The Department of Labor (DOL) published a new final rule this week that will change its process for certifying U.S. farmers to hire foreign guest workers under the H‑2A visa category. DOL initially proposed the rule in 2019 under the Trump administration, but the proposed rule contained a variety of cost-saving and streamlining measures for employers. The Biden DOL went line-by-line removing all those positive aspects leaving only the cost-increasing parts.

This new rule will add to the already sky-rocketing food prices in the United States. In September, food prices had already increased 11.2 percent over last year—the highest amount in over four decades and a sixfold increase over the prepandemic rate. Yet DOL is about to impose even more costs on farmers and U.S. consumers. The rule has several cost-inflating measures, but the most significant would indirectly cause the H‑2A minimum wage for many farmers to go up, increasing the cost for hiring, reducing the number of H‑2A workers hired, and thereby reducing food production.

The new rule inflates H‑2A minimum wage rates.

H‑2A farmers must pay H‑2A workers (and U.S. workers in corresponding employment) the higher of: 1) the Adverse Effect Wage Rate (AEWR), 2) the prevailing wage, or 3) a collective bargaining (union) wage (very rare on H‑2A farms). The AEWR is the regional average wage of field and livestock workers in the U.S. Department of Agriculture’s Farm Labor Survey. Almost always, the binding wage has been the AEWR—which already has several elements designed to inflate wages—but this rule seeks to impose even higher “prevailing” wages.

“Prevailing wages” are established through state or local surveys of workers in a specific type of agricultural activity. Until this new rule, State Workforce Agencies—state entities funded by the DOL—had the sole responsibility for conducting these surveys. However, DOL laid out such rigorous standards for the surveys that they are almost never conducted, and when they are, they are almost never binding on the employer. Just eight states had conducted valid prevailing wage surveys for 2022, and only one such survey produced an hourly wage higher than the Adverse Effect Wage Rate applicable for that state. A few others produced wage rates per unit of production (bins, bushels, etcs) that may be higher, but overall, fewer than 2 percent of H‑2A workers had wages not set by the AEWR in 2022.

Now DOL wants to calculate higher prevailing wages for every H‑2A worker by eliminating the rigorous standards for H‑2A prevailing wage surveys and unleashing a flood of shoddy surveys to inflate worker wages above the AEWR. The new rule makes six significant changes to the prevailing wage survey methodology to increase the frequency of surveys and inflate wage rates:

1. Surveyors no longer need to interview survey subjects. This removes a major cost barrier to conducting surveys.
2. Surveyors no longer need to validate employer-provided wages with surveys of workers. This removes another major cost barrier to conducting surveys.
3. Surveyors no longer need to estimate the population size being surveyed. This means that State Agencies can impose on a huge population a poor estimate based on a small sample without having to estimate the number of affected workers.
4. Surveyors can be any state entity other than the State Workforce Agency including state universities. This means that any agency interested in higher wages can conduct a survey, which will vastly increase the resources available for these surveys.
5. Surveys do not need to reflect average wages across the entire year or season, but rather only the peak season. Although this isn’t a change from the current rule necessarily, the new rule explicitly authorizes this practice which biases wages for an entire season based on the week where the shortage is most acute. This means that the surveys will be biased before we even get to the sampling design.
6. Surveys can be based on sample sizes as small as 30 workers. With a sample size this small, these surveys will have a huge margin of error (about 17% for a population size of 500). Any values lower than the AEWR would be thrown out, while the errors on the high end would be accepted as valid and binding on employers. Table 1 shows the sample sizes, share of workers surveyed, and margin of error under the current and new rule.

We would expect that the survey errors alone would inflate wages by about 3 percent if prevailing wage surveys were conducted in every state for every job. But since the surveys will also likely only reflect the peak weekly wage rather than the average for the season, the effect could be double. Given that total H‑2A wages will be above $8 billion next year and $10 billion the year after, it’s possible that this aspect of the rule could end up costing farmers more than $500 million per year if fully implemented, reducing the number of farm workers employed, decreasing production, and raising prices.

The DOL argues that the Bureau of Labor Statistics (BLS) publishes wage survey data that includes samples as small as 30 workers and that the H‑2B regulations permit employer-provided surveys with samples as low as 30 workers. Yet the H‑2B employer-provided workers are entirely optional for employers, and they can only lower the required wage, not increase it. The BLS data include the margin of error for each occupational classification, so researchers understand its reliability. It is published for informational purposes, not as a mandate for employers. DOL does allow non-H-2A employers to use the BLS data, but again, doing so is optional. The new H‑2A rule explicitly prohibits any other surveys for H‑2A farmers.

The new rule includes other costs and no benefits.

The other cost raising measures in the new rule include:

1. Prohibiting a reduction in wages (even with contractual agreement of the worker) on the rare occasions when the mandated wage goes down;
2. Codifying that farm associations which file H‑2A applications on behalf of individual members would be liable for the actions of those members (currently a matter of legal dispute);
3. Effectively prohibiting many farms from using motels or other public accommodations to house workers to comply with H‑2A’s housing requirement by requiring that they meet totally inapplicable guidelines for temporary farm labor camp standards; and
4. Massively increase surety bonds for H‑2A labor contractors which are the employers driving most of the growth in H‑2A visas. Increasing costs for H‑2A labor contractors targets the fastest growing group of H‑2A employers. Contractors expressed concern that they might not be able to obtain surety bonds in the massive amounts required under this provision.

DOL asserts that the rule is still balanced by allowing electronic filing or electronic signatures for employers. But nearly all H‑2A applications are already filed online, and the so-called streamlining measures are either just codifying existing practices or are such minor concessions (e.g., e‑signatures) that they do nothing to offset the new costs. DOL carefully went through and removed proposals from the proposed rule that would have reduced costs. The final rule contains:

1. No ability to stagger the start dates of workers on a single application;
2. No ability to fulfill any recruitment requirements before filing the application;
3. No ability to make changes to an application after it is certified;
4. No two-week transition periods for implementing new mandatory wage rates;
5. No reduction in the requirement to hire U.S. workers after H‑2A workers have already arrived;
6. No increase in the certification of employer-provided housing from one to two years;
7. No ability for previously certified employers to self-certify their housing;
8. No elimination of the requirement to pay for H‑2A travel to the U.S. consulate; and
9. No inclusion of pine straw or forestry industries in the uncapped H‑2A visa category.

These changes were relatively minor compared to the sweeping reforms that the overly bureaucratic program requires. The government has imposed more than 200 rules on employers, and this rule does not streamline or reduce any of those rules. The H‑2A visa is one of the few alternatives to illegal immigration and illegal employment, and making it more costly and more bureaucratic is counterproductive to reducing illegal immigration and improving food security in the United States.

On October 10, Politico’s Andrew Desiderio reported that Senate Foreign Relations Committee Chair Bob Menendez (D‑NJ) said that “the United States must immediately freeze all aspects of our cooperation with Saudi Arabia, including any arms sales and security cooperation beyond what is absolutely necessary to defend U.S. personnel and interests.” Desiderio’s tweet and the corresponding article both claim that “Menendez has veto power over foreign weapons sales.”

While stopping the sales would constitute a bold step in reassessing U.S. relations with Saudi Arabia, Menendez cannot veto such sales under current conditions. Our research examines how Congress can restrain the president’s ability to use weapons sales as a foreign policy tool. Ultimately, the Senate Foreign Relations Committee chair—and Congress as a whole—can stop weapons sales to a specific country through three legislative mechanisms. Unfortunately, they all require presidential tolerance.

Method 1: Section 502B(c) of the Foreign Assistance Act of 1961

Section 502B(c) of the Foreign Assistance Act of 1961 allows the Senate Foreign Relations Committee or House Foreign Affairs Committee to request a report on a specified country. This addition was passed following two House Foreign Affairs subcommittee reports on human rights in 1973 and 1974. After 30 days, no security assistance is delivered until the report is received. Once received, Congress can then pass a joint resolution of disapproval to terminate or restrict security assistance. In the Senate, resolutions requesting a report and post-report are subject to expedited procedures, meaning that a simple majority should be able to move them forward.

The problem is that this is subject to the president’s willingness to let it happen. Current legal precedent does not make this easy. It was tried twice: first in Crockett v. Reagan (1982) and again in Clark v. United States (1985). Both cases were dismissed and never advanced to the Supreme Court. In addition, following Immigration and Naturalization Service v. Chadha (1983), former President George H. W. Bush noted that 502B(c) is likely inconsistent with U.S. law because it would allow a single congressional committee to stop security assistance without being “presented to the President” for review.

More recently, Senator Jeff Merkley, Senator Bob Menendez, and Representative Tom Malinowski have all attempted to employ 502B(c) to no avail. Former President Donald Trump successfully argued that the provision violated separation of powers to stop Menendez and the then chair of the Senate Foreign Relations Committee Bob Corker from using a similar provision of the Global Magnitsky Human Rights Accountability Act. Likely, President Biden could do the same thing if Congress enacted 502B(c) to stop sales to Saudi Arabia.

So, while this provision could in theory allow Menendez to veto a sale to Saudi Arabia, it would likely trigger a lengthy court battle. Legally, it is unclear if it can be used, and any lawsuit would likely not have any resolution for well over a year if it did make it to the Supreme Court. Ultimately, that is why one of the most anti-sales-to-human-rights-abusers chairs of the Senate Foreign Relations Committee, Frank Church, never invoked 502B(c) during his tenure as chair between 1979 and 1981.

Method 2: The Arms Export Control Act of 1976

The Arms Export Control Act gives Congress the ability to stop a sale 30 calendar days before a transfer of equipment valued at $14 million or more. After being notified of a sale, Congress can pass a joint resolution of disapproval. Yet because of two legislative barriers, Congress has never successfully stopped a sale.

First, in the House, there is no mechanism to force the House Foreign Affairs Committee to debate an arms sale, which allows a potential resolution to die in committee. If the House Foreign Affairs Committee does not act to stop a sale, there is nothing Menendez can do because he needs the House to disapprove of the sale to pass a joint resolution.

Second, because Congress needs to pass a resolution disapproving of the president’s sale, the president can veto the resolution. Therefore, even if Congress can unify and both chambers pass a resolution of disapproval to stop a sale, they need to have a veto-proof majority. Trump was able to veto such resolutions to stop sales to Saudi Arabia multiple times.

Absent legislation that “flips the script” to give Congress the power to approve, rather than disapprove, every sale, this presidential veto will override any “veto” that Senator Menendez attempts.

Method 3: The Informal “Hold” Process

In the current arms sales process, the State Department traditionally submits an informal notification to the Senate Foreign Relations Committee and House Foreign Affairs Committee 20–40 days before the formal notification. If any members of Congress have serious problems with the sale, the offices can then place a “hold” on the sale until the issues are resolved.

The problem is that this hold is a courtesy and not written into law. According to Alexandra Stark at the New America Foundation, “the administration has the legal authority to ‘blow’ a hold, meaning they trigger the formal notification process anyway despite Congress’ objections.”

Menendez himself already failed to stop a sale of precision-guided munitions to Saudi Arabia this way in June 2018. He blocked the sale for a few months by placing a hold but was eventually overruled when the Trump administration declared an “emergency exception.”

It is not only optimistic but also inaccurate to say that Senator Menendez has veto authority. Through both legal and informal processes, the executive branch has the final say on arms sales, unless Congress has a veto-proof majority behind a disapproval or passes new legislation that grants it more power over the process.

Nonetheless, Menendez may still succeed in blocking the next round of sales to Riyadh. Biden is growing irritated with Saudi Arabia and may be looking for a way to de-emphasize the American-Saudi security relationship. Allowing Congress to stop the sales helps him avoid political blowback.

When Mara Linaberger lost her position as a school district administrator, she was at a crossroads. She never expected that what seemed like a low point would eventually lead her to start her own business, Microschool Builders.

After she was so abruptly dismissed, Mara began to question the system and why it worked the way it did. She started to investigate alternative education models and learned about small schools using models such as Montessori, Waldorf, or Reggio Emelia. She even taught in a one-room schoolhouse off the coast of Maine.

As she got deeper into the alternative education world, Mara began to re-think the current system. She realized it wasn’t working for a number of children—it wasn’t treating them as unique learners and allowing them to lead with their personal interests. She decided to put her background to use to help teachers and parents create small microschools that would be a modern take on the one-room schoolhouse. In 2017, she wrote The Micro-School Builder’s Handbook to help would-be school founders through the process of starting a microschool.

Building on her 25-year career as a public school educator, teacher trainer, and administrator, along with her increasing understanding that there are better ways to educate children, Mara launched Microschool Builders in 2019. Her goal is to serve people who want to create an educational environment that treats each child as an individual.

Microschool Builders offers varying levels of support. Prospective clients can start with a 30-minute “clarity call” to diagnose a prospective builder’s needs, offer solutions, and to discuss the workshop.

The heart of Microschool Builders is the 9‑week workshop to map the business plan, budget, and marketing strategy. The workshop includes a weekly call with Mara, full-time access to her and her team, and gives budding microschool owners the opportunity to learn from each other as they work through the steps of building their schools.

The next level is the StartUP, a year-long membership to go from idea to launch. Mara offers the Collective for clients interested in scaling and replication—and potentially becoming leaders in the movement, coaching new school builders

The biggest roadblock Mara sees in her clients is fear. Not surprisingly, this often means fear of failure as they’re potentially risking their own careers, stability, salaries, and personal funds. Mara is confident her process helps alleviate those fears by equipping them with a plan to minimize the risk as much as possible.

But many fear success as well—what if they get up and running and someone comes to shut them down? Mara trains her clients to overcome those challenges by educating local officials, asking them to show what rules they are breaking, and working with them to make the microschool legal if there is a legitimate issue. For example, she worked with the owner of a licensed private school in Minnesota who bought property on 15 acres to relocate, and the town said she needed 20 acres to operate a school. Mara’s client explained that she had students who were counting on her and asked what she could do. The town officials said she could operate as a homeschool co-op, so she worked with her families to get them registered as homeschoolers.

Mara admits starting a microschool is hard. One owner called it the hardest thing she’s ever done, but also the best thing she’s ever done. “Hard is good,” says Mara. “People climb Mt. Everest because it’s hard. They run marathons because it’s hard. But there are pathways. My book and guide provide a framework. The workshop and collective offer more support as well as a community. While they can do it on their own, it’s a lot more fun working together.”

As education entrepreneurship continues to expand, organizations like Microschool Builders offer support and guidance so school founders aren’t constantly reinventing the wheel. Mara has supported dozens of microschools that are now up and running—across the U.S. and in other countries. “Changing the face of education one small school at a time,” isn’t just a tagline for Mara; it’s her mission with Microschool Builders.

The Center for Immigration Studies (CIS) recently released a short report by Sean Kennedy, Jason Richwine, and Steven Camarota on illegal immigrant crime rates in Texas. The CIS report was previewed in a segment on Tucker Carlson Tonight on Tuesday, October 11^th, and claims Cato’s original research on illegal immigrant criminal conviction and arrest rates in Texas is flawed. CIS produced their results by using updated and higher Texas data on criminal convictions of illegal immigrants that don’t appear in the most recent crime data. CIS also reduced the size of the illegal immigrant population in Texas that mechanically resulted in a higher crime rate in their analysis, contradicting their own research elsewhere that finds a higher population of illegal immigrants.

In 2018, Carlson let Peter Kirsanow give a monologue criticizing my work on his show. Carlson didn’t invite me to appear on the segment, so I responded in a blog post. Carlson has invited me on his show several times before, but he has hosted two guests to criticize my work without inviting me to respond. I’ll respond here.

Cato’s Research on Illegal Immigrant Crime in Texas

My research on immigration and crime in Texas uses Texas Department of Public Safety (DPS) data on arrests and convictions by immigration status and my own estimates of the state-level illegal immigrant and legal immigrant populations. My most recent research on immigrant crime in Texas used population numbers estimated using methods developed by Christian Gunadi, an economist and scholar at the University of California San Diego. I calculated the crime rate per 100,000 for each subpopulation by dividing the number of criminal convictions by the size of the subpopulation multiplied by 100,000.

Cato’s research on the illegal immigrant criminal conviction rate in Texas broadly lines up with research by other scholars and our own work estimating the number of incarcerated illegal immigrants nationwide.

CIS’s Research on Illegal Immigrant Crime in Texas

CIS found different results by changing both the numerator and the denominator in its equation. Their researchers increased the number of illegal immigrant convictions in ways that don’t match recent Texas DPS data and they chose low estimates of the number of illegal immigrants living in Texas. Their reported increase in the number of illegal immigrant convictions, the numerator, is in the realm of possibility given how Texas updates its crime data over time, as I wrote in my previous research on this topic, but more recent data I received from Texas DPS does not match their numbers. However, CIS’s choice of a lower denominator is dubious and contradicts their own estimates of the illegal immigrant population in other CIS papers.

Different Criminal Conviction Counts – CIS is Contradicted by Texas DPS

CIS reported that there were 56 convictions of illegal immigrants for homicide in 2018, compared to my data from the Texas DPS that say 46 illegal immigrants were convicted for the same crime in the same year – a difference of 10. Homicide is the most serious crime, but a reallocation of 10 homicides is just above one percent of the 867 total homicide convictions in Texas in 2018. It’s a small revision. In my 2021 Cato Brief on the illegal immigrant crime rate in Texas, I wrote about how the state updates its crime data over time to correct for errors. I ran a robustness check that still produced lower illegal immigrant rates of conviction relative to native-born Americans. CIS extended my robustness check with slightly different data. Relative to Cato’s work, CIS increased the number of illegal immigrant criminal convictions for homicide by 21.7 percent – 10 more individual convictions out of 867 in Texas in 2018. That puts in perspective how relatively few illegal immigrants are convicted of homicide in Texas.

CIS’s new data on illegal immigrant criminal convictions don’t match more recent Texas DPS data. I received updated data on convictions by immigration status from Texas DPS in April 2022 (the data sets were created in March 2022 by Texas DPS). Every year I request updated Texas DPS data on criminal convictions, individuals convicted, arrests, and individuals arrested by crime, county, month, year, and other variables, so I can check my earlier work and prepare for future projects. I analyzed those more recently compiled numbers for the year 2018 and found 46 homicide convictions of illegal immigrants – the exact same number I had already reported and 10 fewer than what the CIS authors say they found.

Curious, I checked the same most recent data from Texas DPS for 2015, the first year examined in my series of papers on this topic. The most recent Texas DPS data I received just six months ago show that illegal immigrants were convicted of just 42 homicides in 2015, four fewer convictions than I reported when I published my first paper on the topic. CIS reported a 17.4 percent increase in homicide convictions in 2015 compared to the numbers I reported for the same year, but Texas DPS’s most recent 2015 data show an 8.7 percent decline in the number of homicide convictions for illegal immigrants. Thus, following CIS’s advice and looking at the most updated Texas DPS data for a few earlier years, the largest revision I found was fewer homicide convictions of illegal immigrants in 2015. In both 2015 and 2018, Texas DPS reported one and three more homicide convictions of legal immigrants, respectively. CIS is reporting much larger revisions in the data that they acquired in 2021 that do not show up in the data I received in April 2022.

CIS’s authors argue that there is a systematic undercount of illegal immigrant prisoners in the Texas criminal justice system. That could be, but it hasn’t shown up in my most recent data request from the Texas DPS. However, I did unexpectedly find a revised decline in illegal immigrant homicide convictions in 2015. That shows that immigration-related errors in Texas crime data don’t always undercount illegal immigrant convictions, sometimes they overcount. As my colleague David Bier has noted, DHS misidentified at least 228 U.S. citizens as illegal immigrants in just one Texas county from 2005 to 2017. Texas DPS may have serious problem misidentifying legal immigrants if the revisions I identified indicate a general trend. I can’t trust CIS’s analysis of their most recent data because it contradicts what I received from Texas DPS just six months ago. CIS wrote that they received their data in 2021. The most recent data disagree with CIS.

Different Illegal Immigrant Population Estimates – CIS Contradicts Itself

The CIS crime report uses the second lowest available estimate of the illegal immigrant population in Texas provided by the Center for Migration Studies (CMS), which also produces the lowest nationwide estimate. A lower illegal immigrant population mechanically results in a higher illegal immigrant crime rate by reducing the denominator (assuming the numerator stays the same or increases). Oddly, CIS did not use their own estimates of the illegal immigrant population that they produced elsewhere and instead chose to rely on the far lower CMS population estimates. What’s even more odd about CIS’s choice to ignore their own pure population research on the number of illegal immigrants in their crime paper is that both pieces of research are coauthored by Steven Camarota.

CIS’s own research on the size of the illegal immigrant population in their pure population research paper estimates a nationwide illegal immigrant population of 11,390,000 in 2018 and 11,480,000 in 2019, compared to CMS’s estimate of 10,565,000 in 2018 and 10,348,884 in 2019 – a difference of 825,000 in 2018 and over 1.1 million in 2019. In other words, in its paper focused on illegal immigrant population estimates, CIS estimates a nationwide illegal immigrant population that is eight percent higher than CMS in 2018 and 10.9 percent higher in 2019. Yet, the CIS authors used CMS’ lower illegal immigrant numbers for its paper on illegal immigrant crime rates in Texas. CIS’s pure population estimates imply a Texas illegal immigrant population of 1,940,000 (what DHS found using the same methods) but CMS found 1,781,752. CIS thus used a population estimate for the number of illegal immigrants in Texas that is 7.5 percent below their pure population estimates in 2018 and 8.9 percent lower in 2019.

Cato’s own estimate of the illegal immigrant population is based on a method developed by Christian Gunadi that found 10,995,696 illegal immigrants in the United States and 1,856,421 illegal immigrants in Texas in 2018. Compared to the CMS population estimates that CIS used for their crime paper, Cato’s estimates are about 3.4 percent higher in Texas and 3.7 percent higher nationwide in 2018. For 2019, our nationwide estimates are 5.6 percent higher and our Texas estimates are five percent higher than CMS’s estimates. Cato did use the CMS data in an earlier brief on illegal immigrant crime in Texas, as well as another estimate by the Department of Homeland Security (DHS), but that was before we discovered and used the superior Gunadi method.

In their pure population research, CIS bragged that their estimates of the illegal immigrant population were in line with DHS’s own population estimates. CIS’s pure population research didn’t break out their estimates by state, but DHS did. Since the DHS and CIS methods are nearly identical (they use different data sources), I can use DHS’ Texas-level estimates in the following example. CIS’s slightly higher counts of illegal immigrant crime, coupled with with CIS’s pure population research that implies a Texas illegal immigrant population of 1,940,000 in 2018, reveals that illegal immigrant homicide rates are below what Cato’s illegal immigrant population estimation methods would have been if compared to CIS’s crime data (Figure 1). CIS’s pure population research, combined with their illegal immigrant homicide convictions data, produces a homicide rate of 2.9 per 100,000 illegal immigrants compared with Cato’s three per 100,000. Both rates are below Cato’s native-born American homicide rate in Texas in 2018.

When CIS wants to show the illegal immigrant population is high, they use the highest nationwide and state-level estimates that they and others have produced. When CIS wants to show a high illegal immigrant crime rate in Texas, they choose the second lowest estimates of the illegal immigrant population for Texas, which also implies the lowest nationwide population number for illegal immigrants. This inconsistency in CIS’s own research is noteworthy.

Tucker Carlson was quick to support CIS’s research on illegal immigrant crime in Texas that was calculated with some of the lowest illegal immigrant population estimates available. But Carlson has also stated there are likely many more illegal immigrants than the common estimate of roughly 11 million. This matters because a larger illegal immigrant population mathematically results in a lower illegal immigrant crime rate. So, which is it? Are there many more illegal immigrants than reported, or do they have a crime rate similar to native-born Americans? You can only believe one of those given the data on illegal immigrant crime.

It would be great to hear why CIS’s authors change their estimates of the illegal immigrant population based on the type of study they’re publishing.

Another Wrinkle – CIS vs. PNAS

CIS also criticized a paper published in the Proceedings of the National Academy of Sciences (PNAS) that finds an even lower illegal immigrant crime rate than my own research. The authors of the PNAS paper conclude that “many legal noncitizen and foreign-born arrestees are not recorded in” government databases. When they corrected for that, the legal immigrant criminal conviction rate was frequently higher than that of illegal immigrants. Fortunately, the authors of the PNAS paper shared their methods and data in detail, so curious readers can evaluate them.

Conclusion

Relative to my Cato research, CIS made two data changes to estimate higher illegal immigrant criminal conviction rates in Texas. The first change was to use updated and higher Texas DPS data on criminal convictions of illegal immigrants – changes that I can’t replicate in more recent and up to date Texas DPS data. The second change was to reduce the size of the illegal immigrant population. They chose the second lowest Texas illegal immigrant population estimate published, which contradicts CIS’s own pure population research elsewhere that finds a much higher illegal immigrant population in Texas and nationwide.

In other words, CIS found their new criminal conviction estimates by increasing the number of convictions of illegal immigrants in a way that doesn’t match the most recent Texas DPS data but that could be true and implausibly reducing the population of illegal immigrants below what their own research suggests. They increased the numerator and decreased the denominator to produce a higher crime rate. Increasing the numerator doesn’t appear to be correct but it’s not an implausible adjustment. Reducing the denominator below CIS’s own estimates of the illegal immigrant population is not plausible. Using CIS’s homicide conviction data and its own pure population estimates narrows the conviction rate gap between illegal immigrants and native-born Americans in Texas, but it does not vanish and it certainly doesn’t show that illegal immigrants have a higher homicide rate relative to native-born Americans in Texas.

Social Security just announced the biggest increase in beneficiaries’ cost-of-living adjustment (COLA) in 40 years: 8.7%. The trouble is, Social Security is using an outdated measure that’s driving up benefit costs. The so-called chained CPI would protect seniors’ purchasing power while extending Social Security’s ability to provide benefits.

Social Security benefits are indexed for inflation to protect beneficiaries from a decline in purchasing power when the prices of goods and services rise. That’s generally a good thing. The 8.7 percent COLA increase, announced today, is a direct result of the 40-year inflation high, that’s plaguing the post-pandemic nation. Without this increase in nominal benefits, more seniors would likely experience poverty at older ages.

However, the index used to calculate Social Security’s cost-of-living adjustment needs an upgrade. CPI‑W was the name of the game back in 1975 (10 years before this author was born) when Social Security adopted automatic inflation adjustments. Since then, the measure has become outdated and riddled with measurement errors.

As a result, CPI‑W overstates the rise in the cost of living by about a quarter percentage point (0.26 from 2013–2022), compared to the chained CPI. Because Social Security COLAs are only adjusted upwards, benefits rose by 0.32 percent more, using CPI‑W versus chained CPI, over the past decade.

This contributes to the growth in Social Security benefit payouts, raising program costs beyond what’s necessary to keep beneficiaries whole.

Back in 1975, when Congress first adopted automatic inflation adjustments for Social Security benefits, the Bureau of Labor Statistics published only one Consumer Price Index – also known now as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W).

CPI‑W tracks the prices paid by urban wage and clerical workers, reflecting the purchasing behavior of about 3 in 10 U.S. individuals. There is a broader Consumer Price Index for All Urban Consumers (CPI‑U), that covers 8 out of 10 individuals in the U.S. This broader measure—by considering the prices paid by a larger number of individuals—improves inflation measurement accuracy.

There’s yet another important facet to this issue. As prices change, consumers change what they buy. For example, if the price of apples rises more rapidly than the price of bananas, households will reduce their purchases of apples and buy more bananas instead. That’s called the substitution effect. You can probably think of a thing or two you’ve bought less of (and what you’ve purchased instead) since inflation took hold in America’s grocery stores, gas stations, and elsewhere.

Beginning in 1999, the Bureau of Labor Statistics began reporting a yet more accurate measure of inflation, the chained CPI. The chained CPI incorporates the broader CPI‑U and adjusts for the substitution effect.

Lawmakers should index Social Security’s COLA to the more accurate chained consumer price index (C‑CPI‑U), which also acknowledges that people choose less expensive and different goods and services in response to changes in prices. According to the Social Security Administration, this reform would eliminate about one-fifth of Social Security’s long-term fiscal imbalance. And it would more accurately protect the value of benefits from the impact of inflation on beneficiaries’ cost of living.

The Congressional Budget Office last projected that adopting chained CPI would save Social Security about $150 billion over 10 years (or about 15% of the projected 10-year growth in benefits). And that was before the 2022 spike in inflation.

What about adopting chained CPI for other social welfare programs? Because the chained CPI is a more accurate measure of changes in the cost of living, it should be adopted across all federal benefit programs that are currently using the CPI‑W or the CPI‑U to make benefit adjustments. Opponents of moving to this measure, argue that it would grow welfare beneficiaries’ benefits more slowly, leaving them with fewer resources over the long run. If proponents believe that welfare benefits are too low, they should address this issue directly; not perpetuate use of a less accurate inflation measure to achieve their ends.

What about adopting the Consumer Price Index for the Elderly (CPI‑E) instead? Proponents of the experimental Consumer Price Index for the Elderly (CPI‑E) argue that the current COLA adjustment doesn’t keep up with the more specific inflation that seniors face because they spend more than other Americans on out-of-pocket health care costs and those costs rise faster than average inflation. They have a point. However, there are at least three reasons why Social Security should not adopt the CPI‑E:

• One-third of Social Security beneficiaries are not elderly. Social Security also pays benefits to eligible disabled individuals and so-called survivors of Social Security beneficiaries, including children.
• The CPI‑E includes persons age 62 and older, many of whom participate in the workforce. The purchasing behavior of working seniors differs from the retired elderly.
• The sample size for the CPI‑E is only one-quarter that of the CPI‑U sample. Using a smaller sampling size increases the probability of sampling error, reducing the measure’s overall accuracy.

What about adopting chained CPI in the U.S. tax code? Congress adopted chained CPI for the tax code in the 2017 tax bill. This change pushes taxpayers into higher tax brackets sooner, resulting in tax increases for U.S. households. Opponents of shifting to chained CPI for the tax code acknowledge that it represents a more accurate measure, but they take issue with the indirect tax increase this change represents. My colleague Chris Edwards has argued that shifting to chained CPI worsens the existing “bias that pushes families into higher tax brackets over time, which is called “real bracket creep.” Real growth in the economy steadily moves taxpayers into higher rate brackets since the tax code is indexed for inflation but not real growth.” Chris instead proposes that federal lawmakers use an entirely different index for the U.S. tax code: nominal GDP growth.

With Social Security running a cash-flow deficit of $126.5 billion in 2021 and trust fund exhaustion projected by 2034, reform is long overdue. Using chained CPI to determine future Social Security cost-of-living adjustments would extend benefits for longer without raising taxes on working Americans, while protecting beneficiaries from a real loss in purchasing power based on inflation.

Note: A previous version of this piece omitted that Congress adopted the chained CPI for the U.S. tax code in the 2017 tax bill. Clarification comparing the average annual percent change for actual cost of living and COLAs was also added.

Cato has released the 16th biennial Fiscal Report Card on America’s Governors. The report grades the governors on their tax and spending records since 2020. Governors who have restrained taxes and spending receive higher grades, while those who have increased taxes and spending receive lower grades.

Five governors were awarded an A: Kim Reynolds of Iowa, Chris Sununu of New Hampshire, Pete Ricketts of Nebraska, Brad Little of Idaho, and Doug Ducey of Arizona.

These governors have led the largest wave of state tax-cutting in more than four decades. As discussed in the study, 21 states have cut individual or corporate income tax rates since 2020.

Kim Reynolds of Iowa is the highest-scoring governor. She has held the line on spending and signed into law a series of impressive tax reforms since entering office in 2017.

The report discusses each governor and looks at trends in state fiscal policy. State budgets are flush with revenues despite the wave of tax cutting. One reason is that many states have expanded tax bases to include revenues from marijuana, gaming, and online sales.

The report also looks at the continued migration of Americans from higher-tax to lower-tax states. High-earners seem particularly drawn to lower-tax states, which is one reason why many governors are focusing on cutting top income tax rates.

The report card by Chris Edwards and Ilana Blumsack is here.

A National Review piece summarizing the study results is here.

The sad, tragic, outrageous story of the California high-speed rail boondoggle continues, as Ralph Vartabedian writes in the New York Times.

When California voters first approved a bond issue for the project in 2008, the rail line was to be completed by 2020, and its cost seemed astronomical at the time — $33 billion — but it was still considered worthwhile as an alternative to the state’s endless web of freeways and the carbon emissions generated in one of the nation’s busiest air corridors.…

[Recently] the “final plan” raised the estimate to $113 billion.

The rail authority said it has accelerated the pace of construction on the starter system, but at the current spending rate of $1.8 million a day, according to projections widely used by engineers and project managers, the train could not be completed in this century.

Advocates of high-speed rail always present it as the modern, efficient, environmentally sensitive alternative. It seems like an obvious choice for a technologically advanced society. But in the real world, not only are there serious questions about the likely ridership and the environmental benefits of high-speed rail, planners always forget that politicians will be in charge. Read every word of Vartabedian’s article. Instead of a quick, direct route between two of the nation’s biggest cities, politicians insisted on running it “through the district of a powerful Los Angeles county supervisor” and through the less-populated Central Valley and San Jose. We’ll have hovercraft before this rail line connects Los Angeles and San Francisco.

Vartabedian points out the big picture:

Now, as the nation embarks on a historic, $1 trillion infrastructure building spree, the tortured effort to build the country’s first high-speed rail system is a case study in how ambitious public works projects can become perilously encumbered by political compromise, unrealistic cost estimates, flawed engineering and a determination to persist on projects that have become, like the crippled financial institutions of 2008, too big to fail.

And I say, as I did 10 months ago when Vartabedian wrote a similar critique of big infrastructure projects nationwide, that it would have been more useful to members of Congress and the public if the Times had published these stories during the many months that Congress was debating the Biden administration’s $1.2 trillion infrastructure plan.

Maybe I’m in a grumpy mood because I just endured an Amtrak journey that arrived at 5 a.m. (by bus!) instead of the promised 9 p.m. by train. But I was writing about this disastrous project long before that trip, as here and here.