Freedom Line Blog

The Daily Caller profiles a new book, Population Decline and the Remaking of Great Power Politics, that explains why aging and shrinking populations in China, Japan, and Europe will dramatically alter American foreign policy.

Some of the book’s findings are startling:

• By the end of this decade India will surpass China as the most populous nation.

• Japan will lose 1 million people a year by 2060, contracting from 127 million to less than 87 million.

• Europe’s expensive social welfare model and aging populations will increasingly spur governments to scale back military spending in order to fund burgeoning entitlement program.

• Even though America’s current rate of replacing itself gives it a demographic advantage, unless serious reforms are instituted to entitlement spending, it too will continue to cut military expenditures to pay for rapidly expanding benefits for the elderly.

India surpassing China means that democracy – not a communist-controlled autocracy – will be the government adopted by the most populous country on Earth.  It may also encourage the United States and India to forge a closer strategic partnership around shared values to check China’s ambitions.

And of course, we’ve already seen how the European model of heavy on services, light on defense is making the region – though not a few individual countries – increasingly irrelevant when it comes to making the world safe.

In his budgets, President Barack Obama has chosen to increase spending on entitlements and gut defense, arguing like a European that multilateral institutions such as the United Nations and NATO can accomplish more than any one nation.

Paul Ryan highlighted this danger in his latest budget proposal, “The Path to Prosperity: A Blueprint for American Renewal.”  In it, he faults President Obama for cutting $500 billion from the Defense Department instead of making the changes needed to entitlements so that Americans can be protected both at home and abroad.

Americans need not accept decline through badly prioritized budgets.  Instead, using innovative entitlement reforms like the ones in Ryan’s Path to Prosperity, we can have sustainable entitlement programs and a robust defense.

We’ve got the people.  Now we need to implement the right policies.

Remember in 2009 when conservatives in Congress presented an alternative to ObamaCare that would have guaranteed bipartisan support for some of the outcomes the Obama White House and its liberal allies wanted?  Had the liberals concentrated on targeted reforms instead of a gargantuan“comprehensive solution” not only would the ultimate bill have been much shorter, it would have been much easier to read and comprehend.

That’s a point worth considering since judging by the comments from the Supreme Court this week, passing health reform piecemeal would have been a far better strategy for those wanting to salvage the legislation.

Due to ObamaCare’s massive size, Byron York notes that none of the Justices actually admitted reading the entire law.  “I haven’t read every word of [the law], I promise,” said Justice Stephen Breyer on Wednesday.  Justice Antonin Scalia’s comments to an attorney defending the law were more pointed: “You really want us to go through these 2,700 pages?”  “You really expect the court to do that?”

The problem for ObamaCare’s defenders is that the Justices’ refusal to read the entire law means that they are much less likely to rule the individual mandate unconstitutional and keep the rest.  Instead, they’ll just invalidate the whole thing and have Congress start over.

If that happens, the liberal mania for “comprehensive” solutions for everything from illegal immigration to financial transactions and health care will be dealt a much-deserved blow.  You can’t interpret what you can’t define.

If the Court strikes down ObamaCare in its entirety liberals will have only themselves to blame.  Had they listened to conservatives, some of the popular aspects of ObamaCare – guarantees of coverage and subsidies for premiums – would likely be in place with bipartisan support.  Now, they may have nothing to show for what could ultimately end up being a massive waste of time and money.

Philip K. Howard, author of Life Without Lawyers, has a thought-provoking essay in the Atlantic about how to repeal old laws in order to make room for new policies that will unleash American ingenuity and discretion:

Fixing what ails America is impossible, indeed illegal, without a legal spring cleaning. The goal is not mainly to “deregulate” but to restate programs in light of current needs and priorities.

As a practical matter, this requires Congress to authorize special commissions to make proposals, area by area. Using the base closing commission model, these proposals would be submitted to Congress for an up or down vote.

Going forward, Congress should incorporate sunset provisions in all laws with budgetary impact. The goal is not to end good programs but to impose a discipline that is essential for a functioning democracy that must constantly make tough tradeoffs.

Howard’s point about including sunset clauses into all new laws with budgetary impact would be a HUGE step in the right direction.  In Texas government, where I once worked as a legislative staff member, every state agency is subject to elimination pending the outcome of a once-a-decade review.

Each session the legislature is given the option to continue, modify, or eliminate state agencies falling within a policy area (e.g. all agencies having jurisdiction over education).  In practice, very few agencies are eliminated completely, but the many are consolidated and streamlined.  In every case, legislators get a chance to think through issues like whether the agency is meeting its mission; if not, why not; and if so, is there a better way?

There’s a case to be made that reforms that do little more than add to the existing body of law are, in practice, de-forms of public policy.  We don’t need more laws; we need less of the ones we have, and better versions of those.

Fred Barnes has a terrific column in today’s Wall Street Journal explaining the origin, structure and philosophy of Paul Ryan’s Medicare reform proposal.  The most intriguing paragraph explains how Ryan’s reform ideas went from minority alternative to majority consensus in just two years.

But House passage alone was a milestone. When Mr. Ryan first proposed premium support in 2008, 14 House Republicans signed on as co-sponsors. But when his budget cleared the House in 2011—with Medicare reform its most controversial provision—only four of the 241 Republicans voted against it. Of the 87 GOP freshmen, only one voted no. In the Senate, all but five of the 47 Republicans declined to back Mr. Ryan’s plan.

After weathering some resistance in the beginning:

Premium support is now Republican orthodoxy. But absent a GOP landslide this fall, that’s not sufficient to win congressional approval. Besides, entitlements are best enacted on a bipartisan basis. Otherwise, they may wind up like ObamaCare—unpopular, under legal challenge, and the target of endless partisan attacks.

Barnes is right that entitlement reform is best enacted on a bipartisan basis, but there’s every indication that a conservative victory this year that keeps the House and wins the Senate, supplemented with smart liberal support from the likes of Senator Ron Wyden (D-OR) and others, would certainly be considered bipartisan.

According to Barnes, a handful of Democrats in the Senate and House have told Ryan they are willing to go public with their support for Medicare reform after the 2012 elections.  Momentum is building for real reform of the largest deficit driver in the federal budget.  This should be a motivator for every fiscal conservative to make this election the year Ryan’s reforms become law so America can get its finances in order.

Back in December I wrote a column defending a Medicare reform proposal outlined by Rep. Paul Ryan (R-WI) and Senator Ron Wyden (D-OR).  Unlike Ryan’s “Path to Prosperity” budget resolution that passed the House in 2011, Ryan-Wyden retains traditional Medicare.  However, like Ryan’s original reform, Ryan-Wyden introduces private sector competition by allowing seniors to use vouchers to select the plan – public or private – that they want, with any savings from a less expensive plan landing in the seniors’ pocket.

At the time, Ryan-Wyden was reported as an idea by two policy wonks with no discernable political support on Capitol Hill.  That changed this week when Senators Tom Coburn (R-OK) and Richard Burr (R-NC) introduced a bill that substantially mirrors Ryan-Wyden’s Medicare-plus-competition proposal.  Although both pairings are so far quiet on the similarities between their plans, this is a good first step toward getting a common conceptual framework around an idea that increases competition.

Not that you’d know any this from reading Think Progress’ headline announcing the Coburn-Burr plan as “Two Republican Senators Try to Walk Back Paul Ryan’s Medicare Privatization Plan.”  Indeed, one has to read halfway into the article to discover that Coburn-Burr “is very similar to the bipartisan framework outlined by Ryan and Sen. Ron Wyden (D-OR) last year and adds little to the Medicare reform debate.”

To Think Progress’ way of thinking there is little news value when two conservative Republican Senators introduce an almost identical reform plan to one announced by a liberal Democratic colleague and the most influential Republican Congressman.  Almost everyone else knows better.  With support growing for Ryan’s Medicare 2.0 reform, expect to see more movement Ryan’s way as the year rolls on.

The Manhattan Institute is honoring Rhode Island Treasurer Gina Raimondo for doing the seemingly impossible – reforming a Democratic state’s public pension system so that it starts to realize savings within years, not decades.  (The key is changing the contribution and pay-out systems for everyone, not just new hires and non-vested employees.)

But beyond dollars and cents, Raimondo made an appeal that should convince people whether it’s made by her or Paul Ryan.

Without real reform, Rhode Island’s annual pension costs would soar by hundreds of millions of dollars a year — a large figure in a state of one million residents. Raimondo emphasized that the ever-rising demands of the pension system would mean less money available for education and municipal services, and a deterioration in the effectiveness of government.

The emphasis is mine, but it is one Raimondo shares.  Government must do (some) important things and in certain areas it can even do nice things, but it cannot afford to do anything if a policy item starts to eat up the entire budget.

Though there are many positive things to say about Rick Santorum’s candidacy – battle-tested conservative on national security, welfare reform and foundational issues like family and marriage – he has yet to catch anything resembling a break while seemingly every other Republican running for president has (witness the regrettable Jon Huntsman ticking up in New Hampshire).

Unlike frontrunners Mitt Romney and Newt Gingrich, Rick Santorum has no personal baggage, and has not flip-flopped on any principled issue since entering public life twenty years ago.  As we’ve discussed before, Santorum has great ideas on personal and corporate tax reform that would lead to real economic growth.  So, with the base refusing to support Mitt Romney and others skittish of Newt Gingrich’s past and future, why can’t Rick get a break?  Is it media bias over his stance on social issues?  Bad debate performances?  Does he lack contacts with big donors?

Byron York has written several pieces anticipating an Iowa surge for Santorum, but so far…nothing.

Thoughts?

Steven Hayward of the American Enterprise Institute writes a thought-provoking piece for the fall edition of Breakthrough Journal.  In it, the conservative environmental expert and presidential historian discusses how to deal with three facts of modern political life:

(1)   Neither liberals nor conservatives will ever defeat the other side so decisively as to be able to govern without the consent of the other side

(2)   The divisions between Left and Right are fundamental and unbridgeable because each side has conflicting modes of moral reasoning that cannot be easily synthesized or bridged

(3)   The welfare state, or entitlement state, is here to stay

On this last point Hayward voices support for some of the reforms in Paul Ryan’s Path to Prosperity budget plan, and other conservative attempts to make social programs more fiscally sustainable by changing eligibility requirements.  Citing Ronald Reagan’s retreat from serious entitlement reform as a prime example of how unlikely it is for modern conservatives to simply do away with entitlements, Hayward offers a cautionary analysis against perennial cost-control proposals like “starve-the-beast” and balanced budget amendments.

As the GOP presidential voting gets underway in less than 50 days, this is a piece well worth reading, considering, and applying to those who would replace President Barack Obama.

One way to think of a presidential campaign is as a nationally followed negotiation.  Each political party provides players who in turn generate ideas for public consumption.  Some proposals change the national consensus (e.g. Ronald Reagan’s tax cuts), while others fall flat (Walter Mondale’s “I will raise your taxes” pledge). 

If we look at what leading Republicans have proposed this cycle, it’s an impressive range of serious fiscal ideas.  Paul Ryan has his “Path to Prosperity” budget, Rick Santorum his tax cuts. Mitt Romney has 59 points to get America working, and Herman Cain has “9-9-9”.  Now, Ron Paul says we should cut $1 trillion dollars by eliminating entire federal cabinet departments and going back to 2006 funding levels for those that survive. 

My suspicion is that Paul’s plan will get the most criticism because it is the most radical.  But might it also be the most helpful in a sense, since it probably represents the least government that any major Republican will put his or her name to this year?  And if that’s the case, then isn’t Paul doing the electorate a favor by clearly articulating what the most radical version of reform would look like so voters can weigh the differences fully? 

If Quin, Tim, or Troy has anything to add, I’d like to read it.  Is Ron Paul’s plan bold, crazy, or something in between?

Once upon a time, candidate Obama promised to participate in the federal campaign finance program in a sop to free speech restrictionists.  Of course, he reneged as soon as he could, claiming that since the system is “broken” it was his right to collect as much money as he could  from willing donors.

Fast-forward to today, and it looks like President Obama has long forgotten his former aversion to privately financed campaigns:

[The President] can also raise large contributions for the Democratic National Committee — topping out at $30,800 per donor rather than the $5,000 limit on contributions to candidates — that are helping finance the party’s broader efforts to help Democrats up and down the ballot. During the last three months, the committee has already transferred funds totaling more than $1.3 million to Democratic organizations in all 50 states and the District of Columbia, according to the party’s filings.

I don’t begrudge any candidate for choosing a free(r) market approach to campaign finance.  What’s galling in Obama’s case, though, is that once again we have an example of how brazenly opportunistic he is when it comes to basic principles.  Whether it’s promising people they can keep their health insurance after Obamacare or campaigning as a post-partisan then saying Republicans want folks to drink dirty water, the man seems incapable of keeping his word. 

The joke on some politicians is a truth applied to the president: you know he’s lying when his lips are moving.

For every crisis, there is an opportunity:

As part of the June budget agreement, the state will transfer to the 58 counties responsibilities for managing low-level offenders, as well as providing mental health, substance abuse and child protective services. It’s a Reaganesque approach – the idea that we can deliver better service at less cost by moving government decision-making closer to the people. Or, as Gov. Jerry Brown described Thursday, “It’s a bold vision of a new relationship between the state and local governments.”

It’s also a bow to fiscal reality.  Here’s to more (forced) bold thinking that gives local officials the power to best serve their neighbors.

Hat tip to Rep. Darrell Issa (R-CA) and his staff at the House Committee on Government Oversight for sharing this “Myth v. Fact” explanation via email of the USPS’s alleged overpayment into the federal retirement system.

Myth: The Postal Service has overpaid by $50-$75 billion into the Civil Service Retirement System and Congress owes this money back.

Fact: There is no Postal Service overpayment.

The United States Postal Service was created in 1971 from the old Post Office Department in order to provide better mail delivery and let it act more like a business. In 1974, the Postal Service agreed to a formula to share the retiree costs of individuals who worked for both the Post Office Department and the Postal Service, calling it “proper, as a matter of principle.” Now, with revenues declining, the Postal Service argues that that formula is unfair. The Postal Service argues that if a formula it considers to be fair had been used instead, then it would be owed $50-$75 billion by the US Treasury.  This is an attempt to rewrite history. The original formula was instituted as part of a broader set of decisions concerning the creation of USPS.  For instance, those decisions included not charging any fee to USPS in return for the postal monopoly it was granted.  Another reason why it makes little sense to speak of an overpayment due to USPS is that the Postal Service had a clear requirement from 1971 until 2006 to raise postage rates to cover all costs, including its cost of retirement funding.  If a different formula had been used all these years that had resulted in lower annual payments by USPS for its federal employee retirement costs, those savings would have been used to lower the cost of postage rates.

Issa’s postal reform bill is up for consideration in a congressional subcommittee today.  You can get more information on his version of postal reform at this website.

Larry Summers, the economist whose resume includes helping create the kind of mortgage default swaps that crashed the financial system, being fired as President of Harvard for sexist remarks about female scientists, and resigning in disgrace as his infrastructure-heavy stimulus package failed, is back with a plan only a Soviet central planner could love.

Writing for Newsweek (itself an entity that’s seen better days), Summers tells his former boss, “Mr. President, We Need a 10 Year Plan.” Give Summers credit for brashness; in Soviet Russia the Communist Party considered it a success if it could make good on any of its 5 year plans.  (It never did.)

I’ll use Summers’ piece as an excuse to do something otherwise thought impossible: praise President Barack Obama for firing at least one bad economist.

It’s not about central planning, Larry; it’s about incentives.  Reform the tax code and streamline regulations with incentives for hiring and producing, and the economy will grow.

New York Times columnist Anand Giridharadas did today what precious few liberal commentators would: give Sarah Palin a fair hearing.  “Confessing” a knee-jerk reaction to Palin that writes-off the former Alaska governor before she speaks, Giridharadas nonetheless noted Palin’s striking analysis of the current political scene from a recent speech in Iowa:

She made three interlocking points. First, that the United States is now governed by a “permanent political class,” drawn from both parties, that is increasingly cut off from the concerns of regular people. Second, that these Republicans and Democrats have allied with big business to mutual advantage to create what she called “corporate crony capitalism.” Third, that the real political divide in the United States may no longer be between friends and foes of Big Government, but between friends and foes of vast, remote, unaccountable institutions (both public and private).

This is the kind of anti-establishment populism that Palin articulated to victory against incumbent Republicans in Alaska (first, fellow members of the state’s Oil & Gas Conservation Commission, then the sitting governor).  Indeed, one of the main reasons John “Maverick” McCain chose Palin as his vice presidential running mate was because of her willingness to buck the system in favor of her principles.

As just what might those principles be as president?  Giridharadas says:

Ms. Palin may be hinting at a new political alignment that would pit a vigorous localism against a kind of national-global institutionalism.

On one side would be those Americans who believe in the power of vast, well-developed institutions like Goldman Sachs, the Teamsters Union, General Electric, Google and the U.S. Department of Education to make the world better. On the other side would be people who believe that power, whether public or private, becomes corrupt and unresponsive the more remote and more anonymous it becomes; they would press to live in self-contained, self-governing enclaves that bear the burden of their own prosperity.

No one knows yet whether Ms. Palin will actually run for president. But she did just get more interesting.

Kudos to the Heritage Foundation for drawing attention to this analysis from the Brookings Institution about President Barack Obama’s unprecedented use of the waiver process to bypass Congress and rewrite education law:

It is one thing for an administration to grant waivers to states to respond to unrealistic conditions on the ground or to allow experimentation and innovation. Similar waiver authority has been used to advance welfare and Medicaid reform going back to the Reagan administration, and to allow a few districts and states to experiment at the margins of NCLB in the Bush administration. It is quite another thing to grant state waivers conditional on compliance with a particular reform agenda that is dramatically different from existing law. The NCLB waiver authority does not grant the secretary of education the right to impose any conditions he considers appropriate on states seeking waivers, nor is there any history of such a wholesale executive branch rewrite of federal law through use of the waiver authority.

Michael Barone says that thanks to a sputtering economy, a growing Mexican middle class, and measures like Arizona’s e-Verify system that puts the onus of enforcement on employers, President Barack Obama’s push for immigration reform is behind the curve.  It would be far better if the federal government reacted to facts on the ground.

That means we can shift our immigration quotas to more highly skilled immigrants, as recommended by a panel convened by the Brookings Institution and Duke University’s Kenan Institute for Ethics and as done currently by Canada and Australia.

Such a change would be in line with the new situation. Mexican immigrants have tended to be less educated and lower-skilled than immigrants from other Latin or Asian countries. Lower Mexican immigration means lower low-skill immigration. Employers of such immigrants may have to adjust their business models.

Probably they are already doing so. But government adjusts more slowly.

Tell us about it.

Mercury News opinion writers David Houston and Jot Condie give a sense of the near impossibility of doing business in California.  Andy Puzder is the CEO of CKE Restaurant, the parent company of Carl’s Jr., a popular hamburger eatery in California.

Even after businesses have gotten off the ground, California’s regulations continue to pigeonhole business owners in how they operate. For example, California’s strict work rules classify general managers as employees, requiring that they take breaks at specified times, harming their ability to manage the business effectively. Puzder said he has had to fire managers who insisted on working more hours than the state allows.

The reason managers would have to be fired for working hard is that it makes businesses vulnerable to litigation. With more than 1 million lawsuits filed every year, California is one of the most litigious states in the country, and its countless regulations make business owners a magnet for abusive lawsuits. No matter what type of business you are in, it seems like there is a lawsuit waiting for you.

If you own a restaurant and your bartender chooses to forgo a break to collect extra tips, you can be sued for wage-and-hour violations. If your trash can is moved by someone else in your store, you can be sued under the Americans with Disabilities Act. If you try to bring renewable energy to the desert, you can be sued by environmentalists and unions. Is it any wonder that many owners are deciding doing business in California is not worth it?

Firing managers who want to work more hours for more money because the law makes litigation almost mandatory?  Now that’s Progressivism!

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.

Conservatives are rightly convinced that private sector initiative is the key ingredient to almost every major improvement, be it economical, cultural, etc.  But before individuals can make big changes, they must be legally allowed to do so.

Thanks to Education Secretary Arne Duncan’s Race to the Top program, states like California opened up their public school districts to more parent involvement.  (These kinds of reforms are necessary to qualify for Race to the Top funding.)

According to Parent Revolution, a Los Angeles-based organization helping parents maximize their rights under the law,

The Parent Trigger is a historic new law that gives parents in California the right to force a transformation of their child’s current or future failing school. All parents need to do is organize – if 51% of them get together and sign an official Parent Trigger petition, they have the power to force their school district to transform the school.

If successful, parents have five options:

1) Charter conversion:

If there is a nearby charter school that is outperforming your child’s failing school, parents can bring in that charter school to transform the failing school. The school will then be run by that charter school, not the school district, but it will continue to serve all the same students that have always attended the school.

2) Turnaround:

If parents want huge changes but want to leave the school district in charge, this option may be for them. It forces the school district to hit the reset button by bringing in a new staff and giving the local school community more control over staffing and budget.

3) Transformation:

This is the least significant change. It force the school district to find a new principal, and make a few other small changes.

4) Closure:

This option would close the school altogether and send the students to other, higher-performing schools nearby.  Parent Revolution does NOT recommend this option to parents – we believe schools must be transformed, not closed.

5) Bargaining power:

If parents want smaller changes but the school district just won’t listen to them, they can organize, get to 51%, and use their signatures as bargaining power.

Parents get to pick which option they want for their children and their school. For a much more detailed overview of each one of these options, please click here.

All public policy needs to do is create space for private initiative to occur.  Once it does, the ingenuity of the American people will make the most of the opportunity.

For more on Parent Revolution, click here.

Perhaps the Department of Health and Human Services (HHS) should get credit for making the road to serfdom a little easier to travel.  Beset by criticisms that ObamaCare grants HHS Secretary Kathleen Sebelius “dictatorship” status with powers including on whom to bestow compliance waivers, HHS confirmed it handed out 500 new get-out-jail-free cards.

The purpose of the year-long waivers is to provide a compliance-free bridge for employers who would otherwise opt to pay the penalty for canceling out-of-compliance insurance plans.  That bridge only extends to 2014.

Alex Cortes at The Daily Caller notes that the waivers (averaging about two a day so far for 729 total) will only be granted until 2014 when ObamaCare’s state-run insurance exchanges come online.  Then, companies that stop offering insurance will pay the fine, but their employees will be able (i.e. forced) to use the exchanges or be fined themselves for ignoring the individual mandate.

Until then, private sector employers and employees must go hat-in-hand begging for a waiver from Comrade Sebelius.  Don’t worry, says a HHS spokesman, the number of waiver requests denied is “more than a handful, but not a big number.”  How benevolent.