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InsiderOnline Blog: December 2007

Still Omnibusting!

Those still tracking earmark action—including a possible Executive Order on earmarks by the President and new pork finds in the Omnibus—should continue to monitor for updates!

Posted on 12/31/07 06:57 AM by Alex Adrianson

Taking a Break

The Insider will be out for the next week or so. See you next year. Merry Christmas, Happy Hanakah, and Happy Holidays to everyone.

Posted on 12/20/07 01:33 PM by Alex Adrianson

At Heritage

Surrender is not an option, says John Bolton. … What’s at stake in Taiwan’s bid for U.N. membership? … Ana Montes was a Cuban master spy who sent Fidel Castro some of America’s most closely guarded secrets and influenced American perceptions of Cuba.

Posted on 12/20/07 01:25 PM by Alex Adrianson

A World Wide Web of Liberty

Our friends at the Cato Institute are continuing to reach beyond national boundaries with innovative products. They’ve just launched six new Web sites each aimed at communicating the message of liberty to a particular national group. What’s neat about the sites is that each one has its own team that produces the content just for that site—i.e., they’re not just translations of the English-language content on Cato’s main site. Check them out:

Cato already had three sites targeted at particular national audiences:

Posted on 12/20/07 01:00 PM by Alex Adrianson

Looking Ahead: Morse on Why Socialism Is Bad for the Family

On January 3, the Acton Institute will host what looks like an interesting lecture from Jennifer Roback Morse on Freedom, the Family and the Market: A Humane Response to the Socialist Attack on the Family. According to the teaser:

The socialist ideal of equality has played an independent role in the breakdown of the family. Socialism has attacked the family directly, and has adopted policies that have led to demographic collapse. Christianity and capitalism offer more appealing solutions to the problems socialism claims to solve.

Posted on 12/20/07 11:49 AM by Alex Adrianson

Bye, Bye Transparency

More backroom dealing, as reported by the RSC Blog:

As you may have heard, the massive 3500 plus page spending bill last night contained over 9000 earmarks (spread over 692 pages). What you may not have heard is that over 300 of these earmarks were “air-dropped” into the bill, which means that they were secretly inserted in back room negotiations between House and Senate appropriators. This means that these specific earmarks were not passed by either the House or Senate during previous consideration of spending bills, were not subject to a point of order, amendment or debate on the floor of either body questioning their merit.

Posted on 12/18/07 03:39 PM by Alex Adrianson

Too Many Promises?


The government is promising $45 trillion more than it can deliver on Social Security, Medicare and other benefit programs.

That is the gap between the promises the government has made in benefits and the projected revenue stream for these programs over the next 75 years, the Bush administration estimated Monday.

The $45.1 trillion shortfall has increased by nearly $1 trillion in just one year, according to the administration’s “Financial Report of the United States Government” for 2006. And, it’s up 67.8 percent in just the past four years. In 2003, the shortfall between promised benefits and revenue sources over a 75-year period was put at $26.9 trillion.

It would be a good idea for somebody to come up with a plan to fix this problem. In 2004, Heritage’s David John wrote about how incorporating Personal Retirement Accounts into Social Security could help avoid both drastic tax increases and significant benefit cuts. Maybe something like that could work.

Posted on 12/18/07 03:28 PM by Alex Adrianson


Starting in February, look for Flunked, a feature length documentary from Evergreen Freedom Foundation on education in America. As the title suggests, the film reviews the depressing state of our educational system, but it offers hope, too. According to our friends at EFF, the film will highlight some of the truly exceptional schools and explain how they are achieving at such a high level. Flunked is narrated by Joe Montagne. Here is a trailer:

Hat tip: National Taxpayers Union.

Posted on 12/18/07 03:09 PM by Alex Adrianson

Riedl: House Spending Bill Fails Test of Fiscal Restraint

Brian Riedl, the source of much of the information in the previous post on the Omnibus, lays out five benchmarks for an omnibus spending bill:

  1. Cap discretionary spending at the President’s proposed $932 billion level.
  2. Refrain from abusing the “emergency” loophole and other budget gimmicks.
  3. Keep pledge to halve earmarks.
  4. Exclude unrelated policy riders.
  5. Give Congress time to read the omnibus bill.

The bill passed by the House last night, says Riedl, failed all but the fourth benchmark. What will the Senate do?

Posted on 12/18/07 02:15 PM by Alex Adrianson

Fiscal Conservatives Very Concerned About Omnibus Spending Bill

The Omnibus spending bill passed the House last night, and now moves to the Senate. Quite a few groups have expressed concerns about the amount of pork-barrel spending in the bill, as well as the use of budget gimmicks to hide bill’s true cost. Groups weighing in include Americans for Prosperity, Americans for Tax Reform, Citizens Against Government Waste, the Club for Growth, FreedomWorks, National Taxpayers Union, and Taxpayers for Common Sense.

Posted on 12/18/07 02:05 PM by Alex Adrianson

Budget Fakery Hides Real Spending

The Democrats latest spending proposals for the federal government exceed President Bush’s proposed spending levels by approximately $19.6 billion. The Democrats proposed spending was unveiled today in a massive omnibus appropriations bill that combines the 11 appropriations bills that have not yet been passed for the fiscal year that started October 1. At first glance, the bill appears to spend $474 billion, which, when combined with the $459.3 billion in the already passed Defense spending bill, meets Bush’s overall fiscal 2008 request of $933 billion. The early reporting on the bill was that the Democrats had caved to the President’s veto threats over the level of discretionary spending.

However, the reported totals do not include the following items:

  • $7.5 billion in emergency funding for border security, foreign aid, drought aid, and the 2008 conventions;
  • $6.5 billion in emergency funding in the defense appropriations bill;
  • $3.7 billion in discretionary spending for veterans health; and
  • $2 billion in advance appropriations—money that will be spent this fiscal year, but simply not counted as spending in any fiscal year.

All that adds up to $19.6 billion above what the President requested when he said he would veto appropriations bills that exceed his requests.

Also buried in the massive 3,417 page bill are 9,170 earmarks. Just today, The Heritage Foundation launched Omnibusting, a blog devoted to uncovering all the earmarks, budget chicanery, and extraneous policy provisions in the bill. The site also includes a searchable text version of the bill. Check it out, and encourage your Member of Congress to read it, too—in case he doesn’t have time to read 3,417 pages.

Posted on 12/17/07 06:20 PM by Alex Adrianson

Greenhouse Gases Are So Last Millennium

National Review notes some interesting data:

While the climate warriors heap scorn on the U.S. for its supposed “lack of leadership,” no one is taking note of the fact that the U.S. is probably the only industrialized nation whose greenhouse-gas emissions went down in 2006. (Figures for Europe are not available yet.) The Department of Energy reports that U.S. emissions declined 1.5 percent. This is significant because it has never before happened in a non-recessionary year. That it happened now is a sign of the increasing energy efficiency and superior innovation of the U.S. economy. In fact, the U.S. has had the best GHG-emissions record in the industrialized world for most of the last decade.

Posted on 12/17/07 02:35 PM by Alex Adrianson

Today’s Howler: Only Government Has Good Ideas on the Law

Two U.S. Senators are worried that Supreme Court Justices and sitting federal judges are receiving the wrong ideas from legal seminars. The right kind of ideas, according to Senators Russ Feingold (D-Wis.) and Jon Kyl (R-Ariz.), can be found only in government-run seminars. John Fund reports in today’s Wall Street Journal that the two Senators have sponsored a bill that would “flatly ban federal judges from attending anything other than a government-sponsored program.”

Fund continues:

It appears to be a clever way for liberals to rewrite the rules so they can hobble distinguished legal programs for federal judges offered by Virginia’s George Mason University and the Foundation for Research on Economics and the Environment, which partners with Montana State University in putting on its programs.

The animus against such programs is that they have become too successful at injecting sound science and economic principles into legal thinking. Instead of coming up with better arguments, liberals are trying to shut down the debate.

Posted on 12/17/07 12:45 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: An energy bill should not make gas more expensive.

At Heritage: Words have power.Just war theory can provide guidance for the United States in Iraq. … Having Communists in your government is not a good thing. …South Korea is on the cusp of a new future, but the form it will take remains uncertain.

Posted on 12/14/07 04:01 PM by Alex Adrianson

Happy Bill of Rights Day

Tomorrow is the 216th anniversary of the formal ratification of the first 10 amendments to the Constitution, also known as the Bill of Rights. Over the years, December 15 has acquired unofficial recognition as Bill of Rights Day. As Larry Reed of the Mackinac Center points out, “a free people don’t have to wait for Congress to declare a holiday to celebrate one.” So, on Bill of Rights Day, you might ponder: Why do we have a Bill of Rights and what is it good for?

Joe Postell has new paper for the Heritage Foundation that provides a good short history of how the Bill of Rights came to be. Postell tells the story of how the Founders themselves struggled with the question of whether we really needed a bill of rights.

The Founders feared that we might infer that they created a government with unlimited power and that the specific provisions in the Bill of Rights denote particular reservations of power from an otherwise unlimited government.

Postell points out that inclusion of Amendments IX and X played a key role in convincing James Madison and others that a Bill of Rights would not undermine the logic of the Constitution.

Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Still, says Postell, “Neglect of these amendments by the public as well as by the courts has been so conspicuous as to illustrate the force of the Federalists’ original objections to a bill of rights.”

James Madison believed that putting specific individual liberties in the Constitution would help shape a general predisposition for liberty. He said:

The political truths declared in that solemn manner acquire by degrees the character of fundamental maxims of free Government, and as they become incorporated with the national sentiment, counteract the impulses of interest and passion.

In that vein, it is all the more fitting to take a moment tomorrow and reflect on the liberties granted by the Bill of Rights.

You might also check out the special Web page that the Bill of Rights Institute has set up for just for Bill of Rights Day. It contains lots of great resources for teachers.

Posted on 12/14/07 03:51 PM by Alex Adrianson

Follow the Money

Today, the Office of Management and Budget gave taxpayers a new tool for tracking how the federal government spends their money. OMB unveiled, a searchable Web site of federal government spending. The site’s data on federal expenditures are sortable by contractor, state, and congressional district.

“We hope the Transparency Act is a brushfire that takes off across the country,” said Robert Shea, Associate Director of the Office of Management and Budget.

Today’s unveiling is the culmination of an effort begun last year by Senators Tom Coburn (R-Okla.) and Barack Obama (D-Ill.), who formed an unlikely coalition to write and pass the Federal Funding Accountability and Transparency Act of 2006. Their hope is that it will make our government more accountable to taxpayers by allowing them to follow the money.

The Washington Post covered today’s event, noting that the point of the legislation is:

… to make both the executive branch and Congress accountable for their spending decisions by allowing regular taxpayers to follow the money. The legislation was the realization of a dream long held by a coalition of libertarians and liberals, fiscal conservatives and social-justice types, all of whom believe that greater budget transparency is the ideal way to achieve that accountability.

OMB worked on the project with one of its occasionally harsh critics, the group OMB Watch, which, a year earlier, released its own searchable Web site, OMB Watch had won a competitive bidding process to provide the software and expertise to get online ahead of its deadline.

Increased spending transparency via online databases is happening at the state level as well. The Missouri Accountability Portal is one recent example. For information on other state transparency efforts, see American’s for Tax Reform’s excellent comprehensive survey.

—by Mark Kelly

Posted on 12/13/07 03:33 PM by Alex Adrianson

Congress Plans Increase in the Price of Gas

The price of a gallon of gas will rise 22 cents on average by next year if the energy bill currently being considered by Congress becomes law, according to an analysis by Bill Beach and Shanea Watkins of The Heritage Foundation.

The bill (H.R. 6) increases fuel-efficiency standards, which, by themselves, might reduce the demand for gas and lower the price (at the cost of less variety in automobile features). But the bill also raises the requirements for biofuel content, i.e., ethanol or cellulosic alcohol. Those components are more expensive to produce and that will make gas more expensive. Also likely to add to the price at the pump are a variety of tax increases on oil companies.

Beach and Watkins estimate that the price reduction from higher fuel-efficiency standards would offset only about one-fourth of the increased price arising from the biofuel requirements.

Posted on 12/12/07 03:53 PM by Alex Adrianson

What Would Adam Smith Say?

Profs. Jody Lipford and Jerry Slice ask an interesting question: What would Adam Smith say about the size of the U.S. government today? In his classic work The Wealth of Nations, Smith identified the three functions that he believed were appropriate for government to undertake: national defense, law and order, and the provision of some public goods like transportation and education. Lipford and Slice calculate:

In 1962, expenditures that Smith advocated accounted for 54.4 percent of the U.S. budget. Yet, by 2005, this percentage had fallen to 27.6 percent, with the Congressional Budget Office projecting this percentage to fall to 22.0 percent by 2011.

Posted on 12/12/07 10:20 AM by Alex Adrianson

Protecting Tender Ears: Yet Again, the Private Sector Does Something Better Than Government

New technologies could ease constitutional tensions over free speech, but first Congress would have to abandon the regulatory framework for radio that it created 80 years ago. By law, radio broadcasters must offer their content free without exclusion. That means that radio has to play by the rules of a public space: You can’t prance around nude in a public park, and you can’t use obscenities on the public airwaves.

Satellite radio, by contrast, is a subscription service. You can’t get it if you don’t want it; nobody is forced to receive content they might find objectionable. Hence, satellite radio has the full protection of the First Amendment and doesn’t have to worry about the threat of fines from the Federal Communications Commission for indecent broadcasting.

Does that mean satellite radio is a cesspool of unfiltered, un-family-friendly raunch? Satellite does carry Howard Stern. But XM and Sirius also offer rating systems that give listeners information about content that might be objectionable to them. Also, both XM and Sirius allow parents to block particular channels. Neither of those features is available on terrestrial radio. The FCC fines terrestrial radio stations that it judges to have broadcast indecent material. But that only deters such broadcasting; indecent broadcasting still happens.

According to Cord Blomquist and Eli Lehrer, authors of a new survey of entertainment rating systems, the technology that allows satellite services to exclude non-subscribers could be adapted to terrestrial radio. Freed from the constraint of needing to avoid offending anybody, broadcasters could develop programming that better serves particular tastes and sensibilities. But why would anyone bother as long as Congress makes it illegal to exclude listeners?

For more on the value of non-government rating systems see Politically Determined Entertainment Ratings and How to Avoid Them by Cord Blomquist and Eli Lehrer, Competitive Enterprise Institute, December 11, 2007.

Posted on 12/11/07 06:51 PM by Alex Adrianson

Of the Government, by the Government, for the Government

In Russia, the Putin system exercises subtle but effective instruments of coercion over civil society, according to Oleg Shvartsman in an interview published by the newspaper Kommersant. As summarized by David Satter in the Weekly Standard:

Shvartsman described plans to develop a state corporation called “Social Investments” that would realize the concept of “velvet re-privatization” on behalf of Rosoboronexport, Russia’s state arms exporter. He described this as a market form of absorbing strategic assets in regions that are dependent on state subsidies. Instead of seizing enterprises, it involved using administrative instruments, including accusations of nonpayment of taxes, to drive down the market price.

Shvartsman also spoke about a political organization called the Union of Social Justice of Russia where he is in charge of finances. He said the organization encourages businesses to fulfill their “social responsibility” by donating money for the needs of the “power ministries,” including, besides the FSB and SVR, the Defense Ministry, the Emergency Situations Ministry, and the Interior Ministry. Originally, the method used was straightforward extortion. More recently, however, the organization began offering partnerships to businesses. “We started to go to them with various proposals,” Shvartsman said, “and these resulted in joint activities. For example, the Russian Oil Group is the result of alliances with [the oil companies] Rosneft, TNK, and Lukoil. … In other words, these companies gave the Russian Oil Group part of their markets.”

He also spoke about plans to create a national debt-collecting agency using veterans of the Interior Ministry capable of working with minority shareholders to force out owners “who are not loyal to the government.” 

Remember, this is a government that was, fraud notwithstanding, re-elected by popular vote. Unfortunately, sometimes voters want governments powerful enough to give them things—until they realize too late, anyway, what a bad bargain that is.

Posted on 12/11/07 06:50 PM by Alex Adrianson

The Coming Week – Monday, December 10, 2007

Monday: Hear Douglas Feith uncover the thinking—and interagency debates—that gave rise to America’s strategy in the war on terrorism. The American Enterprise Institute hosts the former undersecretary of defense and author of the forthcoming War and Decision.

Monday – Friday: Learn the fundamentals of health care policy at the Cato Institute’s Health Care University, a series of five Capitol Hill briefings.

Tuesday: Find out why many Democrats support charter schools, too. The Pioneer Institute hosts a panel examining how charter schools are not the partisan issue people think they are.

Wednesday: Catch the New York City premiere of Call of the Entrepreneur.

Wednesday: Learn how Sen. Joseph McCarthy was not the scourge of civil liberties that conventional histories make him out to be. The Heritage Foundation hosts journalist and historian M. Stanton Evans, author of Blacklisted by History: The Untold Story of Senator Joe McCarthy and His Fight Against America’s Enemies.

Thursday: Assess the impact of the early primaries by attending The American Enterprise Institute’s Election Watch, session 1.

Friday: Celebrate the power of words, as The Heritage Foundation reflects on 1,000 Heritage lectures.

Posted on 12/07/07 02:36 PM by Alex Adrianson

Heritage on Video

Heritage in Focus: The United States has become a harder target since 9/11. … Those who go to church tend to be more engaged in their communities.

At Heritage: Colombia deserves the support of U.S. policy. … Russia’s recent parliamentary elections were a critical moment for Russian democracy. … In his person and in his rule, Alfred the Great exemplified revelation, reason, rule of law, liberty and personal responsibility. … Recent developments call for an assessment of U.S. maritime security. … Islamic teachings are a source of Islamic radicalism. … The history of the postwar Right is a story of moderate Republicans battling right-wing Republicans for control of their party, and conservatives battling liberals for control of government. … Today’s technology allows nuclear waste to be recycled or disposed of safely.

Posted on 12/07/07 02:08 PM by Alex Adrianson

An Idea for Disentangling the Feds from State Responsibilities

How’s that accountability thing going with No Child Left Behind? Not so good, reports George Will:

NCLB requires states to identify, by criteria they devise, “persistently dangerous schools.” But what state wants that embarrassment? The Washington Post recently reported that last year, of America’s approximately 94,000 public schools, the “persistently dangerous” numbered 46. There were none among the 9,000 schools in amazingly tranquil California.

NCLB’s crucial provisions concern testing to measure yearly progress toward the goal of “universal proficiency” in math and reading by 2014. This goal is America's version of Soviet grain quotas, solemnly avowed but not seriously constraining. Most states retain the low standards they had before; some have defined proficiency down.

Will notes with approval a proposal by Rep. Scott Garrett (R-N.J.) to “allow states to opt out from under NCLB’s mandates and regulations and to give residents of those states tax credits equal to the portion of their taxes their state would have received back in federal funds for K-12 education.”

That would better align the incentives of state governments. Instead of worrying about the flow of dollars from Washington, D.C., state lawmakers would instead worry about making sure their own taxpayers are satisfied with how state resources are used.

Posted on 12/07/07 11:45 AM by Alex Adrianson

Denmark Shrugged

Denmark’s high marginal income tax rates are making it hard for companies there to recruit talented employees. A story in the International Herald Tribune highlights one particular worker who has fled to greener pastures:

As a self-employed software engineer, Thomas Sorensen broadcasts his qualifications to potential employers across Europe and the Middle East. But to the ones in his native Denmark, he is simply unavailable.

Settled in Frankfurt, where he handles computer security for a major Swiss corporation, Sorensen, 34, has no plans to return to the days of paying sky-high Danish taxes. Still, an unknowing headhunter does occasionally pass his name to Danish companies.

“When I get an e-mail from them, I either respond negatively but politely,” Sorensen said. “Or I don’t respond at all.”

Sorensen is one of many Danes who have left Denmark because of its 63 percent tax rate on high-income earners.

The Confederation of Danish Industries estimated in August that the Danish labor force had shrunk by about 19,000 people through the end of 2005, because Danes and others had moved elsewhere. Other studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses.

Posted on 12/07/07 11:09 AM by Alex Adrianson

Even Tax Codes Should Compete

Usually overlooked in the debate on globalization is the fact that it’s not just businesses and workers who are exposed to competition, but governments, too. The more citizens and businesses are able to vote with their feet and their pocketbooks, the more pressure governments face to abandon confiscatory tax rates. In the video below, produced by the Center for Freedom and Prosperity, Dan Mitchell of the Cato Institute explains how tax competition has for several decades been a liberalizing force in the world economy.

Opponents of tax competition argue that governments will be left with insufficient revenue to provide needed services for their citizens. They should ask themselves: If the services were worth the tax bill, why would taxpayers and businesses want to move to low-tax jurisdictions? Don’t citizens like services, too? Of course, the idea of treating taxpayers as if they were sovereign consumers who shop for efficiently provided government services doesn’t square with the real agenda of those opposed to tax competition. The real agenda is to preserve the ability of governments to redistribute wealth to favored constituencies.

Posted on 12/07/07 10:37 AM by Alex Adrianson

Keep the Golden Globe, I'll Take the Golden Umbrella

Yesterday, the Stockholm Network recognized some of best in the idea business at its first Golden Umbrella Think Tank Awards. Here are the winners:

Best Think Tank in New Market Economies: Free Minds Association in Azerbaijan.

Best Contribution to Free Market Thinking: Jose Pinera, former Secretary of Labour and Social Security in Chile.

Best New Think Tank: European Centre for International Political Economy in Brussels.

Think Tank of the Year: Institute for Market Economics in Bulgaria.

Personality of the Year: Professor Atila Yayla, political scientist and President of the Association for Liberal Thinking in Turkey.

The Internet Award: Institute of Economic and Social Studies in Slovakia.

Best Research: Istituto Bruno Leoni in Italy.

The Innovation Award: Taxpayers’ Alliance in London.

The Media Award: Institute for Market Economics in Bulgaria.

Posted on 12/06/07 05:43 PM by Alex Adrianson

Do As We Say, Not As We Do

Bloomberg reports:

Government officials and activists flying to Bali, Indonesia, for the United Nations meeting on climate change will cause as much pollution as 20,000 cars in a year.

The delegates each will produce an average 4.07 metric tons of carbon dioxide, or CO2, to reach the resort island 950 kilometers (600 miles) from Jakarta, according to estimates e- mailed to Bloomberg by the UN agency holding the conference.

Some of the 187 nations participating in the two-week forum promised to offset their so-called carbon footprint by planting trees or buying emission credits. The symbolic actions won't help stop global warming, some scientists say.

Symbolic actions, of course, are much better than hastily adopted policies that impose significant economic burdens on the world for little or no gain in environmental quality. 

Posted on 12/06/07 05:23 PM by Alex Adrianson

Freedom Won This Round, What’s Next?

The defeat of Hugo Chávez’s proposed constitutional reforms on December 2 was the culmination of a bad month for the Venezuelan (not quite so) strongman. Heritage’s James Roberts and Ray Walser recount how it went for him:

Chávez’s former comrade-in-arms and defense minister, retired General Raul Baduel, who saved Chávez from being overthrown in a 2002 coup attempt, turned on him and categorized the reform package as a “coup d’etat.” … In his now famous shut-down of the obnoxious and overbearing Chávez, who was indulging in a rant against former Spanish Prime Minister Jose Maria Aznar during the Ibero-American Summit in Santiago, Chile, Spanish King Juan Carlos said to Chávez what millions have only dreamed of saying: “Why don’t you just shut up?” The King’s put-down is selling as a cell phone ring tone all over the world. …

Sensing that the King had wounded Chávez politically, opponents seized the moment to pounce. President Alvaro Uribe of next-door Colombia, a staunchly pro-U.S. ally, kicked Chávez off a mediation panel that had been negotiating with the FARC, a Marxist Colombian narco-terrorist group, over the release of hostages. The preening and posturing Chávez had made much of his role as peacemaker while making little real progress and simultaneously seeking to rewrite the Colombian constitution and funding FARC efforts to overthrow democracy. …

Meanwhile, students in Venezuela, who oppose Chávez by nearly 10 to 1 because of his crackdown on press freedom, took to the streets by the thousands in Caracas and elsewhere. They soon encountered Chávez thugs drawn from the purportedly peaceful “Bolivarian Circles.” At least one person was killed, but the students did not back down. … Roman Catholic Church leaders in Venezuela and other human rights groups also stepped up their criticism. … Even Chávez’s ex-wife deserted him. Journalist Maria Isabel Rodrigues, who divorced Chávez in 2004, encouraged the opposition to vote. “It will be more difficult for fraud to take place if we all vote,” said Rodriguez. … She was right.

Still, Chávez has ambitions and plenty of power. Democracy in Venezuela is “hanging on by a thread,” say Roberts and Walser. They recommend that the United States help contain Chávism in the region by approving the Colombian Free Trade Agreement, and negotiating free trade agreements with Venezuela’s neighbors, Paraguay and Uruguay.

Posted on 12/06/07 05:15 PM by Alex Adrianson

Property Rights a Bulwark Against Tyranny

One reason why Venezuelans voted not to change their constitution to give Hugo Chavez virtually unlimited power: They didn’t want to give government the power to take their property. Even some of the poor who had previously supported Chavez felt that way. From the Wall Street Journal

Algimiro Polanco, a 56-year-old bus driver, told the Miami Herald, “I have always voted for Chávez, but he wants a dictatorship like Cuba. I don't want the government to take my small house. It's mine.”

Posted on 12/06/07 04:54 PM by Alex Adrianson

Worker Freedom Measured

Utah is the state that gives workers the most freedom from union influence and burdensome labor regulations, according the Alliance for Worker Freedom. The alliance today released the first in what it expects to be a series of annual publications, The Index of Worker Freedom. Utah received a grade of A in the index, which ranks states according to such factors as right-to-work laws, paycheck protection laws, union density, the absence of minimum wage legislation, the absence of prevailing wage laws, and the presence of defined contribution retirement plans. Four other states earned an A-: Colorado, Idaho, Mississippi, South Carolina. The worst six states, each receiving a grade of F, were Connecticut, Hawaii, Minnesota, New York, Pennsylvania, Rhode Island.

The more flexible a labor market is, the easier it is for businesses and entrepreneurs to start new ventures, incorporate new technology or processes into their operations, and compete in an evolving market. In other words, more worker freedom should help a state’s economy grow. Study author Brian Johnson notes that there is a strong correlation between the index results and state population growth. The top five states had an average population growth of 1.74 percent between 2005 and 2006 (and that group includes Mississippi, which grew by only 0.1 percent while still recovering from Hurricane Katrina). The national average population growth was 1 percent between 2005 and 2006. Meanwhile, the bottom six states in the index had an average population growth of just 0.26 percent over that period.

Posted on 12/06/07 04:06 PM by Alex Adrianson

Covertly Expanding the Welfare State

Is Congress trying to sneak an expansion of the welfare state past the goal posts? President Bush vetoed Congress’s first attempt to update the State Children’s Health Insurance Program (SCHIP)—now called simply the Children’s Health Insurance Program (CHIP)—because it would have transformed a program meant for the poor into another middle-class entitlement. Soon, the President will receive Congress’s latest effort (H.R. 3963). The bill purports to cap eligibility for the program at 300 percent of poverty level (an annual income of about $62,000 for a family of four). However, Heritage’s Nina Owcharenko reports that some members of Congress are very concerned that the eligibility limits may apply only to certain types of program designs, not to the program as a whole. Writes Owcharenko:

States can choose between three basic structures for SCHIP: an expanded Medicaid program; a separate SCHIP plan; or a combination approach. The vast majority of states have expanded Medicaid or chosen a hybrid approach. The current controversy is whether the eligibility cap in H.R. 3963 applies only to the separate SCHIP plans. If so, states with a Medicaid expansion could continue to expand SCHIP through Medicaid and receive the enhanced SCHIP matching rate.

Owcharenko also warns:

Even if the cap language were to apply to all SCHIP design approaches, H.R. 3963 does nothing to prevent or discourage a state from returning to an aggressive Medicaid strategy to increase government control over health care. Some analysts argue that there is little incentive for state officials to expand Medicaid because the federal matching rate is smaller that it is with SCHIP. However, the federal matching rate for Medicaid is still generous, ranging between 50 percent and 83 percent; by law, no state receives less than a 50 percent matching rate. Moreover, the matching rate in Medicaid is unlimited. This means that so long as a state can generate its share of the cost of the program, the federal government is obligated to match it.

Some other problems with the new bill:

The bill makes it easier for illegal immigrants to receive Medicaid benefits. Currently, those claiming eligibility for Medicaid as a U.S. citizen must document that they are indeed U.S. citizens. The new bill, says Robert Rector, requires only that applicants present

... a name and Social Security number that correspond to a valid identity on file with the Social Security Administration. … [T]he state agency would not be required to take any steps to determine if the applicant is actually the individual he purports to be, or to determine whether the individual is actually a U.S. citizen. Since many illegal immigrants routinely use "borrowed" Social Security numbers to obtain jobs, it seems likely that many would also use those numbers to fraudulently obtain Medicaid benefits.

The bill also hampers the ability of states to give participants in the program coverage choices through private insurance. The bill does allow states to use CHIP money to reimburse families for purchasing coverage through private insurance markets. That idea, called “premium assistance,” is a good one, but there are too many limitations. Owcharenko points out the following flaws: The bill makes premium assistance available only for employer-sponsored coverage; disallows premium assistance for consumer-directed plans, such as Health Savings Accounts; requires states to supplement coverage when private plans are not generous enough; and requires onerous monitoring requirements that will dissuade states from offering premium assistance.

Posted on 12/04/07 05:35 PM by Alex Adrianson

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