Today, the Cato Institute releases my latest working paper, “50 Vetoes: How States Can Stop the Obama Health Care Law.” From the executive summary:

Despite surviving a number of threats, President Obama’s health care law remains harmful, unstable, and unpopular. It also remains vulnerable to repeal, largely because Congress and the Supreme Court have granted each state the power to veto major provisions of the law before they take effect in 2014.

The Patient Protection and Affordable Care Act (PPACA) itself empowers states to block the employer mandate, to exempt many of their low- and middle-income taxpayers from the individual mandate, and to reduce federal deficit spending, simply by not establishing a health insurance “exchange.” Supporters of the law do not care for this feature, yet they adopted it because they had no choice. The bill would not have become law without it.

To date, 34 states, accounting for roughly two-thirds of the U.S. population, have refused to create Exchanges. Under the statute, this shields employers in those states from a $2,000 per worker tax that will apply in states that are creating Exchanges (e.g., California, Colorado, New York). Those 34 states have exempted at least 8 million residents from taxes as high as $2,085 on families of four earning as little as $24,000. They have also reduced federal deficits by hundreds of billions of dollars.

The Obama administration is nevertheless attempting to tax those employers and individuals, contrary to the plain language of the PPACA and congressional intent, and to deny millions of Americans the opportunity to purchase low-cost, high-deductible coverage. Employers, consumers, and even state officials in those 34 states can challenge those illegal taxes in court, as Oklahoma has done. States can also block those illegal taxes—and even stop the federal government from operating an Exchange—by approving a strengthened version of the Health Care Freedom Act.

The PPACA’s Medicaid expansion, which would cost individual states up to $53 billion over its first 10 years, is now optional for states, thanks to the Supreme Court’s ruling in NFIB v. Sebelius. Some 16 states have announced they will not expand their programs, while half of the states remain undecided. Yet the Obama administration is trying to coerce states into implementing parts of the expansion that the Court rendered optional. States can replicate Maine’s lawsuit challenging this arbitrary attempt to limit the Court’s ruling.

Collectively, states can shield all employers and at least 12 million taxpayers from the law’s new taxes, and still reduce federal deficits by $1.7 trillion, simply by refusing to establish Exchanges or expand Medicaid.

Congress and President Obama have already repealed the third new entitlement program the PPACA created—the Community Living Assistance Services and Supports Act, or CLASS Act—as well as funding for the “co-op” plans meant to serve as an alternative to a “public option.” A critical mass of states exercising their vetoes over Exchanges and the Medicaid expansion can force Congress to reconsider, and hopefully repeal, the rest of this counterproductive law. Real health care reform is impossible until that happens.

Recent news reports have missed a major item on Afghanistan. Last week, the Independent reported on an internal study from the British government’s Ministry of Defence (MoD). The study, obtained under the Freedom of Information Act, examines the “extraordinary number of similar factors that surround both the Soviet and Nato campaigns in Afghanistan.” 

The study finds that despite their differences: 

Both interventions have been portrayed as foreign invasions attempting to support a corrupt and unpopular central government against a local insurgent movement which has popular support, strong religious motivation and safe havens abroad. In addition, the country will again be left with a severely damaged and very weak economic base, heavily dependent upon external aid. 

It goes on: 

The highest-level parallel is that both campaigns were conceived with the aim of imposing an ideology foreign to the Afghan people: the Soviets hoped to establish a Communist state while Nato wished to build a democracy,” it says. “Equally striking is that both abandoned their central aim once they realised that the war was unwinnable in military terms and that support of the population was essential. [Emphasis added.] 

In a questionable comment that one would expect a U.S. official to utter, the British government website states “We are in Afghanistan to protect our own national security by helping the Afghans take control of theirs.” The internal study, of course, comes to a contrary conclusion: “The military parallels are equally striking; the 40th Army [of the Soviet Union] was unable decisively to defeat the mujahedin while facing no existential threat itself, a situation that precisely echoes the predicament of Isaf [the Nato-led security mission].” 

To learn more about the international community’s inability to rescue Afghanistan—and why the international community made that grandiloquent pledge in the first place—register for the Cato Institute policy forum on Friday, April 5th , “The war in Afghanistan: What Went Wrong?” I will host Washington Post reporter Rajiv Chandrasekaran, the RAND Corporation’s Ambassador James Dobbins, and West Point Professor and COIN critic Colonel Gian Gentile to discuss America’s longest war.

The latest politician to blur the lines between legislating and running a protection racket is Representative Dan Eaton, division chairman of the New Hampshire state legislature’s powerful House Finance committee.

In what Charles Arlinghaus of the New Hampshire Union Leader generously described as “a rare moment of candor”, Rep. Eaton recently stated during a committee hearing that he was going to hold up an entirely uncontroversial bipartisan charter school bill purely for political purposes. As he explained, “I’m looking at this as political. We have a [budget] negotiation [with the state senate] coming up in June and I want to have a trump card or two, and this is … a very healthy trump card.”

Arlinghaus breaks it down:

Consider what he’s saying: He liked the bill and supports the policy, but he believes he can use the bill as part of a hostage negotiation with the Senate. He wants to say to the Senate “I know you want this, but we’ll kill it even though we like it too unless you do something else we want that is completely unrelated.”

Without question, some give and take and normal compromise will be part of a budget process. Everyone expects the House and Senate to pass different budgets and to then negotiate over the details of what gets included. But this bill isn’t part of that process and wouldn’t be part of that negotiation unless Eaton gets to keep it captive in a back room. In effect, he’s looking at charter schools and saying, “I’m sorry you got caught in the crossfire, but I think I can sell you for a good price.”

The bill in question was intended to clear up a misunderstanding about a recent change to the Granite State’s charter school law that the state attorney general’s office understood to mean the opposite of what the legislative authors had intended. The bill, which restored the previous statutory language, had already received a positive recommendation from the NH House Education Committee and passed the full NH House on a voice vote, meaning that the support was so overwhelming that it was unnecessary to count the votes in favor and opposed. What seemed like common sense to most legislators apparently looked like an opportunity for political hostage-taking for Rep. Eaton.

Without the fix, the five new charter schools that are already in the governor’s budget cannot be authorized. Even a delay until the budget negotiations in June will jeopardize the ability of these charter schools to be ready to open in September.

As a former member of the New Hampshire House of Representatives, I can attest that the “Live Free or Die” state’s citizen legislature often embodies the highest ideals of self-government. Most of the legislators I encountered in both parties were principled and completely dedicated to making New Hampshire an even better place to live. Unfortunately, these sort of legislative shenanigans leave a stain on the august institution. Let us hope that sunlight proves to be a sufficient disinfectant.

State and local politicians love federal money. Every federal dollar that a state or local politician can spend is a dollar that he or she doesn’t have to ask his or her voters to come up with through taxes or fees.

One problem is that citizens might (erroneously) view local spending that is subsidized by the federal government as being a “free lunch.” Citizens are numbed to the real cost of government and the incentive for them to keep tabs on how state and local officials spend money is weakened.

According to an article in Politico, federal sequestration cuts to state and local subsidies could mean that local taxpayers will be asked by local officials to cover the difference: 

To keep their budgets in order, local officials across the country — many of whom don’t have the luxury of running deficits — say a dysfunctional Congress is forcing them to resort to the type of tax increases that Republicans, in particular, so fiercely oppose. 

…

Some of the hard-hit jurisdictions are obvious. Residents in Fairfax County, Va., which is home to defense contractors and thousands of federal employees, are being warned that property taxes could rise by an average of $262 later this year because of fallout from the sequester.

Heaven forbid that defense contractors and federal employees – already beneficiaries of captive federal taxpayers – might have to bear a greater responsibility for the local government services that they “benefit” from. Perhaps a potential tax increase will cause Fairfax County residents to take a closer look at how local officials have been spending money and decide that additional money isn’t needed. (And perhaps the defense contractors and federal employees in particular will have a better understanding of why some of us don’t want to pay additional federal taxes to help maintain current levels of federal spending.)

Sequestration might not be the ideal way to cut federal spending, but if it results in people appreciating that federal spending isn’t a free lunch, good.

See this Cato essay for more on fiscal federalism.

That’s the question posed by US News and World Report’s “Debate Club” today.

Here’s the opening to my response.

Tragically, the Iraq War was not worth the costs. The leading advocates for war understated the costs and exaggerated the benefits. They claimed that the war would be cheap, perhaps even profitable, thanks to lower oil prices. They suggested that it would be easy, a “cakewalk,” not requiring a long-term U.S presence to stabilize the country after Saddam Hussein’s ouster. They blithely dismissed concerns about the tensions between Arabs and Kurds, and between Sunnis and Shiites.

We now know how wrong they were. A new report from the Watson Institute for International Studies at BrownUniversity tallies up the costs: nearly 4,500 U.S. troop fatalities, more than $1.7 trillion spent, and another $490 billion owed. Estimates of the number of Iraqis killed in the sectarian bloodletting that occurred after the collapse of Saddam’s regime exceed 130,000. Millions were displaced, many still have not returned to their homes. The Iraqi Christian community has been decimated.

You can read the rest here and vote for the best argument.

For the first time in state history, the Idaho House of Representatives passed a scholarship tax credit (STC) bill. Like the bill that the Alabama legislature passed last month, Idaho’s STC legislation is a step in the right direction though it has some limitations.

The Idaho bill would grant tax credits to individuals and corporations in return for donations to nonprofit scholarship granting organizations (SGOs). The SGOs would fund low- and middle-income students attending nonpublic schools. To be eligible to participate, a family’s household income could not exceed 150% of the federal free-and-reduced lunch program’s income threshold ($63,964 for a family of four). According to the Friedman Foundation for Educational Choice, that would cover about 59% of Idahoans. The program is limited to students who attended a public school in the previous year or are entering kindergarten or first grade.

The program would be capped at $10 million per year. While the cap would adjust for inflation, there is no “escalator” provision to grow the program over time to meet demand, as in Arizona, Florida, and New Hampshire.

The program would also require participating private schools to administer standardized tests. This is an unnecessary provision that’s intended to provide accountability but could exacerbate the “teach to the test” problem. The most effective form of accountability is the chosen schools’ direct relationship with parents who can choose to leave if their kids’ needs are not met. Most STC programs do not require schools to administer standardized tests, yet many schools voluntarily administer them because parents desire it. However, when the state mandates testing to participate in school choice programs, there are fewer choices available to parents who want to avoid the “teach to the test” issue.

Despite the bill’s limitations, the Idaho House of Representatives just took the Gem State one step closer to having an education system that empowers families to choose the education that best meets their kids’ individual needs.

The New York Times reports today that Whole Foods, Trader Joe’s, and Aldi supermarket chains have decided not to sell a new form of genetically modified fish. The FDA is set to approve the sale of a type of salmon genetically engineered to mature more quickly than its natural ancestors. This will be the first genetically modified animal approved for human consumption. While the FDA has determined that the genetic alteration of the fish has no effect on its meat, “Frankenfish”—as some have called it—still gives many consumers the heebie-jeebies. 

I would just like to point out that consumer demand for natural fish has prompted a market response that provides convenient access for GM-wary eaters while (most importantly) preserving choice for less-cautious consumers. Mandatory labels like those proposed last year in California were not needed to ensure consumers received desired information; retailers have filled that function instead. 

Anti-GM campaigners lobby for restrictions on GM foods like out-right bans or onerous labeling requirements with the aim of ensuring that everyone has access to non-GM options. Whole Foods has offered non-GM products for a long time, but this has generally not mollified anti-GM campaigners, because Whole Foods is pricier than most grocery stores. Aldi, however, is very much a discount grocery store that targets and appeals to a different demographic than Whole Foods. I won’t hold my breath, but I’m hoping that anti-GM activists are now more open to the idea that consumers are empowered by choice, not mandates.

Without government intervention retailers will provide consumers with what consumers want. When government intervenes, retailers are forced to provide consumers with what ideological activists and lobby-savvy industries want them to have. Those industry groups are especially active right now as regulators seek to amend mandatory country of origin labels for beef and dolphin-safe labels for tuna that have been rightly decried by our trade partners as protectionist discrimination. Trusting consumers to look after themselves could save us a lot of trouble.