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Walter Olson

Libertarian thinkers have long proposed that courts should do more to protect the right to earn a living, more precisely articulated as the right to pursue the occupation of one’s choice as against government‐​granted monopolies and arbitrary curbs on entry to a chosen trade. Timothy Sandefur has noted that this right “was protected under English common law as far back as the Elizabethan era,” and was seen by both proponents and opponents as part of the set of rights protected by the Fourteenth Amendment. As a fundamental right, Sandefur writes, the freedom to pursue an occupation “should receive the protections of review under the strict scrutiny standard, rather than the deferential rational basis test.” Yet as we know, the federal courts chose a different path.

You might be surprised to learn that North Carolina, unique among the states, includes in its constitution a clause that covers much of this ground. Adopted in 1868 after the Civil War, the document proclaims in Article I, Section 1 (boldface added):

We hold it to be self‐​evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.

In the Twentieth Century, amid hesitations and false starts, the Tarheel State’s courts began to treat this language as a serious source of enforceable rights. Cases as far back as the 1940s applied the clause to strike down arbitrary licensing restrictions on photographers and dry cleaners. In later cases from Wilmington and Durham, they held that the clause could protect government employees who lose their jobs if the cities that employ them had not followed proper legal rules. (I won’t try to address here whether “on the public payroll” should be an implied dimension of the stated right.)

Last month, the state’s intermediate appellate court, the North Carolina Court of Appeals, ruled that bar owners could use the clause (as well as the state’s equal protection clause) to challenge as arbitrary a 2020 order by Governor Roy Cooper closing some but not other bars on grounds of risk of Covid contagion. A 2022 decision from the same court applied similar reasoning in a case brought by a racetrack that had held events with social distancing and other precautions deemed safe by its local health authority. 

As Clay Shupak relates in a wide‐​ranging piece at the Wake Forest Law Journal, the clause is also the subject of a pending challenge by a New Bern ophthalmologist to the state’s “certificate of need” law as applied. Such laws require those who seek to build or offer a new facility or service, in this case a specialized operating room in a small community, to prove against objections that there is (as somehow defined) an economic need for it. Carolina Journal covers remarks about the clause by North Carolina Supreme Court Justice Phil Berger, Jr. here and here.

Given North Carolina’s real‐​world experience with the clause, which some might see as inspiring and hardly anyone seems to regard as disastrous, it wouldn’t surprise me if there developed moves to add similar language by amendment to other states’ constitutions.

Patrick G. Eddington

Get ready for another one of those “Congress is trying to pull a fast one” stories … and if you work for or financially support one or more nonprofits, you’ll want to read on. Congressional sources have informed Cato that an extremely controversial tax code bill that could be used to target politically disfavored nonprofits that has already passed the House may get a Senate vote this week. First, some important background information.

The very same day (April 15) the House was voting on the atrocious Foreign Intelligence Surveillance Act (FISA) “reform” bill, it also passed the very innocuous sounding H.R. 6408, the purpose of which is “To amend the Internal Revenue Code of 1986 to terminate the tax‐​exempt status of terrorist‐​supporting organizations.”

The bill’s author, Rep. David Kustoff (R‑TN), issued a press release when his bill passed the House that claimed the following:

Recent reports indicate there are U.S.-based nonprofits that are suspected of providing support and funding to terrorist groups.

The gentleman from Tennessee offered exactly zero evidence to support the statement, a fact confirmed by the Charity and Security Network, itself a nonprofit.

Yet despite failing to produce any data from the FBI, DHS, or the Office of the Director of National Intelligence (ODNI) to back up his claim, Kustoff managed to convince his House colleagues to pass a bill that would allow the Secretary of the Treasury to designate a US nonprofit as a “terrorist supporting organization,” if it is found to have provided “material support or resources” or “training” or “expert advice or assistance” to a designated foreign terrorist organization per 18 U.S.C. § 2339A.

The actual target of this legislation is not ISIS or Al Qaeda, but nonprofit groups that are supportive of a cease‐​fire in the Israel‐​Hamas war or who are otherwise rhetorically supportive of the Palestinians or even seeking to provide humanitarian aid to people in Gaza.

As Matthew Petti at Rea​son​.com recently wrote, “Under the proposed bill, murky innuendo could be enough to target pro‐​Palestinian groups. But it likely wouldn’t stop there.” I agree, and there’s already a well‐​documented and thoroughly dishonorable history to this practice that should serve as a warning about the very dark place this current episode may take us.

Just shy of five years ago, I provided a little bit of a history lesson on previous episodes involving the political weaponization of the tax code or business or organizational records by Congress. In that instance, it was the infamous House Un‐​American Activities Committee (HUAC) strong‐​arming then‐​President Franklin D. Roosevelt into giving the committee access to tax and business records on individuals and organizations HUAC believed were Soviet controlled or influenced. As I noted then:

Between 1938 and 1975 (when it was finally abolished by Congress), HUAC either attempted to obtain or actually utilized sensitive personal information on American citizens to conduct anti‐​communist persecutions that destroyed the professional and personal lives of thousands of citizens.

This time it appears that Congress wants to outsource the tax status‐​centric political repression to the executive branch, specifically the Treasury Department. But whether it’s a presidential administration or Congress itself doing it, demanding the tax, business, or organizational records of a civil society organization that takes unpopular political positions to chill the speech or activities of that organization is pure political repression.

Indeed, Arab and Muslim Americans have lived under a state of de facto political siege since the 9/11 attacks, something I and many other scholars have written about at length. If Kustoff’s bill becomes law, it will not only likely intensify government repression against Palestinian Americans, it will also set a dangerous legislative and policy precedent that could be used against other nonprofits deemed a “terrorist supporting organization” even in the absence of concrete, verified evidence to that effect.

Is that the kind of thing we want the Treasury Department to do? Is that the kind of country we want to live in?

David J. Bier

The employer‐​sponsored green card system is so backlogged, delayed, and overregulated that it is nearly impossible for foreign workers to get through without first obtaining a work visa. The H‑1B visa is the main option available. All applicants must have at least a bachelor’s degree, and two‐​thirds have a master’s degree or higher. H‑1B workers have wages in the top 10 percent of workers nationwide. Unfortunately, the H‑1B visa also has a low cap of 85,000 for most types of jobs.

As a result of the cap, the government has awarded H‑1B visas through a lottery since 2014. This week, US Citizenship and Immigration Services (USCIS) announced that it received nearly half a million lottery entries for the 2025 fiscal year (which starts in October). It selected 120,603 individuals to move on to the application stage (25.6 percent), and of those selectees, just 85,000 will receive a visa.

Ultimately, just 18.1 percent of lottery entries will result in someone receiving H‑1B status. In other words, 82 percent of these skilled workers will be denied permission to work in the United States in H‑1B status.

For the FY 2021 lottery, the government introduced a new application method. Rather than submitting a complicated petition containing all the information necessary to obtain an H‑1B visa, it established a streamlined process. This allowed employers to register for the lottery for a small fee and provide only basic information about the worker. While this change was an improvement, it also made it easier for workers to line up multiple employers to submit registrations on their behalf, as there was little cost to doing so. This phenomenon reached its peak in FY 2024, when a majority of the 758,994 entrants had multiple employers petitioning for them, which increased their odds of winning.

For the FY 2025 lottery, the government changed the system again. This year’s lottery selected specific workers rather than employers, so having multiple submissions did not affect a worker’s odds of winning. Every worker received equal odds. Though it may have disadvantaged the go‐​getters who actively pursued multiple offers, this change was certainly fair. However, some people anticipated that it would improve the overall odds of winning the lottery, which it did not.

The H‑1B lottery has always proceeded in three stages. First, the applicant enters the lottery. Second, the applicant is selected. Third, the applicant’s employer must petition for them. To account for various factors like applicants declining the offer, employers withdrawing, or denials of workers or employers, the government always selects more lottery “winners” than the final number that receive a visa.

In the FY 2024 lottery, there were so many entries with multiple job offers that the government selected more than twice as many winners as was necessary to fill the visa cap. With fewer double entries in FY 2025, it selected 66,000 fewer winners, so in both years, the overall odds of selection were just 24.8 percent for 2024 and 25.6 percent for 2025. By the third step, the number will fall to just 18.1 percent getting a visa (Figure 2).

The odds certainly did increase for individuals without multiple registrations submitted on their behalf, but the odds aren’t in anyone’s favor. There is nothing special about the number 85,000. Given the average wage for H‑1B workers at $130,000 per year, Congress is randomly turning away at least $61 billion in economic contributions for no reason. I have previously written about the kinds of reforms that Congress should be urgently pursuing for Regulation magazine:

The H‑1B visa’s restrictions are harming U.S. competitiveness and innovation. Ideally, the H‑1B cap should simply be eliminated, but at a minimum it should be updated to reflect the current demand for visas, which is about four times the available visas. Moreover, visas that go unused or are revoked should be added back to the cap, and when an H‑1B worker receives a green card, the H‑1B slot should go to another applicant. These changes would put the focus on at least maintaining the stock of H‑1B workers rather than on the annual number of visas issued.

The longer Congress waits, the worse the situation becomes. Talent will increasingly flock to countries like Canada, Australia, the United Kingdom, Germany, India, China, and others that would welcome these workers. Where talent gravitates, much of the innovation, investment, and economic growth will follow suit.

David Inserra

Senator Ted Cruz’s (R‑TX) staff on the Senate Commerce Committee recently published a report that investigates several instances of what it calls “Online Service Providers … silencing conservatives” by relying “upon biased left‐​wing organizations.” While these specific examples may be viewed as mere anecdotes, the report dives deeper than many other accusations of political bias and tries to understand how exactly these companies reached their decisions to de‐​platform various conservatives. 

The report concludes that “The ideal solution is for market forces to correct Online Service Providers’ discriminatory policies.” While the report also embraces some limited legislative fixes that do not live up to this ideal, its emphasis on understanding how content decisions are made and how the market can help address real or perceived bias is constructive. In this same vein, I will be publishing a paper next month that explains how social media content moderation works and how the market and civil society can support greater expression and greater choice online.

It’s worth noting that it is and should be the right of such companies to set their own policies and deny their services to those with whom they disagree. But, the report argues, then we should dispense with the pretense that these are neutral companies trying to offer their services to most Americans so that the market can satisfy those no longer being served by these large tech companies. And unlike many other criticisms of tech company decisions, the report spoke directly with the companies to understand how and why these decisions were made.

The first highlighted decision was by Slack, a workplace and communications system, to suspend the right‐​wing social media influencer Libs of TikTok because of its various posts and reporting about what myriad LGBT organizations and activists were themselves posting online. The report notes that the deplatforming effectively caused Libs of TikTok employees to lose their prior communications on Slack, causing significant disruption to their organization’s operations.

The report then looks at Eventbrite’s cancellation of various events by groups like Young Americas Foundation, College Republicans, and others hosting conservative commentator Matt Walsh or his documentary What is a Woman? for questioning a progressive view of sex and gender. Similarly, Eventbrite cancelled an event featuring Riley Gaines, an elite college swimmer, for her views regarding transgender athletes participating in female sports. These cancellations often caused significant disruption and costs to the event organizers.

The report also notes other instances of deplatforming including the immigration‐​critical Foundation for American Immigration Reform (FAIR), the Independent Woman’s Forum, and other organizations that were excluded by these and other online service providers because of mainstream political and social views on important issues of our day.

The enforcement described in this report is different than your typical social media content moderation. When dealing with billions of pieces of content, AI‐​powered enforcement tools are necessary to weed through the sheer amount of material, often paired with large contingents of human moderators who must make relatively quick moderation decisions. This report describes more comprehensive reviews by expert and executive trust and safety teams that are looking at a broad range of factors.

This was one of my roles when I was a member of Meta’s content policy team and was often reserved for the most difficult and socially or politically sensitive content. And while using highly trained and expert moderation for difficult decisions makes sense, it also risks allowing external and internal biases to influence the outcome. 

For example, the committee report identified outside organizations that may exert significant influence over not just the writing of various policies but also how those policies are enforced. Eventbrite testified to the committee that it “relies on third‐​party sources, including Southern Poverty Law Center (SPLC) and the Anti‐​Defamation League, in determining whether an organization’s event violates the Eventbrite Community Guidelines.” Similarly, Slack told the committee that “it generally relies on “third‐​party experts” and “industry‐​recognized resources” in enforcing its policies. 

The way this works in practice is that external and generally progressive “experts” and “partners,” frequently, persistently, and aggressively lobby for certain users, pieces, or types of content to be removed as hateful or otherwise harmful. It is rare for right‐​leaning or libertarian groups to be as trusted internally or to report as much content as these progressive “partners.” 

Often, the content did not violate the clear letter of the policies, but pressure was applied by these organizations through media campaigns, organized boycotts, or one‐​sided research designed to make companies appear complicit in some harmful content. The result of such external pressure, together with receptive internal teams, is that sometimes companies cave or willingly support the suppression of certain viewpoints. They invoke high‐​level principles or certain contexts rather than specific policy lines or may even change the policy to align with activist demands.

This can be seen at work in this committee report, in which the service providers often avoid detailing how a user specifically violated their policies but instead refer to vague principles or contextual information they believe to be important. For example:

When asked if they were removing events featuring Riley Gaines because she made an X post about how women lack a Y chromosome, Eventbrite said the post “speaks for itself.” 

“[W]hen asked multiple times if Eventbrite would remove another event concerning women’s sports that featured Riley Gaines, Eventbrite dodged the question.”

Libs of TikTok was “problematic” on Slack because of its “specific audience.”

Eventbrite cited “the overall tone and message” of the trailer for the What is a Woman? documentary … “in combination with Matt Walsh’s related public statements,” rather than anything specifically violating in the film, for removing various organization’s viewing parties of the film or even unrelated events with Matt Walsh.

FAIR was de‐​platformed by Slack for being “affiliated with a known hate group” (likely referencing lists maintained by groups like the SPLC).

As I noted earlier, these organizations can be as vague, imperfect, or biased as they want in creating or enforcing their rules. And as the report concludes, “First Amendment protections generally do not apply to actions by private companies, who have the freedom to associate and do business with the customers they choose.” Therefore, “the ideal solution is for market forces to correct Online Service Providers’ discriminatory policies. If Online Service Providers continue to cancel conservative organizations, it should create a new demand for Online Service Providers that service the conservative market.”

This is exactly right. Nothing is stopping new service providers from entering into these fields to provide these important services—except for the threat of additional tech regulation by those on the right and the left. Those who want more expression online should make the case to current and prospective service providers that policies limiting significant amounts of socially important speech may not be serving these companies or the broader society well. Those who want more restricted speech have no problem aggressively making their case for less speech, leveraging increasing sympathy in academia, government, and society with their views as various metrics point to increasing conflict over the value of free expression. 

Those of us who want to see greater free expression must make the case not only for the First Amendment legal protection from government censorship but also make the case for a culture of free expression, including to the companies that are limiting vibrant discussions of important social issues. 

The research done by the Senate report is part of this effort to promote a broader culture of free expression, but it goes a bit too far in seeking legislation that makes some significant demands of private companies. Specifically, the report calls for intrusive transparency from companies regarding their policies and enforcement actions. While many of these recommendations may be best practices that I think companies would benefit from employing, I also know that sometimes companies don’t want to provide complete transparency in their rules. A common reason is to prevent adversarial actors from gaming their policies.

Similarly, requiring specific transparency around why users are being punished or deplatformed appeals to our desire for due process and fairness, but companies don’t need a reason, much less a clear or good reason, to remove users from their services. Ultimately, their lack of transparency and due process are creating bad experiences with their products that, unchecked, will likely result in alternative solutions emerging in the marketplace, a reality that the Senate report elsewhere understands.

Judge Learned Hand famously stated, “Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can even do much to help it. While it lies there it needs no constitution, no law, no court to save it.” We must remind our fellow Americans why a culture of free expression is so important and how the free market can address bias and discrimination.

Brian Chau

In general, the policy discussion around Artificial Intelligence (AI) underestimates the diversity and vulnerability of the AI startup ecosystem. The reality is often different than what policymakers think. Without understanding the startup ecosystem, the resulting policy could lead to unnecessary interventions into competitive markets that disrupt innovation in the free market.

So what might policymakers need to better understand about the current state of the AI startup ecosystem?

Policy analysis that focuses on the effects on industry leaders rather than on startups underestimates the damage done to AI development by harsher regulatory approaches, such as the Biden Executive Order on Artificial Intelligence. For example, the National Telecommunications and Information Administration (NTIA) is set to impose auditing and content regulation on “all stages of the value chain.” This means that instead of focusing narrowly on the areas where harms actually occur, the NTIA treats all AI developers as preemptively suspect.

Consequently, developers whose products have no risk of causing the harm the NTIA identifies are still forced to censor the output of their software, conduct time‐​consuming audits, and be delayed by inefficient regulatory approval processes.

This regulation would make the experimentation process far more time‐​consuming by increasing compliance costs, restricting what instructions AI models will respond to, and possibly harming the underlying efficacy of AI models. This results in more startups failing because they cannot acquire the capital to continue operating, there are longer timelines to complete research and development for the ones that persist, and there is a less effective end product. The NTIA’s proposed regulations would also have an anticompetitive effect, as they impose fixed costs that disproportionately affect smaller businesses with less time and capital to comply with them.

AI is often equated with its industry leaders, such as OpenAI, Anthropic, Google or Meta. However, just as assembling a car requires many suppliers and subcontractors, user‐​end AI products often consist of many specialized layers. Examples include producing the hardware required to run AI models, curating specialized data used as an input to AI models, computer intensive pre‐​training to produce a general language model such as GPT‑4, or fine‐​tuning a general model to improve performance on a specific task. The following chart is a map of these categories, which captures the complicated and competitive landscapes of each AI sub‐​industry.

Click here to see a larger image of the chart. 

Competition is increasing on each of these layers as AI becomes a more well‐​funded industry. As basic tools for every part of the AI pipeline become more widely available, startups can conduct thorough experiments on a narrower niche of the AI market.

Many startups will use a base model, such as OpenAI’s GPT‑4 or Meta’s Llama 3, as an input to their product. They experiment with a variety of base models, infrastructure, hardware, and optimization techniques to create the best product for their use case, leading to a complicated network of de‐​facto suppliers and subcontractors. Just as software companies now rely on other software for web development, databases, networking, or cloud services, AI companies will rely on increasingly specialized vendors for different components of AI models.

This process of market specialization is best demonstrated by the practical experience of startups. Proemial AI is a company that narrows down GPT‑4, sacrificing generality to make it the best at doing one specific thing: communicating scientific papers. “We were just surprised at how bad [unmodified] GPT4 was, because we were constraining it in interesting ways,” said founder Geet Khosla. Scientists often struggle to anticipate what questions an ordinary user would have about their work. By being able to respond to a user’s questions and vary its depth of explanation based on the experience of each individual user, Proemial would be able to make scientific work more accessible.

While most AI models require expensive hardware to run, Hal​tia​.AI is creating one that doesn’t. “We are taking the Mistral‐​7B model and putting a [version] on the iPhone,” said Hal​tia​.AI founder Arto Bendiken. This allows users to get an AI response much faster, at a lower cost, and even when they aren’t connected to the internet. This highlights the tradeoff between accuracy and convenience, which presents another opportunity for startups to compete.

Lastly, consider Superflows, a company that assembles a chain of Large Language Models (LLMs), ChatGPT, to explain a company’s software to a new programmer. “There’s a relatively long chain of prompts we use … get one LLM to describe endpoints … another LLM reads it,” said Superflows co‐​founder Matthew Phillips. His company experiments with AI models, their own modified models, and ways of formatting user input. “There’s a process of evaluating which LLM has the best ratio of quality to speed.”

These extensive experiments on base models and techniques carried out by startups require flexibility to operate. The NTIA’s proposed regulations impede them in several ways that are particularly impactful on smaller businesses. The most obvious issue is compliance costs for auditing or content restrictions, which each company would have to adapt their end product to. This serves as a barrier to entry for new companies, which may not have the resources to comply.

The result of content restrictions on their base‐​model suppliers would also make experimentation more difficult. Restrictions on model content can result in denying user requests that are not actually harmful. Overcoming these restrictions in non‐​harmful use cases sacrifices crucial engineering hours. Finally, there is some evidence that the techniques used to achieve content restrictions can reduce the overall performance or flexibility of AI models.

Brian Chau is the executive director of Alliance for the Future. He is a former machine learning engineer and International Olympiad in Informatics gold medalist.

Jeffrey A. Singer

The Drug Enforcement Administration announced today that it intends to reschedule cannabis as Schedule III on its schedule of controlled substances. For the past half‐​century, the DEA classified cannabis as Schedule I: “No currently accepted medical use and high potential for abuse.”

Of course, no serious person would argue that cannabis has “no currently accepted medical use.” As far back as 1916, Sir William Osler, the so‐​called “father of modern medicine,” recommended cannabis as the “drug of choice” for treating migraines. But cannabis’s history of “accepted medical use” dates back to at least 2800 B.C.

President Biden had asked the Department of Health and Human Services to review cannabis classification in 2022, and last summer HHS recommended that the DEA reclassify cannabis to Schedule III: “Drugs with a moderate to low potential for physical and psychological dependence.”

The good news is that the federal cops practicing medicine—the DEA—finally recognize that cannabis has medicinal uses. Rescheduling should make it easier for patients to obtain the drug with a prescription in the states that have not yet legalized medicinal cannabis. To date, 38 states and the District of Columbia have legalized medicinal cannabis. It will also make it easier for researchers to perform high‐​quality studies on the plant’s medicinal uses. And it will make it easier for cannabis retailers to take federal tax deductions from which the law has barred them.

The bad news is that it is still federally illegal for people to use cannabis recreationally. With rescheduling, the only way people will be federally permitted to purchase and consume cannabis will be if a health care practitioner prescribes it to them. This should be welcome news to recreational cannabis purveyors in the unregulated black market in the 26 states where recreational cannabis remains illegal.

The medical profession has long recognized that alcohol has medicinal uses. There is evidence that consuming moderate amounts of alcohol may be good for you. Alcohol can also be addictive and cause serious health problems, including cirrhosis, gastrointestinal cancers, cardiomyopathy, and encephalopathy. Yet, after their disastrous experience with alcohol prohibition, federal regulators have never sought to list alcohol as a controlled substance. People don’t need a doctor’s prescription to purchase a product from their local liquor store.

Tobacco has no currently known medicinal use but many known harmful effects. And, while relatively harmless, the nicotine in tobacco smoke can addict smokers and expose them to tobacco smoke’s harmful components. Yet the DEA has never listed cigars or cigarettes on its schedule of controlled substances, even though one can argue that they have “no currently accepted medical use and a high potential for abuse.”

I am not arguing for the DEA to add alcohol and tobacco to its list of controlled substances. On the contrary, I am calling for the DEA to remove a much less harmful—and more medicinally useful—product from that list.

Rescheduling cannabis is nice. It’s a small step in the right direction. But it doesn’t go far enough. The DEA should de‐​schedule cannabis.

Jennifer Huddleston

Last week, some headlines stated that the US had passed a “TikTok ban” as part of the foreign aid package, likely eliciting panic from many of the millions of American individuals and businesses who use the popular social media app. But the actual proposal is more nuanced, and the exact questions of what will happen are likely to take months—if not years—to settle. So, what should Americans expect now that the proposal is law?

In the next few months users are unlikely to notice changes.

Calling the proposal that was signed into law a “TikTok ban” is a bit of a misnomer although that could end up being a result. The actual proposal that was included in the foreign aid package requires certain apps designated by the US government as being controlled by a foreign adversary to divest in a way approved by the US government as removing that influence within a certain time frame. If they fail to do so in the time frame, the proposal prohibits the distribution, updating, or maintenance of such apps.

While the proposal could apply to other companies as discussed below, it explicitly names TikTok and parent company ByteDance as a company to which its terms apply. In short, the signing of the bill started a clock that forces TikTok to engage in a sale or face a ban. This means that the company would have roughly nine months (a rather short time frame) to find a buyer for some portion of the app that satisfies the government’s concerns or face a ban.

It remains unclear exactly what elements of the social media app would need to be sold to respond to these concerns or what, if any, buyer the government would consider as alleviating these challenges without facing additional regulatory scrutiny.

To be clear, as I have discussed in other work, there are many concerns about the impact this proposal will have on TikTok’s American users and their speech rights. Still, for the next few months, the legal status of the app does not really change, and most users are unlikely to experience changes related to the law. In general, users should still be able to update and use the app and see it available on app stores as they did before the law’s passage.

Litigation is almost certain.

TikTok has already said it will challenge the law in court; however, no case has yet been filed. This challenge is likely to raise several concerns, including First Amendment questions, takings‐​related issues, and possibly bill of attainder.

Particularly should a sale fail in the time frame, TikTok users or creators could challenge the law for the impact it would have on their speech and their business. I have explored the legal issues particularly related to the First Amendment rights of these users in previous work.

While a divest or ban proposal is distinct from prior attempts at a ban, precedents around bans indicate that the courts will likely be skeptical of such a significant action when less speech‐​restrictive means like disclosure, data audits, or data localization could respond to national security concerns. Past examples of legal challenges to TikTok bans, including the executive order during the Trump administration and the Montana state‐​level ban of 2023, have resulted in these bans being struck down or enjoined.

So, what will the court have to consider in its analysis of likely constitutional questions in a challenge to a ban? Much of the discourse focuses on the First Amendment‐​related, free expression concerns. This means courts will consider if the proposal merits intermediate or strict scrutiny and whether the government has made a sufficient argument on its national security grounds compared to the impact on speech.[1] Additionally, the courts will also likely consider if the proposal is content‐​neutral or a content‐​based restriction and/​or whether it constitutes a prior restraint.

The litigation could mean it is an even longer time before the implementation of any divest‐​or‐​ban timeline. The parties will likely request a preliminary injunction during litigation, which could at least pause any impending bans. A preliminary injunction would be likely if, for example, the court found there was a high likelihood of harm to speech while the case was pending.

Bigger than TikTok.

While this proposal names TikTok and has some limiting principles, it could be applied to other apps as well. As many have noted, popular e‑commerce services like Shein and Temu, which also have ties to China, could likely be covered as well.

But the proposal could extend much farther and be used to target specific companies an administration might disfavor. For example, Parler at one point relied on a Russian DDoS (distributed denial of service) guard service, and conservative video platform Rumble hosts Russian state media content. Could this be used by an administration to label those sites as controlled by a foreign adversary? As Senator Rand Paul (R‑KY) discussed in a Reason op‐​ed, without clear limits, this could allow the government to force sales or changes from many more companies than one might initially think with little due process to respond to such a classification.

Conclusion

The average TikTok user may not experience changes immediately as a result of the signing of the often mischaracterized “TikTok ban,” but the actual impact of the law is more significant than TikTok. Whether one is a TikTok user or not, this new law could open the door to significant executive intervention in the technology market and it raises First Amendment concerns that merit attention.

[1] A federal court issued a preliminary injunction to the Montana TikTok ban stating it was likely to fail even intermediate scrutiny but did not reach a conclusion on the appropriate level of scrutiny.

David J. Bier

To sponsor a foreign worker for a green card (i.e., permanent resident status in the United States), an employer must first receive an approved permanent labor certification from the Department of Labor (DOL). This certification states that the green card will not adversely affect US workers. The statute requiring the labor certification provides no details about what this process should look like and, into this void, the DOL has unleashed an avalanche of complicated requirements, forcing employers to recruit US workers before they can receive a certification.

But the DOL will waive many of these complicated requirements in the case of a shortage occupation. The DOL’s shortage occupation list is known as Schedule A. It was last updated in 1991, and it contains just two “shortage” occupations: physical therapists and registered nurses (as well as people with “exceptional ability,” but this classification is reportedly almost never used, though this might change thanks to a new US Citizenship and Immigration Services’ policy change announced this month). For the last 33 years, DOL has never recognized any other occupations as being in short supply. But now DOL is requesting that the public weigh in on whether to expand the list.

The permanent labor certification should not exist. Green card holders do not harm US workers because foreign workers consume goods and services, which increases demand for US workers elsewhere in the economy. Green card holders can’t be paid below market wages because they can simply leave to go to a job offering the market wage. This bureaucratic protectionism ultimately hurts US workers to the extent that it keeps out skilled workers who will increase demand for their services in other jobs elsewhere in the economy.

The permanent labor certification as it exists is an unnecessary bureaucratic nightmare. In 2004, when the government announced it would be streamlining the labor certification, it stated that most applications would receive a decision between 45 and 60 days under what it calls “non‐​audit review,” which is supposed to be a streamlined approval process.

Instead of 60 days, these applications are now taking an astounding 397 days—up from 96 days in the second quarter of 2019. Instead of meeting the 60‐​day limit announced in the regulation, the wait time is growing by almost 60 days every six months.

Naturally, the result is that a huge backlog has developed, increasing from about 27,000 in 2019 to over 161,000 in the first quarter of FY 2024. This is now more than an entire year’s worth of filings and adjudications. It’s likely that at the current pace, none of the filings being submitted right now will be reviewed by the DOL for a year and a half or more.

The DOL is not increasing adjudications in response to this crisis (Figure 2). From calendar year 2019 to 2023, DOL has not adjudicated as many applications as in 2018. In total, just keeping up with the 2018 pace would have reduced a cumulative 61,000 backlogged cases. That pace would have been insufficient to keep up with demand, but it would be better than where the agency is now.

Given that it has proven incapable of increasing adjudications through the individualized procedure, DOL must update Schedule A to meet its legal obligations to issue certifications and follow its own regulations.

It’s also important to locate the permanent labor certification in the full context of the employer‐​sponsored immigration process. The first step of the labor certification—which even Schedule A applicants must perform—is to receive a prevailing wage determination from the DOL. This is also unnecessary because DOL publishes the prevailing wages for each occupation on its website. Naturally, DOL is doing historically bad at processing these applications as well, with the average application taking over six months.

Then, the average employer takes another six months from the prevailing wage determination to recruit and prepare to file a labor certification application. Altogether, DOL’s procedures are taking an astounding 800 days for the average employer in 2024 (Figure 3). That’s not including lawyer consultations before the process begins. Schedule A cuts over 600 days from this process.

Although DOL’s processing times have escalated in recent years, the permanent labor certification has been a convoluted disaster since the current iteration began in 1977. Until 1965, the permanent labor certification only existed as a veto in cases where the government could show that workers would be harmed, such as during a strike. After 1965, the language shifted the burden to the immigrants to prove that they would not harm US workers. However, in 1967, the DOL clarified that it would not be using the new system similarly to the old system.

As Figure 4 shows, the type of labor certification is a key predictor of whether employer‐​sponsored immigrants must obtain another temporary visa first before the employer tries to run through this process. This two‐​step process has become a necessity for employers because the labor certification is time‐​consuming and complicated. Employers cannot sit around for years waiting for the DOL to approve them, so the DOL has funneled all these permanent employees into the temporary system unnecessarily. This reduces visas available in the temporary system while limiting the rights of the workers who come.

Despite this monumental bureaucratic morass, DOL denies few permanent labor certifications. From October 2014 to December 2023, DOL denied a total of just 50,427 permanent labor certification applications compared to 892,380 approvals. DOL is reviewing 19 applications to get a single denial. This fails any reasonable cost‐​benefit test. Employers are spending tens of thousands of dollars to go through this process. The permanent labor certification needs fundamental reforms to streamline it. At a minimum, DOL should conduct an in‐​depth audit of a random percentage of employers and simply approve the rest, which is effectively the system that the 2004 regulation promised.

However, since DOL cannot figure out how to efficiently handle them, it should put more occupations in Schedule A. Table 1 lists 83 occupations accounting for two‐​thirds of all labor certifications, which have denial rates of 2 percent or less (including only occupational codes with at least 20 applications). DOL is reviewing 57 applications for each denial in these occupations. This is unjustifiable. Moving these 83 occupations to schedule A would speed up the other one‐​third of applications and give the agency more time to review the applications with higher denial rates. These occupations have demonstrated that there is a shortage, so there is no need to subject them to an individualized review.

This is not the only way that DOL should consider whether an occupation is a shortage occupation, but it is a useful place to start. This is something that DOL has directly measured over a long period and bears directly on whether it is worth DOL’s limited resources to review these particular applications. Of course, the employment situation in the United States is not static, but the unemployment rate has almost no relevance to these highly specialized jobs. In 2020, the unemployment rate increased without any change in the labor certification approval rate.

To avoid a perpetual Schedule A list, however, the DOL could reinstate individualized review to see if the situation has changed if the yearly average unemployment rate in the occupation has increased by more than two percentage points since it was last listed as Schedule A. The DOL could then reassess these occupations again after six months to see if 98 percent or more are still being approved.

DOL’s goal should always be to optimize its resources and avoid the lengthy delays that harm US companies that file labor certification applications. According to DOL data, these companies employ over 84 million people, and harming these companies only harms their existing employees who work alongside immigrant workers. It also hurts countless US consumers who use the products and services that these immigrants produce in the United States. DOL must immediately address its permanent labor certification processing and expand Schedule A.

Nicholas Anthony

The US Department of Justice (DOJ) has charged Keonne Rodriguez and William Lonergan Hill with “conspiracy to commit money laundering and conspiracy to operate an unlicensed money‐​transmitting business.” Better known as the co‐​founders behind Samourai Wallet, Rodriguez and Hill are now facing upwards of 25 years in prison, according to the DOJ.

While there’s little defense for where Rodriguez and Hill appeared to have openly and deliberately marketed their services for criminal activity, the news still marks yet another example of the US government’s ever‐​growing intolerance for financial privacy.

Bitcoin and Privacy

Although I won’t go into the weeds here to explain how Bitcoin works from scratch, some context is likely helpful. One of the features that makes Bitcoin unique is that it operates on an open and decentralized blockchain—often referred to as a public blockchain. This feature is special because it allows anyone at any time to look to see what transactions are taking place and audit the system. Yet that also poses a problem for privacy.

Users are pseudonymous insofar as they are identified only by digital addresses, but those addresses can be linked to people with some clever sleuthing. An entire industry has arisen to do just that. This industry (including companies such as Chainalysis, TRM Labs, and Elliptic) looks at public blockchains and works to untangle transactions to narrow down and even directly identify the people behind them.

It’s here that Samourai Wallet comes in.

Samourai Wallet was designed to be a digital wallet with access to privacy‐​enhancing features. More specifically, it offered access to features referred to as “Whirlpool” and “Ricochet.” These features offered users the ability to either mix funds or create additional transactions to add a layer of privacy on an otherwise transparent blockchain. Yet in the eyes of the DOJ, these features are nothing more than tools for criminals to launder their money.

For others, however, these services are vitally important. As Anna Chekhovich, CFO for the Anti‐​Corruption Foundation and non‐​profit Bitcoin adoption lead at the Human Rights Foundation, told Bitcoin Magazine,

At the Anti‐​Corruption Foundation, we use mixers because we need to protect [the identity of] our donors. We’re responsible for the safety of our donors because we encourage them to support us financially, and for supporting us, they risk being imprisoned up to eight years. We have a huge responsibility to do everything we can [to] not to let that happen. We also need mixers to protect [the identity] of the recipients of our funds.

The Charges

With that said, the news of the charges broke on April 24 when the DOJ announced that Samourai Wallet allegedly had “executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions.”

To be clear, however, the $2 billion is later clarified as “unlawful” because Samourai Wallet was allegedly operating without a money transmitter license, not because it was linked to serious crimes. Yet, even then, it’s worth taking the claim with a grain of salt. What the court has to say is still to be seen. But, as Coin Center’s Peter Van Valkenburgh has explained at length, Samourai Wallet could very well have been operating within the bounds of guidance previously issued by the Financial Crimes Enforcement Network (FinCEN) in 2013 and again in 2019.

So, what’s perhaps more accurate to say is that 95 percent of the $2 billion in total activity was likely made by normal people seeking to simply preserve their privacy.

A Chilling Moment for Cryptocurrency, Privacy, and Innovation

Beyond those directly affected, the news of the charges marked a chilling moment for cryptocurrency defenders, human rights activists, privacy defenders, and software developers. Wasabi Wallet, for instance, announced it would block Americans from using its service, and Phoenix Wallet is set to be removed from US app stores on May 3 despite no publicly known issues. Others may likely follow.

When commenting on the news of Phoenix Wallet’s departure from US markets, investment strategist Lyn Alden wrote, “It’s increasingly the case that a lot of good bitcoin apps work in dozens of other countries but not in the United States. The US is kind of slowly firewalling itself from the rest of the world in terms of financial innovation.”

While Alden’s take may be grim, it seems to be correct. For instance, the day after the DOJ announced its charges, the FBI specifically cautioned Americans from using services like Samourai Wallet in a public service announcement (pictured below). The announcement effectively told Americans not to do business with others unless those businesses collect your identifying information.

In other words, in an age of increasingly sophisticated fraud and cyber risks, the FBI said not to do business with anyone unless they collect your name, date of birth, address, and social security number.

To be clear, this information doesn’t just sit idly by in a database after it is collected. On the contrary, businesses are then required to report much of it to the government. In a single year, US financial institutions are required to report Americans tens of millions of times under the Bank Secrecy Act.

Given this nearly “all access pass” to our financial information, it’s easy to understand why law enforcement might find it jarring to learn someone is providing any semblance of an alternative. Yet, at the same time, it should be as easy to understand why Americans want an alternative when they learn how sweeping the financial surveillance status quo is.

If Congress truly cares about the Constitution, it should step in and reform the sweeping surveillance that is now the norm. Americans would be much less likely to seek out privacy tools in the first place if companies were not required to collect all of their information just to open an account.

(As the DOJ noted in its press release, “The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.”)

Thomas A. Berry and Alexander Khoury

On the night of May 28, 2021, Gregory Pheasant was arrested for riding his dirt bike through Moon Rocks, Nevada, without a taillight. Moon Rocks is a section of federally owned public land managed by the Bureau of Land Management (BLM). The BLM’s authority to issue regulations derives from the Federal Land Policy and Management Act of 1976. Claiming authority under the Act, BLM had issued a rule requiring all dirt bikes operating at night to be affixed with a taillight, on pain of criminal penalty. Pheasant was charged with violating BLM’s taillight regulation and two other crimes.

Pheasant moved to dismiss, arguing that the broken taillight charge was unconstitutional under the “nondelegation doctrine.” Pheasant maintained that Congress had unconstitutionally delegated its legislative authority to the executive branch and that crimes created by the executive branch pursuant to that power (including the taillight regulation) were void.

The United States District Court for the District of Nevada agreed and dismissed two counts against Pheasant on nondelegation grounds. The government has now appealed the district court’s decision to the United States Court of Appeals for the Ninth Circuit.

Cato has filed an amicus brief in the Ninth Circuit on behalf of Pheasant. In our brief, we argue that the district court correctly dismissed the two counts against Pheasant on nondelegation grounds. Further, we also explain that the court of appeals should take this opportunity to resolve an inconsistency between its separation‐​of‐​powers standards for overly vague criminal statutes.

Our brief explains that parties alleging a separation‐​of‐​powers challenge to overly vague criminal statutes risk facing the inconsistent application of two separate standards of scrutiny—vagueness review and the nondelegation doctrine’s intelligible principle test. Vagueness review is applied when a law gives too much discretion to police and prosecutors, while the nondelegation doctrine concerns laws giving too much discretion to rule‐​makers.

Both of these standards enforce the same core constitutional concern: preventing Congress from delegating away its criminal lawmaking authority to other government actors charged with executing the law. Yet courts scrutinize laws under vagueness review more strictly than under the nondelegation doctrine, where they apply the lenient intelligible principle test. Our brief argues that this distinction has no merit and that both vagueness and nondelegation claims should be scrutinized under the same standard of review.

Additionally, our brief contends that under a unified separation‐​of‐​powers standard, Pheasant’s charges for violating the regulatory crimes should be dismissed. The executive branch has been granted nearly unfettered authority to create regulatory crimes for federally owned public lands. A federal rulemaker is thus effectively a one‐​person super legislator for over 240 million acres of federal land, a discontinuous landmass more than double the size of California. This tremendous grant of lawmaking power far exceeds anything the courts have upheld under vagueness precedents. For that reason, the Act’s delegation of regulatory power violates the separation of powers.

The district court’s decision should be upheld, and the two regulatory charges against Pheasant should be dismissed under a unified separation‐​of‐​powers standard.