October 20, 1999

by Peter J.M. Orvetti

"Reforming" the First Amendment
Iraq: Nine Years and Counting
Nuclear Standoff?
Driving Up Tax Rates

"Reforming" The First Amendment

Senate Republican leaders have held off a vote on legislation that would overhaul the campaign finance structure, with supporters twice falling short of the 60 votes needed to break a filibuster. Senate Majority Leader Trent Lott (R-Miss.) declared the issue "dead for the year," according to the New York Times.

Presidential candidate Sen. John McCain (R-Ariz.) defended the bill earlier this week. Appearing on NBC, McCain said that "[t]he fact is when someone gives large amounts of money, then they expect and receive influence in Washington." National Republican Senatorial Committee Chairman Sen. Mitch McConnell (R-Ky.) disputed that, and argued that McCain-Feingold would eliminate the ability of political parties to support their candidates. "Thirty-five percent of the budget of the Senatorial committee, 40 percent of the budget of the Republican National Committee is non-federal money," McConnell said. Supporters say the legislation would decrease the risk of influence peddling, while opponents say the measure violates the First Amendment.

Bradley A. Smith addressed the First Amendment aspects of campaign finance reform in 1997 testimony before Congress: "After twenty years of campaign finance regulation, it should by now be clear that independent electoral advocacy by citizen groups lies at the core of the First Amendment, and that such advocacy ought to be beyond the permissible scope of government regulation. Political battles should be fought out in forums of public persuasion. It is poor policy to divert such debates to federal courtrooms, with each side attempting to silence its opponents through such arcane concepts as 'express advocacy' and 'coordinated' or 'uncoordinated' expenditures… Deregulation of campaign finance, not added regulation, is the proper course of action. The FECA $1000 limit on individual campaign contributions should be abolished entirely, or at least raised to a realistic figure, in order to reduce the need for candidates to rely on independent expenditures… All caps on political party giving should be removed. Donations from a party to its own candidates are not 'corrupting.' Moreover, since last year's Supreme Court decision in Colorado Republican Federal Campaign Committee v. Federal Election Commission, 1996 WL 345766 (U.S. 1996), parties may spend unlimited amounts in support of their candidates, but only independently of the candidate's campaign. Driving a wedge between parties and candidates is poor public policy.

"Disclosure of political expenditures meets any public need to know the source of financing. However, even here I must counsel caution. Disclosure rules can have a chilling effect on speech and may be constitutionally limited. McIntyre v. Ohio Board of Elections, 1995 WL 227810 (U.S.)(1995). Disclosure rules governing independent expenditures should be limited, therefore, to groups which engage in substantial activity, spending over $50,000 in an election cycle. Electronic filing and mandatory FEC posting of reports on the Internet would help to insure an informed public. These are the type of sensible, constitutional reforms Congress should consider… Now is the time to get out of the box. We must not plunge ahead, sacrificing our First Amendment Freedoms… The House should reject simplistic proposals such as Shays-Meehan, or efforts to amend the Constitution to destroy the right to free political speech, and move generally to deregulate political speech. It ought not be a crime to 'commit politics' in America." Cato Handbook for Congress (pdf) recommendations on campaign finance are also available.

Iraq: Nine Years And Counting

Secretary of Defense William Cohen is in the middle of a nine-nation jaunt to the Middle East, AP reports. Cohen's meetings will deal largely with policy toward Iraq. Cohen told reporters travelling with him the purpose of his trip was to "reinforce the United States' position that we are here for the long-term and that we value the security relationships we have with the individual countries." Pentagon officials said that international cooperation on Iraq, the Middle East peace process, proliferation of nuclear, biological and chemical weapons, and terrorism comprise the bulk of Cohen's agenda.

According to the Cato Handbook for Congress (pdf), "After nearly a decade of heated rhetoric condemning Iraqi president Saddam Hussein, it became clear that Washington could not fulfill its stated policy of 'keeping Saddam in the box' at a cost acceptable to policymakers. So the Clinton administration quietly abandoned that policy, but it failed to recalibrate its rhetoric. Exposure of such a discrepancy does tremendous harm to U.S. credibility. The weaker U.S. credibility becomes, the more likely that Saddam and other adversaries will test U.S. credibility in the future-perhaps by military means."

"The conventional wisdom is that the United States must defend Saudi Arabia and Kuwait to ensure the flow of cheap oil from the Persian Gulf to the West," Ivan Eland wrote in the Cato Policy Analysis "Tilting at Windmills: Post-Cold War Military Threats to U.S. Security". "But as Lawrence Korb, former assistant secretary of defense, argues, 'Why does the U.S. spend $50 billion a year to safeguard access to $10 billion a year worth of oil from the Persian Gulf while the Europeans, who use $30 billion a year, spend next to nothing?' Western Europe gets 24 percent of its oil from the Persian Gulf and Japan gets 70 percent; in contrast, the United States gets only 19 percent. The United States is spending vast sums to ensure that its wealthy economic competitors in Europe and East Asia have cheap supplies of oil. (In a global oil market, any production cutback by Persian Gulf states will raise the price of oil for all consumers. The greatest transaction costs, however, will probably be incurred by the Europeans and Japanese because they must sacrifice the most efficiency in switching more of their purchases to other suppliers.) Japan and most of the Western European nations spend far smaller portions of their GDPs on defense than does the United States. By lowering the percentage of their societies' resources that must be allocated for defense, those nations give their companies a competitive edge over U.S. firms that are burdened by a higher societal defense bill."

Nuclear Standoff?

Bucking the will of the Senate, Secretary of State Madeleine Albright said Sunday that the United States will continue to honor the Comprehensive Test Ban Treaty, which the Senate rejected by a margin of nearly 20 votes last week. Albright complained that the rejection hurt the United States internationally and said, "What we've lost for the time being is the real international leadership in terms of trying to make others live up to the CTBT. But I want to assure all your viewers, around the world, that the United States is going to live up to the conditions of the treaty," Albright told CNN.

But the CTBT is not a good idea for the United States. In "The Comprehensive Test Ban Treaty: The Costs Outweigh the Benefits", a January Cato Policy Analysis, Kathleen C. Bailey wrote, "The first of two principal arguments for CTBT ratification is that the treaty will be a step toward total nuclear disarmament because it will constrain the modernization and development of nuclear weapons. The second argument is that the CTBT will stem nuclear proliferation. While it is true that modernization and development will be constrained, some opponents of the treaty view that as a negative outcome for the United States. Further, they fear that other nations may continue to modernize and develop nuclear weapons despite the treaty because CTBT verification measures will not likely detect evasive testing. The notion that the CTBT will stem proliferation is clearly untrue. Nations can acquire workable nuclear arsenals without testing… [T]he limited political benefits of the CTBT are not worth the high cost to U.S. national security."

Driving Up Tax Rates

Opponents of a gasoline tax hike approved by the Oregon legislature have turned in enough petition signatures to block the increase until a May 2000 referendum can be held, AP reports. The Oregon/Idaho American Automobile Association said that 71,369 signatures were submitted to the secretary of state's office, well over the 44,524 needed to send the five cent per gallon increase to a public vote.

But drivers in Oregon and everywhere are already overburdened by the federal gasoline tax. In a 1997 commentary, Stephen Moore said that it was time to "Give Motorists a Tax Break": "What has been the fastest-growing federal tax imposed on middle-income Americans over the past 20 years? The answer may surprise you. No, it's not the income tax. And it's not the payroll tax. It's the federal gasoline tax. The federal penalty for driving in 1980 was a tax of 4 cents a gallon. But the tax climbed by 5 cents a gallon under Reagan in 1982; by another 5 cents a gallon under George Bush in 1989; and most recently by an additional 4.3 cents a gallon under Bill Clinton in 1993. For those who are counting, that's a steep four-and-a-half-fold increase in 16 years. When state and local gas levies are included, motorists in many states now pay 40 to 50 cents a gallon. It's hard to say where all the money has gone. Clearly, the nation's roads aren't four and a half times better today than they were 15 years ago. In fact, it seems that there are more watermelon-sized potholes nowadays than ever… The gas tax was originally intended to be a 'user fee' -- a quasi-toll for using roads, bridges and highways. But for more than a decade the federal highway trust fund has been accumulating billions more from the tax than has been spent on roads. In fact, the revenues from Bill Clinton's 1993 gas tax hike were explicitly dedicated to reducing the deficit, not fixing roads."