Let’s Have a National Referenda on Key Issues

July 10, 2013Danny Vinik Leave a comment

Gallup is out with a poll today on political reform. Here are the results:
Obviously, a national referenda isn’t going to happen. But if we did, it would clearly show that the vision most Americans have for their government is not realistic.

For instance, a Pew poll in February found that 70% of Americans, including 65% of Democrats, wanted the President and Congress to act on deficit-cutting legislation this year. But another Pew poll released just a day (PDF) later found that Americans don’t want to cut any individual programs except foreign aid (to the right).

Of course, it’s not that surprising that no one wants to cut any of those programs. They all sound very useful. But how are we going to reduce the deficit – as voters say they want – if we don’t cut anything. Well, how about we raise taxes? I’m very confident in saying that if we put tax increases up for a national referenda, it would lose badly.

Here we get to an impasse. Voters don’t want to cut individual programs, don’t want higher taxes but want to reduce the deficit. Those three things together are not possible. In the mean time, voters get angry when spending cuts pass (they don’t like the sequester), hate higher taxes (remember how hard it was to raise taxes on the richest Americans?) and are demanding cuts to the budget deficit. One party demands spending cuts, the other wants higher taxes and both clamor about the budget deficit. This all stems from a fundamental misunderstanding of the capabilities of the US government.

Maybe a national referenda is just what we need – at least then Americans would have a better understand of what its government can and cannot do.

Increase the IRS’s Funding

July 9, 2013Danny Vinik Leave a comment

The recent IRS scandal is not a reason to cut the agency's funding.

The IRS scandal is not a reason to cut the agency’s funding.

After the IRS scandal broke in early May, there was no doubt that Republicans would use it as a reason to drastically reduce the agency’s budget. As expected, House Republicans are doing just that. A new bill looks to cut the department’s funding from $12 billion to $9 billion a year – a 25% reduction. This is in contrast to the $1 billion raise that the President outlined in his budget.

There is no doubt the IRS screwed up. It targeted both Tea Party and progressive groups for more intense scrutiny in the approval process for (c)(4) status than it should have. Even worse, the agency singled out Tea Party groups more than progressive groups, making it harder for those organizations to gain 501(c)(4) status. None of that is okay and we need to correct it.

But that has nothing to do with the IRS’s budget. Subtracting money from the agency does nothing to correct the approval process. It just strains the department’s resources and creates the potential for more mistakes. What makes the House Republican’s bill most foolish though is that we should be increasing the IRS’s budget as the President has called for. In fact, increasing its funding saves the country money. The Treasury estimated in May (PDF) that its proposed budget increase would bring in six times that amount in additional revenue!

Certainly the IRS needs to combat waste within the agency – such as the $49 million it spent on conferences from 2010-2012. But squeezing the budget does nothing to directly combat this waste. The department can still fund those lavish conferences and just relax its enforcement. In the end, taxpayers lose (and those who skip out on their taxes win). If House Republicans really want to make the IRS more efficient, it needs to increase its oversight – as should be done anyways given the recent scandal. But don’t slash the budget simply because people hate the agency. After all, these are the same people who’ve been screaming about our budget deficit the last five years. Even though the IRS’s budget proposal reduces the deficit, I don’t hear them clamoring about it anymore.

Raul Labrador Has a Point

July 8, 2013July 8, 2013Danny Vinik 3 Comments

Over the weekend, Raul Labrador appeared on Meet the Press to talk about immigration reform:

In fact, if you look at this Obamacare debacle that they have right now, this administration is actually deciding when and where to actually enforce the law. And that’s what some of us in the House are concerned about. If you give to this administration the authority to decide when they’re going to enforce the law, how they’re going to enforce the law … what’s going to happen is that we’re going to give legalization to 11 million people and Janet Napolitano is going to come to Congress and tell us that the border is already secure and nothing else needs to happen.

Sounds a bit crazy, right? Not really. Republicans have been clamoring for years now about the authoritarian Obama administration. Much of it has been utter bogus, but Labrador has a point here and we can look right back to last week’s delay of the employer mandate to see it.

The employer mandate requires all employers with more than 50 workers to offer affordable health insurance or pay a $2,000 fine. Implementing this policy has proven difficult so the White House announced last week that it was delaying the employer mandate until 2015. Except the Obama Administration doesn’t have the ability to do that. Congress does. Instead, the Administration told the IRS to not enforce the $2,000 fine for a year. That’s not how the government is supposed to work. Here’s Ezra Klein last week:

This is a regulatory end-run of the legislative process. The law says the mandate goes into effect in 2014, but the administration has decided to give it until 2015 by simply refusing to enforce the penalties.

The administration says this kind of thing happens all the time. “I think you’d be harder pressed to find some example where there wasn’t some discretion on how to implement major policies than one where everything went exactly by the books,” says one senior administration official involved in implementation.

Be that as it may, the regulatory solution reflects the fact that the legislative process around the health-care law is completely broken. Republicans won’t pass any legislation that makes the law work better. Improving the law, they fear, will weaken the arguments for repeal. But Democrats, of course, won’t permit repeal. So Congress is at a standstill, with no viable process for reforming or repairing the Affordable Care Act as problems arise. And so the White House is acting on its own.

If the President had come out and asked Congress to pass a bill delaying the employer mandate for a year, do you think legislators would have obliged? I’m not sure. Republicans would be up in arms screaming for repeal again. Would they agree to the delay? I don’t know. But even if they hadn’t, the White House would have at least tried to adjust the law legally and not used its own authority. Instead, it circumvented Congress without even trying to adjust it legally.

That’s exactly what Labrador feels could happen with immigration reform. The immigration bill that passed the Senate does not have any hard triggers so Secretary of Homeland Security Janet Napolitano wouldn’t actually have to tell Congress the border is secure before illegal immigrants could apply for citizenship. But in any bill that passes the House, hard triggers will almost certainly be part of it and would require such testimony from Napolitano.

Why are Democrats so against hard triggers? They fear that a future Republican Secretary of Homeland Security will never declare the border secure to prevent illegal immigrants from receiving citizenship. Labrador has the exact same fear: that a future Democratic Secretary of Homeland Security will definitely declare the border secure, even if it isn’t, to allow illegal immigrants to apply for citizenship. Republicans favor hard triggers because it’s much harder to declare the border secure when it isn’t than to declare it insecure when it is. Nevertheless, Labrador has the same fear that Democrats have. Both are rooted in a deep distrust of the opposite party with the belief that a future administration will simply bend the rules to get what it wants.

With the employer mandate, the Obama Administration did just that. Raul Labrador isn’t crazy. Conn Carroll isn’t foolish to suggest that “immigration reform is dead and Obamacare implementation killed it.” That may be a bit extreme, but it’s not unfounded. It’s just an ugly component of the dysfunctional, distrustful atmosphere that plagues our political system right now.