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Clark Packard and Scott Lincicome

Article I, Section 8 of the US Constitution grants to Congress the power to “lay and collect Taxes, Duties, Imposts and Excises” and to regulate commerce with foreign countries. Yet a central plank of Donald Trump’s presidential campaign is a promise to impose tariffs of between 10–20 percent on imports from every country and 60 percent tariffs on all imports from China, which the former president recently claimed he could do without congressional approval.

Economists and other trade policy analysts understand such aggressive protectionism would be extremely damaging to the economy and broader foreign policy goals, but is Trump correct?

Yesterday, we released a Cato Institute briefing paper surveying the legal authorities available to the president to unilaterally impose aggressive tariffs. As we explain in the paper, in the early 1930s, Congress began delegating some of its constitutional powers to the president. Indeed, several US laws provide the president with vast discretionary authority to impose trade restrictions, and we argue that neither domestic courts nor the World Trade Organization is likely to check the exercise of such authority.

Ultimately it falls on Congress to claw back at least some of its constitutional authority to set US tariff and trade policy. Over the past several years, members of Congress have introduced legislation to rebalance trade authorities. Last month, for example, Sen. Rand Paul (R‑KY) introduced a bill that would, if enacted, require Congress to approve tariffs proposed by the president under a number of laws. Should Congress fail to act, US trade law will continue to be ripe for abuse by protectionist presidents.

Adam N. Michel

The United States is at a fiscal policy crossroads. If federal spending remains on its current upward trajectory, the US budget will increasingly resemble government budgets in Europe, where government spending dominates economic activity. Judging by the campaign rhetoric of both Republicans and Democrats, neither party is serious about cutting spending.

To our benefit, the United States has historically been a relatively low-tax country. However, without significant spending reform, Americans should be prepared for a future that looks more like Europe.

To illustrate this potential future, a new Cato Institute policy analysis puts numbers to how typical workers fare under the tax system of the United States and EU countries. Using data from the Organisation for Economic Co-operation and Development (OECD), I calculate the total tax burden faced by workers, including the costs of income taxes, employee payroll taxes, employer payroll taxes, and consumption taxes.

Figure 3 from the analysis shows that an average single worker with no children in the 22 countries that are both members of the OECD and EU faces an all-inclusive average tax rate of 47 percent. A similar worker in the United States faces a 32 percent tax rate and pays almost $12,000 less in taxes. 

Belgium, Germany, Austria, and France confiscate more than half of their workers’ pretax earnings. Compared to the EU countries, workers in the United States face the lowest average tax rate.

The discrepancy in taxes paid also exists for lower-income taxpayers, higher-income taxpayers, and families. For example, a family of four with two earners making a combined $125,000 in an EU country pays $21,500 in higher taxes than a similar American family of four. 

Beyond the obvious effects of reducing workers’ take-home pay, the European fiscal system disincentivizes productive market activity by reducing the private return to work. In countries with high income and payroll taxes, individuals work fewer hours, take longer vacations, work shorter careers, and spend more time on nonmarket activities, like housework, childcare, and eldercare.

The full paper includes a summary of the tax systems and the size of government across Europe and the United States and discusses in detail how Europe’s high tax burdens incentivize people to work less, making them materially poorer than their American counterparts.

Importing the European fiscal system to the United States would not only require a roughly 50 percent tax increase on lower- and middle-income American workers and families, but the higher taxes would also have broader economic costs, making society as a whole worse off.

The United States has been trapped in a fiscal illusion for more than two decades. When deficit financing can no longer sustain the illusion, Americans will have to face the reality that the only way to fund a big and growing government is with high taxes on the middle class. However, Congress can and should avert a stagnant, high-tax European future by decisively cutting spending—the sooner and deeper the cuts, the better.

Read the full Cato policy analysis, “A Bigger Government Means Giving Up Almost Half Your Paycheck.” 

Chris Edwards

Hurricanes Helene and Milton have now passed, leaving trails of destruction. Some politicians are using the disasters as a political football, focusing particularly on the funding of the Federal Emergency Management Agency (FEMA). But the debate over FEMA is somewhat misplaced.

FEMA is the lead federal agency for natural disaster response, but the American system of disaster response is not a top-down structure imposed by Washington. Rather, two core principles in disaster response are federalism and mutual aid between states, cities, utilities, and other private entities. In other words, we have a decentralized and horizontal response system.

State, local, and private groups play the main role in disaster response. As the Congressional Research Service noted, “The United States takes a ‘bottom up’ approach to both managing and providing assistance during a disaster.” State and local governments employ 1.3 million people in police and fire departments, for example, and those first responders are spread across the nation.

State governors are crucial. They have wide-ranging responsibilities and powers during disasters, such as the power to order evacuations. The states have standing agreements for mutual aid. For example, search and rescue teams from across the nation come to the aid of disaster-struck areas. Teams from Virginia and Maryland arrived in Florida even before Helene made landfall. Colorado sent helicopters, K9s, and other first responder assets and personnel. Pennsylvania sent emergency management workers and a helicopter rescue team.

The National Guard under state command plays a crucial role during disasters, and more than 6,000 guardsmen have arrived to help in the Southeast. After Hurricane Katrina in 2005, 50,000 guardsmen from virtually every state provided services such as medical care, law enforcement, and debris removal. 

Most of the nation’s critical infrastructure—such as utility infrastructure—is owned by the private sector, not by governments. Electric utilities have standing agreements for mutual aid, and we always see a rapid response of crews from many states aiding disaster areas. Within a day of Helene hitting North Carolina, crews were arriving from utilities in the Northeast. Crews from Kentucky arrived in Florida on Tuesday.

Looking at US history, disasters have always generated large outpourings of aid from individuals, businesses, churches, and charitable groups. The American Red Cross plays a huge role, providing food, water, and temporary shelter after disasters. The media and social media are reporting many private aid efforts in North Carolina and Florida. Elon Musk has “sent more than 10,000 Starlink terminals to North Carolina and other areas impacted by Helene,” and he has teamed with T‑Mobile to provide emergency texting. Walmart and Home Depot are delivering truckloads of food and supplies, and Taylor Swift donated $5 million.

The federal role should be to offer its unique assets and capabilities to disaster-struck areas. The Coast Guard’s search and rescue operations are vital after hurricanes. The US Army is supplying assets to aid the Helene and Milton efforts, and the Air Force is flying search and rescue missions.

FEMA distributes emergency aid to individuals after disasters and has sent water, meals, tarps, and generators to the areas hit by Helene and Milton. This function is important, although it overlaps the activities of the states and private sector. Much of FEMA’s budget goes toward rebuilding after disasters, but the states should handle those costs.

FEMA’s disaster response has been known for bureaucracy that slows the relief efforts of businesses, charities, and individuals. The agency’s blocking of private aid efforts after Katrina was appalling. With Helene, social media posts have criticized FEMA’s efforts, but I don’t know the veracity of these claims.

Presidents usually visit disaster-hit areas to appear to be in charge, and news reports often imply the same. However, the states are actually in the driver’s seat. The bipartisan House report on Katrina in 2006 noted that “many Americans—and perhaps even some state and local officials—falsely viewed FEMA as some sort of national fire and rescue team,” but “FEMA is not a first responder agency.” Instead, FEMA mainly provides funding for relief and rebuilding.

News reports are discussing whether or not FEMA has enough money and employees on the ground in the Southeast. But the important thing is to ensure that FEMA is supporting and not hampering the states, businesses, charitable groups, and individuals in aiding communities after these two awful storms. 

See “The Federal Emergency Management Agency: Floods, Failures, and Federalism” at Downsizing the Federal Government for more on FEMA and natural disasters.

Ian Vásquez

This fall marks both the 50th anniversary of economist Friedrich Hayek winning the Nobel Prize and the 80th anniversary of the publication of his book The Road to Serfdom in the United States. Below, I reproduce an article (roughly translated) that I published in Peru last week about Hayek’s classic book.

Hayek had a huge influence in Peru, perhaps more than in any other Latin American country. In 1979, on the eve of the transition from military rule to democracy, economist Hernando de Soto invited Hayek to Lima, Peru to lecture. There, he met with other classical liberals like novelist and Nobel laureate in literature Mario Vargas Llosa and Cato adjunct scholar Enrique Ghersi, among others.

Hayek emphasized many of the messages in The Road to Serfdom while in Peru. In 1990, after years of heterodox and ruinous policies, Vargas Llosa ran for president on an explicitly libertarian platform. He lost the election to Alberto Fujimori but won the battle of ideas. Peru ended up adopting a far-reaching, free-market agenda along the lines that Fujimori had originally opposed. 

Through regime changes and a succession of administrations, Peru has stuck to Hayekian-inspired economic policies, which have transformed the country and made it one of Latin America’s success stories.

“The Road to Serfdom?”

It has been 80 years since the publication of Friedrich Hayek’s The Road to Serfdom in the United States. Almost instantly the book became a classic and, within days of its publication, there were requests for its translation into Spanish and other languages.

Like any classic, the book by the Nobel laureate in economics was influential in its time and has remained so despite the changing times. With the Nazi dictatorship and the cataclysm of World War II in mind, Hayek warned against central planning. He worried that the collectivist mentality in democracies such as England’s would harm freedom significantly and could lead to totalitarianism, as it did in Germany.

The prime minister of the United Kingdom, Margaret Thatcher, made it known that Hayek’s ideas were shared by her government when it came to power in 1979. That same year, Hayek visited Peru when the transition to democracy was being planned. During that visit, Hayek insisted that democracy should not be idealized or equated with freedom. He said that democracy is not an end in itself, but rather a tool that should be used to limit power, support the rule of law, and safeguard individual freedom.

Hayek’s ideas had an enormous influence in Peru. Mario Vargas Llosa cites him as one of the three intellectuals who have had the greatest influence on his economic and political thought. And there is no doubt that, since the 1990s, Hayekian ideas have put Peru on the right track.

Fortunately, what Hayek feared might happen in the most advanced democracies did not happen. Indeed, totalitarian communism collapsed in the 1990s, as did central planning on a global scale. Hayek’s warnings helped.

But his warnings are still relevant in a world where too many countries are going down illiberal paths. What was one of Hayek’s main messages? He said that central planning, even if implemented under democracy, is incompatible with freedom.

That is so because “an economic plan involves the choice between conflicting or competing ends—different needs of different people.” Only politicians or experts will have the power to make decisions. Therefore, “it is inevitable that they should impose their scale of preferences on the community for which they plan.”

Decisions that affect everyone tend to be discretionary, favoring some more than others and thus violating the principle of equality before the law. In practice, the wishes of a minority are imposed on others. Central planning ends up destroying both democracy and freedom.

For Hayek, central planning guarantees arbitrary power. It must be so because we all have very different goals from one another. That is why those who adhere to a collectivist mentality commit the following mistake highlighted by Hayek: “The effect of the people’s agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all.”

Today, it is painfully clear to Venezuelans that they chose the road to serfdom under democracy and have ended up in a totalitarianism they did not want. Mexico is now also heading in that direction and other Latin American leaders advocate going down the same path.

A welcome exception in the region is Argentina, whose president, Javier Milei, has read and understands Hayek, and is trying to lead his fellow citizens out of serfdom. After 80 years, Hayek’s classic is worth reading and rereading.

Marc Joffe

As I’ve discussed in this space previously, state licensing requirements are contributing to the shortage of Certified Public Accountants (CPAs). Recently, the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) proposed a licensing reform that promises to diminish the problem. But more radical change may be needed.

Fewer aspiring accountants are pursuing a CPA because states require one year of graduate education in addition to a bachelor’s degree and a passing score on a nationwide exam to become certified. Some state accounting societies have suggested an experiential alternative to the one year of graduate school. Now, the AICPA and NASBA appear to have listened.

The organizations have issued an exposure draft entitled “CPA Competency-Based Experience Pathway” and are seeking stakeholder comments through the end of 2024.

Under the AICPA/NASBA proposal, CPA license applicants can avoid the post-baccalaureate education requirement by completing 2,000 hours of work involving “accounting, attestation, compilation, management advisory, financial advisory, tax or consulting.” The experience must be certified to the state’s accountancy board by a “CPA Evaluator.”

The proposed evaluation requirement, which does not apply to the one year of work experience now needed for a CPA, seems unnecessary. As Sharon Lassar, director of the School of Accountancy at the University of Denver, told me, “I’m concerned that the experience verification process could become unwieldy and ineffective. A costly infrastructure has emerged around continuing professional education requirements for license renewal, and it is not clear that the exercise of accumulating and verifying CPE Is effective. The same could happen with experience verification.”

Lassar was among the speakers at a Cato webinar on CPA licensing restrictions we held in April.

Another concern with the proposal is implementation. The NASBA provides model state legislation that only becomes effective once state legislatures modify their laws to conform to its legislative model.

Assuming NASBA moves forward with the exposure draft, CPA societies in various states will look for sympathetic assembly members or senators to propose reforms. This recruitment process and the rate at which eventual legislation progresses will vary across states.

One way to speed the implementation of this and future reforms in CPA licensing is for states to adopt Universal Licensing Recognition. Under ULR, CPAs licensed in one state can quickly obtain licenses in other states. Legislatures in at least twenty states have adopted ULR for certain occupations and should consider including Certified Public Accountants if they have not already done so.

By pushing the envelope on experiential pathways and including ULR, state legislatures can build on the AICPA/NASBA reform and thereby alleviate the CPA shortage.

Ryan Bourne

Fifty years ago today, on October 9, 1974, Friedrich Hayek was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

The prize committee recognized Hayek’s “pioneering work in the theory of money and economic fluctuations and … penetrating analysis of the interdependence of economic, social and institutional phenomena.” The prize would cement Hayek as one of the most important economic and political theorists of the 20th century.

Much has been written about Hayek’s numerous contributions, but one of his simplest yet most profound insights is presented in the classic paper “The Use of Knowledge In Society.” It’s a theme crucial to The War on Prices.

A market economy will be more efficient than a centrally planned one, Hayek concludes. Why? Knowledge. Hayek argued that the information needed to allocate resources efficiently in an ever-changing world is dispersed across millions of people. It’s often local, personal, and hard to fully explain. Yes, some knowledge is certainly technical or “scientific”—it can be written down as instruction. But a lot of what we do and how we operate reflects highly personal experience and local understanding.

An estate agent will know about the quirks of their local housing market, the individual shop manager has the most detailed knowledge of how to motivate their difficult staff members, and a specific consumer knows that she prefers one cookie over another, even if she cannot explain why. This practical, on-the-ground information simply can’t be collated by government. A central authority will therefore only ever have access to a tiny fraction of the knowledge that goes into making economic decisions. This “knowledge problem” means that central planning tends to inefficiency and, so, relative poverty.

Fortunately, a market economy is able to harness that knowledge without requiring a central authority to try collating uncollectable information. That’s because every time someone makes a decision based upon their preferences—whether buying eggs or hiring staff—it feeds into market prices. Prices, according to Hayek, thus act as signals that reflect all knowledge, including the dispersed, tacit knowledge held by individuals.

Furthermore, when circumstances change, new local knowledge can quickly be communicated and transmitted through market prices without the rest of us needing to know all the underlying details. Egg prices might rise due to a localized bird flu, but more distant consumers and other producers need not follow the epidemiology of the disease in deciding how to react. Consumers adjust to the higher egg price from this supply-shock in stores by buying fewer, while other producers have more of an incentive to increase their own supply. That process helps supply and demand equilibrate. Dynamic market prices thus allow us to coordinate millions of individual decisions relatively efficiently, alleviating the “knowledge problem” without central direction.

Hayek recognized that market prices are thus crucial to both our economic resilience and ongoing prosperity. He writes:

The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.

….

The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; that is, they move in the right direction.

Few governments these days attempt to engage in direct central planning, of course. Nevertheless, although Hayek’s essay wasn’t a direct policy document, its insights about the “knowledge problem” provide at least three valuable lessons for modern governments:

Support decentralized systems: Governments should prioritize policies that allow individuals and businesses to act on their local knowledge. This ensures greater adaptability and experimentation, leading to efficient outcomes without top-down interference.
Industrial policies require other rationales: Given the “knowledge problem” and how central planning harms efficiency, industrial or spatial planning or favoritism must be justified by other aims, like national security or a direct effort to redistribute activity.
Avoid price controls: Market prices serve as vital signals for coordinating economic activity. By manipulating prices—through controls or regulations—governments distort these signals, undermining the effective communication of dispersed knowledge.

In short, Hayek’s insights showed us that economic freedom under the law and a system of market prices are essential prerequisites for prosperity.

Friedrich Hayek was a Distinguished Senior Fellow at Cato. You can read more by him and about him here.

Michael F. Cannon

Vice President and Democratic presidential nominee Kamala Harris proposes to expand Medicare by having it subsidize in-home long-term care for enrollees—paying for someone to help them with activities of daily living, that sort of thing.

One report estimates the proposal could cost the federal treasury $40 billion per year—more than double the amount of the Children’s Health Insurance Program. Harris would have to pay for it by squeezing inefficiencies from other parts of Medicare, principally Medicare subsidies for prescription drugs.

It is difficult to overstate the irresponsibility, corruption, and insanity of this proposal.

The Fiscal Backdrop

First, consider the fiscal environment into which Harris tosses this proposal.

The Congressional Budget Office estimates the federal deficit will reach $1.9 trillion this year. Congress will collect $4.9 trillion in revenue but spend $6.8 trillion.
The deficit spending has been going on so long that the cumulative federal debt now equals 99 percent of the entire US economy. The CBO projects the debt will hit 122 percent of GDP by 2034.

One marvels that politicians are proposing any new spending at all.

Particularly since Congress does not have a revenue problem. It has a spending problem.

From a historical perspective, Congress is collecting more revenue than usual. Federal revenues currently equal 18 percent of GDP, well above the average of 17.3 percent over the past 50 years.
Government spending, on the other hand, exceeds the historical average by far more. Over the past 50 years, federal spending has averaged 21 percent of GDP. It currently stands at 24.9 percent. And it is rising faster than revenues.

Into this environment Harris is proposing to create another $40 billion entitlement.

But this proposal wouldn’t make a debt crisis more likely, right? It wouldn’t increase the debt at all because she has a plan to pay for it, right?

An Irresponsible Proposal, Even on Its Own Terms

Not quite.

Even if Congress were not running massive deficits, Harris’s proposal is irresponsible on its own terms.

With one hand she proposes to increase Medicare long-term-care spending by $40 billion. With the other hand, she proposes to cut $40 billion of Medicare drug spending—all without denying benefits to anyone.

If Harris can wring that much inefficiency out of Medicare, she should! If she uses the savings to provide additional benefits to seniors, that’s a huge win for total social welfare! Right?

But consider what Harris’s proposal implicitly admits.

She admits that Medicare currently contains at least $40 billion in wasteful spending. In other words, this health care entitlement wastes so much money that cutting the waste could fund an entirely new entitlement.

Pretty inefficient, right? Now ask yourself: if that’s how much waste government health programs create and tolerate, then what does that say about the wisdom of using those savings to create a new government health care entitlement?

The fact that Congress has a track record of doing exactly that explains much of the mess that is the US health sector. The best estimates indicate that one-third of the $1 trillion Medicare spends annually delivers no benefit to enrollees. That’s more than $300 billion per year. Such staggering levels of waste have fueled the rapid expansion of other government health spending.

Democrats have spent decades milking the Medicare waste-cow to fund new health care entitlements (and now, energy boondoggles). Republicans have also used it to fund new entitlements and (sometimes) to return some of that wasteful spending to taxpayers. The Manhattan Institute’s Chris Pope writes:

Following steep cuts in the 1997 Balanced Budget Act, leading House Democrat Henry Waxman protested that “the Clinton administration and congressional Republicans used Medicare strictly as a piggy-bank.” President Clinton agreed to the Medicare cuts because part of the savings would be used to create the Children’s Health Insurance Program. Despite his criticisms, Waxman had been the architect of similar bipartisan deals in the 1980s to expand Medicaid by cutting Medicare.

When Democrats have controlled Congress, they have pursued this course unilaterally: cuts to Medicare payments to hospitals and insurers were used to fund 40 percent of the 2010 Affordable Care Act’s $1.9 trillion spending (mostly expanding Medicaid). And in 2022, they claimed that cuts to Medicare reimbursement for prescription drugs would pay for over half of the spending in the Inflation Reduction Act.

A good question to ask Democrats would be: if you admit government health care programs are wildly inefficient, how does it make sense to expand the ones we have or to create new ones?

Indeed, Democrats are guilty of a particular hypocrisy here. They complain that the United States is an international outlier on health spending while using the inefficiencies of the government programs that make us an outlier to create more such programs that make us even more of an outlier.

In all likelihood, Harris’s new health care entitlement will exhibit the same staggering rates of wasteful spending as the existing health care entitlement whose waste she hopes will provide the funding. Maybe future Democrats will use the waste from Harris’s new program to fund still more health care entitlements. Lather, rise, repeat.

Cutting Medicare Waste? Don’t Hold Your Breath.

That’s not to say Harris would actually be able to tap that wasteful spending. Even if Congress were to enact her proposal, her plan to free up that wasteful spending is unlikely to work for the same reason that wasteful spending came to exist in the first place. More likely, her proposal would simply add to the federal debt.

Congress has a hard time cutting even wasteful government spending. Why? Every dollar of wasteful spending is a dollar of revenue to somebody—and that person always has a lobbyist. In the case of Harris’s proposal that somebody is the pharmaceutical industry, whose lobbying budget is nearly three times that of the entire defense industry.

Pharmaceutical companies would pull out all the stops to block Harris’s “pay for.” If they fail to stop the legislation, they would come back again and again to try to protect their wasteful revenue. They would lobby Congress to rescind the legislation—as Congress did with the “sustainable growth rate” and the “Cadillac tax.” They would lobby the executive branch to neuter the legislation, as Obama did to ObamaCare’s Medicare Advantage cuts. They would challenge the legislation in federal courts. Big Pharma is right now challenging in court, and lobbying Congress to rescind, the Inflation-Reduction-Act-Medicare-drug-price-negotiation provisions on which Harris hopes to build.

Were Congress to enact Harris’s proposal, therefore, the new spending would remain. (Indeed, the proposal itself would finance a new health care lobby that would fight to preserve it.) But the reductions in wasteful Medicare spending likely would not materialize. If past is prologue, Congress would preserve those wasteful revenues because no one will provide enough push-back against Big Pharma’s lobbying efforts. That’s what happens when politicians and voters spend other people’s money.

The new spending would remain. The cuts would disappear. The federal debt would rise. In all likelihood, Harris’s proposal would bring the United States closer to The Big One: a debt crisis that would force actual, permanent, painful cuts in government spending on necessary care.

Low-Quality Long-Term Care

As if all that wasn’t enough, Harris is building her new entitlement on Medicare—a model that discourages high-quality care and promotes low-quality care. For its entire history, Medicare has had a negative impact on health care quality. As I wrote in 2022:

The non-partisan Medicare Payment Advisory Commission has warned since at least 2003 that Medicare’s approach to health care quality “is largely neutral or negative”….

Since 1965, Medicare has paid providers more for low-quality care than for high-quality care. For example, in 1995, Utah’s Intermountain Health Care reduced mortality by improving how it treated pneumonia. Medicare rewarded those quality improvements by paying Intermountain less.

In 1999, Duke University developed a better way to treat congestive heart failure. Medication adherence increased. Hospitalizations fell. Resource use fell by half. Again, Medicare (and private insurers with similar payment rules) responded by reducing payments. Duke eventually had to shutter the program for lack of funds.

In 2002, Whatcom County, Washington improved glucose management for diabetics and stabilized congestive heart failure patients, saving $3,000 per patient. The county ended up shuttering the program for the same reason Duke did….

In 2009, Medicare reduced payments to Texas’ Baylor Medical Center after the system cut heart-failure readmissions in half with no increase in mortality.

Hospitals can nearly double net revenues if a Medicare patient develops post-operative complications.

Medicare pays hospitals nearly $3,000 more per patient when low-quality care leads to more post-acute care and readmissions.

Medicare paid a large urban hospital system more when it allowed urinary-tract or bloodstream infections than when it prevented them.

Only in recent years has Congress even attempted to correct Medicare’s perverse incentives for low-quality care. Those efforts have failed. My colleague Jacqueline Pohida and I write:

Even Medicare’s quality-improvement programs pay low-quality providers more than high-quality providers, and award quality bonuses to low-quality hospitals and mediocre health plans.

(NB: that’s how Obama gutted ObamaCare’s Medicare Advantage cuts.)

Traditional Medicare is in its sixth decade of penalizing high-quality care and thwarting the competitive forces that would otherwise improve quality. Congress has spent most of Medicare’s history ignoring the program’s negative impact on quality and the resulting harms. Even after a decade of trying to reduce those harms, Medicare’s “development of new payment and care delivery models has had relatively little impact on the average beneficiary and has lagged well behind what is possible and desirable.” The fact that, to this day, congressional debate over Medicare focuses on enrolling more patients in such a program and expanding the range of services it subsidizes, rather than improving the quality of care enrollees receive, is itself an indication that Medicare’s current structure leads Congress to prioritize the needs of industry over the needs of patients

Medicare’s negative impact on quality is systemic. The perverse incentives that encourage low-quality care would infect the provision of the at-home long-term-care services Harris wishes to subsidize. Her proposal is therefore yet another example of prioritizing the needs of the health care industry—in this case, long-term care providers—over the needs of patients.

If Harris truly wanted to provide quality long-term care to Medicare enrollees, she would propose increasing Social Security subsidies for Medicare enrollees who require long-term care.

That too would be fiscally irresponsible (though perhaps slightly less so). But at least the care would be better: Social Security is a far better health care program than Medicare.

Conclusion

Right now, health reporters, health economists, and other Democrats are furiously pounding away at their computer keyboards to proclaim the good news that Harris has issued a compassionate, wise, and responsible at-home-long-term-care proposal.

On the contrary, that proposal is uncompassionate, fiscally reckless, and a corrupt attempt to buy the votes of Medicare enrollees and their middle-aged children in an election year.

Neal McCluskey

Over the last few years, the country has experienced especially heated culture war in public schools. But new data from Cato’s Public Schooling Battle Map suggest things might be cooling off.

The first chart below shows the number of conflicts we have tracked annually since 2012, when our collection became more regular. There is a clear leap in battles in 2021, after lulls in a generally upward trend between 2012 to 2018. We reached new records in 2021, 2022, and 2023. But the 2024 bar—a projection for the entire year based on our current pace—is well below 2023. Just 329 conflicts, compared to 540 a year earlier.

What is happening?

There has been less action in the area that has burned hottest: reading material, often misleadingly reduced to “book bans.” As seen in the next chart, such conflicts in public schools have dropped from a high of 136 in 2022 to a projection of only 80 in 2024. This is consistent with new information from the American Library Association, which reported fewer challenges in all public and academic libraries—not just public schools—over the last year. 

It is not consistent with PEN America reporting, which suggests a big increase in challenges. The discrepancies are likely because PEN has a more expansive definition of “banned” than the ALA, and tallies unique titles challenged while the Battle Map only counts districts and states with reading material fights, not individual titles challenged. PEN chalks up much of the increase in titles challenged to just a couple of states.

The deeper explanation for declining hostilities likely involves a few things.

First, the COVID-19 pandemic super-heated controversy over public schools, first over whether they would re-open to in-person instruction, then whether they would have vaccination and masking mandates. As we have moved on from the pandemic those conflicts (though maybe not some lingering resentments) have ended.

The pandemic also drove education into people’s homes with online instruction, possibly making some parents aware of their children learning things they did not like. I am not certain how common that was—arguably the national catalyst for book challenges involved a volume physically brought home—but if remote learning was a factor, it has diminished with the resumption of in-person education.

More clearly powerful was the response in some public schools and states to the murder of George Floyd. It led many school leaders and state legislators to announce efforts to combat systemic racism, and, as seen in the chart below from the American Historical Association, it likely sparked an explosion in already growing ethnic studies legislation. 

This spurred conservative pushback, which was exacerbated by the widespread 2020 unrest in response to Floyd’s murder. The pushback launched a great deal of state legislation against teaching “divisive concepts,” such as that some children should feel guilt for the historical actions of members of their race. Another likely reason for the decline in conflicts in 2024 is that states inclined to pass either kind of legislation had probably already done so.

Another possible factor is that 2024 is a presidential election year and a lot of the energy that activists might otherwise have put into public schooling battles is being directed at elections. When the elections are over, conflict over district and state education policies might heat back up, possibly with new political majorities and minorities initiating new conflicts.

Finally, there might just be fatigue from several years of intense conflict. The warriors might be resting, regrouping, and reenergizing to fight another day.

Importantly, how we collect conflicts for the Battle Map has changed over the years; we might have captured smaller or larger shares of conflicts being fought in some years than in others. But our collection has likely become more comprehensive as we have moved from significant use of news aggregators to our own, numerous, Google alerts. The bias for 2024 would be toward finding more battles than previous years, not fewer.

Of course, we would not expect culture war to always be intensifying and spreading. But we know from history, and the winner-take-all structure of public schooling, that conflict is inevitable.

Alex Nowrasteh

American presidents have enormous and growing power over our lives, liberty, and private property. Article II of the Constitution vests the president with “executive power,” which includes faithfully executing laws passed by Congress and acting as the commander in chief of the armed forces. For generations, successive Congresses have delegated much of their power to the president or stood idly by as presidents have usurped more power that is legislative in nature and effect. Much of this presidential power was redistributed and expanded in response to crises like wars, the Great Depression, and other emergencies, but the president’s power never fully receded after the conclusion of those crises.

My colleague Gene Healy wrote, “The modern presidency has become the central fault line of polarization in America because the president, increasingly, has the power to reshape vast swaths of American life.” As a result, we must focus more scrutiny on the president’s “formidable instruments of power”: executive orders (EOs) and other proclamations, memoranda, directives, executive agreements, edicts, and directives with the force of law.

The shifting of power from the Congress to the president and the resultant shrunken liberty of Americans prompted me to edit the first edition of the Cato Handbook on Executive Orders and Presidential Directives. The handbook has two goals. The first is to explain why the growth in executive and presidential power undermines individual liberty, limited government, free markets, peace, and the separation of powers as envisioned in our Constitution. The conclusion analyzes several reforms that would reverse the growth of executive power and properly confine the president’s power.

The second goal of the handbook is to provide a partial list and explanation of EOs and other directives that the next administration should revoke or amend. Many EOs and directives are legislative in nature or effect and reduce American liberty and prosperity, but a great number of them are innocuous or within the bounds of the president’s power. Without systemic reforms to presidential powers and the scope of EOs and directives that could be issued by the president, the next best alternative is to clear out the worst EOs. Thus, the handbook identifies EOs in policy issues as varied as the management of the administrative state, immigration, trade, foreign policy, national defense, health care, technology, energy, the environment, and more that the next president should revoke or amend.

The handbook is primarily intended to guide policymakers and the next incoming administration. In each chapter of the handbook, Cato scholars identify EOs and directives that create policy problems, explain those problems, whether the EO should be revoked or amended, and, if amendment is the answer, how the EOs should be amended. Presidents have more power than they used to and their authority will likely continue to grow. Even if the growth in presidential power continues, revoking or amending the EOs analyzed in the handbook along the lines suggested would at least improve policy.

We published the Cato Handbook for Policymakers in earlier years, which contains numerous policy recommendations for every issue researched by Cato scholars. The newly published Cato Handbook on Executive Orders and Presidential Directives does not replace that other handbook, it merely focuses recommendations on the president as his power becomes increasingly legislative.

As I wrote in the conclusion to the handbook:

The constitutional, legal, political, and judicial defects that have shifted some lawmaking power from Congress to the president must be discovered, remedied, and reversed lest the separation of powers be fatally undermined. James Madison warned of the tyrannical danger when legislative, executive, and judicial powers accumulate in the same hands, but that tendency toward centralized and unseparated power is most pronounced for the president, and EOs are his chief means of exercising undivided power .… Until such reforms and others become law, current or future administrations that are interested in stopping this constitutional hemorrhaging can start by revoking or amending the EOs identified in this handbook along the lines suggested by Cato scholars. The recommendations would improve public policy, reduce government power over the lives of Americans, and increase protection of individual liberties and private property. Those reasons justify their enactment, but much more needs to be done to reduce the impact of executive orders.

President Bill Clinton’s adviser, Paul Begala, blithely described the process and power of modern EOs as a “Stroke of the pen. Law of the land. Kind of cool.” If only he were wrong. Still, divisive and destructive EOs and directives created by the stroke of the pen can be undone by the stroke of the pen. The legal and constitutional drift that brought us to the point where presidents have this enormous power should worry all Americans. Too much power concentrated in a single individual is a tremendous threat to the constitutional order that has been indispensable in maintaining individual liberty, limited government, free markets, and peace that remain in the United States. 

The prospect of reducing the power of the president to its proper constitutional role is slim, but following the recommendations in the Cato Handbook on Executive Orders and Presidential Directives would restore a significant amount of liberty to the American people. That alone is justification enough. 

Jeffrey A. Singer

Last week, the staff at an overdose prevention center (OPC) in London, Ontario were unable to save a client who overdosed on a drug consumed at the facility, even after they rushed the person to a nearby hospital for further resuscitation. Harm reduction opponents have already begun pointing to the event as an argument against Canada’s 38 OPCs.

The coroner’s report and toxicology results are not yet available, so it is important not to jump to conclusions. We don’t yet know what substances contaminated the drug the deceased obtained on the black market. It is possible there were other substances in addition to or in place of fentanyl that rendered naloxone less effective as a reversal agent. For example, an increasing number of toxicology studies are finding another synthetic opioid, isotonitazene or “iso,” which can be ten times more powerful than fentanyl, present in the victim’s system. In late 2023, British law enforcement reported a big influx of this class of opioids called nitazenes had entered the illicit drug market in the UK.

Regardless of what the report ultimately reveals, it is important to maintain perspective. No medical treatment is perfect. The operative word in the term harm reduction is “reduction.” In a 2023 Cato briefing paper, I reviewed the worldwide experience with OPCs, initially called “safe consumption sites.” The oldest legally sanctioned OPC has been operating in Bern, Switzerland since 1986. The paper concluded:

OPCs have a more-than-30-year track record of preventing overdose deaths, HIV and hepatitis, and other diseases, and of helping people with substance use disorder find treatment. As of August 2022, 147 OPCs are providing services in 91 communities in 16 countries. They continue to gain acceptance as an effective tool for reducing the dangers of using drugs obtained through the increasingly deadly black market.

My research at the time found no report of any overdose deaths from any of the 147 OPCs. Eighteen months after the first two OPCs in the US opened in New York City, OnPointNYC, the harm reduction organization operating them, reported that it reversed 1,008 overdoses with no fatalities at its centers.

However, it was never realistic to believe that staff at OPCs would be able to resuscitate every overdose. As Dr. Gillian Golla of the University of Victoria’s Canadian Institute for Substance Use Research told CTV News reporters about the unsuccessful resuscitation at the Canadian OPC:

“…we don’t expect absolute perfection from other parts of the healthcare system. We don’t expect emergency departments to save every single person who walks in their doors.

“As someone who has worked in a supervised consumption site, there are frequently very complex overdoses that occur, and this is happening more frequently as the toxic mix of unregulated fentanyl gets more worse. This emphasizes the need for easily-accessible harm reduction services.”

A May 2022 study found that bystanders successfully reversed 95 percent of overdoses with naloxone nasal spray—usually from illicit fentanyl—but they often needed to administer multiple doses because of fentanyl’s potency. Another study by researchers at Brigham and Women’s Hospital in Boston found that 6.3 percent of overdose victims whom Emergency Medical Technicians (EMTs) attempted to save with naloxone died on the same day.

While it is wrong to claim that overdose deaths are completely prevented at OPCs, it remains the case that they are exceedingly rare.

Just as it would be unreasonable to close emergency rooms for not being able to save every patient, it would be similarly unreasonable to abandon overdose prevention centers for not being able to reverse every overdose.