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  • House Moves To Lift Oil Export Ban

    October 9, 2015 5:55 PM

    The House of Representatives passed a bill on October 9, 2015, to lift the forty-year-old ban on crude oil exports by a vote of 261 to 159. Twenty-six Democrats joined 235 Republicans in voting "yes" on H.R. 702, which was sponsored by Representative Joe Barton (R-Tex.). Six Republicans and 153 Democrats voted "no". 

    An obscure provision to raise authorized funding to subsidize U.S.-flagged merchant ships that can be commandeered for military purposes was added to H.R. 702 by Republican leadership in order to increase Democratic support. That caused at least two conservative groups, Heritage Action and Freedom Works, to withdraw their support for the bill. 

    Although the bill or a similar bill has a good chance to pass the Senate, the White House earlier in the week issued an official veto threat. The statement said: “Legislation to remove crude export restrictions is not needed at this time. Rather, Congress should be focusing its efforts on supporting our transition to a low carbon economy. It could do this through a variety of measures, including ending the billions of dollars a year in federal subsidies provided to oil companies and instead investing in [subsidies for] wind, solar, energy efficiency, and other clean technologies to meet America’s energy needs.”

    As Representative Ed Whitfield (R-Ky.), chairman of the energy subcommittee of the Energy and Commerce Committee, drily noted, President Obama did not make this argument when he lifted the sanctions on oil exports from Iran. The United States is now the only oil-producing country that bans crude oil exports.   

  • What Will a Chaffetz Speakership Mean for Internet Freedom? Part 2

    October 8, 2015 12:23 PM

    Utah Republican Congressman Jason Chaffetz recently threw his hat in the ring in a bid to replace Speaker John Boehner, after House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation made the race far more open. As my colleague Jessica Melugin notes, Chaffetz considers himself one of the more tech-savvy members of Congress and a strong defender of the Tenth Amendment.

    Yet, Chaffetz has twice introduced the Restoration of America’ Wire Act (RAWA, H.R. 707), which would allow the federal government to overturn state laws that govern a wholly intrastate activity. Internet gambling has been around since the day the Internet made it into American homes. And Republican lawmakers have been trying to ban it—without much luck. So much for state sovereignty.

    There is no federal law directly governing Internet gambling, so the task has been left to the Department of Justice to interpret existing federal gaming laws. During the Clinton administration, DOJ defined online sports betting as unlawful. Then during George W. Bush’s administration, DOJ determined that all online gambling was illegal under U.S. law—an interpretation that held until 2011 when, pressed by state lotteries, the Obama DOJ returned to the previously held understanding: As long as the gambling is intrastate and not related sports betting, it is not illegal under federal law.

    This opened the door for states to legalize intrastate online gambling. Three states—New Jersey, Delaware, and Nevada—have done so. In addition, more than a dozen states have some form of lottery games available online.

    Unsurprisingly, casino magnate and GOP mega-donor Sheldon Adelson has poured millions of dollars into promoting legislation meant to crush the burgeoning online competition to his business. What is surprising is who in Congress is now pushing his federalism-trampling bill.

  • What Will a Chaffetz Speakership Mean for Internet Freedom?

    October 8, 2015 11:33 AM

    With House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation, the race to replace outgoing Speaker John Boehner (R-Ohio) appears much more open. Days later, Utah Republican Jason Chaffetz seized the opportunity to announce his own bid for the Speaker’s gavel. The second-term congressman considers himself one of the more tech-savvy members of Congress, but how might a Chaffetz Speakership affect Internet freedom?

  • Trans-Pacific Partnership Agreement Covers a Lot of Ground

    October 7, 2015 1:32 PM

    Trade ministers of 12 Asia-Pacific countries announced October 5, 2015, that they had completed negotiations on the Trans-Pacific Partnership Agreement (TPP). The TPP links together the U.S., Canada, Mexico, Australia, New Zealand, Japan, Chile, Peru, Malaysia, Singapore, Vietnam, and Brunei in a broad trade agreement among countries that represent about 40 percent of the world’s GDP. The trade pact includes 30 chapters dealing with traditional trade issues such as market access and tariffs, while significantly expanding the purview of trade agreements with chapters focusing on such issues as labor, the environment, intellectual property, electronic commerce, and others.

    As summarized on the U.S. Trade Representative’s website and elsewhere, the agreement does provide some definite positives: It eliminates or reduces tariffs on a broad range of industrial and agricultural goods; it takes steps to open up the Canadian and Japanese dairy markets to more imports; it allows more sugar to be imported into the U.S. to help sweetener users meet demands stifled by the U.S. sugar program; it phases out over a very long period U.S. tariffs on Japanese autos and makes inroads into Japan’s non-tariff restrictions on U.S. auto imports; it addresses other non-tariff trade barriers by affirming that restrictions on imports in the name of safety or environmental harm have to be based on science; it streamlines customs procedures for more timely deliveries.

    What’s unique about TPP, among many issues, is the fact that labor and environment disputes among the parties are subject to the same dispute settlement procedures as commercial disputes. Subjecting commitments in the Labor and Environment chapters to dispute settlement—the same enforceability mechanism available for other chapters of the TPP Agreement—including the availability of trade sanctions. Subjecting commitments in the Labor and Environment chapters to dispute settlement—the same enforceability mechanism available for other chapters of the TPP Agreement—including the availability of trade sanctions.Subjecting commitments in the Labor and Environment chapters to dispute settlement—the same enforceability mechanism available for other chapters of the TPP Agreement—including the availability of trade sanctions.Thus, these non-trade issues are raised to the level of traditional trade issues, which marks a new incursion into using trade as a vehicle for special interests.

  • The Death of RAWA: A Performance for an Audience of One

    October 7, 2015 1:29 PM

    RAWA (H.R. 707) is dying the slow death of bills that aren’t sexy enough to draw attention away from much sexier issues. With the House speakership up for grabs, a looming budget crisis (again), and presidential primaries heating up, folks on the Hill seem to care little about a long-shot proposal to ban Internet gambling. Perhaps this is why an event to discuss the measure—one which featured two former members of Congress and three respected political strategists—attracted just one attendee. That is, there was only one person in attendance 20 minutes into the hour-long event, after three other people (myself included), were asked to leave.

    The “Policy Forum” was hosted by The Keelen Group, one of the many lobbying firms hired by Sheldon Adelson to fight the legalization of Internet gambling. Slated to speak at the event was former Congressman Connie Mack, Capitol Counsel lobbyist Aaron Cohen, The Keelen Group’s president and founder Matt Keelen, and Darryl Nirenberg of Steptoe & Johnson, all of whom are registered to lobby for Adelson’s Las Vegas Sands Corp. Also listed as a speaker was former U.S. House Republican Conference Chairman J.C. Watts, who was hired by the Adelson-funded Coalition to Stop Internet Gambling in July.

    I heard about the event the morning of and I fully expected to be unwelcome, since I’ve been something of a thorn in their collective side for several years. However, after sending an email to the listed RSVP contact (from my CEI account), asking if I could attend, I was surprised to receive somewhat of an enthusiastic reply from a Keelen Group junior lobbyist saying that they’d “love” to have me. Pretty decent of them, I thought, to allow “the enemy” to hear out their arguments.

  • Agency Overload: Meet the Federal Bureaucracy One-Page Word Cloud

    October 6, 2015 4:04 PM

    There exist various counts of agencies in the federal bureaucracy, but no particular tally is regarded authoritative.

    The “Agency List” page maintained at probably owns the biggest claim to inclusiveness. Its count? A big 438 federal agencies as of now.  

    This is interesting for many reasons, one of which is that the tally of rules and regulations in the pipeline that I like to use each year in Ten Thousand Commandments in my survey of the Unified Agenda of regulations tops out at around 60.

    One of the things coming into more focus in recent months and years, as the current presidential administration’s “pen and phone” rose into prominence, is that there is more to agency and executive branch actions than just the standard “rule.”

  • Drone Policy Update: FAA Proposes $1.9m Fine, 3 More Bills Vetoed in California, and More

    October 6, 2015 2:01 PM

    FAA PROPOSES RECORD FINE FOR UNAUTHORIZED UAS OPERATIONS: On October 6, the Federal Aviation Administration (FAA) announced it was proposing a $1.9 million civil penalty against SkyPan International, a Chicago-based aerial photography company. FAA alleges that SkyPan conducted 65 unauthorized commercial UAS flights over Chicago and New York City between 2012 and 2014.

    Of these, 43 are alleged to have taken place in New York’s Class B airspace. Class B airspace is reserved for the areas around high-traffic airports, and is subject to the most onerous rules among all airspace classes. Basically, flying in Class B airspace without direct authorization from air traffic control is a big no-no.

    The SkyPan case is by far the largest civil penalty proposed by FAA for unauthorized commercial UAS flights, as has been reported. It is also the only civil penalty proposed so far for unauthorized commercial UAS operations. FAA previously proposed a modest $10,000 penalty for reckless operation in the famous Pirker case. FAA eventually settled with Pirker earlier this year for $1,100. Each violation can result in a civil penalty of up to $25,000 under 49 U.S.C. § 46301, but 65 times $25,000 does not add up to $1.9 million.

    FAA also notes that in all 65 cases, SkyPan operated without an airworthiness certificate or Certificate of Waiver or Authorization, so perhaps this explains the discrepancy. Further, as Brendan Shulman (who represented Pirker) has noted, FAA usually can only administratively assess civil penalties up to $50,000, with an enforcement action seeking anything greater needing to be filed in a federal district court (49 U.S.C. § 46301(d)(4)). It will be interesting to read the enforcement letter.

    3 MORE CALIFORNIA UAS BILLS VETOED: On October 3, California Gov. Jerry Brown vetoed three UAS bills, all from Sen. Ted Gaines. SB 168 would have explicitly outlawed UAS interfering with firefighting operations (scare story citation). SB 170 would have explicitly outlawed UAS flying over prisons and jails (scare story citation). SB 271 would have criminalized flying over public schools and taking pictures.

    These bills were all poor solutions in search of problems. But what makes Gov. Brown’s vetoes even stronger is his explanation, which should warm the hearts of opponents of overcriminalization and mass incarceration.

    Here is his full veto statement: “Each of these bills creates a new crime—usually by finding a novel way to characterize and criminalize conduct that is already proscribed. This multiplication and particularization of criminal behavior creates complexity without commensurate benefit. Over the last several decades, California's criminal code has grown to more than 5,000 separate provisions, covering almost every conceivable form of human misbehavior. During the same period, our jail and prison populations have exploded. Before we keep going down this road, I think we should pause and reflect on how our system of criminal justice could be made more human, more just and more cost-effective.”

    Gov. Brown has emerged as a leader on drone policy, rejecting the baseless fearmongering common among some legislators and members of the public. Earlier, Gov. Brown vetoed a deeply flawed bill that would have greatly restricted legitimate and safe UAS operations. Other governors would be wise to follow his lead.

  • Reasons for Global Warming Skepticism

    October 6, 2015 12:01 PM

    Democrats have developed a cottage industry in ridiculing and condemning Republicans as Luddites. How can any “reasonable” person deny that increased greenhouse gas concentrations in the atmosphere pose a global threat? Certainly dramatic shifts in average global temperatures will have dramatic consequences within a century for many nations?

    But, of course, few skeptics base their arguments on science alone. Critics oppose policies that would restrict current fossil fuel use on a global basis, noting the positive link between energy use and growth and the drastic consequences restricting supplies would pose, especially to already energy-starved regions of the world. Critics suggest a risk/risk approach to the climate change issue: consider the consequences of restricting fossil fuels today versus the consequences of continuing current energy use (with its attendant growth and innovation gains), while relying on those wealth and knowledge gains to make possible adaptations, if needed, at lower costs and pain.

    I outlined that approach long ago (see “The Role of Opportunity Costs in the Global Warming Debate” from the 1997 book Costs of Kyoto). Rational analysis always faces those three options: act now to minimize the threat, act now to reduce the impacts of the threat, and delay while knowledge and wealth increase. Note that most of us delay employment while we acquire greater life skills—do Democrats critique that choice for young people?

    Republicans, noting how past “crises” have been botched by a rush to act, rather than thinking, view the putative risks of climate change as but one of the many risks. The uncertainties of science, economics, and politics—all relevant if a rational, effective policy is to exist—should suggest to critics (some of them running for president), that rather than damaging our economy, as is happening in Germany and other European nations, we should aggressively seek to remove the regulatory and tax distortions that are slowing entrepreneurial growth.

  • No, Politicians Shouldn't Outlaw Driving to Usher in Self-Driving Cars

    October 5, 2015 2:16 PM

    Over at Fusion, Kevin Roose has what is perhaps the worst article on automated vehicles (AVs) I’ve ever seen. In it, he calls for a near-term phase-in of a blanket national driving ban—specifically, beginning it in 2017 and completing it in 2020. That’s quite an ambitious “phase-in,” given that the average age within the U.S. car and light-truck fleet is more than 11 years.

    This call to action isn’t based on facts about where the technology is today or what we can reasonably expect it to offer consumers over the next decade (or even that pesky thing called “the law”); rather, it assumes that fully automated, self-driving highway vehicles are essentially already here while providing no evidence that they’re near the deployment stage. That’s because they’re not.

    To be clear, automation is already here. But automation is a spectrum, with technologies such as adaptive cruise control on one end and autonomous taxis on the other. Here’s how the National Highway Traffic Safety Administration currently defines the various levels of automation:

    And here’s how SAE defines them:

    Note that these levels are not without criticism, but they’ll be useful in keeping our definitions straight. In his piece, Roose is referring solely to NHTSA Level 4 and SAE Level 5 vehicles. This is well beyond the NHTSA and SAE Level 1 vehicles you can purchase right now with features such as adaptive cruise control. So, when do people who spend their careers working on this technology and related issues believe that NHTSA Level 4/SAE Level 5 vehicles will be available to consumers?

  • Warren Bullies Not Just Litan But Consumers

    October 5, 2015 11:31 AM

    Elizabeth Warren “drew blood,” writes Washington Post reporter Tom Hamburger. “Elizabeth Warren Claims Another Scalp,” reads the headline of an excellent piece by John Fund at National Review Online.

    The “blood” and “scalp” are those of Robert Litan, distinguished center-left economist and former high-level official of the Clinton administration Justice Department and Office of Management and Budget, who until recently was non-resident senior fellow at the liberal Brookings Institution. Litan, a friend of mine with whom I have engaged in conversations and civil disagreements, committed the “sin” in Warren’s eyes of going against the gospel of never-ending regulation. He and coauthor Hal Singer, an economist and senior fellow at the Progressive Policy Institute, authored a report that questions whether the costs exceed the benefits of the Department of Labor’s proposed “fiduciary rule” for IRAs, a regulation that I and others have called “Obamacare for Your IRA.”

    Even though Litan disclosed on the front page of the paper and prominently in his testimony before Congress that the study was funded by the Capital Group, a provider of investment management services, Warren complained to Brookings that Litan wasn’t specific enough in his disclosures. Never mind that that, as Fund points out, “it was Senate candidate Elizabeth Warren who, in 2012, played hide-and-seek with reporters for months when they asked for the names of her corporate legal clients.” Brookings, home to many former Democratic officeholders, caved and, according to press accounts, sought Litan’s resignation and received it.

    Yet it’s not just Litan’s scalp that Warren and her allies are really going for. They want the scalps of the vast majority of American consumers and investors, because they’re afraid of letting Americans use the brains under their scalps to make financial decisions. Though much of the coverage of DOL’s rule has characterized it as more mandated disclosure, in fact it is Litan who makes the case for better disclosure to improve options for consumers. Warren and the DOL bureaucrats, by contrast, argue that disclosure has reached its limits due to what they regard as Americans’ inherent intellectual limitations.

    As Warren wrote in 2008 when she was a professor at Harvard Law School, “cognitive limitations of consumers … put consumers’ economic security at risk.” Warren and her co-author Oren Bar-Gill penned some other choice passages about consumers and their “cognitive limitations”—as apparently opposed to the lack of those limitations by Warren, Bar-Gill, and the bureaucrats they have anointed—in their 2008 University of Pennsylvania Law Review article “Making Credit Safer.” Warren and Bar-Gill proclaimed that not only are “many consumers [] uninformed and irrational,” they are also uneducable. The authors refer frequently to the “limits of learning” and “why getting smarter collectively does not work.”

    As described by journalist Michael Patrick Leahy, Warren and Bar-Gill “argued that American consumers are, in essence, too simple-minded to understand credit and therefore must be protected by the federal government.”


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