senate Majority Whip Dick Durbin (D-Ill.).
January 20, 2015 11:05 AM
Technology policy rarely earns more than a brief mention in the President’s annual State of the Union address to Congress. But tonight, when President Obama delivers his seventh address, he’ll lay out his plans for the Internet in greater detail than any President in recent memory. While the President’s tech agenda has its pros and cons, it generally envisions Washington doing more to oversee the Internet and technology markets. For the most part, this is the wrong prescription.
Obama is expected to focus on three tech policy issues: cybersecurity, broadband, and privacy. The President has delivered major speeches on each of these issues in recent days in locales ranging from the Federal Trade Commission down the street from the White House to Cedar Falls Utility in Iowa.
Cybersecurity is in the headlines in the wake of the cyberattack allegedly committed at the behest of the North Korean regime against Sony Pictures Entertainment. Unlike many roles the federal government now attempts to fill, protecting American companies from state-sponsored cyber terrorism is a legitimate governmental function. Therefore, to improve the state of cybersecurity, the President will call for greater coordination between the private sector and the government—including more information sharing about cyber threats between companies and federal agencies.
The approach Obama has outlined is no cybersecurity panacea, but it’s better than doing nothing, provided companies are held to enforceable promises made to their customers about how and when their information will be shared.
January 19, 2015 1:00 PM
It was another slow week with just 40 new final regulations and 37 proposed regulations, but new rules still cover everything from solid waste to washing machines.
On to the data:
- Last week, 40 new final regulations were published in the Federal Register.
- That’s the equivalent of a new regulation every four hours and 12 minutes.
- So far in 2015, 78 final regulations have been published in the Federal Register. At that pace, there will be a total of 1,773 new regulations this year, roughly half the usual total.
- Last week, 1,119 new pages were added to the Federal Register.
- Currently at 2,586 pages, the 2015 Federal Register is on pace for 58,773 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. One such rule has been published so far this year, none in the past week.
- The total estimated compliance cost of 2015’s economically significant regulations is $477 million for the current year.
- 8 final rules meeting the broader definition of “significant” have been published so far this year.
- So far in 2015, 13 new rules affect small businesses; 4 of them are classified as significant.
Highlights from selected final rules published last week:
January 15, 2015 2:13 PM
With the Greek parliamentary elections being only two weeks away, it seems that the opposition leftist party SYRIZA is set for a victory on January 25. The most recent polls show that Alexis Tsipras’s party continues to hold the lead with 2 to 4 percent, even though the difference with the New Democracy is shrinking.
SYRIZA has already proposed a controversial economic program that it plans to implement once it comes to power. The program, which was first introduced by Mr. Tsipras in 2012, mainly focuses on negotiating a write-down of the Greek government debt, and reversing austerity imposed by Antonis Samaras’s government as part of the Greece’s bailout agreement. According to Costas Lapavitsas, a London-based Greek economist and SYRIZA’s economic advisor, in a revealing interview with the BBC, “both of these things are very sensible—basically mild Keynesianism.”
The self-described “anti-austerity” party claims that government debt, which accounts for more than 300 billion euros, is not sustainable, even though its service cost is going to be just 4 percent in 2015, which is much less than what other European countries are paying. Moreover, based on NYU Prof. Nicholas Economides’ calculations, the average interest rate on 250 billion euros debt to the EU Troika is only 1.82 percent with exemptions, such as no interest payments on 60 percent of the debt for 25 years and no interest payments on 20 percent of the debt for 13 years.
The leftist party also argues that austerity measures forced by the Greek creditors, mainly Germany, suppress economic growth and deteriorate debt sustainability. Mr. Tsipras, as a “mild Keynesian,” is certain that the crisis is caused by insufficient consumer demand, and therefore greater social spending together with private debt restructuring would allow Greece to attract private investment and encourage fast economic recovery. The party promises to restore public spending to pre-2012, and in some cases even pre-2009 levels. The 11.5 billion euros worth of social spending programs would increase pensions and minimum wages, cover food stamp and state housing programs, subsidized electricity, transportation, and healthcare.
Additionally SYRIZA plans to reverse Greece’s privatization program, reinstate some of the fired public sector workers and cancel the special heating gas tax. What is interesting is that SYRIZA promises that the program can be implemented without running a fiscal deficit, arguing that after the write-down Greece would not have to sustain such large budget surpluses.
The program was met with a lot of criticism, especially from the Finance Ministry, which concluded that it is based on a poor understanding of economics. The increase in public spending and wages would lead to large external deficits, higher labor and production costs, and a huge loss of competitiveness. Thus, instead of attracting private investment SYRIZA’s policy would result in capital outflow.
Another important concern is the program’s funding gaps. The Finance Ministry report states that SYRIZA’s economic program is more costly than the party claims, and it would actually increase the primary budget deficit to 9 percent compared to the current 1.5 percent surplus. With debt negotiations taking place between Greece and the Troika, SYRIZA would face some serious financing problems. The European partners would refuse to lend on favorable conditions, and the recent surge in bond spreads shows that it would be difficult to rely on the markets.
January 15, 2015 11:54 AM
In recent days, a growing number of congressional Republicans have signaled a willingness to increase the federal excise tax rates on gasoline and diesel. As I noted earlier, there is no fiscal conservative case for raising the federal gas tax. Thankfully, the editorial board of The Wall Street Journal this morning decided to inject a much needed dose of fiscal conservatism into the debate, calling for an abolition of federal highway taxes and spending programs:
Some highways do need repair and modernization, and the U.S. does need more roads to relieve congestion and encourage trade and economic activity. The real crisis isn’t the amount of money but how it is spent.
The 47,714 miles of the interstate highway network would likely be less complete absent federal support, but the system was officially finished in 1992. It is less rational for drivers nationwide to send so many dollars to Washington for Congress to apportion among winners and losers as they did under Eisenhower. Today, the costs of transportation can be reasonably borne by the people who enjoy the benefits, which will generate more accountability and fewer political boondoggles.
Almost three-quarters of highway spending is already supplied by state and local governments, and if the federal role is reduced, they can decide either to increase their own gas taxes; fund roads some other way, such as tolls or public-private partnerships; or use tax dollars for other priorities like schools. States can build cheaper in any case, since the Davis-Bacon prevailing wage rules and Buy America procurement provisions that accompany federal funding don’t apply.
Democrats always want to raise the gas tax. When prices are high, that’s the best time to encourage drivers to buy an electric car or take the bus. When prices are low, they can skim some of the proceeds for other spending. The mystery is why Republicans would go along.
I'm not sure about that last line about Democrats. While some Democrats, along with senior congressional Republicans, have called for increasing federal highway user taxes, this position puts them to the left of the Obama White House, which has stuck to its guns and continues to oppose raising the highly unpopular gas tax. Among some bad policy recommendations, the Obama administration has actually endorsed a very sensible, fiscally conservative proposal that would lift the current federal prohibition on states tolling their own Interstate Highway System segments. This is something we at CEI have advocated for years and have again included it in our forthcoming Agenda for Congress.
January 14, 2015 9:29 AM
With the start of the 114th Congress comes a fresh opportunity to address the challenges created by a broken government. To kick off this new congressional session, the Competitive Enterprise Institute (CEI) recommends numerous reform proposals to strengthen the U.S. economy, increase transparency, and foster fair and open competition instead of favoring special interests.
CEI’s top policy proposals center on substantive regulatory reforms needed to improve America’s economic health. In 2014 alone, 3,541 new regulations hit the books, and the burden is constantly growing. If federal regulations were a country, their cost would amount to the world’s 10th largest economy.
In addition to reining in burdensome regulations, CEI recommends that Congress continue to conduct fundamental oversight to protect Americans from executive overreach. Over the last six years, federal agencies have sought to usurp power from the legislative branch. Congress has a responsibility to demand honesty and accountability from our leaders and defend the rule of law.