Freedom Line Blog

As the Senate debates proposed tax rules that would unfairly and discriminatorily target domestic oil and gas producers, the Center for Individual Freedom on behalf of its 300,000 supporters and activists across the United States today formally urged all Senators to vote “NO” on S. 940.   Addressing that counterproductive proposed legislation, Grant Aldonas (former Under Secretary of Commerce for International Trade) and Pamela Olson (former Assistant Treasury Secretary for Tax Policy) warned of its likely destructive consequences in a Washington Examiner opinion piece today.   Here is one particularly relevant excerpt from their commentary:

Rather than offering serious ideas about how to tackle entitlements, cut wasteful spending or reform the tax code, proponents of raising the oil companies’ taxes have seized on the notion that American energy producers benefit from billions of dollars in alleged tax subsidies.

[The] single most damaging thing the proposal does is mortgage our energy future to the state-owned energy giants that now dominate global energy markets. The U.S. economy runs on oil, but we produce only 40 percent of what we consume, meaning our economy and standard of living depend heavily on our access to foreign oil and gas resources.

Reid’s plan works just fine if you are comfortable having America’s energy future decided in Beijing, Moscow, or Tehran. Not so much if you think we should be deciding our own destiny.

Any proposal that would enhance the competitiveness of foreign government-owned oil giants at the U.S. companies’ expense and lead to greater volatility in oil markets and rising prices for U.S. consumers qualifies as a damaging unintended consequence.”  (Emphasis added.)

To read this excellent commentary in full, please click here.

CFIF also urges you to contact your Senators (contact information for your Senators available here) and urge them to vote “NO” on S. 940.

With all the media attention being lavished on governors Mitch Daniels (R-IN) and Scott Walker (R-WI), it’s easy to forget another Midwestern chief executive: Ohio’s John Kasich.

Human Events’ John Gizzi reports that the Ohio governor is bullish on winning a statewide initiative over whether public employees must increase their percentage of health care spending from 9 to 15 percent.  (Compared to the average 23 percent contribution in the private sector.)

Kasich is also preparing legislation with state Republican lawmakers to eventually eliminate Ohio’s income tax.  If these and other reforms are successful, Kasich might start getting the attention his herculean efforts deserve.

During the 1980 presidential campaign, Republican candidate George H. W. Bush decried Ronald Reagan’s supply-side tax cuts as “voodoo economics” because the policy promised to lower tax rates and generate more production, and thus more tax revenues.  Bush’s denunciation of Reagan’s economic vision was a proxy for Keynesian thinkers in both parties, who thought (and think) that tax reductions spur consumption (demand), not production (supply).

Of course, Bush lost to Reagan in the Republican primary that year, in part because Reagan had a more compelling message: let’s cut taxes to get the economy growing instead of cutting them simply to reduce spending.  Moreover, Bush was wrong because Reagan’s policies worked.

This weekend, 2012 presidential candidate Newt Gingrich slammed Rep. Paul Ryan (R-WI) and the latter’s “Path to Prosperity” budget proposal as “right-wing social engineering.”  Why?  Because Gingrich thinks changing the way Medicare operates – from straight government subsidy to vouchers – is too “radical.”

But that isn’t stopping Gingrich from continuing to support an individual mandate to buy health insurance.  (Like fellow contender Mitt Romney (R-MA), but unlike President Barack Obama, Gingrich wants the individual mandate at the state, not federal, level.)  So, in Gingrich’s mind, transforming Medicare from a defined benefit into a defined voucher is “radical,” but mandating individuals to buy health insurance is not?

When Reagan adopted the mantra of economic growth through across-the-board tax cuts in 1980, he gave voters a clear alternative to the shared scarcity narrative being peddled by politicians in both parties.  Ryan’s budget proposal is based on Reagan’s insight that less taxes and more growth sells; less choice and more government mandates do not.

Like Reagan, whoever wins the Republican presidential nomination next year will have to make some accommodation with Ryan’s economic vision.  Downsizing – whether it’s freedom, opportunity, taxes, or spending – isn’t enough of a message to create the kind of majority needed to enact the kind of policy changes that spur real private sector growth.  With positions supporting ethanol subsidies and state level individual mandates, it sounds like Newt Gingrich is more comfortable playing the elder Bush’s role in this campaign.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CST to 6:00 p.m. CST (that’s 5:00 p.m. to 7:00 p.m. EST) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn.”  Today’s guest lineup includes:

• 4:00 p.m. CST/5:00 p.m. EST:  Jed Babbin, Deputy Undersecretary of Defense in President George H.W. Bush’s administration – foreign affairs;
• 4:30 p.m. CST/5:30 p.m. EST:  Rep. Doug Broxson, Florida House of Representatives – Florida’s 2011 Legislative Session;
• 5:00 p.m. CST/6:00 p.m. EST:  Mitchell Zuckoff, author of “Lost in Shangri-La: A True Story of Survival, Adventure, and the Most Incredible Rescue Mission of World War II”; and
• 5:30 p.m. CST/6:30 p.m. EST:  Erik S. Jaffe, United States Supreme Court expert – ObamaCare Cases.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

If nothing else, presidential candidate Newt Gingrich (R-GA) will almost always give the 2012 campaign cycle its most colorful one-liners.  Along with saying that the 2012 contest is the most important election since Abraham Lincoln’s in 1860, Gingrich said in a speech to Georgia Republicans that Barack Obama is “the most successful food stamp president in modern American history.”

Leaving aside who would be Obama’s competition in the pre-modern American era, Gingrich said that Obama’s economic policies have thrown more people onto the government dole as jobs have dried up.  To Gingrich, cutting corporate tax rates from 35% to 12.5% would drop the compliance cost for businesses, giving them an incentive to redirect money from loophole-loving lawyers to frontline job creation.  Believing that, “The most important social welfare program in America is a job,” Gingrich said, “I would like to be the most successful paycheck president in American history.”

With the nationwide unemployment rate holding steady at 9%, Gingrich’s jobs mantra could catch on.

City Journal has a piece by Pacific Research Institute’s Steve Greenhut praising the California Assembly’s GOP leadership for proposing a series of small fixes that would result in dramatic savings for the state budget:

But much more encouraging is that the Republican plan suggests how simple reforms can save serious dollars. Take the provision of medical care for prison inmates. According to the Assembly GOP’s budget white paper, “The cost of providing health care to state prisoners has been the fastest growing part of the corrections budget. After the [federal] receiver took control of the system in 2006, medical costs skyrocketed. They reached $2.5 billion a year, including mental health care. The cost of health care for each inmate per year in California is approximately $11,600, while prison healthcare costs $5,757 in New York; $4,720 in Florida; $4,418 in Pennsylvania; and $2,920 in Texas. While costs have increased dramatically, it has not improved the quality of care enough to take the system out of federal court receivership.” Under the Republican plan, the state would contract out the correctional health-care system, saving $400 million. But that would mean taking on the powerful California Correctional Peace Officers Association, the prison-guard union that just won an absurdly generous contract from the governor.

Other budget cuts in the Republican blueprint include $3.7 billion from programs related to early childhood, mental health, the poor, and the elderly, as well as $1.1 billion from the state payroll. The plan also includes $2.8 billion in other savings from a bill that has already passed the Assembly but hasn’t become law. It doesn’t go far enough toward addressing the size and scope of California’s government, since the state faces even bigger fiscal problems down the road. But Republicans have made their point: California can fix at least its short-term budget problem if Democrats truly want to.

The Assembly GOP’s white paper on their budget proposal balances the state’s remaining $15 billion budget deficit without raising taxes.  Greenhut points out that although the proposal doesn’t fix the structural issues plaguing California’s chronically dysfunctional governing process, it does show that there are at least a few Republicans able to offer a serious solution to the state’s most troubling problem.

By now, you’ve probably heard that the Wall Street Journal will not be endorsing Mitt Romney or his Massachusetts health care plan for the presidency next year.  The Washington Post’s Dana Milbank, however, has other observations about the businessman-turned-politician’s recent flop as speechmaker:

Romney has what might be called an Al Gore problem: Even if he’s being genuine, he seems ersatz. He assumed a professorial air by delivering a 25-page PowerPoint presentation in an amphitheater lecture hall – but the university issued a statement saying it had nothing to do with the event, for which the sponsoring college Republicans failed to fill all seats. His very appearance – a suit worn without a necktie – shouted equivocation. His hair was so slick that only a few strands defied the product.

Idea for a bumpersticker: Pity Mitt Romney.

Rep. Paul Ryan (R-WI) owes a lot to the late Jack Kemp, Ryan’s former boss at Empower America.  In a published remembrance of Kemp, Ryan said that while Ronald Reagan motivated him to get into politics, Kemp inspired him.

Indeed, Ryan’s “Roadmap to America’s Future” and “Path to Prosperity” budget resolution are models of Kemp’s supply-side thinking about incentivizing economic growth through government policies.  It was thought that, at most, Ryan might entertain becoming the 2012 GOP presidential nominee’s running mate if the right candidate asked.  Much like Senator Marco Rubio (R-FL), Ryan is a methodical politician of substance who is purposefully navigating his career trajectory.  Unlike others, Ryan and Rubio seemed committed to establishing a real record before running for higher offices.

But reality may be pushing up Ryan’s time frame.  With the surprise announcement that Senator Herb Kohl (D-WI) will not seek reelection next year, Ryan has an opportunity not unlike Jack Kemp faced as a rising New York congressman in the late 1970’s.  Then, Kemp decided not to challenge liberal Republican incumbent Jacob Javits in the 1980 GOP primary.  Had he done so and won, Kemp would have significantly increased his national profile by holding a statewide office at the beginning of the Reagan era.

Of course, to run Kemp would have had to split time between promoting his Senate candidacy and his landmark Kemp-Roth tax cuts – the soon-to-be centerpiece of Reagan’s economic recovery plan.  Like Kemp, Ryan has a game-changing economic program to fight for this next cycle, but unlike his former mentor, I think the odds are very good that Ryan will decide to run for the Senate.  If Democrats are going to make Ryan’s “Path to Prosperity” a major campaign theme next year, why not see if Wisconsin voters are ready to promote their state’s best presidential contender to statewide status?

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Senik:  Obama Uses Immigration Reform as a Cynical Ploy
Ellis:  Obama’s Investigation of CIA Interrogators Has No Integrity
Hillyer:  Beating Rattlesnakes and Bottom Feeders: Congress Fights Frivolous Lawsuits

Freedom Minute Video:  Known and Unknown in the War on Terror
Podcast:  Climate Change: An Issue for the Political Branches of Gov’t or the Courts?
Jester’s Courtroom:  A Not-So-Happy Mother’s Day

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

Following the successful raid that led to the death of Osama bin Laden, CFIF’s Renee Giachino discusses the importance of recognizing what former Sec. of Defense Donald Rumsfeld described as the “knowns and unknowns” in the ongoing War on Terror. “What was true a decade ago is equally true today,” says Giachino, in this week’s Freedom Minute.  “In the war on terrorism, you’re either with us or against us.”

Megan L. Brown, a partner at Wiley Rein LLP in Washington, D.C., discusses American Electric Power Co., Inc. v. Connecticut, a case currently before the U.S. Supreme Court.  Brown articulates why the High Court should reject the “public nuisance” climate change claim brought by a handful of states against some of the nation’s largest electric utility companies.

Listen to the interview here.

Yesterday I blogged about new developments in the Ecuadorian environmental case against California-based Chevron Corp., and said I would have a second part of the blog ready today. Well, here it is.

Earlier this week, U.S. District Judge Lewis Kaplan, who has been giving fits to the plaintiffs’ lawyers who have so, uh, creatively pursued this case for years, refused plaintiffs’ demands that he recuse himself. What was particularly devastating in his answer was the fact that the Second Circuit Court of Appeals had praised to high heaven his handling of the case:

“[I]n light of the complexity of this case and the urgency of its adjudication, we wish to note the exemplary manner in which the able District Judge has discharged his duties,” the appellate court stated. “There is no question but that all concerned, not least this Court, are well served by the careful and comprehensive analysis which is evident repeatedly throughout the many memoranda and orders of the District Court, many of which were produced with rapidity in the context of the District Court’s daunting schedule in this and other important cases.”

That’s about as effusive an endorsement from a higher court as I’ve ever seen. It’s also, effectively, a total smack-down (in advance) of the plaintiffs’ recusal motion.

Also:

Kaplan also denied ever having “urged” Chevron to file racketeering suit.
     The Ecuadoreans contend that Kaplan made the suggestion by asking during a hearing: “Now, do the phrases Hobbs Act, extortion, RICO, have any bearing?”
     But Kaplan said he posed the question after Chevron made its accusations known.
     “Chevron had laid out its RICO, Hobbs Act and extortion claims well before the motion to quash was argued and well before the Court even posed its question,” Kaplan wrote. “In short, the chronology is flatly inconsistent with the LAP Representatives’ contention.”

What has gone unsaid in all this is the irony (or hypocrisy) in the plaintiffs’ whining about supposed “bias” against them in U.S. courts, where the alleged bias involved no allegations of financial wrongdoing by the judge and no other conflict of interest — in other words, no real ethical conflict, but merely a glorified difference of opinion — while the plaintiffs’ lawyers have utterly belittled and denounced the importance of manifold evidence of actual ethical conflicts in the Ecuadorean courts that have been raking Chevron over the coals.

(Sorry for such a long sentence.)

When one key judge was videotaped participating in what looked to all the world like a bribery scheme in favor of the plaintiffs, “The Washington D.C.-based Amazon Defense Coalition, which supports the plaintiffs, said in a statement on Tuesday that the video showed Nunez had resisted the attempts to bribe him.” Well, not exactly. Even the judicial system of Ecuador, panned internationally as being corrupt or unreliable, was forced to remove Judge Nunez from the case. Yes, internationally.  As in:

On Feb. 2, a German newspaper featured a lengthy report headlined “Ecuador emerges as hub for international crime.” This follows actions in recent years in which the U.S. State Department, the United Nations, the International Bar Association and six major American business organizations all have denounced Ecuador’s court system as unreliable or corrupt.on Feb. 2, a German newspaper featured a lengthy report headli major American business organizations all have denounced Ecuador’s court system as unreliable or corrupt.”

So we have an American judge with no direct conflict of interest and a record praised by the courts above him being blasted by the same outfits who are perfectly happy with a corrupt Ecuadorean system that they themselves have said is all about graft. Chevron has noted:

On film, Donziger declared, “the only language that I believe, this judge is gonna understand is one of pressure, intimidation and humiliation.  And that’s what we’re doin’ today.  We’re gonna let him know what time it is . . . .  We’re going to scare the judge, I think today.”  These tactics were employed because, according to Donziger, judges in Ecuador “make decisions based on who they fear the most, not based on what laws should dictate.”  When it was suggested to Donziger that no judge would rule against them because “[h]e’ll be killed,” Donziger replied that, though the judge might not actually be killed, “he thinks he will be…  Which is just as good.”

This is not, repeat not, just a question of one company fighting off a lawsuit. This is a question of American companies being badly abused by a foreign court system, at the urging of American lawyers about whom several judges have raised the specter that they have acted fraudulently. This should be a matter where the U.S. government, through the White House and State Department, should weigh in diplomatically to protect American interests. That they have not done so should be a mark of shame for the Obama administration.

Robert Costa at National Review reports that certain members of the Senate GOP sent a letter to President Barack Obama demanding an immediate end to the Justice Department’s politically motivated investigation of CIA interrogators.  I published a column this week concluding that the only reason this nearly two-year travesty is still being funded is because it plays to the president’s liberal base.

The most troubling aspect of the president’s threatened but unlikely prosecutions is that they target interrogators who were acting under authorization from the Justice Department.  The fact that current U.S. Attorney Eric Holder takes a different view than his predecessors John Ashcroft, Alberto Gonzales, and Michael Mukasey is irrelevant.  Prosecuting people for activity that is only determined to be a crime after the fact is a violation of the Constitution’s ex post facto prohibition.

If President Obama really wanted to thread the needle between following the law and pleasing his fellow liberals, he would shut down Holder’s after-the-fact prosecutions and  issue an executive order directing all federal personnel not to use whatever interrogation techniques – enhanced or otherwise – that he deems unacceptable.  That he’s instead choosing to make career civil servants sweat out indictments for doing their job is shameful.

Maybe there’s a Midwestern Miracle in education reform unfolding.  Outgoing Indiana Governor Mitch Daniels (R) was hailed last week for getting an expansive school vouchers program passed.  The Detroit public school system is seriously considering allowing 41 of its schools to become charter schools.  Now, Illinois is within a majority vote of its state House of Representatives of curbing the power of teachers’ unions.  The chief beneficiary of this latest reform: newly elected Chicago Mayor Rahm Emanuel.

Right now, Emanuel’s people aren’t talking, preferring to let state lawmakers take heat for giving the new Hizzoner the right to extend the school day and weaken the teacher tenure system.  Though I think Emanuel is far from the best potential education reformer, I won’t be surprised if he extracts some serious concessions from teachers unions.  If the bill weakening Illinois’ educators’ “rights” to disrupt the education of the children they serve passes, the moment may be ripe for Illinois – through Emanuel – to return a shard of the public school spotlight where it belongs: on the pupils.

If you like inside baseball tidbits, here’s Roll Call‘s list of the top ten most powerful members of Congress in the legislative redistricting fight unfolding across the nation.  (Note: names are not listed in any specific order)

Rep. Mike Thompson (D-CA)

Rep. Mario Diaz-Balart (R-FL)

Rep. Rep. Lynn Westmoreland (R-GA)

Rep. Jerry Costello (D-IL)

Rep. Steny Hoyer (D-MD)

Rep. Steve Israel (D-NY)

Rep. Patrick McHenry (R-NC)

Rep. John Boehner (R-OH)

Rep. Bill Shuster (R-PA)

Rep. Pete Sessions (R-TX)

For summaries of each member’s role in the redistricting process, click here.

For several years, California-based Chevron Corporation has been fighting against what has long appeared to be a rather bogus lawsuit on behalf of Ecuadorian plaintiffs (and the Ecuadorian government, driven by American trial lawyers, in the course of which the specter of potential fraud on the part of those attorneys has been brought up repeatedly by judges and others).

Now come two new-ish developments in the case, which has become an important test of whether American courts and/or the Obama administration will stand up for an American company under apparently groundless assault abroad.  I’ll blog here about the second of these developments tomorrow, but for now, the first one merits watching. About two weeks ago, The NY Times’ “Greenwire” featured this story about a problematic tie-in between the alleged skulduggery against Chevron and a company that is a major U.S. federal contractor on other eco-projects, including last year’s BP oil spill:

Boulder, Colo.-based Stratus Consulting, a long-term contractor with the National Oceanic and Atmospheric Administration and other federal agencies, is gathering and analyzing data concerning the Gulf of Mexico spill.

Stratus was named in February as a defendant in the federal racketeering suit filed by Chevron against Ecuadorean plaintiffs and their legal team who are seeking damages for environmental contamination relating to Texaco Petroleum Corp.’s operations there…. Chevron’s allegations concerning Stratus’ involvement in the conspiracy to extort the company center on the actions of an independent expert, Richard Cabrera, who was hired by the Ecuadorean court to conduct a study of the alleged environmental damage.

Chevron noted this:

Stratus’ own insurance company, Navigators Specialty Insurance Company, submitted a filing with a federal court in Colorado to argue that it had no duty to defend Stratus against allegations of fraud.  According to an article in Law360.com, “Navigators Specialty is now seeking to avoid covering Chevron’s suit on the grounds that the consultant knew when the professional liability policy began in October of an alleged act, mistake or omission that could have reasonably led to a lawsuit. A policy provision excluding coverage for intentional acts also bars indemnification and defense, as does an exclusion for undisclosed circumstances, according to the declaratory relief suit.”

Stratus, of course, denies culpability for any wrongdoing, and this blog post is intended to reach no ultimate judgment on that issue. The point here is to note that if Stratus is found culpable for major misdeeds, it darn well ought to affect its ability to garner federal contracts — a major source of revenue for the company, as this list of what (by my quick arithmetic) looks like nearly $40 million of work indicates.

It also is quite interesting how large a proportion of those contracts (by my VERY quick count, well over half) have come after Barack Obama took office. Stratus’ principles seem to be Democratic/Obama donors. Granted, the amounts aren’t very high, and further granted (indeed, I insist) that political donations are not in any way inherently corrupt or corrupting. But they can give evidence of political connections, of course, and when they coincide with federal contracts they should always be examined so the public itself can decide whether anything looks amiss. That said, for the record, Stratus principles have donated the following amounts in recent years: Douglas Beltman, $1,000 to Obama for America. David Chapman, $250 to the Democratic National Committee Services Corporation and $300 to Obama for America. And Robert Rowe, $250 to Obama for America. As Jerry Seinfeld would say, “not that there’s anything wrong with that.”  But it does show what looks like an apparent liberal bent by Stratus, and at the margins it puts a spotlight on the Obama administration’s failure to lift a finger in support of Chevron’s seemingly just cause.

For more on this, read the excellent round-up by Carter Wood at Shop Floor.  And, to give major credit where due, Bob McCarty beat everybody on this story by a mile.

Again, more on this tomorrow as well.

He’s no John Dean, but ATF Agent Jay Dobyns is flatly contradicting the President of the United States and the U.S. Attorney General on what they knew and when.  The controversy involves ATF’s Project Gunrunner and its offshoot, Operation Fast and Furious.  Both initiatives deliberately allowed military style firearms to “walk” into the hands of Mexican drug cartels, some of which were used to kill American citizens.

In an interview with Fox News‘ Andrew Napolitano, Dobyns said that despite Attorney General Eric Holder’s congressional testimony that he only found out about the programs “a few weeks ago,” both he and the president were aware of the recklessness of each program.

Dobyns also made the startling assertion that “the president and the attorney general are aware of the conclusions that those guys (Newell and Gillett) operate ATF’s business in a reckless and dangerous way, and they did nothing about it.”

During questioning by both the House and Senate Judiciary Committees last week, Holder insisted he did not know about Project Gunrunner’s problems until only “a few weeks ago.” However, this column reported Tuesday that Sen. Grassley personally delivered two letters about Gunrunner to Holder at a meeting Jan. 31 in his office.

The more details that emerge about these programs, the less likely it seems Eric Holder will be back for a second tour of duty at the Justice Department.  If so, thank goodness.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

The Wall Street Journal today fired a tough shot across the bow of Mitch Romney, and in the process again gave fair warning about the dangers of Obamacare.

Romney will try to answer on Thursday.

Here are the bad stats that the WSJ cites:

A new survey released yesterday by the Massachusetts Medical Society reveals that fewer than half of the state’s primary care practices are accepting new patients, down from 70% in 2007, before former Governor Mitt Romney’s health-care plan came online. The average wait time for a routine checkup with an internist is 48 days. It takes 43 days to secure an appointment with a gastroenterologist for chronic heartburn, up from 36 last year, and 41 days to see an OB/GYN, up from 34 last year…..

Massachusetts health regulators also estimate that emergency room visits jumped 9% between 2004 and 2008, in part due to the lack of routine access to providers. … Another notable finding in the Medical Society survey is the provider flight from government health care. Merely 43% of internists and 56% of family physicians accept Commonwealth Care.

Romney’s answer supposedly will include these ideas:

Bullet points issued by the campaign suggest the four major planks of the speech will be: restoring state responsibility “to care for their poor, uninsured and chronically ill” – or, presumably, Medicaid; giving people who buy their own insurance tax deductions similar to the ones granted to businesses; streamlining federal regulations that apply to the health-care industry; and focusing on market-based reforms.

It will be quite interesting to see the details. Clearly, Mr. Romney is vulnerable on this issue. Cognoscenti say it is the biggest single black mark against his bid for the Republican presidential nomination.

None of this, though, helps Romney explain why he accepted an individual mandate to purchase health insurance as part of Romneycare. On principle alone, that should always have been a non-starter.