December 23rd, 2015 at 9:31 am
Entering 2016, Americans Say Big Government Is Greatest Threat
Posted by Timothy Lee Print

As 2015 draws to a close and the presidential election year of 2016 arrives, a new Gallup survey offers an overarching theme and context for the campaign.  Namely, after seven years of Barack Obama, who made it his goal to reverse Ronald Reagan’s legacy and rehabilitate Americans’ faith in big government, the public continues to identify it as the nation’s greatest threat:

Americans overwhelmingly name big government as the biggest threat to the country in the future.  The 69% choosing big government is down slightly from a high of 72% in 2013, the last time Gallup asked the question, but it is still one of the highest percentages choosing big government in Gallup’s 50-year trend.”

Notably, the percentage of Americans identifying big government as the nation’s biggest threat was just 35% in 1965, when the “Great Society” onslaught of spending and regulation and administrative state growth commenced.  Just as conspicuously, that percentage stood at 53% when Obama assumed office in 2009, but quickly shot upward to a record high of 72% as his own big-government agenda kicked into gear.

In addition to once again confirming Obama’s reverse-Midas touch, it demonstrates that the more that Americans get to know big government, the less we like it.  That provides an important lesson to frame the upcoming 2016 race.


December 22nd, 2015 at 10:01 am
Internet Service Tax and Internet Sales Tax: Two Separate but Equally Destructive Proposals
Posted by Timothy Lee Print

Economist Stephen Moore offers an instructive and important commentary today on two separate but oftentimes conflated taxes.  A tax on Internet service is a self-evidently destructive idea, as it would inhibit both consumer access to the Internet as well as the billions of dollars that Internet service companies invest in constant expansion and modernization.

Liberals love to talk piously about the right to universal Internet access and reducing the ‘digital divide’ in America between rich and poor.  This has been their excuse for pushing so-called ‘net neutrality’ regulations on Internet providers.  Yet taxing Internet subscriptions could make web access connection service, much like cable TV, too expensive for millions of Americans to afford…  Today 75 percent of Americans have Internet service.  But almost 1 in 4 still don’t, and the danger of a new tax is that with families financially strapped, a new tax could mean millions might drop service.”

As Moore points out, some in Congress like Dick Durbin (D – Illinois) and Lamar Alexander (R – Tennessee) continue to hold a permanent ban on Internet service taxes hostage:

So what is Durbin’s game here?  He and Lamar Alexander of Tennessee will only allow the Internet Access Tax Freedom Act to pass if Congress votes to allow states to tax online sales – which is an even worse idea than taxing Internet access, with far more money at stake.  This year, goods and services purchased on the Internet are expected to hit $300 billion, according to the Department of Commerce, and account for a record 7.4 percent of total retail sales.  So state and local politicians and left-wing interest groups have long lustily viewed e-commerce as the next giant pot of money to get their paws on…  They want to require Internet companies to collect state/local sales tax even if that company has no connection (or ‘nexus’) to the state where the tax is paid.  An Internet company in New Hampshire would have to be a tax collector for Illinois and California, even though the company uses no services in those states.  That’s terrible tax policy that will erode tax competition.”

The case against both forms of Internet taxes is obvious.  We therefore encourage our supporters across the country to contact their elected officials (you can quickly and easily locate their contact information through CFIF by clicking here) to demand opposition to both types of taxes through a permanent ban.


December 21st, 2015 at 9:48 am
Before You Complain About Drug Costs…
Posted by Timothy Lee Print

Maligning pharmaceutical enterprises is a curious perennial dance, one that becomes even more active during presidential campaign seasons.  That always struck me as odd, since it seems a sign of societal advance that we can complain about the price of something that saves lives and improves living conditions rather than lamenting its nonexistence.

Regardless, the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) offers an instructive corrective entitled “4 Charts Explain the Economics of Drug Development.”  It is worth the brief examination and passing on to others, because it helps rebut many of the politicized myths that threaten the goose that lays the golden eggs:

“It’s not just the science that goes in to developing medicines that’s complicated.  The economics that drive the industry, allowing resources to be available so people can have access to beneficial new medicines is complicated, too.”

Each chart is worth 1,000 words, but the four broad takeaways are:  (1)  It takes ten years and $2.6 billion to bring a single drug to market;  (2)  In 2014, pharmaceutical companies spent $51.2 billion on research & development;  (3)  Only a few drugs, however, become commercial successes;  and (4)  The end result is that pharmaceuticals’ enormous investments result in people living longer and better lives.

Something to keep in mind as sometimes silly presidential campaigns get even sillier, at least in terms of maligning the innovative pharmaceutical industry.


December 18th, 2015 at 12:56 pm
School Choice a Casualty of the Omnibus Budget
Posted by Ben Boychuk Print

Education Week reports some disappointing news on the school choice front:

Although education spending as a whole got a $1.2 billion boost in a federal budget deal announced Wednesday, one small but high-profile program has been left out: Washington D.C.’s school vouchers.

The Scholarships for Opportunity and Results Act (SOAR), which creates a limited number of vouchers for students living in the District of Columbia, was not reauthorized in the omnibus spending bill, which is expected to be passed this week.

Recently departed House Speaker John Boehner was a champion of the Opportunity Scholarship Program, and the House signed off on reauthorizing SOAR earlier this fall even though it wasn’t up for renewal this year.

The Wall Street Journal editorializes:

The omnibus funds the program for fiscal year 2016 but fails to reauthorize it. This means that 20 years after the program was first debated, 10 years after it started, four years after Mr. Boehner revived it after President Obama had killed it, and a few months after the House passed a bill to reauthorize it, we’ll have to fight the battle all over again . . .

Perhaps this reflects the imbalance of passion. Democrats try to kill vouchers every year because unions demand it. Never mind that Opportunity Scholarship recipients have higher graduation rates and more parental satisfaction than D.C. public school students. Or that the children who get these scholarships are from households with an average household income below $21,000 a year.

This part of the editorial rankles: “A spokesman for the House Appropriations Committee chaired by Hal Rogers, which helped negotiate the omnibus, says only that ‘as this was a compromise agreement, not all priorities could be retained.’”

Four years ago, Republicans — and a significant number of Democrats — understood that protecting and extending the scholarship program was a fight worth having. And that was when Republicans didn’t control both houses of Congress.


December 18th, 2015 at 11:30 am
Yalies Say: Blow Up the First Amendment!
Posted by Ben Boychuk Print

Yale University last month was the scene of student protests against what Time magazine described delicately as “the racial insensitivity of the school’s administration.”

To recap: In October, lecturer and associate master Erika Christakis sent an email to her students at one of the university’s residential colleges responding to a campus-wide letter on culturally sensitive Halloween costumes. “Is there no room anymore for a child or young person to be a little bit obnoxious,” she wrote, “…a little bit inappropriate or provocative or, yes, offensive?”

Her students’ short answer: No.

Filmmaker and satirist Ami Horowitz decided to visit Yale “to take this campus free speech debate to its logical conclusion.” Horowitz asked students if they would sign a petition to repeal the First Amendment. No tricks. No funny wording. The pitch couldn’t have been more straightforward.

“The result was this unbelievable display of total stupidity,” Horowitz told Fox News.

Well, maybe not so unbelievable, as Kevin D. Williamson chronicled at National Review when the lunacy in New Haven was near its peak.

In any case, watch Horowitz’s video and see for yourself.

Yale spokesman Tom Conroy questioned the veracity of the video, telling the Daily Beast: “There are a number of heavily edited prank videos like this one circulating lately in which someone surreptitiously records people while pretending to support a position that they actually oppose, and trying to get the individuals they speak with to agree with them.”

(That Daily Beast story is best read in its entirety. Horowitz offers many interesting insights on the video, including this: “One girl had the honesty to say, ‘I don’t know what’s in the First Amendment,’” recalled Horowitz… “She pulled it up on her phone, read it thoughtfully, and said ‘Okay, I’ll sign this,’” said Horowitz. “That one blew me away.”)

Not to be outdone, Harvard’s Office for Equity, Diversity, and Inclusion and the Freshman Dean’s Office last week began distributing what The College Fix describes as “holiday placemats for social justice” in college dining halls.

According to The Harvard Crimson:

[T]he placemats pose hypothetical statements on those topics and offer a “response” to each of those in a question and answer format. For example, under a section entitled “Yale/Student Activism,” the placemat poses the question, “Why are Black students complaining? Shouldn’t they be happy to be in college?” and suggests that students respond by saying, “When I hear students expressing their experiences on campus I don’t hear complaining.”

In the center of the placemat are what it calls “tips for talking to families,” with recommendations such as “Listen mindfully before formulating a thoughtful response” and “Breathe.”

That’s good advice to parents, too. Take a deep, cleansing breath and remember you’re only spending $60,000 a year for this hokum. Then have another eggnog. Maybe make it a double.


December 18th, 2015 at 10:05 am
Legal Reform: Supreme Court Delivers Welcome Victory for Private Arbitration
Posted by Timothy Lee Print

Private arbitration and other forms of alternative dispute resolution provide important alternatives to traditional court litigation, and this week the U.S. Supreme Court delivered an important and welcome victory against trial lawyers and liberals who seek to undermine them.  The ruling is particularly notable for the fact that even liberal justices Breyer and Kagan joined in the 6-3 majority.

The case originated from an agreement between DirecTV and customers under which the parties agreed to a class action waiver and to resolve any disputes through private arbitration.  Although pro-trial lawyer California state law made class action waivers unenforceable, the Supreme Court had rightfully ruled in 2011 that the Federal Arbitration Act preempts such such state laws.  In the instant case, the California courts nevertheless attempted to circumvent that 2011 ruling, but the Supreme Court was having none of it.

For their part, liberal justices Ginsburg and Sotomayor did their best Bernie Sanders and Occupy Wall Street impression.  Their dissent is worth citing simply because of its self-evident reliance upon class warfare and leftist economic policy over objective, sober legal analysis:

It has become routine, in large part due to this Court’s decisions, for powerful economic enterprises to write into their form contracts with consumers and employees no-class-action arbitration clauses…  I would read it, as the California court did, to give the consumer, not the drafter, the benefit of the doubt.  Acknowledging the precedent so far set by the Court, I would take no further step to disarm consumers, leaving them without effective access to justice.”

First and foremost, Justice Ginsburg’s claim is incorrect as a matter of fact.  Arbitration and alternative dispute resolution don’t deprive anyone of justice.  They simply move the parties away from more expensive and tedious traditional litigation in overcrowded court system, and toward fair, speedier and less-burdensome resolution by an arbiter (usually an experienced judge) selected by both parties.  Second, Justice Ginsburg’s argument rests on sentiment and her own policy preference rather than law.

Accordingly, the Court’s ruling constitutes a critical loss for the powerful trial lawyers’ lobby, which essentially by definition makes it a critical victory for Americans more broadly.


December 16th, 2015 at 3:45 pm
Arizona Tribe’s Violation of Trust Demands Congressional Remedy
Posted by Timothy Lee Print

In both contract negotiation and public policy, the duty of good faith and fair dealing remains a fundamental one.

In Arizona, unfortunately, the Tohono O’odham tribe has repeatedly violated that duty, which now requires Congressional action to remedy the situation.

By way of background, this regrettable and wholly unnecessary dispute arises from a $400 million casino in the western Phoenix metro area set for completion later this month.

Back in 2001, the Tohono O’odham continued seeking casino properties even while participating in compact negotiations with a coalition of 16 other Arizona tribes.  The coalition collectively promised Arizona voters and elected officials in 2002 that there would be no additional casinos within the Phoenix metropolitan area until the agreed-upon compact expired in 2027.  Arizona voters subsequently approved the agreement and granted it the force of law.

Just one year later, however, the Tohono O’odham tribe violated that pledge by purchasing a casino site through a shell corporation to conceal its ownership.

Then, in 2009, the tribe launched the current battle by declaring that a “legal loophole” in the state’s existing gaming compact gave it the right to build a casino in Phoenix on a plot of land situated across the street from a high school and close to a number of residential areas.  Beyond the tawdry behind-the-scenes scheming and legal trickery, that constitutes a deep violation of the trust Arizona voters and their elected and appointed officials had placed in the tribe.  The Tohono O’odham tribe, however, flouts the law under color of a legal defense of tribal sovereign immunity.

Accordingly, the tribe refuses to be held accountable by the compact itself, as well as the state and tribes with which it negotiated.

The outrage among state officials is palpable.  Governor Doug Ducey, Arizona Attorney General Mark Brnovich and Department of Gaming Director Daniel Bergin all have alleged that the tribe committed fraud in not disclosing its West Valley casino plans while negotiating its state compact.

Consequently, the battle now shifts to the U.S. Congress as the last line of defense.  More specifically, the power to maintain the Arizona gaming compact sits with Congress and the Keep the Promise Act.

It would have been preferable for this Arizona problem to be settled by its own state institutions, but that is no longer possible.  Congressional action is required.

The Keep the Promise Act would prevent a rapid and chaotic expansion of gaming in the state until the end of the current compacts in 2027.  It would also force the Tohono O’odham to live up to its promises.  The bill is fair, and respects the long-established sovereign rights of the tribes and the state of Arizona.  It’s also supported by key members of Arizona’s Washington delegation, along with tribes in the metro Phoenix area, the Navajo Nation and several rural tribes.

Enough is enough.  We at CFIF support Keep the Promise Act to preserve the agreements voters made – or at least thought they made – concerning Arizona gaming.  We also need to send a message that agreeing parties can’t subvert the very system of laws it once agreed to support.


December 16th, 2015 at 8:18 am
Ramirez Cartoon: ISIS Contained
Posted by CFIF Staff Print

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.


December 14th, 2015 at 11:14 am
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

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: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CST/5:00 pm EST:  Matt Mayer, Visiting Fellow at the American Enterprise Institute – Terrorism and the Visa Waiver Program;

4:15 CST/5:15 pm EST:  Bradley A. Smith, Chairman and Founder of Center for Competitive Politics – Fights Over Campaign Finance Laws;

4:30 CST/5:30 pm EST:  Robert Pondiscio, Senior Fellow and Vice President for External Affairs – Common Core;

5:00 CST/6:00 pm EST:  Jenny Beth Martin: President and Co-Founder of Tea Party Patriots – IRS Proposed Regulation Regarding Social Security Numbers and Charitable Donors;

5:15 CST/6:15 pm EST:  Gail Heriot, Law Professor and Member of the US Commission on Civil Rights - Fisher v. University of Texas; and

5:30 CST/6:30 pm EST:  Timothy Lee, CFIF’s Senior Vice President for Legal and Public Affairs – Net Neutrality, Justice Reform and the Second Amendment.

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



December 14th, 2015 at 9:48 am
Good News: By Over 3-to-1, Americans Blame Terrorism for San Bernardino Attack, Not Guns
Posted by Timothy Lee Print

Barack Obama, the mainstream media and the political left immediately sought to scapegoat firearms and exploit last week’s San Bernadino attacks on behalf of their endless campaign to limit Second Amendment rights.  In an encouraging bit of news, however, a new Rasmussen survey shows that by more than a 3-to-1 margin, the overwhelming majority of Americans aren’t buying it:

A new Rasmussen Reports national telephone survey finds that 69% of likely U.S. voters believe that the shooting incident in California last week is primarily a terrorism issue.  Just 20% think the massacre is primarily a gun issue, while seven percent (7%) think it’s about something else.”

That confirms William F. Buckley’s adage of the wisdom of the governed more than those who seek to lord over them, it also demonstrates that we remain steadfast in our support of the timeless individual right to keep and bear arms.


December 11th, 2015 at 3:36 pm
Beware of Misinformation and Deceptive Tactics by Free Trade and Intellectual Property Opponents
Posted by Timothy Lee Print

CFIF steadfastly supports both free trade and strong intellectual property (IP) protections.  Each has played an invaluable role in making America the most innovative and prosperous nation in human history, and each is important if we hope to maintain that primacy through the 21st century.

In that spirit, we hope to ultimately support the Trans Pacific Partnership (TPP) after our own reasoned analysis.

Even the cleanest trade agreements tend to be complex,  and the TPP is no exception.  Along with so many other conservative and libertarian organizations, we are therefore carefully examining the TPP’s provisions in determining whether to ultimately support the agreement.

Making that determination in an intelligent and good faith manner, however, requires that the debate remain grounded in accurate, reliable and pertinent information.  But opponents of free trade and strong IP protections have undertaken a campaign to confuse and frighten the electorate through distortion.

An organization named IP Watch offers a perfect example of such tactics, with a recent piece about the TPP’s dispute resolution provisions known as the Investor State Dispute Settlement (ISDS) process.  IP Watch contends that, by virtue of the ISDS, “foreign corporations [will have] a huge advantage in IP disputes – private arbitrations that can override courts and statutes, effectively rewriting a nation’s IP laws,” but the simple reality is that ISDS provisions are common to international agreements and unremarkable.

Simply put, an ISDS process allows companies doing business abroad to protect themselves against unfair treatment such as discrimination and government seizure of their property, known as “expropriation.”  Over 3,000 international agreements include a process to resolve these problems, but many stubborn opponents of free trade and IP rights oppose these dispute resolution mechanisms, which are designed to give American companies similar protections to those enjoyed by foreign companies doing business in the U.S.

For its part, the TPP includes countries around the Pacific Rim, collectively  accounting for about 40% of all global trade, and like the 3,000 other international agreements referenced above, it includes an ISDS process to level the playing field for American companies doing business overseas.   Additionally, like so many other previous trade agreements, the TPP broadly exempts IP from the ISDS process unless the IP was expropriated and the expropriation violates the IP provisions of either the TPP or the World Trade Organization (WTO).

Those opposed to free trade or strong IP rights, however, don’t like the idea that companies possess that option to protect themselves, particularly companies that rely on IP protections.   Their attack on the ISDS process as it applies to IP is an opportunistic and cynical attempt to achieve their larger aim, the erosion of IP protections for creators and innovators.

Further, in practice it’s not easy to win an ISDS case.  First, an investor must prove that there was either direct expropriation (the government forcibly comes in and seizes the property, claiming now to be the legal owner of it), or indirect expropriation (the same effect as direct expropriation but without the outright seizure).  That is drawn from U.S. law, and the U.S. Constitution itself,  per the Fifth Amendment provision that, “nor shall private property be taken for public use, without just compensation.”  Moreover, the particular standards in the TPP for proving whether there has been an “expropriation” (e.g., “taking”) are drawn directly from a Supreme Court ruling on the Fifth Amendment in Penn Central Transportation Co. v. New York City (1978).

Accordingly, it should alarm readers of IP Watch that the anti-trade, anti-IP crowd has thus gone so far as to malign concepts contained in the Bill of Rights itself.

In addition to demonstrating an expropriation of IP rights, the TPP requires a company to prove that the government action violated the IP provisions of either the TPP or the WTO.  And those rules are the product of agreement by the governments of nations of all perspectives from across the globe, and constitute the basic levels of protection for IP.

That’s why companies bring so few cases.  Tellingly, only 13 cases have ever been brought to conclusion against the United States, and we won all of them.

There’s another factor that must be considered as well.  Namely, if you are an American company doing business abroad, where you rely on the local authorities for police protection and hope for fair treatment by the government and judges, how eager would you be to start a lawsuit against the whole country?  You, your board of directors and your shareholders would think long and hard about that one.

The ISDS process is a fair and appropriate one, but realistically, companies are only going to resort to it when their backs are truly against the wall.

Anti-trade and anti-IP interest groups and advocates will likely continue to publish misinformation about the TPP and its IP chapter in an attempt to scuttle the deal.  Indeed, activists are openly advertising that they will try to incite people, even though the TPP’s IP provisions are all drawn from U.S. law and have been in other trade agreements for years.

Hopefully, however, the preceding points help cut through the click-bait and hyperventilation that characterizes their rhetoric, so reasonable people can draw their own conclusions about the TPP based on fact and principle.


December 11th, 2015 at 1:41 pm
Time to Make the Ban on Internet Access Taxes Permanent
Posted by Jeff Mazzella Print

When the clock strikes midnight tonight, the federal moratorium blocking states and localities from taxing Internet access and shackling electronic commerce with multiple and discriminatory taxes will expire.  Consumers beware.

Congress first passed the federal law banning state and local governments from taxing Internet access in 1998. Since then, the moratorium has been extended on a temporary basis five times – a move that, among other benefits, has helped keep access to the Internet affordable for citizens and families of all economic levels. 

With the current ban set to expire, however, a number of state and local governments are eager to impose new taxes on the Internet. According to a recent report by the American Action Forum, lifting the ban on Internet access taxes could cost consumers as much as $16.4 billion.

That’s why the Center for Individual Freedom yesterday joined an impressive coalition of national free-market organizations on a letter urging Congress to pass H.R. 644, a trade bill that contains language to finally make the Internet tax ban permanent, something for which we have been advocating for well over a decade. 

To be sure, few in Congress dispute the benefits of keeping the Internet tax ban in place.  Except for a handful of Members of Congress who continually work to hold the policy hostage to the completely separate issue of whether the federal government should give states and localities new powers to force out-of-state retailers to collect and remit sales taxes on their behalf, the ban on Internet access taxes probably would have been made permanent long ago.

Fortunately, the House of Representatives today passed H.R. 644 by a vote of 256-158.  It’s time for the Senate to end the political games and follow suit.


December 8th, 2015 at 9:57 am
Iran: Obama’s Other Legacy “Achievement” Continues to Unravel
Posted by Timothy Lee Print

Last week we highlighted the latest manifestation of ObamaCare’s ongoing failure, and noted how the emerging question is whether that law or Obama’s similarly disastrous Iran nuclear deal will prove the worse of his two signature “achievements” as president.  Well, don’t look now, but the Iran deal just staked its latest claim to that title:

Iran tested a new medium-range ballistic missile last month in a breach of two U.N. Security Council resolutions, two U.S. officials said on Monday…  All ballistic missile tests by Iran are banned under a 2010 Security Council resolution that remains valid until a nuclear deal between Iran and six world powers is implemented.  Under that deal, reached on July 14, most sanctions on Iran will be lifted in exchange for curbs on its nuclear program.  According to a July 20 resolution endorsing that deal, Iran is still ‘called upon’ to refrain from work on ballistic missiles designed to deliver nuclear weapons for up to eight years.”

But not to worry – we can rely upon the U.N. to discipline Iran and steer it back into better behavior as a member of the “international community,” right?  Oh, wait:

In October, the United States, Britain, France and Germany called for the Security Council’s Iran sanctions committee to take action over a missile test by Tehran that month that they said violated U.N. sanctions.  So far, no action has been taken by the committee.”

Your move, ObamaCare.

Tags: , ,

December 7th, 2015 at 2:11 pm
President Obama’s Oval Office Address: “What Could Possibly be the Argument…?”
Posted by Ben Boychuk Print

President Obama addressed the nation Sunday night from the Oval Office on the threat of terrorism and America’s response in light of last week’s atrocity in San Bernardino, California. The speech was . . . not good. Clichéd. Condescending. Utterly uninspired and uninspiring.

And that’s not all.

Marc A. Thiessen, Washington Post: “Usually when a president delivers a prime-time address to the nation, he has something new to announce — like, say, a new military strategy. Not President Obama. Like a notorious Christmas ‘re-gifter,’ Obama did nothing more Sunday night than repackage his old, failing strategy in the shiny wrapping of tougher language.”

Jim Geraghty, National Review Online: “At this point in his presidency, Obama speaks with only one tone, the slightly exasperated and sometimes not-merely-slightly exasperated ‘adult in the room’ who constantly has to correct his fellow Americans, who are always flying off the handle, calling for options that ‘aren’t who we are,’ betraying our values, and so on. He’s always so disappointed in us.”

George Condon, National Journal: “His low point may have come when he in­sisted on veer­ing in­to gun con­trol. If the point of the speech was to unite the coun­try and bring an anxious na­tion to­geth­er, bring­ing up one of the most di­vis­ive do­mest­ic polit­ic­al is­sues is not a great way to do that—par­tic­u­larly when the ad­min­is­tra­tion has struggled to ex­plain how the usu­al items on their gun agenda such as gun-show re­stric­tions and bet­ter back­ground checks would have made any dif­fer­ence in San Bern­ardino.”

The president’s venture into the gun control debate was particularly inept when he took up the cause of barring people on the U.S. no-fly list from buying guns. “To begin with,” he said. “Congress should act to make sure no one on a no-fly list is able to buy a gun. What could possibly be the argument for allowing a terrorist suspect to buy a semiautomatic weapon?”

There are at least two arguments. First, the no-fly list is rife with error and devoid of transparency — which is why the ACLU sued in 2010. Among those on the list: a 4-year-old child, Stephen Hayes of the Weekly StandardTed Kennedy, and at least 72 Department of Homeland Security employees. (Incidentally, Kennedy managed to get himself off the list — no easy feat.)

Second, there is the nontrivial matter of due process of law. The U.S. Senate last week rejected an amendment by Sen. Dianne Feinstein (D-Calif.) that would have empowered the federal government to bar a person from buying a gun if “the Attorney General . . . determines that the [buyer] is known (or appropriately suspected)” to have been involved in terrorism-related conduct “or providing material support support or resources for terrorism,” and “if the Attorney General ‘has a reasonable belief that the [buyer] may use a firearm in connection with terrorism.’”

“Can a person be denied constitutional rights, not based on a past criminal conviction or even a restraining order issued in court under a ‘preponderance of the evidence’ standard, but based just on the government’s suspicion?” UCLA Law professor Eugene Volokh asks and offers an answer at the Volokh Conspiracy:

I can’t see how that’s constitutional. And though the bill would have let the buyer go to court to challenge the attorney general’s decision, the attorney general would simply have had to show by a preponderance of the evidence that the two elements were satisfied — that the attorney general appropriately suspected the buyer and that she had a reasonable belief about what the buyer may do. Plus the evidence supporting the attorney general’s position might never be shared with the buyer, which may make it impossible for the buyer to fairly challenge it, or aired in open court. . . .

But the problem would be even more serious when we’re dealing with the denial of an explicitly guaranteed constitutional right, and not just the denial of the admittedly very important ability to fly on airplanes. If you have a constitutional right to do something, the government has to do more than just provide the attorney general’s suspicion and speculation as a basis for denying you that right. This isn’t a supposedly modest, limited gun control measure. It cuts to the heart of the constitutional right itself.

The president and congressional Democrats are demagoguing this question. They haven’t been able to achieve the sort of “common sense” gun control they’ve long sought through conventional political means — good, old-fashioned persuasion — so they’re left to exploit a terrorist attack in order to subvert the Constitution. Again. “What could possibly be the argument”? Constitutional rights shouldn’t be subject to the whims and caprices of a craven political class, that’s what.


December 4th, 2015 at 5:10 pm
ObamaNet in Court Again: Positive Early Signs from Today’s Oral Argument
Posted by Timothy Lee Print

Today, the D.C. Circuit Court of Appeals, commonly known as the nation’s second-highest court, heard oral argument on the latest attempt by the Obama Administration to regulate Internet service.  On two previous occasions, the same court rejected the administration’s efforts, so now we’re at Round Three.  Lawrence Spiwak of the Phoenix Center offers a helpful summary of today’s hearing, and while it’s impossible to predict the ultimate outcome, early signs are encouraging:

While it is difficult to make accurate prognostications about how a court will ultimately rule based on the questions raised at oral argument, several key points dominated the discussion:

As an initial matter, Judge Tatel clearly took umbrage with the FCC’s rejection of the roadmap under Section 706 the DC Circuit set forth in Verizon v FCC (and initially adopted by the Commission in its May 2014 Notice of Proposed Rulemaking) as the result of direct pressure from the White House. As Judge Tatel observed, given such a short time frame, the Commission’s radical departure ‘could not have been changed facts.’

Notwithstanding this displeasure, the panel generally agreed that they are governed by the Supreme Court’s holding in Brand X which emphasizes a focus on how customers perceive the offer of service provided. However, as the court also recognized that the FCC has great latitude the interpret this offer for purposes of regulatory classification, predicting whether or not the court overturns the FCC on wireline reclassification is a close call.

That said, the court appeared skeptical of the FCC’s reclassification of wireless broadband as a Title II common carrier service due to FCC’s gerrymandering of the definition of the term ‘public switched telephone network.’ Moreover, the court seemed concerned over the lack of public notice of the legal theory the Commission used to reclassify mobile broadband. As such, there is a better chance of the court overturning FCC on this issue.

Finally, as assuming the court upholds the FCC’s decision to reclassify broadband as a Title II common carrier service, the court did not appear convinced that the FCC’s application of Title II was entirely legitimate. In particular, a good part of the oral argument focused heavily on the fact that the FCC — in apparent response to last minute lobbying by edge providers to counter the analysis made in our law law review Tariffing Internet Termination: Pricing Implications of Classifying Broadband as a Title II Telecommunications Service — included ‘terminating access’ (i.e., the relationship between edge providers and BSPs) into ‘broadband Internet access service’ (’BIAS’), even though they are distinctly different products serving entirely different markets.”

Hopefully, the judicial branch will once again reject this administration’s lawless and destructive overreach, and the light-touch federal regulatory approach to Internet service that existed through both the Clinton and Bush administrations will continue.


December 4th, 2015 at 9:44 am
ObamaCare Meltdown, Cont’d: Health Spending Rises Most Since 2007
Posted by Timothy Lee Print

When even The New York Times issues lamentations as the consequences of ObamaCare become more clear, it’s obvious that things aren’t going well:

Health spending grew faster than the economy in 2014, and the federal share of health spending grew even faster, as major provisions of the Affordable Care Act took effect.  Total spending on health care increased 5.3 percent last year, the biggest jump since 2007, and accounted for 17.5 percent of the nation’s economic output, up from 17.3 percent in 2013, the Department of Health and Human Services said in its annual report on spending trends.”

But not to worry.  The Obama Administration assures us that things are fine:

The spending report comes as the Obama administration is already on the defensive over rising premiums and deductibles on insurance policies sold through the health law’s exchanges.  Last month, United Health Group, one of the nation’s largest health insurance companies, significantly lowered its profit estimates and blamed the federal health care law.  Obama Administration officials said Wednesday that the rise in health spending last year did not undermine their conviction that the Affordable Care Act had been a boon for the nation.”

Of course, this is the same administration that assured us just hours before the Paris terrorist attacks that ISIS is contained, not to mention that “if you like your doctor, you can keep your doctor, period.”  Per Nancy Pelosi’s claim, we’re finding out what’s in ObamaCare, and the only question is whether this or the Iran nuclear accord – which we’re now told Iran didn’t even sign – will prove the worse of Obama’s two signature “achievements” as time progresses.


December 4th, 2015 at 8:07 am
Video: Obama’s Dereliction of Duty
Posted by CFIF Staff Print

In this edition of the Freedom Minute, CFIF’s Renee Giachino discusses President Obama’s handling of the growing threat from ISIS and how ensuring America’s national security must come first, before acting on any humanitarian impulse to help the true victims of the chaos in Syria.


December 1st, 2015 at 1:44 pm
Puerto Rico Should Work With Stakeholders to Reach Consensual Solution to Debt Crisis
Posted by Timothy Lee Print

At today’s hearing, Richard Carrion testified that as a professional banker, he was “extremely reluctant” to testify in favor of debt restructuring.  Yet Carrion has given no weight to promising proposals put forth by the private sector, preferring instead to trumpet the agenda of his friend Governor Garcia Padilla.  As demonstrated by today’s bond payment, the Puerto Rican government has the means to meet its obligations, and should work with stakeholders to reach a consensual solution.


December 1st, 2015 at 10:43 am
Puerto Rico Debt Crisis: Richard Carrion Is a Problematic Witness Sitting Alongside Governor Garcia Padilla
Posted by Timothy Lee Print

At today’s Senate Judiciary Committee hearing on Puerto Rico’s fiscal situation, Governor Alejandro Garcia Padilla will likely face tough questioning from Senators displeased with his handling of the island’s economy.  Sitting alongside Gov. Garcia Padilla to face those questions will be a close friend from the Commonwealth’s financial sector:  Banco Popular Chairman and CEO Richard Carrion.

Carrion, whose bank is no stranger to asking for federal assistance – it received almost $1 billion in TARP funding from the Treasury (which it did not repay until July 2014) – is a longtime Garcia Padilla supporter who continues to maintain a close relationship with the Puerto Rican government.  Additionally, Banco Popular’s General Counsel Javier Ferrer is the former GDB President under Gov. Garcia Padilla, and longer-tenured lawmakers will also be familiar with the bank’s previously cozy relationship with Representative Luis Gutierrez, who lobbied for that TARP funding for the bank in 2008.

The island’s largest lender holds unmatched influence over the Island’s financial sector, controlling over 40% of the Commonwealth’s credit market.  It has also benefited from Puerto Rico’s debt crisis by collecting underwriting fees on large swaths of the public debt and acting in a fiduciary capacity for many debt issuers.

At today’s hearing, we therefore urge Senators to consider the motivations behind Carrion’s testimony.

Over the years, Banco Popular stands as the biggest beneficiary of Puerto Rico’s debt crisis, collecting fees to underwrite huge swaths of Puerto Rican debt.  Since 2008, Banco Popular’s subsidiary, Popular Securities, has been involved in the underwriting of over $56 billion in Puerto Rican bond offerings, mostly for the Puerto Rican government.  In that capacity, Popular has had a direct hand in the issuance of billions of dollars of debt to investors on the island and mainland, including to small investors, pensions, and mutual funds.  As underwriter, Popular has performed due diligence on every bond offering in which it has been involved.  Yet in advocating for a complete restructuring of Puerto Rico’s debts, Popular is now asking to restructure the very same bonds it recommended to regular investors saving for retirement after having passed judgment on their suitability for such investors.

In addition to fees collected as underwriter, Popular also acts in a fiduciary capacity for several bond issuers, serving as paying agent, escrow agent, and trustee.  These issuers include institutions with deep ties to Gov. Garcia Padilla’s administration, including the Government Development Bank, COFINA, the University of Puerto Rico, and the recently defaulted Public Finance Corporation among others.

Despite having already profited handsomely on the debt crisis that it has helped to create, Popular is now advocating for a complete restructuring of the government’s public debts.  At first glance, it seems strange that a large lending institution like Popular would take such an anti-lender stance on Puerto Rico’s debt, especially given that it helped to issue so much of it.  Through an agreement with JP Morgan, and previously Morgan Stanley, however, Popular is only exposed to a small fraction of the underwriting exposure for any offering made to mainland US investors.  Further, most of Popular’s outstanding exposure to Puerto Rico debt is to several of the Island’s 78 municipalities, which has never been part of a restructuring proposal.  Their direct exposure to debt that would be subject to a restructuring is minimal.

Even after a total debt restructuring, Popular would no doubt choose to continue its practice of selling  loans made to struggling, regular Puerto Ricans to mainland institutional investors and hedge funds at steep discounts, who in turn seek 100% repayment from the borrowers.  To be clear, Popular has long engaged in these dealings with Wall Street, having already unloaded over $1.75 billion in loans to institutional investors which are in varying states of foreclosure.

All of this suggests a self-serving agenda.  While it carries minimal direct exposure to the debts that it seeks to restructure, Popular stands to profit handsomely on the backs of regular Puerto Ricans by continuing to sell their loans to Wall Street firms when they cannot pay their debts.

It triggers the question, then, that if Popular truly seeks to restructure these debts for the good of Puerto Rico, will it support the same type of unilateral restructuring for other types of loans taken out by regular Puerto Ricans who are Popular customers?  Will Popular allow its own clients to restructure their mortgages and car loans and cease and desist from any and all foreclosure processes against these borrowers?  Or will it reap the financial benefits of the crisis that it is creating for Puerto Rican borrowers?

In addition to those questions, here are some others that Senators would be wise to ask of Carrion:

  • What is your relationship, personally and professionally, with Gov. Garcia Padilla, his administration and his family?
  • How is it that your bank, the largest in Puerto Rico, has avoided the exposure to public securities experienced by other banks?
  • As a recipient of a large federal bailout resulting from poor lending practices, what qualifies you to advise on the best path forward for Puerto Rico’s recovery?
  • As a private sector leader, why are you not working with other members of the private sector to reach a consensual solution?
  • If you are willing to advocate for massive debt forgiveness to the Puerto Rican government, are you willing to provide similar debt forgiveness to regular Puerto Ricans that struggle to make loan payments to your bank?

Considering that the biggest beneficiary of the Puerto Rico debt crisis now calls for “Super Chapter 9″ bankruptcy and broad restructuring powers, those are all reasonable questions.


November 30th, 2015 at 3:56 pm
“Contained?” ISIS Captures First City Beyond Iraq or Syria
Posted by Timothy Lee Print

Just hours prior to the terrorist massacre in Paris, Barack Obama foolishly claimed that ISIS was “contained.”  This morning, we awoke to more bad news, and additional refutation of Obama’s assertion.  Namely, ISIS has now captured Sirte, Libya, meaning that it now controls its first city beyond Syria or Iraq:

Even as foreign powers step up pressure against Islamic State in Syria and Iraq, the militant group has expanded in Libya and established a new base close to Europe where it can generate oil revenue and plot terror attacks.  Since announcing its presence in February in Sirte, the city on Libya’s Mediterranean coast has become the first that the militant group governs outside of Syria and Iraq.”

So much for “containment.” What has become undeniably clear is that Obama’s foreign policy generally, and anti-terrorism leadership specifically, are failures.  Fortunately, there will be a new Commander in Chief in just a few months.  But unfortunately, there’s a lot more damage that he can do before then.  The key for the American electorate is to choose a replacement who will bring improvement.

Tags: , ,