The Washington Post is reporting that the Obama administration will propose a 0.5 percent cost-of-living pay increase for federal workers in its upcoming budget. The paper says that “the modest cost of living increase in federal compensation would be the first pay jump for federal workers since before President Obama ordered a two-year freeze in late 2010.”

That’s not quite accurate. USA Today recently reported that average federal worker wages rose 1.3 percent in 2011, or slightly more than the 1.2 percent increase in average private wages. The federal increase, while modest, occurred despite the pay “freeze” because increases from “longevity, merit, and promotions” were not covered, the paper noted.

I fear that as the economy gains strength and starts expanding, policymakers will forget that we’ve still got a $1 trillion budget deficit. Even with growth, we’re still heading for a Greek-style debt crisis unless we pursue major spending cuts. So Congress should decline Obama’s request and retain the federal pay freeze for a few more years. At the same time, policymakers should pursue cuts to excessively generous federal worker benefits.

Controlling federal worker costs is only part of the budget solution, but it does make economic sense because pay and benefits have risen so rapidly over the last decade.

The White House doubtlessly is happy that the unemployment rate has dropped to 8.5 percent, in part because the President is much more likely to get reelected if voters think the economy is heading in the right direction.

But the latest drop in the unemployment is not unambiguous good news for the Obama Administration.

Before explaining why, let’s take a brief detour and look at how the unemployment rate is calculated. The key thing to understand is that there are two moving parts. First, the government estimates the number of unemployed people. That’s the obvious part of the calculation.

But in order to calculate the unemployment rate, the government has to estimate the size of the labor force. But this is not a simple number to calculate because many people who could work – such as women with young children, students, people approaching retirement age – sometimes decide that their time could be better spent doing other things.

So the government has to look at all the people who don’t have jobs and guess how many of them would like to work.

With this in mind, let’s look at the unemployment rate. The simple way to think about unemployment numbers is that the joblessness rate can rise or fall for good reasons and bad reasons.

If the unemployment rate drops because hundreds of thousands of jobs are being created each month, that’s obviously good news.

But if the jobless rate falls because the government estimates that lots of people have become discouraged and dropped out of the labor force, then that’s not good news.

In other words, sometimes the unemployment rate, by itself, doesn’t tell the full story.

That’s why one of the best statistics to look at is the employment-population ratio, which measures the number of people who have jobs and compares it to the number of people who could have jobs.

And by this measure, the Obama White House can’t be very happy. As illustrated in the chart, the job numbers have barely begun to recover.

This is a woefully under-reported piece of data. A few news outlets do mention the phenomenon of “discouraged workers” dropping out of the labor market, but only policy geeks like me seem to pay attention.

But the employment-population ratio does have real-world implications. The economy’s overall level of output (i.e., national income, gross domestic product, etc) depends on how many people are working. And that is what determines whether living standards are rising, falling, or stagnating.

This is why the Obama Administration can’t rely of a falling unemployment rate. As I’ve explained elsewhere, the American economy appears to have suffered a permanent loss of output in recent years.

So what does this mean, for those of you who care about political implications of economic statistics? The honest answer is that I have no idea. But since living standards are still stagnant, a falling joblessness rate won’t necessarily translate into a victory for the incumbent party.

The Federal Trade Commission has no jurisdiction over government entities so when it looks with concern at the use of facial recognition technology, it’s looking at the private sector.

Facial recognition is only one of many biometric technologies, of course, and Congress is pushing hard for biometrics that can help track and control us for various purposes. If anyone should be looking with concern, it should be us looking at the federal government.

There are legitimate uses for biometrics, of course, and well-designed implementations will undoubtedly benefit us all. But biometrics programs implemented for the government will tend to prioritize hoovering up federal cash over striking delicate balances among cost, effectiveness, privacy, and civil liberties.

So let’s look at how Congress is pressing—and in one case insufficiently restraining—the rapid advance of biometrics.

H.R. 658, the FAA Reauthorization and Reform Act of 2011, has passed the House and awaits action in the Senate. It says that “improved pilot licenses” must be capable “of accommodating a digital photograph, a biometric identifier, and any other unique identifier that the Administrator considers necessary.”

H.R. 1690, the MODERN Security Credentials Act, establishes that air carriers, airport operators, and governments may not employ or contract for the services of a person who has been denied a TWIC card. “TWIC” stands for “Transportation Worker Identity Card,” the vain post‑9/​11 effort to secure transportation facilities from bad people. TWIC cards use biometrics.

The Army deploys biometrics. Public Law 112–10, the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (cost per U.S. family: $13,500+) allowed spending on Army field operating agencies “established to improve the effectiveness and efficiencies of biometric activities and to integrate common biometric technologies throughout the Department of Defense.”

There are lots of biometrics plans in the immigration area. H.R. 1842 is an immigration bill called the Development, Relief, and Education for Alien Minors Act of 2011. (Senate version: S. 952) It would allow an otherwise qualified immigrant to get conditional permanent resident status only after submitting biometric and biographic data for use in security and law enforcement background checks. (Alternative procedures would be available for applicants unable to provide such data because of a physical impairment.)

S. 1258 does roughly the same thing with regard to any lawful immigration status. This bill is called the Comprehensive Immigration Reform Act of 2011, one of many attempts at comprehensive reform. In addition to requiring immigrants to submit biometrics, it also requires the government to issue “documentary evidence of lawful prospective immigrant status” that includes a digitized photograph and at least one other biometric identifier. The bill would also reinforce the use of biometrics in employer background checks and at the border.

H.R. 2463, the Border Security Technology Innovation Act of 2011, calls for continued study of mobile biometric technologies at the border. The Under Secretary for Science and Technology of the Department of Homeland Security would coordinate this research with other biometric identification programs within DHS.

H.R. 2895, the Legal Agricultural Workforce Act, would create a nonimmigrant agricultural worker program. In the program each nonimmigrant agricultural worker would get an identification card that contains biometric identifiers, including fingerprints and a digital photograph.

S. 1384, The HARVEST Act of 2011, is similar. In providing for the temporary employment of foreign agricultural workers, it calls for “a single machine-readable, tamper-resistant, and counterfeit-resistant document” that verifies the identity of the alien through the use of at least one biometric identifier.

There’s more than just immigration. Pursuing waste, fraud, and abuse, H.R. 3735, the Medicare Fraud Enforcement and Prevention Act of 2011, would establish a biometric technology pilot program. The five-year pilot program would use biometric technology seeking to ensure that Medicare beneficiaries “are physically present” when receiving items and services reimbursable under Medicare. How many biometric scanners would have to be out there for that to work?

S. 744, the Passport Identity Verification Act, calls on the Secretary of State to conduct a study into whether people applying for or renewing passports should provide biometric information, including photographs that facilitate the use of facial recognition technology. I bet the answer they get back is “Yes!” That’s how you build programs in the federal government: do a study, then a pilot program, and then—bingo—you’ve got a full-fledged, permanent drain on the public fisc.

Speaking of money, S. 1604, the Emergency Port of Entry Personnel and Infrastructure Funding Act of 2011, establishes a grant program in which the Department of Homeland Security would give cash out to state and local law enforcement for the purchase of various technologies including “biometric devices.”

I mentioned that there is a bill that would restrain biometrics insufficiently. H.R. 654 is the Do Not Track Me Online Act. It would direct the Federal Trade Commission to prescribe regulations regarding the collection and use of information obtained by tracking the Internet activity of an individual. The bill would treat unique biometric data, including fingerprints and retina scans, as “sensitive information” while allowing the FTC to modify its definitions.

And the FTC would have to modify the definitions because one’s face is unique biometric data, meaning that anyone who stores photographs online would be subject to regulation under the bill—oh, except the government.

The bill specifically excludes “the Federal Government or any instrumentality of the Federal Government, nor the government of any State or political subdivision of a State.” Too bad biometric sensors don’t pick up hypocrisy.

So there you have it. The Congress is quite engaged in pushing biometrics, including facial recognition. The one bill I found to restrain their use doesn’t apply to the federal government or the states. I’ll be keeping an eye on all this, while the government uses lasers and infra-red scanners to watch all of us.…

“When I use a word,” Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to mean — neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master — that’s alls.” — Lewis Carroll

Apparently some took issue with my concern, expressed yesterday, that President Obama’s “recess” appointment of Richard Cordray to head the Consumer Financial Protection Bureau, might have some legal and constitutional issues. One of the concerned was my friend Mike Konczal at the Roosevelt Institute.

I’ve always been impressed with Mike Konczal’s ability to say so little in so many words. His basic claim is that this is no different than any other recess appointment because Section 1011 of Dodd-Frank states the appointment is subject to the “advice and consent of the Senate” which he sees as meaningless boilerplate. He cites a Congressional Research Service report as saying that a recess appointee has the same powers as a regular appointee. On its face, that is correct. Had there already been a Senate confirmed Director in place, with the additional powers over non-banks in place, then any future recess appointee would have those same powers.

The problem with that line of thought is that these powers are not already in place, something not addressed in the CRS report. This is very real issue (not a “zombie” as Konczal would claim). During my service on the Senate Banking Committee, when we were drafting language to create the new regulator for Fannie and Freddie, we were very aware of this danger, as it had been a problem when the OTS and FHFB were created out of the FHLBB. We didn’t wish to have a similar problem, so we crafted language to avoid it (see Section 1101 of HERA). The problem is that Dodd-Frank did not include such language (one of many drafting errors in the bill).

Now it’s never enough for Konczal to just disagree, he also has to be disagreeable when doing so (I assume it plays well to the nasty echo-chamber that is New York Liberalism). He snidely says, “I like how libertarians at Cato are all about the Constitution, with grants the President the power to fill up vacancies, until they aren’t.” Well to help him out, I am all about the Constitution as it is written. And the Constitution’s Article 2, Section 2 clearly says “President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate”. Did the vacancy of the CFPB director happen during a recess? Not under the clear language of the Constitution (Mike, I’d be happy to send you a Pocket Copy).

So there you have it. Konczal’s argument boils down to two issues, that in Konczalian Newspeak “advice and consent of the Senate” really means “unilateral action by the President” and that “may happen during the Recess” actually means “whenever the President decides.” Now one has to remember that Konczalian Newspeak changes when the President is a Republican.

Today POLITICO Arena asks:

Did Obama have the authority to make the Cordray and the NLRB appointments, since the Senate is technically not in recess? And will the president’s shift from bipartisan conciliator to partisan agitator pay off?

My response:
All of Obama’s appointments yesterday are illegal under the Constitution. And, in addition, as too little noted by the media, his appointment of Richard Cordray to head the Consumer Financial Protection Bureau (CFPB) is legally futile. Under the plain language of the Dodd-Frank Act that created the CFPB, Cordray will have no authority whatsoever.

Yesterday, Professors John Yoo and Richard Epstein, writing separately, made it crystal clear that the president, under Article II, section 2, may make temporary recess appointments, but only when the Senate is in recess. Add in Article I, section 5, and it’s plain that the Senate is presently not in recess, just as it wasn’t under Senate Democrats when George W. Bush wanted to make recess appointments. The difference here is that Bush respected those constitutional provisions while Obama — never a constitutional law professor but only a part-time instructor — ignores them as politically inconvenient. Attempts by Obama’s apologists to say the Senate is not in session are pure sophistry and, in the case of Harry Reid, rank hypocrisy, as this morning’s Wall Street Journal brings out.

But clear beyond the slightest doubt is the language of the statute (itself unconstitutional on any number of grounds not relevant here). As my colleague Mark Calabria wrote yesterday, “authorities under the Act remain with the Treasury Secretary until the Director is ‘confirmed by the Senate.’ ” A recess appointment, even if it were constitutional, is not a Senate confirmation. There is simply no wiggle room in that language that gives Cordray any authority, as litigation will soon make plain.

So what is this? It’s politics — Chicago politics, plain and simple. If any doubt remained, three years into his presidency, that Obama is a master demagogue, with class warfare as his central tool, this incident should dispel it.

Over the past decade, more than a dozen states have forced independent contractors who are paid through Medicaid to join public-sector unions​.In 2003, Illinois unionized home healthcare workers and imbued the Service Employees International Union with the right to collect compulsory fees from the workers’ paychecks. Democracy is thus being turned on its head: the elected representatives for the people of Illinois have chosen a sub-representative for some of the people and given that sub-representative a taxing power.

In so doing, they have severely impaired home healthcare workers’ First Amendment right of association and the right to petition the government for a redress of grievances. Without limits on government’s ability to forcibly unionize people who indirectly receive government-funded compensation (an increasingly large group), more and more citizens will have to interact with their representatives through a government-designated intermediary (a union); our democracy will become even more dominated by special interests than it is now.

Cato, joined by the National Federation of Independent Business and the Mackinac Center, filed a brief urging the Supreme Court to address this issue and vindicate the First Amendment freedoms upon which a thriving democracy depends. We argue that the forcible unionization of home healthcare workers serves none of the compelling purposes for public-sector unionization that have been articulated by the Supreme Court.

Because the Court has long recognized that unionization impinges certain constitutional rights, it has limited public-sector collective bargaining to those situations which advance the aims of promoting “labor peace” and eliminating “free riders.” Labor peace is promoted by limiting competing workplace interests from bargaining over the conditions of employment — for example, two unions at the same workplace representing different colleagues. Free riders are non-union employees who enjoy the benefits of union-achieved gains without paying into the union’s war chest. But neither aim is promoted by a system, such as Illinois’s, in which employees work in different locations and in which the customer — the disabled person paying the homecare worker through a Medicaid disbursal—still controls every crucial aspect of the employment relationship, including hiring and firing.

This last fact is most telling: the Illinois law only allows collective bargaining for higher wages and more generous benefits. That is, the law is only about speech — petitioning the government for higher wages and benefits — and does not address workplace conditions at all.

As more and more states push to unionize more workers who indirectly receive government money — campaigns that, in face o dwindling private-sector union membership, have been called “labor’s biggest victory in over sixty years” — it is vital that the Supreme Court articulate a limiting principle on this practice. Otherwise, more and more of us will be forced to interact with our representatives only through government-appointed bodies.

President Obama, Defense Secretary Leon Panetta, and Joint Chiefs Chairman Martin Dempsey are scheduled to brief the media tomorrow morning on the recently completed strategic review that will inform the Pentagon’s budget priorities for the coming five to ten years. Early indications suggest that the status quo will hold. And that is bad news for U.S. troops, and U.S. taxpayers.

Obama, Panetta, and Dempsey should clearly spell out:

1. The types of missions that the U.S. military will be expected to perform on a regular basis
2. Those operations that the military will occasionally conduct on short notice, and for short periods of time
3. How defense capacity can be augmented in those very rare cases calling for significant mobilization of additional resources.

Some suggest that the strategy document will abandon the requirement that the Pentagon must be prepared to fight two sustained ground wars at the same time, something that the country hasn’t done since well before Barack Obama was born. Such a change, if true, should be welcomed.

It is significant the president is attending, and the most important questions should be reserved for him. It is particularly incumbent upon the civilian leadership within the Obama administration, beginning with the president himself, to spell out their intentions regarding the use of force, and of the role of the U.S. military more broadly. These should go beyond vague signals; our military leaders shouldn’t be forced to guess what missions that they will be asked to perform. The president must tell them.

For example, does he intend to deploy U.S. troops to more weak and failing states, missions that require a very sizable ground presence for an indefinite period of time? Or have the wars in Iraq and Afghanistan taught the president and his advisers that such missions are costly and counterproductive (and politically unpopular at home)? If the latter, the Pentagon should be planning for significant reductions in the Army and Marine Corps.

Does President Obama plan to conduct more Libya-style missions, operations conducted from the air, with some involvement by other militaries? Or is the recent deployment to Uganda emblematic of future missions, with a small-scale U.S. military presence on the ground in support of indigenous forces? Either way, the Air Force and the Navy are likely to be involved, though perhaps not as active as in the past decade.

More broadly, will the White House and the State Department continue to task the U.S. military with the defense of the global commons, providing security for all countries, and expecting nothing in return? Or will the twin constraints of fiscal insolvency and dwindling public support here at home lead to a less grandiose foreign policy, one that will call on the U.S. military to defend the United States and secure vital U.S. interests, while encouraging other countries to take responsibility for their own defense? The former requires a military even larger than the one that we have today, one that costs more than all other militaries in the world, combined, and that expects and demands much of our men and women in uniform. The latter mission, by contrast, could be easily handled with a smaller, more elite force, based largely here in the United States.

The answers to these key questions are what should guide the Pentagon’s force planning for the coming decade. The president, Secretary Panetta, Secretary of State Clinton, and other senior officials have stated that the United States must continue to be the world’s policeman, effectively discouraging other countries from doing more. The end result is likely to be a smaller U.S. military, tasked with a longer to-do list. That isn’t fair to the troops, or to the U.S. taxpayers who will foot the bill.