Category: reason

When Iryna Nohai had stomach cramps, she went to a doctor who discovered she was pregnant. And since she was living in the United Arab Emirates, the doctor also reported to police she’d been having sex outside of marriage, which is illegal in the country. Both Nohai and her fiancee were detained and have been held since January.

If the pre-budget rumors are true, President Donald Trump is making good on his promise to drain the swamp by putting a few corporate welfare programs, such as the Export-Import Bank and the Overseas Private Investment Corp., on the chopping block. Unfortunately, getting rid of cronyism in the federal government won’t be easy, given the deep-rooted and mutually beneficial relationship between politicians and commercial interests. Still, the new administration and Congress could take some action in the coming year to move in that direction.

Before I start detailing how, let me say that abolishing all corporate welfare programs is the right thing to do. Corporate welfare, a practice in which government officials provide preferential treatment (such as loans, subsidies or regulatory preferences) to hand-picked firms or industries, is unfair. It picks winners and losers for no other reason than that they’re politically connected or not politically connected. The winners are usually big and able to invest in lobbying on Capitol Hill. The victims are often unseen and usually don’t have a press office. Favoritism also slows the economy because entrepreneurs and businesses misdirect their resources. They spend time lobbying for those privileges instead of finding new ways to create value for customers.

Short of terminating programs, the first thing Congress could do is adopt fair-value accounting, writes Veronique de Rugy.

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• A joint statement from leaders of the Senate Intelligence Committee declares that they’ve seen no evidence that Trump Tower was wiretapped during the 2016 election as President Donald Trump has claimed.
• Michael Flynn received more money from Russian-based businesses than had been previously disclosed. Flynn notably resigned as national security adviser after misleading the Trump campaign over his contacts with a Russian ambassador.
• You may have heard that Trump released a budget proposal. It doesn’t cut spending, but rather shifts spending from domestic programs to military spending instead. Nick Gillespie breaks it down here.
• An Oklahoma state senator accused of child prostitution charges connected to a 17-year-old boy has surrendered to police. Note some of the awfulness of sex laws here. The age of consent in Oklahoma is 16, but it counts as “child prostitution” if it’s with somebody under 18.
• Chelsea Clinton is publishing a children’s book titled She Persisted.
• Somebody donated four pounds of marijuana to a Goodwill in Washington State. How charitable!
• So McDonald’s got some attention today for this tweet that was pinned to its feed for a little bit this morning before being deleted. They subsequently claimed that their account had been compromised:

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Issuing a temporary restraining order against President Trump’s revised travel ban yesterday, U.S. District Judge Derrick Watson declared that “a reasonable, objective observer—enlightened by the specific historical context, contemporaneous public statements, and specific sequence of events leading to its issuance—would conclude that the Executive Order was issued with a purpose to disfavor a particular religion, in spite of its stated, religiously neutral purpose.” Watson, who was responding to a lawsuit by the state of Hawaii and the imam of a Honolulu mosque, therefore concluded that Trump’s order does not have “a primary secular purpose,” as required by the First Amendment’s ban on “an establishment of religion.” That conclusion seems dubious to me.

It is pretty clear, based on Trump’s public statements, that anti-Muslim prejudice affects his thinking about immigration and national security. But that does not mean animus against Muslims was the motive for his order. It seems much more likely that the motive was a desire to seem like he was doing something to protect Americans from terrorist attacks, as he promised to do during his campaign. While it is unlikely that the travel ban will have any noticeable effect on terrorism, courts generally defer to the president’s judgment in cases involving national security. The question is whether that deference should go out the window because of stupid stuff Trump said while running for president.

In December 2015, following the terrorist attack in San Bernardino, Trump recommended “a total and complete shutdown of Muslims entering the United States until our country’s representatives can figure out what is going on.” A few months later, in a March 2016 interview with Anderson Cooper on CNN, Trump said, “I think Islam hates us.” When Cooper asked him whether there is “a war between the West and radical Islam, or between the West and Islam itself,” Trump replied, “It’s very hard to separate, because you don’t know who’s who.”

After catching flak for that sort of talk, Trump started talking about “extreme vetting” of immigrants from countries “compromised by terrorism,” instead of focusing on Muslims per se. “I don’t think it’s a rollback,” he said on Meet the Press last July. “In fact, you could say it’s an expansion. I’m looking now at territories. People were so upset when I used the word Muslim. Oh, you can’t use the word Muslim. Remember this. And I’m OK with that, because I’m talking territory instead of Muslim.”

During his October 9 debate with Hillary Clinton, Trump said, “The Muslim ban is something that in some form has morphed into a[n] extreme vetting from certain areas of the world.” When a moderator asked him to “explain whether or not the Muslim ban still stands,” he replied, “It’s called extreme vetting.”

In January, two days before he issued his original travel ban, Trump told ABC News, “It’s not the Muslim ban, but it’s countries that have tremendous terror….It’s countries that people are going to come in and cause us tremendous problems.” Those countries turned out to be Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen, all of which had been excluded from the visa waiver program under the Obama administration because they were deemed sponsors of terrorism or havens for terrorists. The seven countries also happen to be overwhelmingly Muslim, with Muslims accounting for 91 percent to 99.8 percent of their populations.

After Trump issued his order, his adviser Rudy Giuliani, in an interview on Fox News, recalled that “when [Trump] first announced it, he said ‘Muslim ban.’ He called me up. He said, ‘Put a commission together. Show me the right way to do it legally.'”

The revised travel ban, which Trump issued on March 6, dropped Iraq from the list of banned countries and exempted current visa holders as well as permanent legal residents. But it remains true that almost all the people affected by the ban, which imposes a 90-day freeze on new visas for visitors from the six countries, are Muslims.

Although more than 90 percent of the world’s Muslims are not affected by the travel ban, Judge Watson says, “the notion that one
can demonstrate animus toward any group of people only by targeting all of them at once is fundamentally flawed.” That may be true, but the fact that Trump ultimately did not try to impose a literal and explicit Muslim ban does makes it harder to prove he is acting out of hostility toward Muslims.

“Any reasonable, objective observer would conclude…that the stated secular purpose of the Executive Order is, at the very least, ‘secondary to a religious objective’ of temporarily suspending the entry of Muslims,” Watson writes. I like to think I am reasonable, although when it comes to Trump I am certainly not objective. I am inclined to view his policies with suspicion, and the travel ban in particular strikes me as illogical, unnecessary, and (especially in its first iteration) unfair. Yet I have a hard time believing that oppressing Muslims was Trump’s main goal in issuing the order. His main goal was looking tough.

Based on the statements that Trump and his advisers have made, you might conclude that his executive order is a Muslim ban in disguise. But you also might conclude that it is not a Muslim ban at all. While his original idea involved a religious test, he dropped that proposal in favor of a less constitutionally problematic travel ban focusing on countries that are “compromised by terrorism.” That policy may not make much sense, it may be both overinclusive or underinclusive, and it may not prevent a single terrorist attack. But that does not mean it lacks a secular purpose.

As Scott Shackford has noted, Donald Trump’s budget blueprint calls for zeroing out the oft-abused Community Development Block Grant program, which is administered by the Department of Housing and Urban Development. The program is rife with waste, fraud, and abuse but because it also funds the popular Meals on Wheels, which delivers food to housebound seniors, well, it shouldn’t be cut at all, right?

Earlier today, I received a spam email from the Democratic National Committee that read in part

There are a lot of details to parse through in the budget blueprint Donald Trump released this morning, but you can get the gist of it from one sentence:

Donald Trump is cutting Meals on Wheels, a program that delivers meals to senior citizens in need, to pay for his border wall.

But does Meals on Wheels rely on government grants to do its good work? There are hundreds of Meals on Wheels organizations around the country, so it’s hard to generalize, but overwhelmingly, the groups get the majority of revenue from charitable giving, not government funds. In 2015, for instance, the national Meals on Wheels reported that government grants accounted for just 3 percent of its annual revenues of $7.5 million. Meals on Wheels for San Diego County in California says that government grants made up just 1.5 percent ($68,534) of its revenues of $4.4 million. Not all branches are so independent. Atlanta’s group gets 48 percent of its revenue from government grants (none of the annual reports I looked at broke down exactly what level of government or specific program supplied the money). Many of the annual reports don’t even break down revenues by source (see here) and others aren’t even posted online.

The point? As Matt Welch writes, we have gotten so used to increased government spending on everything that any cut to any program is automatically cast in apocalyptic terms. As I wrote earlier today, I’m no fan of Donald Trump’s budget, which actually fails to reduce net discretionary spending and ignores completely the far larger issue of “mandatory” spending on entitlements, which, along with interest on the debt, comprises about two-thirds of the federal budget. But the plain fact is that we have for years now been spending far more than we raise in taxes.

That simply can’t continue indefinitely and there’s every reason to believe that massive, persistent deficits that are covered by continual increases in national debt tamps down economic growth. Despite all manner of attempts to goose tax revenue upwards, it’s exceptionally rare when the feds can squeeze more than about 18 percent of GDP out of us for any length of time. Simply put, we need a government that spends less and does less. And that means that not all programs, even ones that do good work, can or should be paid for out of taxes. In many cities, Meals on Wheels would barely be affected by losing all federal grants. In others, the local citizens (and corporations and charities such as The United Way) would need to step in to fill the void. That’s hardly the worst possible outcome—can Atlanta not really feed its poor senior population via philanthropy?—and it certainly shouldn’t stop Americans from coming to terms with basic fiscal realities.

The problem with Trump’s budget plan is that it spends exactly the same amount on discretionary outlays as President Obama’s did—right around $1.1 trillion. The only difference is that what Trump subtracts from non-defense programs, he plows back into the Pentagon and the Department of Homeland Security. That’s not progress and it’s not even good politics. It would be better to put the military on a diet along with the rest of the government and explain exactly why all agencies should be doing more with less.

At his annual press conference, China Premiere Li Keqiang warned that in a trade war between the U.S. and China, “it would be the foreign-invested companies in China, particularly US firms that would bear the brunt of it,” citing an unnamed international think tank. “We don’t want to see a trade war,” Li continued. “A trade war won’t make our trade fairer. It will only hurt both sides. I understand the whole world is paying close attention to China-US relations. China hopes that no matter what bumps this relationship may run into, it will continue to move forward in a positive direction.”

The press conference, at the fifth session of the 12th annual National People’s Congress, featured pre-selected questions and well-rehearsed answers, as the Los Angeles Times reported. Li and President Xi Jinping have been trying to position China as a champion of trade and globalization in the Trump era, and Li answered his first question, from CNN about U.S.-China relations in the Trump era, saying he was hopeful. He referred to comments he made in October, when the presidential election was “white-hot,” as he described it, that “in spite of twists and turns,” U.S.-China relations have been “going forward” over the last decades. Li welcomed Trump’s reaffirmation of the One China policy, which Li argued “forms the political foundation” of relations between the two countries, and said given that, “China-U.S. cooperation enjoys bright prospects.”

“We feel optimistic about the future of China-US relations on the strength of the extensive common interests that have bound the two countries together in the course of several decades of our diplomatic relations,” Li said. “It is true that there are some differences between the two countries over issues like jobs, exchange rate and security. What’s important for both countries is to stay focused on the overall interests, and enhance dialogue and communication to deepen mutual understanding.”

“Both our peoples are great people,” Li said, channeling his inner Trump, “and we believe that we have the wisdom to properly manage differences.” Li noted that focus on the trade surplus was misguided, saying he spoke with someone from a foreign trade company that told him “90 percent” of his company’s profit “goes to U.S. firms.”

“Statistics show that last year, trade and mutual investment between the two countries created up to one million jobs in the United States,” Li claimed. “We may have different statistical methods, but I believe whatever differences we may have, we can always sit down and talk about them, and work together to find solutions.” Li suggested that by continuing to work on common interests, “the differences will account for a lesser and lesser proportion in overall China-US relations.” Presidents Xi and Trump are set to meet next month at Mar-a-Lago.

Globalization and free trade have benefited the entire world—trade has increased 30 fold since 1950, while the population has only tripled. Research has shown globalization has helped speed economic growth, increase life spans, and even reduce child labor. The Trump administration may represent the first time since the end of World War II that the American president has not been some kind of champion of free trade and globalization, despite particular ideological or other political flaws. The world is also a lot more prosperous than it’s ever been, and from Latin America to Asia, a wide array of governments have come to understand the benefit of liberalization and free trade policies for their countries, even if the rhetoric doesn’t always match.

President Trump’s hostility to free trade need not be a mortal blow to the trend toward free trade and the freeing of markets the last half century has seen. And tariffs, the tool Trump most often points to for a putative trade war with China, will mostly punish American consumers, workers, and entrepreneurs (and especially the poor!).

Tariffs are a bit like Philadelphia’s experiment with the soda tax (or “tax recovery.”) They mayor insists the tax is on beverage companies and that they should pay the tax. But companies can’t absorb the entire cost of the tax—despite the mayor’s insistence that soda companies are greedy, as most companies they are highly competitive and prices reflect that competition for consumers—so the cost is passed on to the consumers. The mayor may insist that’s not what he had in mind, but it’s basic economics. So it is with tariffs, the costs of which will mostly be passed on to the consumer. The concomitant reduction of competition from foreign goods, meanwhile, could also raise prices of domestic goods. Trade happens between willing buyers and willing sellers—government’s role, if any, ought to be to ensure that this is able to happen, and certainly not to interfere with and distort the process.

China’s pro-trade rhetoric, of course, isn’t always matched by its actions. If China truly wants to become a champion of the forces of free trade and globalization that have lifted so many people out of poverty, they should recommit and speed up the privatization of Chinese industries—undoubtedly many of the concerns about China’s trade position come from the state’s dominant role in Chinese companies of all kinds. Privatization would improve performance, stimulating economic growth and even opening up the possibility of political reforms. After President Trump withdrew the U.S. from the Trans-Pacific Partnership, a trade deal between a dozen countries adjacent to the Pacific, but excluding China, the China-backed Regional Comprehensive Economic Partnership, a proposed trade deal including Asian-Pacific countries but not American-Pacific ones took on new importance. Trade deals should be used to liberalize and simplify trade among countries open to free trade, and not as tools to export domestic policies, like labor and environmental, or to contain other countries making a good-faith effort to participate in free and open trade.

When early drafts of the Trump budget started to circulate after the inauguration, the Export-Import Bank—one of Washington’s most notorious corporate-welfare programs—was among the agencies destined for the chopping block. Now the actual budget is out, and the bank has been spared the ax. The Washington Examiner‘s Tim Carney reports that this “follows many reports from congressional fans of Ex-Im that Trump had been persuaded to love the agency, which primarily subsidizes Boeing sales.” (Barack Obama underwent a similar transformation, denouncing the bank as “little more than a fund for corporate welfare” while he was running for president but fighting to preserve it once in office.)

The budget plan does have some good news for foes of corporate handouts. Carney points out that the Overseas Private Investment Corporation (which “subsidizes U.S. companies that want to set up business overseas, such as a Ritz Carlton in Turkey or a Wendy’s in the Republic of Georgia”) is still slated to go, as are the U.S. Trade and Development Agency and the money allocated for the Manufacturing Extension Partnership. The Community Development Block Grant Program, also marked for death, has a long history of funding officials’ business cronies, as my colleague Scott Shackford noted earlier today. And there are other corporate subsidies that will be cut, including several at the Department of Energy.

But the biggest hub of crony capitalism in Washington is the military-industrial complex. And that, alas, is set to expand: Trump wants to give the Pentagon a $52.3 billion spending spike. I’m glad for any small victories against the corporate state, but in the grand scheme of things they’re getting swamped.

Last week Wikileaks finally released its much-hyped “Vault 7” data detailing the CIA’s arsenal of hacking tools. The first tranche, consisting of 8,761 documents and attachments from an “isolated, high-security network” in the CIA’s Center for Cyber Intelligence, reveals important information about the federal spy body’s intrusion techniques, alliances with other government bodies, and internal culture from 2013 to 2016.

These new details alone would be explosive, writes Andrea O’Sullivan, but the media’s relative lack of interest in these major revelations makes this story even more curious. The CIA’s hacking toolkit, while not surprising to those in the security community, should be downright paranoia-inducing for most Americans. According to the Vault 7 documents, the CIA can hack into most consumer devices, rendering even the strongest encryption techniques useless.

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Every year, taxpayers buy hundreds of tickets on otherwise empty flights from places like Ely, Nevada; Lewistown, Montana; and Paducah, Kentucky.

Those vacant seats are bought, at a cost of about $200 million annually, by the federal government as a way to subsidize twice-daily service to 175 rural airports that airlines may not otherwise choose to serve. President Donald Trump’s first budget plan, released Thursday, would do away with those subsidies by shutting down the federal government’s Essential Air Service program.

“EAS flights are not full and have high subsidy costs per passenger,” the White House budget proposal states. “Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation.”

Eliminating the EAS is one part of an overall $2.4 billion budget reduction for the Department of Transportation proposed Thursday by the White House. Other budget savings would come from reducing subsidies for Amtrak, eliminating some local government grant programs, and privatizing the nation’s 14,000 air traffic controllers.

It’s hard to find any proposal in the budget that makes more sense than cutting the Essential Air Service program, which is anything but essential.

The EAS program has it roots in the deregulation of the airline industry in the late 1970s. Before deregulation, carriers were required to serve smaller, rural airports in order to obtain government permission to operate. After deregulation, the federal government created the Essential Air Service program to subsidize those rural routes so airlines would continue to serve them even without being required to do so. It was supposed to be a 10-year program to help those regional airports transition into the new deregulated air market.

More than 35 years later, it’s still with us, another testament to the permanence of temporary government programs.

The Department of Transportation says there are 115 airports in the lower 48 states (and another 60 in Alaska) receiving subsidies through the program. Any airport more than 70 miles from another commercial airport is eligible for subsidies, which are capped at $200 per passenger. Airports in the EAS program get at least two round trips a day with 30- to 50-seat aircraft—although sometimes those planes have as few as nine seats, as Reason has previously reported—to nearby hub airports. Without the EAS subsides, the department says, those communities “would not receive any scheduled air service.”

But those supposedly far-flung places won’t be cut-off from the rest of world if the EAS program were shuttered. In fact, many of them aren’t so far-flung at all, and some might find better, more cost effective ways to get people where they need to go if the subsidies were killed.

For example, the airport in Hagerstown, Maryland, gets subsidies through the EAS program, even though it’s less than a 90 minute drive from there to Dulles International Airport. Taxpayers pay more than $800 to subsidize each and every departure from Jonesboro Regional Airport in northern Arkansas, despite the airport being less than 70 miles from Memphis, Tennessee. It would be more cost effective to reimburse travelers leaving from Jonesboro or Hagerstown for the cost of fuel and mileage to drive to the larger airport.

Those two aren’t unique. In all, 38 of the 153 airports subsidized through the EAS program are within 150 miles of another, larger airport. A 2011 report published by the The Reason Foundation (which publishes this blog), the Natural Resources Defense Council, the American Bus Association, and Taxpayers for Common Sense found that 79,000 one-way flights leave those 38 airports year, carrying 615,000 passengers who pay $70 million in fares. The federal government’s subsidies for those flights totals nearly $60 million.

Replace those flights with a bus service to shuttle passengers to larger, nearby airports could save $89 million annually, the report found. Yes, buses don’t travel as fast as places, but the average trip would be only 45 minutes longer on the ground than through the air, the study found.

That’s fine for the EAS airports near bigger cities, but what about the rest? A 2009 report by the Congressional Budget Office suggested that states and local governments could pick up the tab for airport subsidies if they were truly essential to the local economy. In many places, such service might not be needed at all—or the number of flights could be reduced from two-per-day to perhaps a few flights each week, depending on demand. Indeed, some EAS-eligible airports operate with fewer than five passengers per day, the Government Accountability Office found in 2011.

Trump’s budget, like all presidential spending proposals, is more of a political document than a fiscal roadmap. Congress gets the final say on federal spending, and, if history is any guide, we haven’t heard the last from the EAS program. President George W. Bush tried three times to reduce or eliminate funding for it during the mid-2000s, only to be rebuked each time by Congress. Funding for the program actually increased during the Obama administration, from about $136 million annually to the current level of $200 million.

Cutting back on those subsidies—or eliminating them entirely, as Trump proposes—makes a lot of sense, and could be done without cutting rural communities out of the nation’s transportation networks.