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Jeffrey A. Singer

The state and local revolt against the federal “crack house” statute (21 U.S.C. Sec. 856), which makes it federally illegal to establish and operate overdose prevention centers (OPCs), continues to gain strength. The statute states:

Except as authorized by this subchapter, it shall be unlawful to—

(1) knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance;

(2) manage or control any place, whether permanently or temporarily, either as an owner, lessee, agent, employee, occupant, or mortgagee, and knowingly and intentionally rent, lease, profit from, or make available for use, with or without compensation, the place for the purpose of unlawfully manufacturing, storing, distributing, or using a controlled substance.

On November 30, 2021, New York City became home to the first two government‐​sanctioned OPCs. After the city’s mayor and the Department of Health gave the green light to the non‐​profit harm reduction organization OnPointNYC, the organization opened one center in Washington Heights and another in East Harlem. Last summer, the organization reported it had reversed more than 1,000 overdoses—that’s more than 1,000 people who might not be alive today had these OPCs not existed.

Also, in 2021, Rhode Island’s governor signed into law a bill that permits OPCs in the state, provided they are privately funded and coordinate with county health departments to collect and report data. Project Weber/​RENEW plans to open the Ocean State’s first OPC this year.

In May 2023, Minnesota’s governor signed a bill appropriating funds to establish OPCs in the state. A few days earlier, the governor signed a bill repealing Minnesota’s drug paraphernalia laws.

Now Vermont seems ready to join the rebellion. On January 10, the Vermont House of Representatives voted 96–35 to pass H.72. The bill immunizes organizations and people who establish and operate overdose prevention centers and the people who use them from state or local prosecution. It also appropriates funds for an overdose prevention center pilot program.

The House will vote on the bill once more before sending it to the state senate, where observers say it has strong momentum.

It is not necessary to use taxpayer dollars to fund harm reduction programs. However, it is very necessary to remove government obstacles that prevent people and organizations from employing harm reduction strategies to help save lives in their communities. The federal “crack house” statute and federal and state‐​level drug paraphernalia laws are among the biggest obstacles.

Unfortunately, California Governor Gavin Newsom vetoed a bill that California lawmakers passed in 2022 that would have permitted OPC pilot programs in San Francisco, Oakland, and Los Angeles. This denied harm reduction organizations in the country’s most populous state a chance to establish a major demonstration of the benefits of this proven harm reduction strategy.

As I explain in a Cato policy brief, overdose prevention centers are a proven harm reduction strategy that has been saving lives since 1986. As of the end of 2022, 147 government sanctions OPCs were operating in 91 locations and 16 countries, including 38 in Canada, 29 in Germany, and 14 in Switzerland—where the world’s first government‐​sanctioned OPC, established in 1986, still operates in Bern.

Hopefully, as lawmakers and leaders in other states join the movement, leaders in Washington claiming to be concerned about the overdose crisis will be moved to do something different from enacting the futile law enforcement measures they usually do and repeal the “crack house” statute.

David J. Bier

President Biden is asking Congress for $13.6 billion to fund border enforcement operations, a significant portion of which will go to Immigration and Customs Enforcement (ICE) to detain more immigrants. This strategy is reminiscent of President Trump’s administration, which also poured resources into ICE detention in 2018 and 2019, but that effort produced very little change in the number of ICE removals—the stated goal for both Trump and Biden.

Figure 1 below shows the daily average population detained by ICE each month and the total removals that month for fiscal years 2015 to 2024 (as of December). The key period for evaluating the Biden administration proposal is the surge in detention, which resulted in an increase from 24,000 prisoners per day in February 2015 to 55,000 in August 2019.

The average daily detention population grew from 28,449 to 50,165 from FY 2015 to FY 2019, while average monthly removals increased from 19,618 to 22,272.

Annual removals increased by just 31,845 from 2015 to 2019, while the number of people placed in detention for any period during the year increased from 307,482 to 510,854 (Figure 2). In other words, ICE imprisoned about 203,000 more people in 2019 than in 2015, but just 16 percent of those people were actually removed. The dramatic increase in detention primarily resulted in a much higher number of individuals being subjected to periods of imprisonment at a big cost to US taxpayers before being released into the United States.

From FY 2015 to 2019, detention bed capacity grew on an average day by 21,716, while removals for the entire year increased by just 31,845. This implies that one additional detention bed leads to, at the very most, 1.5 additional removals. Yet even this significantly overstates the effect of detention on the marginal case, as ICE typically receives and removes the easiest cases first. Consequently, the ratio of removals to detention beds would certainly decrease as harder cases were subject to detention.

For this reason, it is reasonable to assume that ICE will need at least one bed for each additional removal it hopes to carry out. Border Patrol is on pace to release about 1.5 million people in FY 2024, so ICE will likely need at least 1.5 million detention beds. ICE spends, on average, $157.20 per day on each bed it maintains for detention, but ICE is not detaining any families, and family detention is about twice as expensive.

With families and children composing about half of Border Patrol arrests, we can assume that the 1.5 million additional beds would come in at a rate of about $129 billion per year, 16 times ICE’s total annual budget.

In fact, President Biden is proposing to increase ICE detention by only 9,000 beds, from the current 37,000 to 46,000. The federal government should detain and deport individuals who pose national security and public safety threats to the United States, but it should not spend taxpayer dollars on useless anti‐​immigrant theater. Moreover, the Department of Homeland Security’s Office for Civil Rights and Civil Liberties has found that ICE detention sites routinely mistreat their detainees in ways that are “barbaric,” and there is no reason to expose anyone unnecessarily to this type of treatment.

A more effective approach to address the border issue is to facilitate legal immigration: let people come legally. This approach has been demonstrated to work, would reduce government expenditures, and make the immigration process more orderly.

Walter Olson

“Trump team argues assassination of rivals is covered by presidential immunity,” was The Hill’s headline. “U.S. president could have a rival assassinated and not be criminally prosecuted, Trump’s lawyer argues,” was the one at Semafor.

It’s true that yesterday’s oral argument before the D.C. Circuit did not go as badly for D. John Sauer, Donald Trump’s lawyer, as the recent congressional hearing went for university presidents. Still, it was eye‐​opening to see just how sweeping was the theory of immunity that Sauer eventually committed to on being backed into a corner by Judge Florence Pan. The specific point of Judge Pan’s line of questioning was that absurdities would result from accepting at face value Sauer’s argument that former presidents can never be indicted for crimes for which they have not been found guilty in an impeachment by the Senate.

I wrote last week about the extreme flimsiness of the part of Trump’s case that tries to make hay of the Constitution’s Impeachment Judgment Clause. George Conway has more at The Atlantic:

…it’s absurd for any number of reasons even apart from the plain meaning of the English language the clause uses. For one thing, a wealth of historical evidence contradicts the argument. As Justice Joseph Story explained in his Commentaries on the Constitution of the United States, even after an acquittal at an impeachment trial, the accused should still be liable to face a criminal trial, for “if no such second trial could be had, then the grossest official offenders might escape without any substantial punishment, even for crimes.”

For another, a public official might be acquitted in the Senate for reasons other than the merits of the impeachment charges against him. In fact, that’s exactly what happened at Trump’s second impeachment trial. As Special Counsel Jack Smith noted in his D.C. Circuit brief, “At least 31 of the 43 Senators who voted to acquit the defendant”—Trump—“explained that their decision to do so rested in whole or in part on their agreement with the defendant’s argument that the Senate lacked jurisdiction to try him because he was no longer in office.” Worse yet, as Henderson and Pan later pointed out during the argument, Trump’s own lawyers conceded to the Senate in February 2021 that, even if Trump were not convicted on the impeachment charges, he could still be criminally charged. Oops.

Nor did the former president get much help from Judge Karen LeCraft Henderson, the conservative on yesterday’s panel. “I think it’s paradoxical to say that his constitutional duty to ‘take care that the laws be faithfully executed’ allows him to violate criminal law,” Henderson said (recording).

The panel, Judge Michelle Childs in particular, did express interest in the jurisdictional question— important primarily for timing rather than merits—of whether it may properly at this point hear an interlocutory appeal, which is what both sides favor. (Just Security has an exhaustive look at the court’s options on this question, and Conway a more popular one.)

Assuming that Trump can get no traction on his impeachment‐​related theories, there still remain open questions—perhaps subject to guidance from courts at this stage—on the extent to which he can couch at least some of his actions as official, which might shelter them under a doctrine parallel to Fitzgerald immunity.

Judge Pan had some effective questioning that looked forward to this question. The institutional interests of the Executive Branch are the subject of solicitude under Fitzgerald’s not particularly rigorous balancing test, and Judge Pan pressed Sauer to concede that this cut both ways, not simply in favor of Trump. While the branch may not want to allow sensitive presidential decisions on, say, war powers to be casually second‐​guessed, it also serves Executive Branch interests best if 1) newly elected presidents are allowed to take office as the Constitution provides and 2) laws are not broken and crimes not committed, since a central function of the Executive Branch is to preside over the orderly enforcement of the laws. Trump’s personal interests here are to an important extent not those of the branch over which he once presided.

Travis Fisher

Offshore wind is one of the most expensive ways to generate electricity. It’s also a perennial favorite when politicians mandate a preferred electricity source. Time and again, East Coast policymakers bet their own political capital and their constituents’ dollars on offshore wind as the future of energy. That is a losing bet.

The fundamental problem with offshore wind mandates is that they do not align with the preferences of energy consumers, which is why the government must subsidize offshore wind for it to exist. But the broad political justification is also curiously absent. Recent polling suggests that just 38 percent of Americans are willing to increase their energy costs by $1 per month to address climate change. The cost of offshore wind exceeds that many times over, meaning offshore wind mandates are out of step with the will of the American people.

Offshore wind faces opposition from local groups because it threatens viewsheds and wildlife, but offshore wind mandates are bad public policy because they simply cost too much and would not be economically viable without taxpayer support. No one has proposed to build an offshore wind project in the United States without lavish subsidies, and the cost to everyday ratepayers is higher than most are willing to pay.

The list of states that have either signed contracts or laid out ambitious goals for offshore wind includes Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland, Virginia, North Carolina, and Louisiana. Offshore wind decrees can come from the legislature, like Maryland’s recent plan to install 8,500 megawatts (MW) of offshore wind capacity by the year 2031. They can also come from executive orders, like New Jersey’s goal to install 11,000 MW of offshore wind by 2040.

The federal government has goals of its own. In 2021, the Biden administration established a goal to deploy 30,000 MW of offshore wind in the United States by 2030. The fact sheet explains how various federal agencies can facilitate the 30 by 30 goal, including offshore permitting from the Department of Interior and loan guarantees from the Department of Energy.

Political Targets Meet Reality

In contrast to the ease and simplicity of issuing aspirational offshore wind plans, policymakers are now confronting the reality that offshore wind faces many obstacles. The second half of 2023 brought story after story of canceled or renegotiated contracts for offshore wind. BP and Equinor canceled their contract with the state of New York; Ørsted canceled two large projects in New Jersey; and developers in Massachusetts canceled four projects totaling 2,400 MW of offshore wind.

Electricity is already expensive in many Mid‐​Atlantic and Northeastern states. According to the most recent data from the US Energy Information Administration (EIA), New York ranked 9th most expensive in the United States with a retail rate of about 23 cents per kilowatt‐​hour (kWh). Maryland ranked 15th most expensive at 17 cents per kWh. Connecticut and Massachusetts ranked 3rd and 4th most expensive at 29 and 28 cents per kWh, respectively, coming in behind only Hawaii and California.

With such high electricity prices, one might expect political leaders to attempt to reduce the burden of the energy costs their constituents pay. Instead, policymakers in these states have insisted on mandating offshore wind, which will invariably increase electricity rates and impose a higher federal spending and tax burden on the country. There are several ways of looking at the cost of electricity from specific resources, such as wind off the East Coast of the United States. Unfortunately, offshore wind is expensive by every measure.

Contract Prices in Power Purchase Agreements (PPAs) and Levelized Revenue of Energy (LROE)

PPA prices are a generous way to examine the cost of offshore wind. They are the price paid by the offtakers of the energy from offshore wind projects—PPAs do not explicitly show the full cost paid by retail electricity consumers and taxpayers. These contract prices are usually expressed in wholesale units of dollars per megawatt‐​hour ($/​MWh).

As one example, the Vineyard Wind project off the coast of Massachusetts has a levelized PPA price of about $98/​MWh (escalating from a lower base price to a higher final price at the end of a twenty‐​year contract). As the National Renewable Energy Laboratory explained in 2019:

This LROE estimate for the first commercial‐​scale offshore wind project in the United States appears to be within the range of LROE estimated for offshore wind projects recently tendered in Northern Europe with a start of commercial operation by the early 2020s. This suggests that the expected cost and risk premium for the initial set of US offshore wind projects might be less pronounced than anticipated by many industry observers and analysts.

Other operational projects, like the South Fork project in New York, don’t advertise the PPA price but have stated that “the power from South Fork Wind … will cost the average ratepayer between $1.39 and $1.54 per month when it starts operating.” (Recall that fewer than 40 percent of Americans are willing to spend $1 monthly to address climate change.)

In short, PPA prices tend to put the cost of offshore wind projects in the best light.

However, even PPA prices for offshore wind resources do not compare well to clearing prices in wholesale markets. Note the difference between the $98/​MWh PPA for Vineyard Wind and the day‐​ahead wholesale market prices in New England, which are less than half the PPA price at around $44/​MWh.

Source: https://​www​.iso​-ne​.com/​i​s​o​e​x​p​ress/

The Levelized Cost of Energy (LCOE)

LCOE is a common measure of the cost of electricity from a given class of resources. LCOE boils down construction and operating costs into a single cost estimate (in dollars), divided by the energy output of the plant over its lifetime (in watt‐​hours). Hence the familiar unit of dollars per megawatt‐​hour. LCOE is a straightforward way to get a sense of the levelized (or averaged‐​out) cost of a standalone power plant.

According to recent LCOE estimates from EIA, the unsubsidized cost of offshore wind exceeds $120/​MWh and is among the most expensive generation resources. The consulting firm Lazard also publishes LCOE estimates that have become common reference points. In the latest Lazard research, the LCOE for offshore wind ranged between $72/​MWh and $140/​MWh.

Going by LCOE alone, offshore wind compares favorably to the highest‐​cost natural gas generators ($115–221/MWh) but not to the lowest‐​cost renewables ($24–75/MWh for onshore wind and $24–96/MWh for utility‐​scale solar photovoltaics [PV]). Quietly outshining these new resources is existing nuclear energy, which has a levelized going‐​forward cost (including decommissioning) of $31/​MWh, according to Lazard.

Source: https://​www​.lazard​.com/​r​e​s​e​a​r​c​h​-​i​n​s​i​g​h​t​s​/​2​0​2​3​-​l​e​v​e​l​i​z​e​d​-​c​o​s​t​-​o​f​-​e​n​e​r​g​y​plus/

The Full Cost of Electricity (FCOE) and Levelized Full System Cost of Electricity (LFSCOE)

Recently, scholars have expanded the LCOE model to include spillover costs that are borne by other generators on the system. To remedy the analytical shortcomings of LCOE, the FCOE approach zooms out and considers the all‐​in cost of the entire electricity system. This is the appropriate measure to use when judging society‐​wide costs because the full system costs are ultimately borne by retail ratepayers (and by taxpayers when subsidies are involved, as they are today).

The most important element of FCOE that is missing from LCOE is the cost to the rest of the system of intermittent output. Intermittent or “non‐​dispatchable” generation always requires backup and balancing help from controllable or “dispatchable” resources to satisfy total electricity demand; however, the cost of making other resources fluctuate their output to accommodate intermittent generation—by backing down in times of high intermittent production and ramping up in times of low intermittent production—is not captured in LCOE estimates.

A group of authors who favor using the FCOE of solar PV and onshore wind said, “LCOE is inadequate to compare intermittent forms of energy generation with dispatchable ones and when making decisions at a country or society level.” A quick look at the very high‐​solar grid in California (the California Independent System Operator or CAISO) illustrates this issue. The term “net load” describes the amount of demand (load) that remains to be met by dispatchable generation, net of production from intermittent sources.

Image source: https://​www​.eia​.gov/​t​o​d​a​y​i​n​e​n​e​r​g​y​/​d​e​t​a​i​l​.​p​h​p​?​i​d​=​56880

Intermittent wind and solar resources present different operational challenges. Although the solar PV output in California is predictable, it still requires a costly effort from dispatchable generators. Specifically, mostly natural gas‐​fired generators must ramp down their output during the day and ramp up quickly in the evening to reliably meet grid demand. Wind output is more random than solar output—even for offshore wind facilities—but the costs imposed on the fleet of dispatchable generators are similar.

Another scholar recently described the Levelized Full System Costs of Electricity (LFSCOE) as follows:

The LFSCOE are defined as the costs of providing electricity by a given generation technology, assuming that a particular market has to be supplied solely by this source of electricity plus storage. Methodologically, the LFSCOE for intermittent or baseload technologies are the opposite extreme of the LCOE. While the latter implicitly assume that a respective source has no obligation to balance the market and meet the demand (and thus demand patterns and intermittency can be ignored), LFSCOE assume that this source has maximal balancing and supply obligations.

Under the LFSCOE assumptions, the cost of onshore wind in Texas is approximately seven times higher than its LCOE (an LFSCOE of $291/​MWh compared to an LCOE of $40/​MWh). The details of applying an LFSCOE to offshore wind would only be slightly different from applying it to onshore wind. Specifically, offshore wind has a slightly higher capacity factor than onshore wind (about 43 percent versus 34 percent in 2018, according to the International Renewable Energy Agency’s 2019 “Future of Wind” report). However, offshore wind is still an intermittent resource, meaning its LFSCOE is higher than its LCOE.

State Policy, Federal Costs

The cost of state‐​level mandates for offshore wind does not stay within state borders. Through federal subsidies like the Production Tax Credit (PTC) included in the Inflation Reduction Act, taxpayers across the country are poised to pay for offshore wind. And it will not be cheap—the PTC offers a lucrative tax credit of $27.50/MWh. Returning to the day‐​ahead wholesale prices in New England of $44/​MWh, the federal subsidy alone represents a hefty 62 percent increase in revenue for wind producers.

As previously covered in this space, the final cost of the PTC by the time it phases down—which could take decades—could reach into the multiple trillions of dollars. Offshore wind’s share of that total would be a modest portion of that (but nothing to sneeze at). If the Biden administration achieves its goal of 30,000 MW of offshore wind and those facilities operate for 30 years at a capacity factor of 43 percent, the total federal taxpayer bill for offshore wind would be over $93 billion. (Note: Although each new facility is supposed to claim the PTC for only 10 years, in practice, owners of many facilities “repower” them: they make enough material changes to the facility to continue to qualify for the PTC for subsequent rounds of 10‐​year eligibility.)

Conclusion

Ambitions for offshore wind are easy breezy—mandating offshore wind development seems like smooth sailing. The harsh reality of offshore wind mandates is that they are incredibly costly. Ratepayers and taxpayers will feel the sting of these decisions for years, potentially decades. Policymakers need to understand the full costs of their actions and come back to the shore. The American people simply don’t want to pay more for energy—not in their electricity bills and not in their tax bills.

Ian Vásquez

Economist James Gwartney passed away at age 83 on Sunday. He was a prolific academic, a colleague (he was an adjunct scholar at Cato), and a real gentleman. Bob Lawson and Richard Vedder wrote a nice appreciation of Jim in the Wall Street Journal.

Jim spent most of his career as a professor of economics at Florida State University. During that time he influenced generations of economists who have since become accomplished professors. He did so by mentoring them and through the publication of countless academic articles and his highly successful textbook Economics: Private and Public Choice, and other books he coauthored such as Common Sense Economics and the annual Economic Freedom of the World report.

He was influential also through his involvement in the Public Choice Society and the Association of Private Enterprise Education, of which he had served as president, and which has grown into an alternative to the more established economics associations that Jim correctly considered had become insular, elitist, and ideologically narrow. Last year, the Johns Hopkins Institute for Applied Economics published a lengthy and informative interview with Jim about his life’s work.

Jim was also a long‐​time friend and colleague of a number of us at Cato. His involvement with the institute began in the early 1980s when he worked most closely with my Cato colleague Jim Dorn. He spoke at numerous Cato events and wrote countless articles in the Cato Journal on a range of topics that reflected his broad interests—the size of government, the flat tax, educational choice, monetary policy, central planning, and so on.

A major interest of Jim’s was the study of public choice, an economic approach to analyzing the political process as it works in the real world and that takes into account government failure. Writing in Cato Policy Report about a decade ago, Jim celebrated the so‐​called public choice revolution in his field, but lamented its neglect at elite universities, which hold an enormous influence on students and the economics profession: “As a result, the mainstream approach is leaving both current students and the general public with a misleading, false, and romantic view of government and the operation of the democratic political process.”

It is through the Economic Freedom of the World report, which is published by the Fraser Institute and co‐​published in the United States by Cato, that I began interacting and working with Jim beginning in the mid‐​1990s. The report, of which he is a co‐​founding author, has served as an invaluable and effective empirical tool to show policymakers, journalists, and the public at large that there is a strong relationship between economic freedom and prosperity, as well as a range of improvements in human well‐​being. Scholars have used the index in more than 1,300 academic papers.

One example of the report’s influence is through the work of our friend and colleague Andrei Illarionov, whose institute in Russia co‐​published the report early on. When Vladimir Putin became president and Andrei became his chief economic adviser, the need for economic freedom became a Kremlin theme and was included in Putin’s state of the nation speech.

Though Russia eventually turned away from freedom, it did achieve some important pro‐​market reforms in the early Putin years, including the implementation of a flat tax, a reform that Jim advocated during a visit to Moscow (which culminated in a meeting with Putin and a group of Western economists) upon Andrei’s invitation.

Another example of the influence of the economic freedom index is that of Argentina’s newly elected president Javier Milei. When Milei explains in countless national interviews and speeches that the most economically free countries are eight times richer than the least free, his reference is the Economic Freedom of the World report, which he explicitly cites here in an academic lecture before he was president (min. 31). I could give many more examples of the index’s influence.

Jim was always very supportive of our work at Cato. I and others benefitted from his guidance in the creation of the annual Human Freedom Index (co‐​published by Cato and Fraser), which I co‐​author and which is an outgrowth of the economic freedom index. Jim participated in the numerous seminars in the United States and Europe leading up to the report’s creation and was enthusiastic about its potential.

Jim began going blind more than twenty years ago at around the time he served for a stint as chief economist at the Joint Economic Committee of the US Congress. His deteriorating vision did not seem to diminish his high level of productivity or his good cheer for the remainder of his life, however.

Though he became fully blind, it was always a mystery to the rest of us how he kept up his pace or could recite the minutest details of new studies in lengthy presentations he would give on various topics. I’ll never forget that when I asked him how he managed to keep a good attitude and a high level of output, he responded that “there is never a great time to be blind, but there has never been a better time than now,” going on to cite helpful new technologies for the blind.

Jim Gwartney was an inspiration because of his scholarship, his character, and his friendship. May he rest in peace.

Chris Edwards and Krit Chanwong

The most important challenge for the next president will be tackling the government’s massive and growing debt. Federal debt held by the public of $26 trillion amounts to $200,000 for every household in the nation. Compared to the size of the economy, the debt will soon reach levels never seen in our nation’s history.

Rising government debt is undermining economic growth and may trigger a financial crisis. We desperately need to cut the budget, yet both leading presidential candidates—Joe Biden and Donald Trump—embraced large‐​scale deficit‐​spending during their tenures in the White House.

Do any presidential candidates offer hope of fiscal sanity? Let’s see what the Republicans are saying.

Donald Trump

Social Security. Trump suggests not cutting a “single penny” from Social Security and has criticized Nikki Haley’s proposal to raise the program’s retirement age. He proposes using oil and gas leasing revenues to keep the program afloat rather than spending restraint.
Medicare. Trump opposes Medicare cuts and has criticized Ron DeSantis for supporting congressional proposals to reform the program.
Ukraine. Trump is skeptical of aid to Ukraine and promises to deliver a quick peace deal with Russia.
Education. Trump proposes closing down the federal Department of Education, but he also suggests new ways for the federal government to meddle in the schools.
Impoundment. Trump says that he will revive the presidential impoundment power to “squeeze the bloated federal bureaucracy for massive savings.”
Federal Workers. In late 2020, Trump issued an executive order that would have turned some federal workers into “Schedule F” employees to make firing easier. Trump would revive the order if re‐​elected.
Other Cuts. Trump has called for cuts to “corrupt foreign countries,” “climate extremism,” “left‐​wing gender programs from our military,” and “waste, fraud and abuse everywhere we can find it.”

Ron DeSantis

Social Security. DeSantis said, “We’re not going to mess with Social Security as Republicans,” but he has also expressed support for making program reforms for younger workers.
Medicare. When he was running for Congress, DeSantis supported turning Medicare into a premium support program, which would increase competition and choice.
Ukraine. DeSantis is skeptical about Ukraine aid, arguing that aiding Israel is a higher priority.
Federal Agencies. DeSantis proposes to eliminate the Internal Revenue Service, Department of Commerce, Department of Energy, and Department of Education. To tackle the deep state, he will “start slitting throats on Day 1.”
Debt. DeSantis, Haley, and Christie have criticized Trump for adding trillions to the government’s debt load.

Nikki Haley

Social Security. Haley wants to raise the retirement age for younger people, adjust inflation indexing of benefits, and limit benefits for the wealthy. She said, “It is unrealistic to say you’re not going to touch entitlements” and “entitlement spending is unsustainable. We need reform.”
Medicare. Haley wants to reform Medicare by expanding privately provided plans in order to increase competition and reduce prices.
Ukraine. Haley supports maintaining Ukraine aid in the belief that defeating Russia would help secure future peace.
Spending Caps. Haley wants to reduce discretionary spending to 2019 levels and limit overall federal spending to a percentage of gross domestic product.
Federalism. Her plan would “push federal programs down to the states. Instead of the federal government deciding where and how tax money is spent, use block grants to give states the freedom to decide the best way to use federal funds.”
Zero‐​Based Budgeting. Haley wants program budgets justified annually, rather than being based on prior spending levels.
Energy Subsidies. Haley would eliminate Biden’s massive green subsidies passed in the Inflation Reduction Act, which would save more than $500 billion over a decade.
Debt. Haley focused on debt and deficits the most during the four presidential primary debates.

Vivek Ramaswamy

Social Security and Medicare. Ramaswamy says that he will not cut Social Security and Medicare benefits for seniors. Instead, he says that economic growth will make the programs solvent, which is unrealistic.
Zero‐​Based Budgeting. Ramaswamy said, “Here’s how we fix the debt crisis: zero‐​base budgeting. Start from zero for every department and ask what (if any) spending is required instead of just taking last year’s budget as the default.”
Ukraine. Ramaswamy opposes aid for Ukraine.
Federal Agencies. Ramaswamy proposes shutting down the Department of Education, the FBI, the IRS, and other agencies.
Defense. Ramaswamy wants to increase defense spending to 4 percent of GDP from 3 percent today. That would cost $4.3 trillion over the next ten years.
Federal Workforce. Ramaswamy wants to lay off 1 million federal workers to cut the federal workforce in half. He also wants to move most federal agencies out of DC, end remote work for federal employees, and end federal workforce unionization.

Chris Christie

Social Security. Christie would raise the retirement age for younger workers and reduce benefits for the wealthy.
Medicare. Christie has called federal policymakers “liars and cowards” for not tackling Medicare and Social Security reforms.
Medicaid. Christie proposes turning Medicaid into a block grant, which would allow federal policymakers to restrain spending and reduce regulations imposed on the states.
Ukraine. Christie strongly supports aid to Ukraine, calling it the “price we pay for being the leaders of the free world.”
Inflation Reduction Act. Christie has called the IRA a “mistake.”

All in all, Republican presidential candidates are proposing modest spending cuts. Some suggestions to cut “waste” are just bluster. Some proposals, such as zero‐​based budgeting, don’t mean very much. And some proposals don’t carry weight without a concrete plan. For example, scrapping the IRS is a good goal, but it needs to be combined with a plan for major tax‐​code simplification.

That said, the candidates are on the right track in proposing shutdowns of agencies that subsidize state and local governments. Defunding the federal Department of Education is a fantastic reform goal that GOP presidential candidates should push hard. The candidates should also push cuts to other state‐​local subsidies, such as those for housing, welfare, and urban transit. Some candidates want spending increases on defense and foreign aid, and the onus should be on them to propose full offsets elsewhere in the budget.

When the next president enters office in 2025, the federal government will be raising $5.0 trillion in taxes but spending $6.6 trillion, or 32 percent more. That level of imbalance is outrageous. All presidential candidates of both parties should propose detailed plans to tackle the government’s massive flood of red ink.

Some spending cut ideas for the candidates are here, here, here, here, and here.

Paul Best

As Congress gears up for debate over the next Farm Bill later this year, many of the subsidy programs meant to aid the agriculture industry are under fire from some of the very farmers they are designed to support.

In a new policy investigation, Farm Bill Sows Dysfunction for American Agriculture, several farmers across the United States sounded off about how crop insurance subsidies and other aid programs disproportionately benefit wealthier farmers, incentivize environmentally harmful practices, distort planting decisions in ways that ultimately impact our food supply, and discourage innovation amid everchanging weather and market conditions.

Agriculture subsidies have taken various forms since the first New Deal‐​era Farm Bill was authorized by Congress, ranging from paying farmers to destroy their crops to lower supply in the 1930s, to transferring direct subsidies to farmers in the early 2000s.

Subsidized crop insurance is the most expensive program under the current iteration of the Farm Bill, with a total cost of over $17 billion.

The government subsidizes about 60 percent of the premiums for policies that farmers buy from private insurance companies, amounting to a record $11.6 billion in 2022. The government also pays those private insurance companies about $2 billion per year to cover their administrative costs.

While the rising cost of subsidized crop insurance may be a concern for taxpayers and the lawmakers who represent them, the many distortionary effects of the program are at the top of farmers’ minds.

“I don’t miss walking into those [government] offices and doing the paperwork and they know every single thing about my operation,” said one of those farmers, Gabe Brown, who attributes the success of his 5,000-acre North Dakota ranch to shifting his focus to regenerative agriculture and quitting all subsidy programs.

“And they say, ‘Oh, but it takes away your safety net.’ My safety net is the resiliency built into my soil,” said Brown. “My safety net is the health of the operation. My safety net is the fact that I don’t rely on only one or two commodities to make my income. We have 17 different enterprises on our ranch now. So I’m resilient—our ranch is resilient—because of the diversity and because of the health of the ecosystem. That’s very liberating. It’s a good feeling.”

Read the full policy investigation here, along with a visual feature here.

Romina Boccia and Dominik Lett

Whoever thought that the May 2023 debt limit deal settled debates over topline government funding levels for fiscal year (FY) 2024 was clearly mistaken. Now four months into FY2024, Congress has reportedly struck a deal to determine how much the US federal government will spend on defense and non‐​defense appropriations, which account for roughly one‐​third of the federal budget that’s subject to annual debate.

In the big picture, House Speaker Mike Johnson (R‑LA) is finding himself between the same rock and a hard place that his predecessor did. House Republicans do not have the option of passing a funding deal without Democratic support in the Senate, necessitating negotiations that require a give‐​and‐​take approach that will leave much to be desired for both sides of the political aisle.

The January 2024 funding deal bakes in higher government spending levels, with modest restraints from capping the use of budget gimmicks and holding the line on new emergency spending. On the flip side, this deal continues business as usual, relying on budget gimmicks and emergency designations to pad topline spending, while falling short of cutting spending back to pre‐​pandemic levels or holding the line on limiting spending to no more than fiscal year 2023’s levels.

What this tells us is that neither Democrats nor Republicans are ready to face the US government’s rapidly deteriorating fiscal situation. This is a deal to avoid a government shutdown during an election year, but not much else.

The Spending is in the Details

The January 2024 spending deal includes $886.3 billion in defense and $772.7 billion in nondefense spending (base nondefense is $703.7) for a $1.659 trillion total. The nondefense topline includes $69 billion in extra spending originally agreed to in a May debt limit side deal between former House Speaker McCarthy (R‑CA) and the White House. It offsets some of this additional spending with cuts to the IRS ($20.2 billion) and by rescinding unspent COVID-19 and other emergency funds ($6.1 billion).

The deal also continues disaster‐​related emergency spending, sticking with the previous year’s level of $12.5 billion (rather than the $23 billion the Senate was asking for). The common CHIMPs (changes in mandatory programs) gimmick is included as well but capped at a lower amount than was the case in the May debt limit agreement ($15 billion, instead of $25 billion). Earmarks will also rear their ugly head yet again.

Does this Deal Establish a New Precedent for Fiscal Restraint?

The Johnson‐​Shumer budget deal fails to return discretionary spending to pre‐​pandemic levels, boosting spending by about $300 billion, before accounting for the roughly 20 percent inflation the US experienced since 2020. The deal also boosts topline spending above 2023 levels, before accounting for inflation. The deal falls short by these objective measures of fiscal restraint.

It reduces spending compared to the May debt limit deal when accounting for side deals and rejects new emergency spending designations, as requested by Senate Democrats (we wrote about these previously here). As such, it secures a small victory for fiscal restraint. That is, assuming it holds, without additional emergency supplemental spending and other final budget shenanigans once the ink is dry.

This deal still has a long way to go before being enacted. Still up for discussion are GOP border measures, Biden’s emergency supplemental request to support Ukraine, Israel, Taiwan, and more, as well as policy riders, and whether Congress will try to address the broader fiscal challenge by attaching a congressional commission bill to smooth final passage. Should they proceed with such a commission, it’s important that they give it real teeth so it stands a chance to succeed.

Romina Boccia and Dominik Lett

We’ve just released a new paper providing comprehensive estimates of “emergency spending” going back to 1992. The key takeaway: Congress is increasingly abusing emergency designations to evade spending limits. With Congress still considering $110 billion in emergency funding for Ukraine and Israel, it is high time we recognize the fiscal and national security consequences of unpaid‐​for emergency spending. We write in our new policy analysis:

Congress has designated $12 trillion in spending for emergencies over the past 30 years. Poorly designed emergency spending rules allow Congress to routinely designate non‐​emergency line items as emergencies, increasing wasteful and excessive spending. High deficits, an escalating federal debt, and the insolvency of major entitlement programs mean that Congress is facing several budgetary challenges that will only grow in importance. It’s time for Congress to rein in emergency spending and its abuse.

Major emergencies have a big impact on the budget. The two largest increases in federal debt over the last three decades were directly related to the extraordinary emergency fiscal responses to the Great Recession and COVID-19 pandemic. Following the most lavish emergency spending binge in US history during the pandemic, which helped drive inflation and interest rates to historic highs, Congress should reform emergency spending and avoid future emergency spending excesses.

Congress needs a budget enforcement mechanism for emergency spending. Clearly establishing what qualifies as an emergency and requiring a higher voting threshold for emergency designations would primarily target questionable “emergency” spending. Without a process to offset emergency spending, Congress will continue to use emergencies as a pretext to pass budget‐​breaking spending initiatives with no plan to rein in future spending.

Myopic abuse of emergency designations contributes to the long‐​term fiscal challenge. Over the past decade, Congress designated one in every ten dollars of federal budget authority as emergency spending. Congress should terminate never‐​ending emergency declarations and reform the emergency spending process to enhance accountability and transparency by: offsetting emergency spending, including justifications for how emergency designations meet all five statutory criteria; raising the voting threshold for emergency designations; enhancing transparency in executive emergency‐​spending reporting; and revising the budget baseline to better reflect the temporary nature of emergency designations.

Here’s what other budget experts have to say about our research:

“Congress must properly track and manage the entire federal budget—ALL spending and revenue, including emergency response—to serve the American people well. This paper’s comprehensive account of emergency spending and its recommended solutions will be a useful contribution to Congress getting its house in order.”

– Kurt Couchman, Senior Policy Fellow, Fiscal Policy, Americans for Prosperity

“This is outstanding work that fills a big gap. Comprehensive, transparent/​honest, easy to follow, and covers the (sadly limited) range of potential reforms.”

– David Ditch, Senior Policy Analyst, Budget Policy, Grover M. Hermann Center for the Federal Budget, Heritage Foundation

“This paper makes many important contributions to the discourse on emergencies, and its new estimates of unforeseen spending are the most thorough ever produced. Policymakers would be wise to consider Romina and Domink’s work as they consider how best to address the burgeoning national debt.”

– Jonathan Bydlak, Fmr. Director, Governance Program, Fiscal and Budget Policy, R Street Institute

Read the full paper here.

Thomas A. Berry

Yonas Fikre, an American citizen, was placed on the No‐​Fly List in 2010 while he was out of the country. Fikre alleges that this was an attempt to coerce him into becoming a government informant. Fikre attempted to appeal his placement on the list using DHS procedures, but these appeals were denied. Fikre was told only that he had been “identified as an individual who may be a threat to civil aviation or national security.” Fikre’s placement prevented him from returning to the United States until 2015, damaged his reputation, and destroyed his marriage.

When Fikre sued in federal court to enforce his rights, the government removed him from the list—initially without explanation—and then argued that the case was moot. The FBI has never conceded that its original decision to place Fikre on the No‐​Fly List was wrong, nor has it explained what changed such that Fikre no longer deserves placement on the list.

Generally, a defendant cannot make a case moot by voluntarily ceasing the challenged conduct, a principle known as the “voluntary cessation” doctrine. The burden is on the defendant to show it is “absolutely clear” that the challenged conduct will not reoccur. Nonetheless, the district court ruled that the case was moot because “the record did not indicate a lack of good faith on the government’s part.” But the U.S. Court of Appeals for the Ninth Circuit reversed that decision, holding that the government had not met its burden to show Fikre was highly unlikely to be placed back on the list.

The case is now at the Supreme Court, and Cato has filed an amicus brief supporting Fikre (with thanks to a team of attorneys from Gibson Dunn who took the lead on drafting: Russ Falconer, Daniel R. Adler, Patrick J. Fuster, and Matt Aidan Getz). In our brief, we explain that the government is not entitled to any special deference in the mootness analysis. When the Supreme Court has dealt with cases of alleged voluntary cessation, it has treated government and private defendants alike, holding them to the same high evidentiary bar.

As our brief further explains, the government has not met that high bar in this case. With the government unwilling to explain why Fikre was added to or taken off the list, it is impossible to judge how likely it is that he may be added again. And although the government has submitted a letter from an FBI special agent insisting that Fikre will not be added back to the list absent changed circumstances, that letter was not issued by a constitutional officer of the United States and thus cannot set binding government policy.

In addition, Cato scholar Patrick Eddington has filed an amicus brief, in his personal capacity, supporting Fikre. In his brief, Eddington explains that the government’s reliance on a “presumption of regularity” in this case is misplaced. The history of that doctrine, which extends back to English common law, makes clear that it is merely a presumption that boilerplate government procedure was followed. The doctrine cannot be extended into a broader presumption that the government did not engage in gamesmanship when it ceased the challenged conduct. As Eddington’s brief recounts, governments at every level of our federal system have frequently engaged in just such gamesmanship to try to stop cases from reaching the merits.

The voluntary cessation doctrine ensures that defendants cannot avoid a judgment on the merits by strategically mooting a case. The Supreme Court should make clear that this concern applies just as much when the government is a defendant as in any other context. The decision of the Ninth Circuit should be affirmed so that Fikre’s case can finally reach the merits.