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Gabriella Beaumont-Smith

On May 3, the Senate passed a House joint resolution to nullify President Biden’s proclamation to freeze the collection of antidumping and countervailing duties (AD/​CVDs) on certain imports of solar cells and panels.

President Biden’s proclamation, issued last June, uses Section 318 of the Tariff Act of 1930 to declare an emergency of insufficient “electricity generation capacity to meet expected customer demand.” The president directed the Secretary of Commerce to freeze the collection of AD/​CVDs on solar cells and panels imported from Cambodia, Malaysia, Thailand, and Vietnam, after the Commerce Department initiated an investigation based on U.S. solar manufacturers’ claims that these imports are assembled with components produced by Chinese companies subject to AD/​CVDs. In other words, U.S. manufacturers alleged Chinese companies are circumventing AD/​CVDs by moving production to Cambodia, Malaysia, Thailand, and Vietnam.

The resolution uses the Congressional Review Act (CRA) to overturn Commerce’s final rule to freeze the collection of duties (as directed by the presidential proclamation). However, the president’s use of Section 318 to declare an emergency of insufficient capacity to generate electricity is unjustified given production continues to exceed consumption. Thus, Congress is well within its right to overrule the president’s action.

It is also clear that the imposition of these duties is economically senseless, but the commentary on this tug of war between Congress and the executive misses the broader, more important story. This is not about free trade versus protectionism. Nor is it about “standing up to China” versus not. It is about the foolishness of U.S. AD/CVD (trade remedy) laws.

Congress frequently amends trade remedy laws, each time making it easier for cases to be brought by U.S. industry for protection against import competition. However, this circumvention case particularly demonstrates the numerous indefensible provisions of U.S. trade remedy laws.

Firstly, this circumvention case comes from the 2012 AD/CVD order on Chinese solar cell and panel imports. Table 1 provides an overview of the active AD/CVD orders on solar products.

In September 2021, Commerce issued a final rule to extend the scope of its inquiry procedures, adding that circumvention inquiries can expand an existing AD/CVD order—essentially meaning that a new investigation does not need to be opened to cover additional countries or products.

Secondly, Congress has broadened Commerce’s methodological and procedural discretion. For example, in this circumvention case, Commerce uses a method called “adverse facts available (AFA),” whereby if the agency deems information from the respondents (usually the exporting companies) missing or deficient, it can fill in the missing information. But this data is usually provided by the industry petitioning for protection in the first place. Thus, the AFA method allows Commerce to calculate duty rates using proxy information that is intentionally adverse to the foreign businesses.

Thirdly, the United States is the only country in the world that applies AD/​CVDs “retrospectively.” In this circumvention case, the duties would be applied back to 2022 when Commerce made its preliminary decision. If both antidumping and countervailing duties are applied, they could reach 254.19% (238.95% for the dumping order and 15.24% for the countervailing order). However, the reason that the AD is so much higher than the CVD is because Commerce used the “non‐​market economy (NME)” methodology, which only applies to antidumping cases. The law requires that Commerce find evidence of price discrimination or selling prices below the complete cost of production, both of which are often completely rational, profit‐​maximizing, and legal business strategies. Yet, the introduction of a border allows U.S. industry to accuse foreign firms of some unfair competitive advantage even though there is no mechanism to determine when price differences between American and foreign firms are actually attributable to unfair advantages as compared to legitimate practices. The basis for using NME is that in centrally planned economies, the price data is unreliable because the government intervenes to influence supply and demand. Therefore, price data is not considered adequate for benchmarking price discrimination or selling below cost. As a result, similar to the AFA methodology, NME methodology is dictated by Commerce’s subjective decisions as the agency tries to estimate what prices would be otherwise, often foregoing accuracy and leading to inflated dumping margins.

Moreover, AD/CVD orders have sunset reviews every five years and in many cases the duties are renewed. The AD/​CVDs on Chinese solar cell and panel imports (the ones alleged to being circumvented) have been renewed every five years since 2012. Further, the duties may be changed during the review process (or even between the preliminary and final decisions), and it is often the case that the rates increase. Since the duties are applied retrospectively, importers are on the hook for the difference, which can result in millions of dollars in unexpected duty liability. In fact, the duties under the circumvention case could impose an immediate cost on American solar maintenance and installation companies of more than $2.3 billion.

Lastly, the laws forbid Commerce and the International Trade Commission from considering the impact of duties on the broader public interest, even in times of emergency.

While the administration and Congress continue to support the trade remedy system to put “U.S. workers first,” the solar industry is vocal about tariffs and duties hurting, not helping, U.S. workers. In fact, the Solar Energy Industries Association estimates that the imposition of the circumvention duties would stall or cancel planned solar projects; potentially eliminating 30,000 jobs (4,000 of which are in manufacturing), and leading to the loss of $4.2 billion of investment in new domestic solar projects. Further, to “help” the domestic solar industry, President Biden maintained former President Trump’s Section 201 (safeguard) tariffs on most imported solar cells and panels. These tariffs are estimated to have cost 62,000 jobs between 2017 and 2021, and $19 billion in investment.

President Biden’s proclamation and his vow to veto the resolution are tacit acknowledgments that AD/​CVDs are harmful. Although Congress is unlikely to see the light with this systemic problem, it would better serve American workers by reviewing and repealing as many active AD/CVD orders as possible. At the very least, Congress should reform trade remedy laws to require an analysis of any prospective duties’ economic impact and reject the imposition of duties where estimated costs exceed a certain threshold.

Robert A. Levy

1. Describe the current impasse regarding the debt ceiling.

Treasury Secretary Janet Yellen warns that the federal government may no longer be able to meet its obligations if the debt ceiling is not raised by June 1. The result: default, with financial chaos to follow. Despite that stark warning, the debate over spending cuts continues. Democrats want a stand‐​alone “clean” vote on raising the ceiling. Republicans want to use the debt ceiling as leverage to force spending reductions. Political compromise remains elusive.

2. What do legal experts say about default?

Enter a handful of imaginative lawyers who promise to save us from economic ruination – not by spending less or taxing more, but by applying the Public Debt Clause in section four of the 14th Amendment. Essentially, they claim the Constitution forbids default and, consequently, a debt ceiling that triggers default is itself unconstitutional.

3. What does the Public Debt Clause of the 14th Amendment say?

The Public Debt Clause says “The validity of the public debt of the United States, authorized by law, … shall not be questioned.” That 1868 provision was intended primarily to prevent repudiation of Civil War debts. But the Supreme Court in Perry v. United States (1935) held that all federal debt is covered: The constitutional text applies “to the government bonds in question, and to others duly authorized by the Congress.” Still, that leaves several unanswered questions: First, what constitutes “public debt … authorized by law”? Second, is default comparable to repudiation in its effect on the debt’s “validity”? Third, even if default is unconstitutional, does that mean a debt ceiling is also unconstitutional?

4. What constitutes “public debt authorized by law”?

Perry plainly states that authorized and existing public debt must be paid. But proponents of the debt ceiling argue that Perry is irrelevant because the ceiling refers to new obligations that haven’t yet been authorized or issued. The counter‐​argument, to which I subscribe, is that Congress’s appropriation of funds for subsequent expenditure is equivalent to authorizing debt that would finance the expenditure. In other words, Congress has implicitly authorized the executive branch to borrow; and a statutory ceiling on that borrowing – even though signed by the executive – cannot be harmonized with the spending directive.

5. Would default be the same as repudiation in questioning the validity of our debt?

Debt ceiling advocates assert that Perry involves repudiation, which is more draconian than merely defaulting. Repudiation is a declaration that the money is not owed. A default, by contrast, declares inability to pay, which may even be accompanied by an acknowledgment that the debt remains valid. As long as the debt is not formally repudiated, so the argument goes, default does not automatically render one’s debt invalid. Once again, I subscribe to the counter‐​argument: If a friend refused to repay my loan when due, while assuring me that he would get around to it at an indefinite future date, I would be hard‐​pressed to intuit that his default – although not a repudiation – left me with a debt of unquestioned validity. As the Supreme Court said in Perry, “[T]he expression ‘the validity of the public debt’ [embraces] whatever concerns the integrity of the public obligations.”

6. What about the constitutionality of excessive spending, which can also affect the integrity of our debt?

A few devil’s advocates have argued that section 4 of the 14th Amendment might also mandate higher taxes, sales of public property, and budget cuts. Without those funding sources, the validity of the public debt might also be called into question. Yet, clearly, enactment of those policies is not constitutionally decreed. Instead, consider this more plausible interpretation: Congress is precluded from capping all sources of funds that could be used to pay the debt, but not from capping some sources. Accordingly, a debt ceiling is constitutional as long as other funding is not statutorily barred. That means, of course, Congress and the president would be compelled either to reduce spending, raise taxes, sell the Treasury’s mortgage‐​backed securities or gold, or delay principal and interest on debt held by the Federal Reserve. The choices to avoid default are numerous, notwithstanding a debt ceiling.

7. What’s the bottom line?

Here are my conclusions, tempered by awareness that legal authorities across the ideological spectrum have wide‐​ranging views: First, duly enacted appropriations are legally the counterpart of “public debt … authorized by law.” Second, default on public debt, like repudiation, casts doubt on the debt’s “validity,” and therefore is unconstitutional under the Public Debt Clause. Third, a congressional ban on all funding sources to pay principal and interest would lead ineluctably to default, and is thus unconstitutional as well. But fourth, a debt ceiling that forecloses only one source of funding, leaving open several alternative sources, passes constitutional muster. On the other hand, if default loomed because Congress and the president were unable to agree on a solution, I believe the president would be justified in breaching the debt ceiling.

8. Who would have legal standing to challenge the president if he borrowed above the ceiling?

As a practical matter, I suspect no one has legal standing to challenge an executive decision to borrow in excess of the ceiling. Standing to sue entails a showing of imminent, concrete, and particularized injury to the plaintiff – distinct from injury to the broader public. Perhaps Congress as a whole could claim such injury, but that would require a joint resolution, which would never pass the Democratic‐​controlled Senate. Moreover, even if someone had standing, the Supreme Court would likely treat the debt ceiling dispute as non‐​justiciable – that is, as a political question lacking legal criteria by which a court can resolve the impasse.

9. Where do we go from here?

Finally, there is one subject on which legal scholars seem to agree: Nothing good can come from an attempt to invoke the Public Debt Clause. The constitutional implications for separation‐​of‐​powers, the effect on capital markets, and the status of the dollar as the world’s reserve currency– those considerations should convince the Biden administration and Congress that they, not the courts, must restore fiscal sanity.

This post is an updated version of “Defaults, Debt Limits, and the 14th Amendment,” Daily Caller, July 7, 2011.

Romina Boccia

A new CBO (Congressional Budget Office) report and a Treasury letter by Secretary Janet Yellen now estimate the debt ceiling may bind as soon as June 1st. Following this announcement of a crunched timeline, President Biden invited congressional leaders to a meeting at the White House on May 9th.

As Congress and the Biden administration grapple with how to raise the federal debt ceiling in the next few weeks, they should work together on a fiscal plan to stabilize the growth in the federal debt. One part of such a plan could be the creation of a Base Realignment and Closure (BRAC)-like fiscal commission. The 64‐​member Problem Solvers Caucus, co‐​chaired by Rep. Brian Fitzpatrick (R‑PA) and Rep. Josh Gottheimer (D‑NJ), recently proposed a commission as part of their debt ceiling framework, recommending:

“…a BRAC‐​like external Fiscal Commission to review and recommend a package to stabilize long‐​term deficits and debt.”

Commissions have been used in the United States and in many other OECD countries to develop large‐​scale fiscal reforms because they can elevate the public discourse by taking divisive and controversial issues out of the direct political process. Importantly, they build a firewall to shield policymakers from political risks inherent in supporting fiscal reforms that will inevitably result in winners and losers. This allows policymakers to better evaluate the reforms based on their merits and to focus less on the political ramifications. Examples of successful commissions include the U.S. Greenspan Commission (1981), the U.S. Defense Base Closure and Realignment Commission (BRAC) (1988), the Swedish Pension Commission (1984), the Dutch Donner Commission (2001), and the German Rurup Commission (2002).

Many commentators were quick to brush off a fiscal commission as a fig leaf proposal. It’s understandable that some have grown cynical following the failure of several earlier congressional commissions, including the 2010 Simpson Bowles Commission and the Budget Control Act’s supercommittee. It matters greatly who makes up the commission’s membership and how recommendations will be adopted for the success prospects of such a plan. Congress can learn valuable lessons from the BRAC process for getting these details right.

The BRAC process was first used by the Department of Defense in the late 1980s to address inefficiencies and redundancies within the military base structure. The process involved an independent commission that evaluated military installations and recommended closures and realignments based on a set of criteria. The Secretary of Defense and the President would then review the recommendations before the President sent them to Congress. The BRAC commission’s recommendations would take effect automatically unless both the House and Senate passed a joint resolution disapproving them within a specified period. BRAC was a successful process that resulted in significant savings for the federal government while enabling the military to focus on key priorities.

The BRAC process was necessary because base closures resulted in concentrated benefits and dispersed costs, as districts in which bases were closed experienced mostly temporary disruptions while the benefits of reduced costs were shared among all taxpayers. Despite bipartisan interest in base closures, it became increasingly difficult to carry them out as Members of Congress sought to protect each other’s districts from being affected. An independent commission to close and realign defense bases without Congress having to actively vote for closing bases in their districts broke through the gridlock. A well‐​designed BRAC‐​like fiscal commission is a promising proposal to help elected officials overcome similar political gridlock in pursuit of better fiscal management and debt control. Congress should consider the following design features when setting up a fiscal commission:

Independent Experts. The commission should be composed of independent experts in economics and public finance, including those with expertise in retirement security and health care policy. Congress might also consider including independent commissioners of different generations to give voice to the concerns of Americans of different ages and how they will be affected by programmatic changes.
Concrete Goals. The commission would be tasked with reviewing all major aspects of government spending, including entitlements, discretionary spending, and tax expenditures, and recommending changes to stabilize the growth in the debt at no more than 100 percent of GDP for the next 10 to 30 years. The commission could consider the effectiveness and efficiency of government programs and agencies and recommend changes to reduce costs or eliminations if programs are duplicative or no longer serving as intended.
Certified Results. The Congressional Budget Office (CBO) or the Government Accountability Office (GAO) should certify that the commission’s recommendations would achieve debt stabilization over the short and medium term. This added layer of oversight and accountability would ensure that the recommendations were based on sound economic and fiscal analysis.
Fast‐​Track Authority. The President would review the commission’s recommendations and either approve or reject them. If the President rejected the recommendations, the President should detail their objections to allow the commission to revise their recommendations. If the President approved the recommendations, they would be sent to Congress as one holistic package, without allowing for congressional amendments.
Silent Approval. The commission’s recommendations would become law within 45 days unless Congress, both the House and Senate, passed a joint resolution disapproving of the reform package.

The fast‐​track authority granted to the original BRAC commission was initially controversial, with some members of Congress expressing concerns about potential violations of their Article I powers. The changes made to the BRAC process in response would also apply to this fiscal commission, including certification by a nonpartisan body that the recommendations were sound and allowing Congress sufficient time to evaluate recommendations and seek input from affected communities before changes would go into effect.

Given the powers a BRAC‐​like fiscal commission would have, it’s important to ensure oversight and accountability. Other ways of enhancing congressional oversight might include requiring that the commission publish meeting agendas and minutes, provide public access to documents and data informing the commission’s work, and hold public hearings and community forums to gather input from the public. Congress could also require the commission to publish periodic reports on its findings and deliberations. Lastly, Congress might require that the heads of affected executive departments certify commission proposals as sound before they’re sent to the President for approval. A well‐​designed BRAC‐​like process will be an effective tool for reducing government spending while also respecting Congress’s constitutional authority.

As federal debt is projected to rise to new record highs—exceeding levels last seen since World War II—the responsible choice at the debt limit is for Congress and the executive to reduce government deficit spending and slow the growth in the debt. Stabilizing the debt would require at least $8 trillion in deficit reduction or reducing projected spending by 10 percent over the next 10 years. Congress could stabilize the debt through a combination of new limits on discretionary spending, immediate reductions to mandatory programs, and future savings from reforms to major entitlement programs and other changes put forth by a BRAC‐​like fiscal commission.

For such a commission to have the greatest chance of succeeding, it should be independent, given clear criteria for carrying out its mission, subject to review by a nonpartisan government body to certify its recommendations are sound, and propelled forward by executive fast‐​track authority and congressional silent approval.

Colleen Hroncich

Like many newer educational options, Boone Prairie School began because parents were looking for something different for their own child. “My husband and I started the school because we were looking for an option for our son,” recalls Shawna Reinhardt. “My daughter was in a hybrid type option and my son was not really interested in learning. I was looking at what their options were going to be for him when he started school—we homeschooled him for the first two years. And I just needed something where he’d be able to be hands‐​on and able to get up and go outside for recess a couple of times a day.”

The Reinhardts found an amazing school in Florida, but that wouldn’t work because they lived in Indiana. They learned that it was affiliated with Hillsdale College, so Shawna’s husband Bret took a trip to Hillsdale to find out more. He toured Hillsdale Academy, and they showed him how everything worked—the classrooms, the lunch room, the assembly, and all the operations of the school. When he came home, he told Shawna they should start a school. She agreed—despite having a newborn at the time.

They built their new school on their family farm in Whitestown, Indiana, and opened in 2017. Shawna says Hillsdale was very helpful as they got up and running, connecting them with other schools and helping them avoid some pitfalls that others experienced. “We started with K – 5th grade and now we have a junior this year. Next year will be our first graduating class,” says Shawna. “We’ve just been adding on each year as we grow.”

Boone Prairie School is a Christian school that blends classical and Charlotte Mason approaches and follows a hybrid schedule. The classical method is based on “great ideas, great books (including primary sources when possible), foundational truths and principles, and enduring traditions and skills.” Pairing that with a Charlotte Mason‐​inspired philosophy means students learn through living books, cultivate good habits, and spend time outdoors as weather permits. Classes are held three days a week—Wednesday through Friday—and the kids learn at home the other days. This gives families both support, since the primary instruction is done at the school, and flexibility, since they can control their own schedules the other days.

Shawna is committed to meeting children where they are and helping them move ahead. For example, they place kids into whatever math level they need to be in, not one matched to a specific age. “When a new student comes, we start them at their level. We don’t try to force them into a level that’s not appropriate for them,” she says. For some, that level is higher than is typical for their age, and for others, it is below. But Shawna says it’s working well and there isn’t any sort of stigma with not being in your “grade level.” It’s all about putting them where they need to be. For kids who struggle with math, she’s found, “Once you can give them that confidence, then sometimes they don’t think they hate math so much anymore. Oftentimes they’re just missing a couple of key concepts that are kind of holding them back.”

According to Shawna, the whole school stays on similar tracks for history and science, except for high school because their requirements are a little bit different. This allows the families to be able to read the same chapters together and stay on some of the same topics for the at‐​home days. This year, for example, they’re studying Africa in geography, even the high schoolers. So they’re all listening to the same songs at home, learning the same trees, and cooking foods from various African countries. The whole school also learns a Bible verse together each month that usually relates to a character trait that they’re learning that month.

Boone Prairie also offers a variety of extracurricular activities, including chess, archery, yearbook, a skiing/​snowboarding club, and an outdoors club (fishing, hiking, camping, shooting sports, kayaking). For children who are interested in music or sports, the school will help connect them with local options.

For others who are considering starting a hybrid school, Shawna recommends connecting with the Hybrid Schools Project at Kennesaw State University in Georgia. She attended their conference last year and said they did a great job organizing it. She thinks it would be very helpful for anyone in the early stages of starting a school. Unfortunately, it’s too late for this year’s conference—it was held last weekend and was a terrific event. But KSU is launching a new Hybrid Schools Society, which is sure to be a wonderful resource for hybrid school founders and operators.

David Boaz

A new study by the Indian newspaper The Print, based on data from The Economist Intelligence Unit’s Democracy Index 2022, finds that 88 percent of full democracies recognize same‐​sex marriages or civil unions, while only 2 percent of authoritarian regimes do.

As my colleague Swaminathan Aiyar told the paper, “Autocracies do not recognise individual rights as fundamental and inalienable. Autocracies are organised on principles that allow the autocrat to discriminate on any grounds. In such countries, the progress of same‐​sex rights will naturally be slower or non‐​existent.” By contrast, implementation of same‐​sex marriage in democratic countries proceeded very rapidly once it became a matter for debate. In 1989 Denmark became the first country in the world to legally recognize same‐​sex unions, in the form of “registered partnerships.” In 2001 the first same‐​sex marriage law came into effect, in the Netherlands.

In a sense this finding isn’t very surprising, of course: Liberal countries tend to be liberal. I’ve written about this before, citing a column written in 2013 by the British journalist Michael Hanlon. Hanlon wrote about a “morality gap” in the world that could be seen most clearly in attitudes toward gay rights. His column is worth quoting at length:

It is now clear, though not much talked about, that humanity, all 7.1 billion of us, tends to fall into one of two distinct camps. On the one side are those who buy into the whole post‐​Enlightenment human rights revolution. For them the moral trajectory of the last 300 years is clear: once we were brutal savages; in a few decades, the whole planet will basically be Denmark, ruled by the shades of Mandela and Shami Chakrabarti.

And there’s some truth in this trajectory — except for the fact that it only applies to half the planet. The other half resolutely follows a different moral code: might is right, all men were not created equal and there is a right and a wrong form of sexual orientation.…

Let’s start with attitudes to gays, not because gay rights are the most important issue, but because attitudes to homosexuality show the morality gap in sharpest relief.…

A look at the timeline of gay rights shows a seemingly unstoppable barrage of permissiveness, with state after state passing laws first legalising homosexuality, then going further: permitting gay marriage and gay adoption and formalising gay relationships in terms of pensions and property rights. It’s tempting for those of us in this enlightened half of the world to think of this as a great wave of progress that rose up in the mid‐​20th century and will sweep across the world.

Tempting, but wrong. In fact, in much of the world, received wisdom on homosexuality appears to be going into reverse.

Of course, this divide in the world is well known. It’s been discussed and analyzed in Pew Research studies, examined at Human​Progress​.org, and included in the rankings of the Human Freedom Index. The findings from The Print show the divide in stark relief.

Liberalism is the most successful idea in the history of the world, yet it is now under attack in many parts of the world. Not just in countries such as Russia, China, Uganda, and India, but in liberal and democratic countries as well. Ideas we thought were dead are back. Socialism, protectionism, ethnic nationalism, antisemitism, even — for God’s sake — industrial policy. Liberals must sharpen their arguments and redouble their advocacy efforts on behalf of individual rights, free markets, limited government, and peace. Or as I like to say, we must continue to extend the promises of the Declaration of Independence — life, liberty, and the pursuit of happiness — to places, and people, and aspects of life they have not yet reached.

Paul Matzko

Those of us who get to chat with Peter Van Doren in the hallways at Cato HQ will be familiar with the following scenario: Mention a conversation topic that even slightly touches on government regulatory policy — from salmon farming to highway barriers or microparticulate air pollution — and ask Peter what he thinks. He will initially demur, saying that he really needs to go back and find this‐​or‐​that article in so‐​and‐​so journal that he once read about the subject, and then promptly unload a lifetime’s worth of accumulated knowledge that is just rattling around that remarkable mind of his.

It’s a pity that more folks outside Cato don’t get that opportunity. So I decided to make a podcast to give people just a taste of what a conversation with Peter is like. It will be coming out quarterly and is pegged to the release of each issue of Regulation as we highlight articles of particular and surprising interest.

Although I make no promises to always be current, this first episode starts with a rather timely segment discussing railroad industry economics in light of the eastern Ohio trail derailment. It turns out that railroad company profits are indeed up despite the coal‐​induced decline of freight rail and some rather outdated labor practices.

Then we interview our colleague Mark Calabria about his time as head of the FHFA, where he helped prevent a mortgage meltdown during the early pandemic. If you were one of the folks who was laid off in 2020 and then benefited from a paperwork‐​light mortgage forbearance, Mark deserves your handshake and a sincere thanks.

Finally, Peter offers a somewhat surprising critique of YIMBY utopianism. While up‐​zoning residential neighborhoods is beneficial and could slow housing price growth, the natural lifecycle of cities still tends to drive up prices, even in low regulation metros in states like Texas.

If you’re a subscriber to Regulation, or if you just enjoy picking Peter’s mind, then check out the episode and consider subscribing.

Ian Vásquez

Today is the 30th anniversary of World Press Freedom Day and, as the Washington Post points out, “there seems little to celebrate.” Indeed, press freedom has been on a years‐​long decline around the world and the situation is getting worse. The number of journalists imprisoned hit a record last year according to the Committee to Protect Journalists and in their annual survey of press freedom, Reporters Without Borders finds that “the environment for journalism is ‘bad’ in seven out of ten countries, and satisfactory in only three out of ten.”

Our findings in the Human Freedom Index also document the long‐​term decline of global freedom of expression.

It is the category of freedom that saw the largest decline in the past two decades, besides freedom of movement, which was suddenly and dramatically affected by the COVID pandemic. The fall in free expression is part of what free speech scholars such as Jacob Mchangama have called a global free speech recession. That recession includes rich and poor countries, democracies and non‐​democracies, and every region of the world.

The greatest violations have come from autocracies, but free speech is also coming under threat in liberal democracies. That includes, significantly, the threat to the culture of free speech that is harmful in itself and is inevitably upstream from the law as Mchangama and Greg Lukianoff have pointed out. Relatively free societies should be especially on guard against that kind of intolerance.

I take this occasion to highlight the case of Jimmy Lai, publisher of the now‐​closed Apple Daily and currently in jail in Hong Kong. We at Cato are honored to award him the Milton Friedman Prize for Advancing Liberty. (Read more about Jimmy Lai’s fight for Hong Kong’s freedoms and the award ceremony on May 18 here.) The fall in freedom of expression in Hong Kong has indeed been dramatic (see graph) with Jimmy Lai being one of thirteen media people currently imprisoned there. Their persecution, and that of other journalists around the world, is a vivid reminder of what’s at stake, as Cato Letter No. 15 eloquently put it:

“Freedom of speech is the great bulwark of liberty; they prosper and die together: And it is the terror of traitors and oppressors, and a barrier against them.”

Chris Edwards

Congress is scheduled to reauthorize the Farm Bill this year, the largest part of which is the $127 billion Supplemental Nutrition Assistance Program (SNAP). The SNAP, or food stamp, program is run by the U.S. Department of Agriculture (USDA). It was created in 1964 to improve nutrition for low‐​income families, but the economic situation and food consumption of such families has greatly changed since then.

Cato’s John Early and colleagues have described how real levels of poverty in America have plunged over the decades. One change has been food consumption. Chart 1 shows that calories have risen substantially for Americans since the 1970s, including low‐​income Americans. The USDA data is the average daily intake for age two and above, and low income means individuals with incomes of less than 186 percent of the poverty level.

Today, many Americans at all income levels are eating too much food, including too much unhealthy food, and they are gaining excess weight. The main food‐​related health problem for low‐​income Americans today is obesity, not hunger.

Chart 2 shows that low‐​income adults and children have higher obesity rates than other Americans. SNAP was originally aimed at alleviating food shortfalls, but many low‐​income individuals today are eating too much of the wrong foods. In the CDC data for the chart, adults are age twenty and over and children are age two to 19. Low income means individuals with incomes of less than 130 percent of the poverty level.

There are many unresolved issues in low‐​income nutrition. Why do SNAP recipients have less healthy diets than others? Which foods cause obesity? Are “food deserts” an important problem? How can people be encouraged to eat better?

Complex nutrition problems likely won’t be solved by one‐​size‐​fits‐​all solutions from Washington. Indeed, federal interventions are often flawed, and because they are imposed nationally can generate widespread harm. The imposition of arguably faulty federal dietary guidelines is an example.

Another example is SNAP, which has also had broad—and perhaps partly negative—effects on diets. The USDA says that the program is supposed to provide “nutrition benefits,” “healthy food,” and “healthy eating patterns.” But about 23 percent of SNAP benefits are for junk food including sugary drinks, desserts, salty snacks, candy, and sugar.

The N in SNAP is for nutrition, but studies have found the opposite. One USDA study found that “lower nutritional quality of household food acquisitions was associated with SNAP participation status.” A recent review by Jerold Mande and Grace Flaherty found, “Children participating in SNAP were more likely to have elevated disease risk and consume more sugar‐​sweetened beverages (SSBs), more high‐​fat dairy, and more processed meats than income‐​eligible nonparticipants.” The USDA has found that SNAP recipients are more obese than similar‐​income nonrecipients.

Because SNAP is a rigid top‐​down program, it has likely displaced alternative, and perhaps better, solutions for low‐​income nutrition. The federal government, for example, has repeatedly denied city and state requests to withdraw SNAP subsidies from soft drinks and candy, as discussed by Nicole Negowetti. The nutrition case against sugary soft drinks is clear‐​cut as Negowetti notes, but they are the single largest purchase item in SNAP. The USDA advises against sugary drinks, but its own SNAP program subsidizes them.

People can buy foods they want with their own money. But when taxpayers are paying $127 billion a year for a program that does not produce the outcomes promised, it is time to reevaluate. Congress should perform a thorough review of SNAP’s nutrition failures as it reconsiders the Farm Bill this year.

I recommend that Congress devolve SNAP funding and administration to the states, allowing for a diversity of policy approaches. Low‐​income nutrition involves many uncertainties, so imposing a single national policy does not make sense. With devolution, states could try different rules for allowable purchases, work requirements, benefit levels, and other program features. That approach would generate information about what works best for recipients, taxpayers, nutrition, and the economy.

More on SNAP, nutrition, and obesity here, here, here, here, and here.

Data Note: Obesity for adults means a BMI of 30 or more. Thus, an average‐​height man of 5’ 9” is obese if he weighs more than 203 pounds. Obesity is a higher weight category than overweight, which is BMI 25 to 30.

Marc Joffe

Federal, state, and local governments are being called upon to support struggling transit agencies to meet climate change goals. But spending money on transit is not necessarily the best way to reduce greenhouse gas emissions. In most of the United States, people are reluctant to or unable to use trains and buses to get to the destinations that matter to them. As a result, per rider operating and capital costs are quite high for many systems.

Faltering Ridership

Ridership data from reports compiled by the American Public Transit Association shows that passenger trips peaked in 2014 at 10.7 billion. By 2019, ridership had fallen 8% to 9.9 billion. It then cratered during the pandemic and recovered modestly in 2022.

To better chart Americans’ propensity to use public transit, I divided the ridership totals by annual population estimates published by USAFacts. Per capita transit use peaked at 35 rides per US resident in 2008 (a year of unusually high gas prices) and had fallen to just over thirty rides per resident prior to the pandemic. In 2022, ridership remained below 19 trips per resident.

Given longer term trends, it seems likely that total transit utilization will never return to 2019 levels, and that once they have reached a post‐​pandemic equilibrium, should not be expected to grow, at least on a per capita basis.

High‐​Cost Systems

The Federal Transit Administration’s National Transit Database (NTD) contains operating cost data by system but is provided on a lagged basis. For fiscal year 2021, NTD data shows aggregate operating expenses of $47.4 billion or $10.87 per passenger of which only $1.40 were covered by fares, yielding a farebox recovery ratio of 12.9%.

Because FY 2021 (which, depending on the transit provider, may contain several months from calendar year 2020) represented a ridership trough, we should expect costs per passenger and farebox recoveries to improve substantially in FY 2022 and 2023.

But NTD’s operating cost data does not incorporate the full cost of transporting passengers. And once we move beyond the Northeast and Chicago, overall costs per passenger can reach very high levels.

An example is the San Francisco Bay Area Rapid Transit (BART) system. NTD data for 2021 show $633 million in operating expenses, 18 million trips, and a cost per trip of $35.46. But BART’s 2021 audited financial statement shows $1.175 billion in operating expenses implying a cost per trip of $65.86. Among the costs included in the financial report but excluded by NTD is depreciation.

In the more normal year of FY 2022, BART had operating expenses of $1.226 billion (per its 2022 audit) and 38 million trips yielding a fully loaded cost per trip of $32.07.

Smaller rail systems can have even higher costs per trip. An example is Sonoma‐​Marin Area Rail Transit (SMART), which runs trains between Sonoma County Airport and the ferry terminal in Larkspur, CA. In FY 2022, its audit showed operating expenses of $48 million covering 354 thousand trips, thus yielding a cost per trip of $134.74.

Expensive Capital Projects

Adding riders by extending transit systems is a costly exercise that may not make financial or climate sense. Larger projects such as the Second Avenue Subway (costing $4.6 billion) and Grand Central Madison ($12 billion) have been thoroughly examined. But projects outside the Northeast promise to yield even worse results.

In Santa Clara County, the Valley Transit Authority (VTA) has raised $530 million to extend a light‐​rail line 2.4 miles and make related improvements. Projected daily boardings across the three stations served by the station are expected to reach 4,534 by the year 2043. But even this paltry ridership figure is misleading.

As we learn from Table 18 of VTA’s Supplementary Transportation Analysis, there would still be 2,322 boardings at the current terminal station, Alum Rock, if the extension was not built. Further, 896 of the projected light rail boardings would be from bus riders switching to the new transit mode. So, on net, this $530 million light‐​rail extension is expected to add only 1,316 daily transit rides.

Finally, these ridership projections were developed before the pandemic and do not appear to have been updated since. Given the sharp decline in VTA light rail ridership since early 2020, an updated forecast would likely show fewer than a thousand added rides daily. A subset of those would replace car trips.

Spending over half a billion dollars to replace just a few hundred car trips per day is an inefficient way to save the planet. Assuming, generously, that the light‐​rail extension would replace a thousand car trips daily and that the infrastructure has a useful life of forty years, the capital cost per car trip replaced would be over $36,000, enough to buy everyone an electric vehicle!

Alternatives

Continued large transit investments are unlikely to replace a substantial proportion of gasoline‐​powered car trips and the greenhouse gas emissions they cause. Policymakers concerned about the transportation sector’s impact on climate change should consider more cost‐​effective alternatives.

For example, if more people live within a short distance of shopping, dining, and entertainment activities, they may choose walking or biking over driving. One way to shorten travel lengths is to relax zoning laws to encourage mixed use development.

Meanwhile, car buyers are increasingly choosing electric vehicles. In January 2023, electric vehicles accounted for seven percent of US auto sales. The Inflation Reduction Act’s EV tax credits are contributing to the demand for these vehicles. But the credits are limited to vehicles whose final assembly is in North America. If car buyers could also use the credits for often‐​cheaper EVs imported from overseas, they would be more likely to choose an EV over internal combustion vehicles (for EVs to be an effective climate solution sufficient clean electricity needs to be available and greenhouse gas emissions during the EV production process should be limited).

Finally, cities can reduce idling at intersections by introducing smart traffic lights that change based on the flow of traffic rather than at fixed intervals. The Department of Energy has estimated that eliminating unnecessary idling “would be the same as taking 5 million vehicles off the roads”.

With all this said, transit can make sense in densely populated cities like New York and Chicago where infrastructure has already been built and operating costs per rider are relatively low. But transit does not work everywhere, and policymakers should be cautious about relying on it as a universal climate solution.

Vanessa Brown Calder

In the evolving post‐​Dobbs policy equilibrium, many Republican policymakers are looking for new policies to support mothers and children. Among other things, these policymakers are concerned with ensuring that mothers are adequately supported before and after birth. Policymakers are also worried that some mothers affected by the Dobbs decision and resulting policies will have limited resources to meet their babies’ needs.

These concerns are understandable. Although estimates vary, some suggest that the Dobbs ruling will result in a four percent increase in U.S. births. According to the Guttmacher Institute, a majority of women that received an abortion pre‐​Dobbs were living below the poverty line, about half were single, and a third were cohabitating with a partner. It seems likely that more women giving birth after Dobbs will be looking for help than before the Dobbs decision.

In an effort to respond to these issues, and in an effort to appear more pro‐​family (as opposed to simply pro‐​life), Republican policymakers have proposed various policies which expand the scope of government. Recently, Tennessee Governor Bill Lee expanded Medicaid coverage for pregnant women and proposed covering two years’ worth of baby diapers. Oklahoma’s Governor Kevin Stitt has proposed expanding government‐​funded fatherhood programs. And federal policy makers Marco Rubio and Mitt Romney introduced a bill to provide monthly cash benefits to families last year.

Policymakers sometimes forget that there are alternative ways to support families outside of creating new programs or expanding spending. In general, there are a wide variety of reforms that could increase affordability and make life easier for families that cost nothing at all. For pregnancy and childbirth specifically, it is also possible to increase support for single mothers by increasing accountability for noncustodial fathers.

One option is to require non‐​custodial fathers to absorb a greater portion of the costs associated with pregnancy and childbirth. With this in mind, Virginia policymakers recently passed a bill that would allow single mothers to request monthly child support and reimbursement for pregnancy and delivery‐​related costs from their child’s legal father. Specifically, the legislation would assign “the mother’s unreimbursed pregnancy and delivery expenses and those reasonable expenses incurred by either parent for the benefit of the child prior to the birth of the child” to the legal parents based on their gross incomes. This policy essentially extends the concept of child support to pre‐​birth and birth expenses.

Virginia’s law is not the first of its kind, and two other red states have passed similar legislation: Utah was the first state to pass a law requiring fathers to pay half of a mother’s pregnancy‐​related medical costs in 2021 and South Dakota passed a similar law earlier this year. Legislators in Arkansas have likewise proposed legislation requiring biological fathers to pay half of pregnancy‐​related medical costs. And last year, federal policymakers introduced legislation that would allow pregnant mothers to receive child support.

The concept is seemingly popular across party lines. In a weighted survey conducted by YouGov that asked about extending child support payments to the time of conception, 47 percent of respondents supported the hypothetical law and 28 percent opposed it. Despite the legislation so far being proposed by Republican policymakers, the law was favored most strongly by Democrats, especially Democratic women (61 percent in favor, 16 percent oppose) compared with any other group in the survey.

In a perfect world, it would not be necessary to require fathers to pay for child support. But child support payments deal with the financial reality that single mothers face in the absence of a committed and financially supportive partner. They help apportion child‐​related costs among parents when a preexisting agreement does not exist. Moreover, it seems reasonable to require fathers to absorb some of the cost of pregnancy and childbirth, given that women living in places with more restrictive abortion laws will be expected to do the same.

Policymakers should think clearly about the exact problem they are attempting to solve with any new law and be careful to consider potential unintended consequences when passing legislation in a delicate policy area. Still, Virginia’s law and those like it seem like an improvement on alternatives and a step in the direction of increasing both accountability and support.