Last week, the Biden administration announced that it would unveil a second attempt at issuing blanket student loan forgiveness within the next few months. The announcement comes more than a year after its first attempt was blocked by the Supreme Court.

"The Biden-Harris Administration made a commitment to deliver student debt relief to as many borrowers as possible as quickly as possible," said Education Secretary Miguel Cardona in a statement last Wednesday. "And today, as we near the end of a lengthy rulemaking process, we're one step closer to keeping that promise."

The announcement builds on a release in April of draft rules that aim to enact student loan forgiveness primarily by expanding existing loan forgiveness programs. The Education Department says it has begun notifying borrowers about the coming rules and informing them about a deadline to opt out of forgiveness. 

The proposed rules target specific groups of borrowers, including borrowers who now owe more than they originally took out in loans due to accumulating interest, borrowers who have been in repayment for decades, and those who are eligible but not enrolled in existing forgiveness programs. Borrowers who enrolled in low-value degree programs, such as those that "failed to provide sufficient financial value, or that failed one of the Department's accountability standards for institutions" are also eligible for new forgiveness efforts. 

Last week's announcement also stated that those eligible would most likely receive forgiveness automatically, with no application or additional steps required.

If enacted, the rules could end up affecting even more borrowers than would have been affected by the Biden administration's first forgiveness plan. The Education Department predicts that if the proposed rules go into effect, the Biden administration would have made over 30 million borrowers eligible for forgiveness through its efforts over the last three years. In contrast, Biden's first attempt at blanket student loan forgiveness was predicted to impact just 27 million eligible borrowers.

"If finalized as proposed, these new rules would authorize relief for borrowers across the country who have struggled with the burden of student loan debt," reads last week's statement. "The Biden-Harris Administration has taken historic steps to reduce the burden of student debt and ensure that student loans are not a barrier to educational and economic opportunity for students and families."

The Education Department predicts that the finalized rules will be released sometime in the fall. However, with the election in November looming, it's doubtful whether the department can actually provide forgiveness before the end of Biden's term. And considering that legal challenges are almost certain to follow any attempt to enact large-scale loan forgiveness, it's unclear if there is any realistic chance that the Biden administration can enact this plan. At the moment, these latest efforts might be best thought of as a last-minute political stunt designed to energize young, college-educated voters rather than an earnest policy effort.

The post Biden Administration Says It Will Finalize Second Attempt at Blanket Student Loan Forgiveness This Fall appeared first on Reason.com.

Less than a month after the attempted assassination of former President Donald Trump, the agency that failed to protect him from harm may get a bigger budget.

On July 13, when Thomas Matthew Crooks shot and wounded Trump during a campaign rally in Pennsylvania, Secret Service agents sprang into action, heroically shielding him from further harm and escorting him from the stage.

But subsequent reporting revealed that the incident was entirely preventable: Rally attendees alerted law enforcement to the presence of a suspicious person more than an hour before he started shooting, and they later saw him climbing on top of a building with a gun. "Trump was on stage for around 10 minutes between the moment Crooks was spotted on the roof with a gun and the moment he fired his first shot," the BBC reported.

After a particularly disastrous appearance before the House Oversight Committee, Secret Service Director Kimberly Cheatle resigned. Appearing before two Senate committees this week, acting Director Ronald Rowe Jr. testified that he was "ashamed" of the agency's failure.

Almost immediately after the shooting, a narrative emerged that the lapse owed to a lack of resources.

At a July 15 White House press briefing, a reporter asked Secretary Alejandro Mayorkas of the Department of Homeland Security—which oversees the Secret Service—"Is the Secret Service stretched too thin?"

"The Secret Service in—in times like this calls upon other resources and capabilities to handle a—a campaign of this magnitude," Mayorkas replied. "And I do intend to speak with members of the Hill with respect to the resources that we need."

"Our agency needs to be adequately resourced in order to serve our current mission requirements and to anticipate future requirements," Cheatle noted in her opening testimony before the House Oversight Committee on July 22. "As of today, the Secret Service has just over 8,000 employees," she told Rep. Stephen Lynch (D–Mass.). "We are still striving toward a number of 9,500 employees, approximately, in order to be able to meet future and emerging needs."

In a letter to Rowe this week, Sens. Chris Murphy (D–Conn.) and Katie Britt (R–Ala.)—respectively the chairman and the ranking member of the Senate Appropriations Subcommittee on Homeland Security—sought to understand the agency's financial needs as the subcommittee drafts an appropriations bill.

"Congress provided more than $190 million to the Secret Service in Fiscal Year 2024, specifically for protection requirements related to the 2024 presidential campaign, plus an additional $22 million above President Biden's budget request for protection-related travel costs," the senators wrote. "Despite this increase, in mid-June, prior to the attempted assassination, the Secret Service submitted a reprogramming notification to our subcommittee detailing its intent to shift $19 million to cover a shortfall for protection-related travel funding." This was in addition to the imminent addition of two vice presidential candidates and their families to the agency's protective purview, plus independent presidential candidate Robert F. Kennedy Jr., whom President Joe Biden added to the list after the shooting.

"As a result, the Secret Service is assuming new protection costs related to the campaign at a time when it already appears to lack sufficient resources to fulfill its protective mission," the senators continue.

But it's not at all clear that a lack of resources was the issue: The agency's budget in real numbers grew 55 percent over the last decade, to $3.62 billion, and its work force grew 33 percent from 2002 to 2019.

It is possible the agency may be stretched thin in its duties: The Secret Service is tasked by law with protecting not only the president, vice president, and their immediate families, but also former presidents, vice presidents, and their spouses for life, and their children until age 16. They also protect visiting heads of state and "other distinguished foreign visitors to the United States and official representatives of the United States performing special missions abroad when the President directs that such protection be provided."

"The Secret Service currently protects 36 individuals on a daily basis, as well as world leaders who visit the United States," Cheatle told the House Oversight Committee.

But that's not the agency's only job: Agents are tasked with investigating a number of financial crimes like counterfeiting, money laundering, and identity theft, as well as ransomware attacks, botnets, and "online sexual exploitation and abuse by predators and other criminals, sometimes for financial gain."

It's possible that the Secret Service is doing too many jobs for the amount of resources it enjoys. Perhaps many of its financial and investigative tasks should be shifted to the U.S. Treasury Department, which is where the Secret Service originated before Congress added presidential protection to its plate in 1901. The numbers demonstrate that the agency's problem is not purely financial.

But it's also worth keeping in mind that government agencies, by their nature, do too much, too poorly, and for too much money. The Secret Service, for all the nobility of its mission, is no exception.

The post Secret Service May Get Even More Money After Failing To Protect Trump appeared first on Reason.com.

In California, Cajon Valley Union Superintendent David Miyashiro ran up nearly $400,000 in charges on his school district credit card between May 2022 and March 2024. Miyashiro spent thousands of dollars for professional conferences and memberships in education associations, while also spending $76,000 on hotels, $30,000 on airfare, $10,000 on rideshares, and $50,000 on food plus another $115,700 on catering; his average purchase during that period was $19,000. Miyashiro is one of the highest-paid superintendents in the state, receiving a $408,000 annual salary, an $800 monthly car allowance, and a $300 monthly stipend for business expenses.

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Robert F. Kennedy Jr. won applause at the Libertarian National Convention by criticizing government lockdowns and deficit spending, and saying America shouldn't police the world.

It made me want to interview him. This month, I did.

He said intelligent things about America's growing debt:

"President Trump said that he was going to balance the budget and instead he (increased the debt more) than every president in United States history—$8 trillion. President Biden is on track now to beat him."

It's good to hear a candidate actually talk about our debt.

"When the debt is this large…you have to cut dramatically, and I'm going to do that," he says.

But looking at his campaign promises, I don't see it.

He promises "affordable" housing via a federal program backing 3 percent mortgages.

"Imagine that you had a rich uncle who was willing to cosign your mortgage!" gushes his campaign ad. "I'm going to make Uncle Sam that rich uncle!"

I point out that such giveaways won't reduce our debt.

"That's not a giveaway," Kennedy replies. "Every dollar that I spend as president is going to go toward building our economy."

That's big government nonsense, like his other claim: "Every million dollars we spend on child care creates 22 jobs!"

Give me a break.

When I pressed him about specific cuts, Kennedy says, "I'll cut the military in half…cut it to about $500 billion….We are not the policemen of the world."

"Stop giving any money to Ukraine?" I ask.

"Negotiate a peace," Kennedy replies. "Biden has never talked to Putin about this, and it's criminal."

He never answered whether he'd give money to Ukraine. He did answer about Israel.

"Yes, of course we should,"

"[Since] you don't want to cut this spending, what would you cut?"

"Israel spending is rather minor," he responds. "I'm going to pick the most wasteful programs, put them all in one bill, and send them to Congress with an up and down vote."

Of course, Congress would just vote it down.

Kennedy's proposed cuts would hardly slow down our path to bankruptcy. Especially since he also wants new spending that activists pretend will reduce climate change.

At a concert years ago, he smeared "crisis" skeptics like me, who believe we can adjust to climate change, screaming at the audience, "Next time you see John Stossel and [others]… these flat-earthers, these corporate toadies—lying to you. This is treason, and we need to start treating them now as traitors!"

Now, sitting with him, I ask, "You want to have me executed for treason?"

"That statement," he replies, "it's not a statement that I would make today….Climate is existential. I think it's human-caused climate change. But I don't insist other people believe that. I'm arguing for free markets and then the lowest cost providers should prevail in the marketplace….We should end all subsidies and let the market dictate."

That sounds good: "Let the market dictate."

But wait, Kennedy makes money from solar farms backed by government guaranteed loans. He "leaned on his contacts in the Obama administration to secure a $1.6 billion loan guarantee," wrote The New York Times.

"Why should you get a government subsidy?" I ask.

"If you're creating a new industry," he replies, "you're competing with the Chinese. You want the United States to own pieces of that industry."

I suppose that means his government would subsidize every industry leftists like.

Yet when a wind farm company proposed building one near his family's home, he opposed it.

"Seems hypocritical," I say.

"We're exterminating the right whale in the North Atlantic through these wind farms!" he replies.

I think he was more honest years ago, when he complained that "turbines…would be seen from Cape Cod, Martha's Vineyard… Nantucket….[They] will steal the stars and nighttime views."

Kennedy was once a Democrat, but now Democrats sue to keep him off ballots. Former Clinton Labor Secretary Robert Reich calls him a "dangerous nutcase."

Kennedy complains that Reich won't debate him.

"Nobody will," he says. "They won't have me on any of their networks."

Well, obviously, I will.

I especially wanted to confront him about vaccines.

In a future column, Stossel TV will post more from our hourlong discussion.

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

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You can add the Internal Revenue Service to the ranks of federal agencies conceding that raining taxpayer money on all and sundry to offset the negative effects of pandemic-era closures didn't go as well as intended. Not only was a program meant to offset the cost of paying workers during lockdowns and voluntary social-distancing prone to being gamed, but the "vast majority" of claims submitted to the program show evidence of being fraudulent.

The Tax Man Is Shocked To Discover Fraudsters

In the course of a detailed review of the Employee Retention Credit, "the IRS identified between 10% and 20% of claims fall into what the agency has determined to be the highest-risk group, which show clear signs of being erroneous claims for the pandemic-era credit," the IRS announced June 20. "In addition to this highest risk group, the IRS analysis also estimates between 60% and 70% of the claims show an unacceptable level of risk."

The Employee Retention Credit was offered to businesses that were shut down by government COVID-19 orders in 2020 or the first three quarters of 2021, experienced a required decline in gross receipts during that period, or qualified as a recovery startup business at the end of 2021. But it was clear early on that scammers were taking advantage of giveaways of taxpayer money, either to claim it for themselves or to pose as middlemen helping unwitting business owners file claims.

In March of 2023, the tax agency warned of "blatant attempts by promoters to con ineligible people to claim the credit." In September of that year, it stopped processing claims amidst growing evidence that vast numbers of applications were "improper," as the IRS delicately puts it. In March 2024, the agency announced that its Voluntary Disclosure Program had recovered $1 billion (since raised to over $2 billion) in improper payouts from participants who got to keep 20 percent of the take.

Ultimately, only "between 10% and 20% of the ERC claims show a low risk" for fraud, even by generous federal standards for throwing other people's money at problems largely of government creation.

"We will now use this information to deny billions of dollars in clearly improper claims and begin additional work to issue payments to help taxpayers without any red flags on their claims," commented IRS Commissioner Danny Werfel.

As of the end of May, the IRS "has initiated 450 criminal cases, with potentially fraudulent claims worth nearly $7 billion."

There's More Fraud Where That Came From

Of course, this is only the tip of the iceberg when it comes to pandemic stimulus fraud.

In April, Attorney General Merrick Garland boasted that the COVID-19 Fraud Enforcement Task Force (yes, it's widespread enough to rate its own task force) had "charged more than 3,500 defendants, seized or forfeited over $1.4 billion in stolen COVID-19 relief funds, and filed more than 400 civil lawsuits resulting in court judgements and settlements."

Strong work. But the various pandemic stimulus bills tallied up to trillions of dollars. And a lot more than a few billion ended up in the hands of grifters.

"The total amount of fraud across all UI [unemployment insurance] programs (including the new emergency programs) during the COVID-19 pandemic was likely between $100 billion and $135 billion—or 11% to 15% of the total UI benefits paid out during the pandemic," the Government Accountability Office warned last September.

Earlier, the Small Business Administration's Inspector General found more than $200 billion stolen from the Economic Injury Disaster Loan (EIDL) program and Paycheck Protection Program (PPP). "This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors," noted the report.

With between 70 percent and 90 percent of claims for the Employee Retention Credit identified as likely scams, either the IRS is a stand-out magnet for grifters or other agencies need to return to their own investigations with a somewhat more skeptical eye.

Stimulus Fueled Inflation as Well as Fraud

It's maddening enough that the federal government is handing out vast sums of money to con artists. But Americans are contending with a 2024 economy in which the U.S. Bureau of Labor Statistics' own inflation calculator finds that it takes $124.77 to purchase what $100 bought in 2019, before anybody heard of COVID-19. Federal stimulus programs are directly to blame for much of that inflationary slippage in the dollar's buying power.

"U.S. fiscal stimulus during the pandemic contributed to an increase in inflation of about 2.6 percentage points in the U.S.," three economists with the Federal Reserve Bank of St. Louis estimated last year. The reason, they said, was that governments "injected large amounts of money into the economy"—money created from thin air to artificially pump up the economy.

"Inflation comes when aggregate demand exceeds aggregate supply," agreed economist John Cochrane of the Hoover Institution and the Cato Institute in a March piece for the International Monetary Fund. "The source of demand is not hard to find: in response to the pandemic's dislocations, the US government sent about $5 trillion in checks to people and businesses, $3 trillion of it newly printed money, with no plans for repayment."

Officials justified the stimulus as a necessary evil to offset economic collapse from often-mandatory pandemic closures by keeping demand flowing with government checks. After conceding that stimulus fueled inflation, the St. Louis Federal Reserve economists argued that massive spending likely prevented "worse outcomes despite the price pressures that may have resulted from the spending."

But officials could have refrained from issuing closure orders so the economy could function without mandated disruptions. That would have made the creation of trillions of dollars from thin air and its distribution around the country entirely beside the point. Then, grifters wouldn't have opportunity to scam hundreds of billions of dollars out of federal agencies, including the IRS.

It's nice that the IRS, like other federal agencies, is catching up with the vast fraud it enabled. But it would be better if government officials weren't constantly addressing problems they created.

The post 'Vast Majority' of Pandemic Employee Retention Credit Claims Are Likely Scams, Says IRS appeared first on Reason.com.

In 2024, the federal budget deficit is estimated to reach nearly $2 trillion, according to new projections released by the Congressional Budget Office (CBO) this week. In February, the agency predicted that the deficit would only be $1.58 trillion. However, spending increases have caused the projected deficit to increase by $400 billion, a staggering 27 percent hike. 

According to the CBO, 80 percent of the spike in the deficit can be blamed on four sources of government spending.

The largest source, responsible for $145 billion of the increase, is changes to the federal student loan program that have resulted in massive waves of federal student loan forgiveness and increased forgiveness going forward.

Second, the CBO's report details how the costs for "deposit insurance have increased by about $70 billion because the Federal Deposit Insurance Corporation (FDIC) is not recovering payments it made when resolving bank failures in 2023 and 2024 as quickly as CBO previously anticipated."

Third, an additional $60 billion in cost increases came from additional legislation. And lastly, $50 billion in increased spending came from higher-than-expected Medicaid costs.

The long-term outlook for the budget deficit has increased too. In February, the CBO estimated that in 2034, the deficit would climb to $2.5 trillion. Its latest estimate now places that number as over $2.8 trillion.

"For the 2025–2034 period, CBO now projects that if current laws generally remained unchanged, the cumulative deficit would be $22.1 trillion. That amount is $2.1 trillion (or 10 percent) more than the $20.0 trillion the agency projected this past February," reads the CBO's report. "Measured in relation to the size of the economy, federal debt at the end of 2034 is now projected to equal 122 percent of gross domestic product (GDP); in February, debt at the end of that year was projected to equal 116 percent of GDP."

If the deficit continues to increase as the CBO predicts, the outcome could be disastrous. 

"As debt grows unabated, there is the risk of a sudden loss of confidence in bond markets, with investors demanding much higher interest rates that could trigger a debt doom loop and broader fiscal crisis," Cato Institute researchers Romina Boccia and Dominik Lett warned this week. "Congress and the Biden administration should cut spending now while the economy is growing and conditions are favorable for deficit reduction, alleviating pressure on interest rates and the federal debt to grow, and before a fiscal crisis forces their hands."

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On March 14, 2024, Senate Majority Leader Chuck Schumer (D–N.Y.), a man who 13 months prior had vowed at Jerusalem's Yad Vashem World Holocaust Remembrance Center that "as long as Hashem breathes air into my lungs, the United States Senate will stand behind Israel with our fullest support," peered solemnly over his glasses into the Senate's C-SPAN cameras and informed Israeli Prime Minister Benjamin Netanyahu that it was time for him to go.

"The Netanyahu coalition no longer fits the needs of Israel after October 7," Schumer declared, referring to the shock Hamas massacre and mass kidnapping event just across the militarized border separating the Palestinian Gaza Strip from the Israeli envelope around it. "Nobody expects Prime Minister Netanyahu to do the things that must be done to break the cycle of violence, preserve Israel's credibility on the world stage, and work towards a two-state solution….At this critical juncture, I believe a new election is the only way to allow for a healthy and open decision-making process about the future of Israel."

And if Netanyahu, in such an election, were to win enough votes to form another government, then continue prosecuting the war against Israel's attackers in ways Schumer doesn't approve?

"Then," the highest-ranking Jewish elected official in U.S. history warned, "the United States will have no choice but to play a more active role in shaping Israeli policy by using our leverage to change the present course."

It's an increasingly common refrain among American critics of Israeli policy, including many who are otherwise wary of Washington thumbing the scales on world affairs: The $3.8 billion that the U.S. gives each year should directly influence Israeli behavior—on war, on humanitarian assistance to Gaza, on settlements in the West Bank, even on proposed reforms to the judiciary branch—or be withdrawn.

"The Netanyahu government, or hopefully a new Israeli government, must understand that not one penny will be coming to Israel from the U.S. unless there is a fundamental change in their military and political positions," Sen. Bernie Sanders (I–Vt.) said last November, reiterating a critique he and several other candidates made when seeking the 2020 Democratic presidential nomination.

President Joe Biden, a stalwart supporter of Israel throughout his half-century in public office, seemed this spring to be moving closer to Sanders' point of view. Three days before Schumer's well-telegraphed speech, Politico reported, based on "four U.S. officials with knowledge of internal administration thinking," that Biden "will consider conditioning military aid to Israel if the country moves forward with a large-scale invasion of Rafah."

The Rafah offensive was indeed tabled a few days later. But then, after the Israel Defense Forces (IDF) on April 1 pulverized a World Central Kitchen aid convoy in Gaza, killing seven, Biden informed Netanyahu in a tense phone call that (in the words of a White House readout) Israel needed to "announce and implement a series of specific, concrete, and measurable steps to address civilian harm, humanitarian suffering, and the safety of aid workers," or else, for the first time in a generation, the U.S. would hold up military aid.

Rep. Nancy Pelosi (D–Calif.) and three dozen other members of Congress sent a letter to the president April 5 urging him "to reconsider your recent decision to authorize the transfer of a new arms package to Israel, and to withhold this and any future offensive arms transfers until a full investigation into the airstrike is completed." NBC declared this a potential "turning point" in U.S.-Israeli relations.

But that turn lasted fewer than 10 days. On April 14, Iran fired more than 300 potentially lethal missiles and drones into Israel, marking the first time the Islamic republic had directly attacked the Jewish state, after decades of supporting proxy harassments from Hamas, Lebanon's Hezbollah, Yemen's Houthis, and various armed factions in Syria and Iraq. Largely thanks to the technological and regional military agreements that the U.S. and Israel have jointly forged, virtually all of the projectiles that did not misfire were intercepted.

"Now is not the time to abandon our friends. The House must pass urgent national-security legislation for…Israel, as well as desperately needed humanitarian aid for Palestinians in Gaza," Biden wrote in The Wall Street Journal three days later, in support of a supplemental $26.38 billion Israeli package. "I've been clear about my concerns over the safety of civilians in Gaza amid the war with Hamas, but this aid…is focused on Israel's long-term defensive needs to ensure it can maintain its military edge against Iran or any other adversary."

That same day, after months of delay, embattled House Speaker Mike Johnson (R–La.) announced that the aid bill would finally be introduced on the House floor. The only attached condition was imposed not on Israeli policy makers but on the controversial United Nations Relief and Works Agency operation in Gaza. So much for a turning point.

Yet the conversation about leverage is precisely the one America needs to be having while confronting yet another deadly and seemingly intractable standoff in the Middle East. A realistic contemplation of Washington's regional and global system of carrots and sticks, at a time when American imperial appetites are on the noticeable decline, might reveal some awkward if potentially game-changing truths. Beginning with: There are many on the pro-Israeli side who want the same policy result as Bernie Sanders, for precisely the opposite reasons.

End it, Don't Mend it

Three months before the October 7 massacre, the American Jewish publication Tablet published a provocative essay by Jacob Siegel and Liel Leibovitz bluntly headlined "End U.S. Aid to Israel."

The brief: "Israel ends up sacrificing far more value in return for the nearly $4 billion it annually receives from Washington. That's because nearly all military aid to Israel…consists of credits that go directly from the Pentagon to U.S. weapons manufacturers," they wrote. "In return, American payouts undermine Israel's domestic defense industry, weaken its economy, and compromise the country's autonomy—giving Washington veto power over everything from Israeli weapons sales to diplomatic and military strategy."

Critics of Israel, particularly in light of the subsequent war with Hamas, will surely blanch at the notion that Washington has anything like "veto power" over Tel Aviv. Yet America has nonetheless coordinated and consulted on policy far more closely with Israel, including during this conflict, than it has on, say, nearby NATO ally Turkey in its ongoing battles with Syrian Kurds. All at a time when the comparative purchasing power of America's Israeli aid has plummeted.

"The Israel of 2023," Siegel and Leibovitz observed, "is immeasurably wealthier and more powerful than the dusty socialist country of 40 years ago, where local electrical grids could be overloaded by American hair dryers." Boy howdy is it.

Israel now has a highergross domestic product (GDP) per capita than Japan and Italy, and is closing in fast on France and the United Kingdom. In 1981, as the hawkish former Assistant Secretary of State Elliott Abrams pointed out in Commentary last year, "the United States provided Israel with $4.5 billion in economic and military aid at a time when the entire GDP of the Jewish state was only $25.4 billion." Now? GDP is north of $500 billion.

Annual U.S. aid has gone from 17.7 percent of the Israeli economy to 0.7 percent; even with the big new cash infusion, that figure goes up this fiscal year to just 5.7 percent. And as Biden himself crassly observed when selling the supplemental, the strings attached include "send[ing] military equipment from our own stockpiles, then us[ing] the money authorized by Congress to replenish those stockpiles—by buying from American suppliers….[We're] help[ing] our friends while helping ourselves." So America is sending money that Israel no longer needs to lock in long-term contracts for the military-industrial complex. (The 10-year, $38-billion Memorandum of Understanding signed by President Barack Obama in 2018 allowed for Israel to spend about a quarter of the annual total on its own domestic defense production until this year, after which the percentage is to be ratcheted steadily down to zero.)

This close military partnership, which has been the basic bilateral setup since not long after the 1967 Six Day War, has produced benefits for both Washington and Jerusalem. Israel gets some of the world's most advanced defense tech, such as the Iron Dome and David's Sling missile-interception systems; the U.S. gets premium intelligence in a volatile region and a privileged seat at the table for making commerce-lubricating peace deals.

But it's also true those contracts could be freely entered into, without a cent of U.S. taxpayer money, just as both Sanders and anti-interventionist Republicans like Sen. Mike Lee (R–Utah) would prefer. What would happen to American influence then?

"Weaning Israel off of American assistance would have the added advantage of removing the issue of conditioning such aid or using it as leverage, ideas that sometimes surface when the United States and Israel differ on important policy issues, such as the peace process," former Israeli Justice Minister Yossi Beilin and former U.S. ambassador to Israel and Egypt Daniel Kurtzer wrote four years ago in The National Interest.

In other words, say goodbye to Schumer's—and Biden's—serially insisted-upon "two-state solution," which has been a political non-starter in Israel especially since October 7. And don't be surprised if the country's regional Qualitative Military Edge, enshrined in U.S. law, would be deployed more freely in preemptively striking Iran's offensive capabilities, whether in missile production, nuclear development, or senior-level military planning.

So would cutting aid to Israel actually lead to more, not less war? Making predictions in the Middle East is a fool's errand. But one way to think through the scenario planning, and move faster toward a world where foreign policy commitments are more commensurate with the domestic public opinion of the countries involved, is to remember a factor that too often escapes attention: Israel is hardly the only country along the Arabian Peninsula to receive billions in American military aid.

What Leverage Bought

If the U.S. permanently cut off all aid tomorrow—and even if the American Israel Public Affairs Committee, the infamous "Israel lobby," were suddenly to close up shop—the bonds of affection between the two countries would still remain strong. According to a Gallup poll, Israel has for the past quarter-century been among the leading countries toward which Americans have the most favorable opinion. Eighty-five percent of the world's Jewish population lives either in the U.S. or in Israel, in roughly equal numbers (the numerical capital of Jewry is not Tel Aviv or Jerusalem, but New York City). There are some 200,000 dual citizens living in Israel; at least 33 were killed by Hamas on or after October 7, and five more were still believed to be held hostage as of May 1. Even as Americans—particularly Democrats, and the young—have soured on Israel's prosecution of the war, there remains between the countries a shared liberal democratic (and capitalistic) culture and decades' worth of human intercourse.

Now consider Saudi Arabia.

The country that has purchased more U.S. military equipment than any other—at $140 billion and counting—has been unpopular with the American public for the entire 21st century, and not only because it was home to most of the September 11 hijackers. The House of Saud's dictatorial monarchy routinely ranks near the bottom of global freedom indices, women only recently were granted the right to drive a car, and the regime infamously assassinated Washington Post columnist Jamal Khashoggi in 2018. Saudi Arabia has been a prime mover in the brutal, decade-long Yemeni civil war, a conflict that the United Nations estimates has led to nearly 400,000 deaths, most of them civilian.

Yet in the absence of any American sympathies at all, Riyadh has still been a key strategic partner with Washington for going on eight decades. Why? Oil production is certainly part of it, though Russia and Venezuela also have tons of the stuff. The truth is that the kingdom has been deft enough diplomatically, and flush enough with spendable petrodollars, to keep insinuating itself into whatever preoccupations the American empire has at the moment: the Cold War, the Gulf War, the Iraq War, containing Iran, and doing the often messy work of behind-the-scenes negotiations on military logistics, CIA skulduggery, and peace deals.

It is in that latter category that the Saudis find themselves yet again the object of not-quite-requitable American desire, this time in the form of a tantalizing peace pact with Israel, one that could potentially dwarf in practical and symbolic significance the historic 2020 Abraham Accords between the Jewish state and Bahrain, Morocco, Sudan, and the United Arab Emirates. The Saudi asking price thus far? Just a military security guarantee, the likes of which America has only with Japan, South Korea, and the members of NATO.

Such are the realities of American leverage in the Middle East. Washington now includes among its major non-NATO allies Qatar (circa 2022, in exchange for help with U.S. withdrawal from Afghanistan), Tunisia (2015, for its role in the Arab Spring), Morocco and Kuwait (2003, for assistance in the war on terror), Bahrain (2002, ditto), and more than a dozen other countries, including Israel and Egypt.

When states are both relatively poor and militarily insecure, as Israel was in the 1970s and Egypt remains to this day, the lure of access to the world's dominant military can persuade otherwise reluctant leaders to do things they and/or their populations would rather not. Like siting U.S. military bases, or taking the American side in a regional conflict—or recognizing Israel's right to exist.

Israel since its 1948 inception has been the single largest recipient of U.S. aid, at north of $300 billion in constant 2024 dollars. Clocking in at No. 2, with more than $150 billion, is Egypt. This American money bought the modern Middle East's most foundational peace treaty. That 1979 deal, brokered by President Jimmy Carter, not only formally ended the longtime antagonists' various wars; it marked the first time an Arab country formally accepted Israel's existence. For that move against the preponderance of his country's public opinion, Egyptian President Anwar Sadat paid two years later with his life.

Such are the inherent and ongoing tensions of bribing authoritarians to make unpopular deals, particularly in countries predisposed toward resenting Israelis and/or Americans. The basing of non-Muslim U.S. troops near Saudi Arabia's holy Islamic sites of Mecca and Medina was the original radicalizing complaint of Osama bin Laden. The Jordanian population, long encouraged to treat neighboring Israel as the enemy, was ill-prepared to accept King Hussein's 1994 signing of mutual recognition, nudged in part by President Bill Clinton's promise to forgive $700 million of the country's debt. A 2022 poll of the Hashemite kingdom by the Arab Center for Research and Policy Studies found opposition to diplomatic recognition at a staggering 94 percent.

That number would almost certainly be lower if the Jordanian monarchy didn't choose to stoke anti-Israeli sentiment in public while cooperating privately to such a degree that the country shot down several Iranian missiles before they could even cross into Israeli airspace. King Abdullah II called for three noisy days of national mourning last October over the deadly explosion outside of Gaza's Al-Shifa Hospital even after Israel's involvement and the initial death toll had both been convincingly debunked. Queen Rania that same month told CNN that the world "silence" in the face of Israel's war was "deafening," and that "to many in our region, it makes the Western world complicit." The kingdom tamps down criticism of the normalization deal (which it still publicly defends) and prevents protesters from ransacking the Israeli embassy but otherwise keeps the rhetoric ratcheted.

A poor country with rampant unemployment, Jordan is a top-10 recipient of U.S. aid, and it relies heavily on Israel for trade and resource cooperation. Caught literally between Iran and Israel, home to a large and restive Palestinian population, beset by months of anti-Israel protests, the monarchy is increasingly fragile and constantly triangulating. If the U.S. were to suddenly pull the rug out from underneath Jordanian aid, some 6 percent of the country's GDP would go poof.

It is easy to look upon such realities as an excuse to keep perpetuating the American foreign policy status quo. If leverage in the authoritarian Arab neighborhood has bought peace deals with Israel, the reopening of the Suez Canal, and the forging of an anti-Iran axis in the Persian Gulf, why threaten to unravel these projects by beating a hasty retreat?

That question implies a far-too-rosy picture of the status quo, and it ignores the extent to which American public opinion deviates from the conventional wisdom in Washington.

Imperial Autopilot

The American-led world order, with its emphases on international cooperation, tariff reduction, and mutual military treaties, arose out of the ashes of World War II as a bulwark against communism. That comprehensible project, while the source of semi-constant controversy in implementation, was broadly popular in the United States; it was articulated regularly by every president from Harry Truman to George H.W. Bush. With the end of the Cold War, and the failure to secure an explicit postwar settlement, came the end of domestic support for America's starring global role.

What happens when institutions wheeze on long after their rationales have collapsed? Elite corruption and populist revolt.

Corruption doesn't necessarily have to mean self-enrichment, though surely the people near the top of the American foreign policy pyramid rarely have to scrounge up their next meal. It's more about the temptations of using America's unmatched power. In the immortal 1993 words of the United States' then-ambassador to the United Nations, Madeleine Albright, spoken to the more restraint-oriented Colin Powell, "What's the point of having this superb military that you're always talking about if we can't use it?" Albright's interventionist point of view ended up winning the battle for Clinton's foreign policy, and then Powell became the chief salesman for President George W. Bush's disastrous war of choice in Iraq.

Afghanistan was America's longest and least popular war, yet imperial autopilot, along with the fallacy of sunken costs, meant that it took more than two decades until Biden finally (and messily) ended it. NATO, and Washington's preeminence within it, is still the dominant military paradigm on the decidedly non-American continent of Europe, even with the open skepticism about the alliance expressed serially by the former and possibly future president Donald Trump.

America has already retreated under both Trump and Biden from its legacy role in reducing global tariffs, embracing instead the kind of made-in-America mercantilism that generations of their predecessors had mostly resisted. Wherever there is some 75-year-old, Washington-forged institution and commitments thereof, there is active domestic politics railing against it.

Washington's leading role in the Middle East is somewhat younger, at around a half-century, but similarly archaic. We no longer need to counter the Soviet Union, no longer depend on foreign oil, and no longer cling to the messianic delusion that liberal democracy in the region can be spread at the point of a gun. If you could somehow wipe the slate clean and craft a new U.S. approach to the Middle East that would better align with public opinion, what would that look like?

Almost certainly, the vast majority of foreign aid to this and other regions would vanish overnight. Nos. 3 through 10 on the 2022 aid-recipient list—Ethiopia, Afghanistan, Yemen, Egypt, Jordan, Nigeria, Somalia, South Sudan—would be cut off. But Nos. 1 and 2 might well remain.

The Intolerability of October 6

The Republicans who unsuccessfully opposed the $95 billion aid package to Ukraine, Israel, and Taiwan were onto something, as have been such presidential candidates as Pat Buchanan, 1992 Clinton, and 2000 George W. Bush. Americans are generally weary of throwing billions abroad at problems that should be solved by someone else, particularly when there are unresolved problems galore at home.

But specifically, Americans favor helping with the defense of Ukraine (No. 1 on the 2022 aid recipient list), Israel (No. 2), and Taiwan. In the absence of a coherent and comprehensible strategy, one that reflects the more modest ambitions of voters, foreign policy remains subject to the temporal emotions and legacy attachments of the public. Jordan probably wouldn't win an up-or-down referendum on U.S. support; Israel almost certainly would. Both, however, could benefit from being cut off.

The Israeli case for independence is largely about latitude, but not only: Having to spend $3.8 billion a year rather than receive it means making some responsible choices about budget priorities. Authoritarian Arab governments, too, need to take, rather than continue to shirk, responsibility.

The horrors of October 7 revealed that the seemingly operable status quo of October 6 was in fact untenable. It was, and is, untenable for Israel to live next to neighbors, to the north and southwest, who regularly fire rockets into the country and sporadically dig tunnels to execute acts of terrorism. It's untenable for Gaza's residents to live under the dictatorial whims of a theocratic death cult that takes money from foreign governments not to build prosperity but to harass and murder Israelis. It's untenable for the region's autocrats to loudly pin the blame for their own heavy-handed misgovernance on American and Israeli scapegoats while quietly reaching out for assistance from Washington and Tel Aviv.

Qatar enjoys the status of being a major non-NATO ally with the U.S. while also financing and sheltering the leadership of Hamas. That too is untenable, and the designation should be withdrawn. Residents of the Palestinian West Bank live in a harassed and conflict-ridden uncertainty and emasculation, with second-class property rights and lousy government services. Untenable. Iran flexes its muscle to turn parts of Israel's neighbors into vassal states rather than fully fledged independent entities. None of this is tenable.

Meanwhile, the U.S. floats above the whole region, handing out aid and military contracts like a grand seigneur, hoping on Mondays to build peace, on Tuesdays to launch airstrikes, and on Wednesday try to tamp down the resulting messes from spreading into a regional war. It does deals with some of the most hideous regimes on earth while the captive populations seethe.

It is axiomatic, yet catastrophically underappreciated in Washington: Those with the most power will inevitably behave corruptly, and those without responsibility will inevitably behave irresponsibly. An Israel less tethered may feel less constrained, sure, but it may also find itself more isolated on the world stage, and therefore a tad more cautious. Arab leaders without the American security blanket may find themselves having to speak blunt truths to their populations, including about the true sources of their comparative lack of prosperity and freedom. And a United States less compromised by getting its thumbs in every pie will potentially have more, not less, moral standing in the world.

So cut off Israel. And Egypt, and Jordan, and Saudi Arabia as well. Let them bear the responsibility of their own actions, and the costs of their own security. It's time to consciously manage America's imperial drawdown, rather than careen between fading Atlanticism and resurgent populism. What's the point of having this superb military? To defend America.

The post What If the U.S. Cuts Off Aid to Israel? appeared first on Reason.com.

In 2021, the Infrastructure Investment and Jobs Act included $7.5 billion to build 500,000 public charging stations for electric vehicles (E.V.s) across the country in an effort to boost a switch to the use of clean energy.

As Reason reported in December, not one charger funded by the program had yet come online. Now, six months later, the number of functional charging stations has ticked up to eight.

That news comes from an Autoweek article earlier this month. In March, The Washington Post reported that only seven were built; a charging station in Bradford, Vermont, opened in April, containing four E.V. fast chargers. Public chargers are either Level 2, which use alternating current electricity and take several hours to fully charge an all-electric vehicle from empty, or Direct Current Fast Charging (DCFC) superchargers, which use direct current and can charge in less than an hour.

Why so little progress? Alexander Laska of the center-left Third Way think tank told Autoweek's Jim Motavalli that the federal cash "comes with dozens of rules and requirements around everything from reliability to interoperability, to where stations can be located, to what certifications the workers installing the chargers need to have." Laska says the regulations "are largely a good thing—we want drivers to have a seamless, convenient, reliable charging experience—but navigating all of that does add to the timeline."

A spokesperson with the National Electric Vehicle Infrastructure (NEVI) program, which administers $5 billion of the $7.5 billion total, further told Motavalli that the delay is because "we want to get it right."

Thankfully, federal grants aren't the only way to build out charging infrastructure.

"US drivers welcomed almost 1,100 new public, fast-charging stations in the second half of 2023, a 16% increase," Bloomberg's Kyle Stock reported in January. And not just in big cities or progressive enclaves: Deep-red Idaho "switched on 12 new [DCFCs] between July and December," while "Alabama, Arkansas, Mississippi and Tennessee welcomed 56 new fast-charging stations in the second half of 2023, an infrastructure increase of one-third."

While Stock notes that $5 billion of federal money is expected to roll out soon, "the vast majority of chargers added in the US last year were bets by for-profit companies on the future of battery-powered driving."

The most prominent company by far is Tesla, whose network of Superchargers includes over 57,000 DCFC chargers around the world and generated an estimated $1.74 billion of revenue in 2023 alone. Just in the fourth quarter of 2023, the company built 357 new stations, accounting for 3,783 charging ports.

Around two-thirds of all public chargers in the U.S. are manufactured for Teslas, but the company has also expanded its network for its competitors to use: In the 2025 model year, most major automakers' E.V.s will use the same charge port as Teslas and be able to access the Supercharger network.

Rivian, a Tesla competitor, is also building out its own DCFC network: In February 2024, it counted 400 chargers in 67 locations, with plans to expand further, and just like with Tesla's Superchargers, Rivian plans to make its chargers accessible to other models.

In fairness, both Tesla and Rivian have benefited from government handouts: State and local governments in Georgia promised Rivian a raft of incentives worth up to $1.5 billion. And Tesla has received at least $2.8 billion in federal, state, and local subsidies over the years, despite CEO Elon Musk's professed distaste for government intervention in the economy. In fact, Politico found in February that Tesla was the single largest recipient of funds disbursed by the federal NEVI program, winning "almost 13 percent of all EV charging awards from the law, earning it a total of more than $17 million in infrastructure grants."

But those companies still provide the best template for expanding access to public chargers.

While proponents of the federal regulations may defend the amount of red tape involved in the federal program, with demands on where a charging station can be placed and the types of licenses people need to build one, the fact is that the private sector is already building out a nationwide E.V. charging network that will be available to most drivers.

The post $7.5 Billion in Government Cash Only Built 8 E.V. Chargers in 2.5 Years appeared first on Reason.com.

Congressional Budget Office (CBO) projections provide valuable insights into how a big chunk of your income is being spent and reveal the long-term consequences of our government's current fiscal policies—you may endure them, and your children most certainly will. Yet, like most other projections looking into our future, these numbers should be taken with a grain of salt. So should claims that CBO projections validate anyone's fiscal track record.

So much can and likely will happen to make projections moot and our fiscal outlook much grimmer. Unforeseen events, economic changes, and policy decisions render them less accurate over time. The CBO knows this and recently released alternative scenarios based on different sets of assumptions, and it doesn't look good. It remains a wonder that more politicians, now given a more realistic range of possibilities, aren't behaving like it.

First, let's recap what the situation looks like under the usual rosy growth, inflation, and interest rate assumptions. Due to continued overspending, this year's deficit will be at least $1.6 trillion, rising to $2.6 trillion by 2034. Debt held by the public equals roughly 99 percent of our economy—measured by gross domestic product (GDP)—annually, heading to 116 percent in 2034.

The only reason these numbers won't be as high as projected last year is that a few House Republicans fought hard to impose some spending caps during the debt ceiling debate. The long-term outlook is even scarier, with public debt reaching 166 percent of GDP in 30 years and all federal debt reaching 180 percent.

No one should be surprised. To be sure, the COVID-19 pandemic and the Great Recession made things worse, but we've been on this path for decades.

Unfortunately, if any of the assumptions underlying these projections change again, things will get a lot worse. That's where the CBO's alternative paths help. Policymakers and the public can better see the potential risks and opportunities associated with various fiscal policy choices, enabling them to make more informed decisions.

For instance, the CBO highlights that if the labor force grows annually by just 0.1 fewer percentage points than originally projected—even if the unemployment rate stays the same—slower economic growth will lead to a deficit $142 billion larger than baseline projections between 2025 and 2034. A similarly small slowdown in the productivity rate would lead to an added deficit of $304 billion over that period.

Back in 2020, the prevalent theory among those who claimed we shouldn't worry about debt was that interest rates were remarkably low and would stay low forever. As if. These guys have since learned what many of us have known for years: that interest rates can and will go up when the situation gets bad enough. So, what happens if rates continue to rise above and beyond those CBO used in its projections? Even a minuscule 0.1-point rise above the baseline would produce an additional $324 billion on the deficit over the 2025-2034 period.

The same is true with inflation, which, as every shopper can see, has yet to be defeated. If inflation, as I fear, doesn't go away as fast as predicted by CBO—largely because debt accumulation is continuing unabated—it will slow growth, increase interest rates, and massively expand the deficit. To be precise, an increase in overall prices of just 0.1 points over the CBO baseline would result in higher interest rates and a deficit of $263 billion more than projected.

Now, imagine all these variations from the current projections happening simultaneously. It's a real possibility. The deficit hike would be enormous, which could then trigger even more inflation and higher interest rates. The question that remains is: Why aren't politicians on both sides more worried than they seem to be?

What needs to happen before they finally decide to treat our fiscal situation as a real threat? President Joe Biden doesn't want to tackle the debt issue. In fact, he's actively adding to the debt with student loan forgiveness, subsidies to big businesses, and other nonsense. Meanwhile, some Republicans pay lip service to our financial crisis, but few are willing to tackle the real problem of entitlement spending.

The time for political posturing is over. The longer we wait to address these issues, the more severe the consequences will be for future generations. It's time for our leaders to prioritize the nation's long-term economic health over short-term political gains and take bold steps toward fiscal responsibility. Only then can we hope to secure a stable and prosperous future for all Americans.

COPYRIGHT 2024 CREATORS.COM.

The post The Congressional Budget Office's Alternative Scenarios Forecast a Dire Economic Picture appeared first on Reason.com.

One of the most persistent myths in K-12 education is the idea that high-poverty schools are near-universally, significantly underfunded. However, the truth is much more complicated. As it turns out, poor districts get more money in almost every state—and school spending has an incredibly weak relationship with school quality in the first place.

This week, USA Today published another example of fearmongering, giving a Thursday article the inexplicable headline, "Enrichment only for the rich? How school segregation continues to divide students by income." However, the research the article presents doesn't exactly show the apocalyptic outcomes implied by the headline. In fact, the research it cites concluded that "poverty rates do not have a clear relationship" with local and state funding.

Reporter Alia Wong's article is filled with heartwrenching stories of schools with "regular lockdowns and the sound of gunfire in the lobby," where "classrooms lacked basic supplies and teachers didn't notice how often [a student] skipped class. Desks tended to be broken and textbooks decades old."

While these situations are tragic, the reality is a bit more complex. Not only is the funding gap between wealthier and poorer schools found by the researchers smaller than you might think—it disappeared when dividing schools based on their poverty rates. Further, other research shows that school funding, and thus the chaotic, neglectful state of many failing schools, has basically no relationship with school quality. 

The study, from education think tank Bellwether, examined schools in 123 metropolitan areas and classified districts into lower, middle, and wealthy based on how much local income and property values differed from the average in their metro area. The researchers did this in order to study funding differences between schools in the same area—meaning that some districts in the lowest category (what they called Opportunity Outsiders) are not actually high-poverty schools.

In all, researchers found that wealthy districts received the most total funding in their metro area just 39 percent of the time. However, they did find a modest, but significant funding gap between wealthier and poorer schools. The median Opportunity Outsider school spent $14,287 per pupil, while the median wealthy school (called Economic Elite) spent $16,702. 

However, this gap all but vanished when the researchers reclassified schools not based on relative wealth but on their actual poverty rates. The study concluded that "poverty rates do not have a clear relationship with the amount of state and local revenue that districts receive."

So do the schools poor kids actually go to receive less funding? Not according to this study. Only the schools that are among the poorest in their metro area—which includes plenty of schools in wealthy areas, where the relatively poorest school has only average poverty—that face a funding gap. 

And that's only accounting for local and state funding. When you include federal funding, the situation becomes even better for high-poverty schools. According to research from the Urban Institute, when considering "federal, state, and local funding, almost all states allocate more per-student funding to poor kids than to nonpoor kids." Just three states, Nevada, Wyoming, and Illinois have a "weakly" regressive funding structure. 

If so many states allocate more money to poor districts, why do low-income schools have worse results? As it turns out, per-pupil spending doesn't seem to impact school quality all that much. One 2012 report by Harvard and Stanford researchers, found that, on average, an extra "$1000 in per-pupil spending is associated with an annual gain in achievement of one-tenth of 1 percent of a standard deviation," an increase the researchers say is "of no statistical or substantive significance."

This isn't to say that funding doesn't matter at all. Rather, low-income school districts tend to spend their funding less responsibly. 

"More money can help schools succeed, but not if they fritter those extra resources in unproductive ways," Jay Greene, a senior research fellow at the Heritage Foundation, told Reason last year. "There are many common ways that schools blow resources. Wasteful schools tend to hire more non-instructional staff while raising the pay and benefit costs for all staff regardless of their contribution to student outcomes."

Despite the headlines pointing to the contrary, high-poverty school districts aren't generally underfunded and funding gaps aren't responsible for lackluster academic performance. That's not to say we shouldn't be concerned when poorer schools receive lower funding, but rather that the issues in underperforming schools almost certainly won't be fixed by throwing more cash at the problem.

The post Are Poor Schools Underfunded? It's More Complex Than You'd Think. appeared first on Reason.com.

Is college worth it? Well, it depends on what degree you're getting and where you're getting it, according to a new paper from the Foundation for Research on Equal Opportunity (FREOPP), an economic opportunity think tank.

While more than three-quarters of all bachelor's degrees have a positive return on investment (ROI), according to the paper, master's and associate degrees are much riskier bets—with many costing students in the long run.

The paper, by Senior Fellow Preston Cooper, examined data from over 50,000 degree and certificate programs at thousands of American colleges and universities. Cooper's analysis looked at how much students were earning immediately after graduation, as well as how much they were making 10 years later. The paper also took into account a student's chance of dropping out when calculating a degree program's ROI.

In all, Cooper found that 31 percent of students are enrolled in a program with a negative ROI—meaning that "the earnings benefits of the degree are unlikely to fully compensate students for the cost and risk of pursuing post-secondary education."

However, different kinds of degrees were more likely to have a negative ROI than others. For example, 77 percent of bachelor's degrees and doctoral and professional degrees have a positive ROI. In contrast, just 57 percent of master's and associate degree programs have a positive ROI. 

For bachelor's degrees, fine arts, education, and biology programs had the lowest median ROI, while engineering, computer science, and nursing degrees gave students the highest long-term rewards.

However, where college students were enrolled also mattered when it came to ROI. For example, an English degree from the University of Virginia has a $581,925 positive return on investment—climbing to over $600,000 when only including students who graduated on time. In contrast, students at Virginia Commonwealth University—another public university—who majored in English have a negative $30,000 ROI, with just a $3,624 benefit for those who end up graduating on time.

"When choosing a college and program of study, students should evaluate several key variables that contribute to ROI. The most important is earnings after graduation," Cooper writes. "Besides starting salary, another critical factor is the institution's completion rate. While students' individual ability and motivation affects their likelihood of completion, research shows that college quality also has an impact on completion rates."

Cooper also pointed out just how much federal dollars go toward funding low-value degree programs. He found that 29 percent of the federal funding that went to the programs he studied went to programs with a negative ROI.

"That figure includes $37 billion in Pell Grants, $47 billion in loans to undergraduates, and $39 billion in loans to graduate students," Cooper writes. "Because ROI is negative for these programs, it's unlikely that most of those loan dollars will be repaid." 

This latest paper paints a detailed picture of the kinds of concerns prospective students and their families should take into account when deciding whether to enroll in college. While bachelor's degrees are still a good bet overall, students need to consider what they'll really get out of both the major they want to study and the school they've been accepted into.

The post Nearly Half of All Masters Degrees Aren't Worth Getting appeared first on Reason.com.

When arguing about whether the Treasury needed to take urgent action to deal with soaring federal debt in the 1980s, the late former chairman of the Council of Economic Advisers Herb Stein coined Stein's Law. It was simple and obvious: "If something cannot go on forever, it will stop."

I hate to pick nits with such an esteemed economist, but I'll offer Greenhut's Corollary: "Never underestimate politicians' ability to kick the can down the road." In 1986, federal debt was $2.1 trillion. In 2024, the debt is $34 trillion. Debt spending of this magnitude cannot go on forever, but it can fester for a long time and cause economic damage in the process. But, yes, it probably will stop eventually.

I thought of Stein's oft-cited quip when pondering California's pension crisis. A recent CalMatters report reminds us the state never has gotten its pension debt under control and that Gov. Gavin Newsom and the Legislature keep making the problem worse: "More generous-than-expected raises for California state workers are nudging up the cost of public employee pensions."

Back to my corollary: The report adds that Newsom "sidesteps the growing cost of CalPERS pensions" by using an accounting gimmick. The California Public Employees' Retirement System is only 72 percent funded, which means it only has 72 cents on the dollar to pay for the promised pensions—and they are one of the state's senior obligations. If the state budget ever collapses, government retirees are at the top of the list to get paid.

Per CalMatters, the Legislative Analyst's Office questions whether Newsom's shifting of funds from paying down CalPERS debt toward funding next year's pension costs runs afoul of Proposition 2, the 2014 ballot measure requiring the state to pay down certain debts. But let's not get too deeply into the weeds. The point: Even as the state's pension debt continues to spiral, Newsom and the Legislature won't tackle the problem head on.

Peruse the state legislative website and you'll find lawmakers fixated on every miniscule concern—concert ticket monopolies, landlord pet policies, healthcare wages, social-media age-verification policies—but nothing dealing with pension costs. The reason is obvious. The state's public employee unions rule the roost in the state Capitol and lawmakers better not touch their pensions.

Most normal people find pension reform to be mind-numbing. I'm not particularly normal, having written a

While most Californians will depend on Social Security and meager savings for their Golden Years, the state's public employees will retire at ages 50-57 with 60 to 90 percent of their final years' inflated pay. If you think that we're "all in it together," then peruse the total compensation numbers on Transparent California. You'll find the average local firefighter earns well over $200,000 a year and pages of police sergeants with packages in the 400s and above.

This comes at a cost: fewer public employees providing services, higher taxpayer-funded debt, and higher taxes. Note the large number of local tax measures on every ballot. Officials sell them as ways to improve public safety, upgrade parks, provide affordable housing, and fix the roads. But money is fungible. The growth in pension costs is fueling these tax grabs. These costs are "crowding out" spending on public services.

A dozen years ago, pension reformers predicted, a la Stein, that this could not go on forever. Some believed the state's then $30-billion-plus deficit would lead to fundamental budgetary changes. Local governments and voters—even in liberal jurisdictions such as San Jose—passed pension-reform measures that reduced pension formulas (or limited pensionable pay) in the face of budget cutbacks. But they ultimately lost every battle.

The courts rebuked San Jose's measure based on the California Rule, which refers to a series of court interpretations claiming that governments can't reduce pensions even going forward unless they provide something of equal or greater value in return. The California Supreme Court sidestepped that issue when it had a chance to change the rule. A union-friendly state agency derailed San Diego's effort at reform.

In the end, Gov. Jerry Brown passed a useful but exceedingly modest pension reform law and spearheaded large tax increases to fix the budget deficit he faced. The pension reform movement lost steam. As usual, the unions flexed their muscle in the Capitol, in the courts, and in the state's administrative agencies. Reformers tried and failed—and since then talk about serious reform has been verboten in Sacramento.

Can this go on forever? Probably not. The pension problem isn't going away, but neither is the power of the unions or the desire of the state's leaders to delay the reckoning for another day.

This column was first published in The Orange County Register.

The post California's Leaders Still Ignoring State Pension Debt appeared first on Reason.com.

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

The House of Representatives passed a $95 billion military spending package over the weekend, including $59 billion in weapons purchases in three separate bills. The aid package had been held up because some Republicans opposed more aid to Ukraine. Those concerns melted away after this month's Iranian-Israeli clashes.

The Senate already passed a similar $95 billion package two months ago, so the new House spending bills should pass the Senate and make it to President Joe Biden's desk quickly. The House package also includes a fourth "national security" bill with measures that the Senate has not voted on, including the forced sale of TikTok and new economic sanctions on Iran and Russia.

"Today, members of both parties in the House voted to advance our national security interests and send a clear message about the power of American leadership on the world stage," Biden declared in a statement after the legislation passed.

The White House advertised these bills as an aid package for Ukraine, Israel, and friendly nations in the Indo-Pacific region, such as Taiwan. But the bulk of the money will go directly into the American military-industrial complex. The package includes $29.5 billion to replenish stockpiles of American weapons given to Ukraine, Israel, and Indo-Pacific allies as well as another $29.5 billion for the development, production, and procurement of new weapons.

The wars in Eastern Europe and the Middle East have burned through stockpiles of American ammunition and missiles faster than they can be replaced, and American factories will have trouble keeping up even if more money is thrown at them.

Some non-American weapons manufacturers are also poised to rake in taxpayers' money from the aid package. The U.S. government will spend $5.2 billion on Israel's Iron Dome, Iron Beam, and David's Sling defense systems, produced by an Israeli company, Rafael Advanced Defense Systems. And the Indo-Pacific bill loosens rules for spending Defense Production Act money on British and Australian companies. The United States, Britain, and Australia are working together on the AUKUS submarine project.

Supporters of the aid package have claimed that Ukraine and Israel are fighting so that American troops don't have to. But the bills themselves make it clear how much heavy lifting the U.S. military is already doing in these wars. They include $11.3 billion to support an American military buildup in Europe, and $2.4 billion for American military operations in the Middle East.

U.S. forces have bombed the Houthi movement that is threatening Israeli shipping in the Red Sea, shot down most of the Iranian missiles and drones en route to Israel, and flown surveillance drones over Gaza in order to provide intelligence to the Israeli army.

The United States is at risk of getting dragged further into these conflicts, as the Biden administration has been having trouble controlling its proxies. Israel bombed an Iranian consulate without consulting with Washington, leading to last week's Iranian-Israeli dustup. Meanwhile, Ukraine has refused U.S. calls to stop attacking inside Russian territory.

While pumping money into the wars, the package also provides aid to people that the wars have made homeless. The bills allot around $9 billion to refugee aid and other humanitarian relief, on the condition that none of the money is spent on the United Nations Relief and Works Agency, the Palestinian refugee organization that Israel has accused of supporting Hamas. (The agency, for its part, has accused Israel of torturing its employees into confessing alleged Hamas ties.)

And as usual, the spending package includes a hodgepodge of unrelated or only vaguely related items: $98 million for the Department of Energy to produce nuclear isotopes, $250 million for the World Bank's emergency response fund, $75 million for Middle Eastern border agencies fighting drug smuggling, and $390 million for the Federal Emergency Management Agency to help nonprofit organizations defend their facilities from terrorism.

The legislative package was designed to prevent either Democratic or Republican dissidents from derailing it. Speaker of the House Mike Johnson (R–La.) broke the aid package apart into three separate bills, then put them back together again after they passed. That way, votes against aid to Ukraine did not count against aid to Israel, and vice versa.

It was a compromise between the Biden administration, which wanted to send Ukraine and Israel aid together, and Republicans, who wanted to vote on aid to Israel separately. Ukrainian President Volodymyr Zelensky and CIA Director Bill Burns have personally lobbied Johnson over the past two months, according to CNN, as Ukrainian troops have lost ground to Russia.

Johnson appealed heavily to conservative Christian feelings about Israel when trying to sell Republicans on the package. "Of course, for those of us who are believers, it's a Biblical admonition to stand with Israel," he told Newsmax on Friday.

The Ukraine-focused bill passed 311–112, with unanimous Democratic support and some Republican support. Many Democrats cheered and waved Ukrainian flags during the vote. Johnson snapped at them: "We should only wave one flag on the House floor, and I think we know which flag that is."

The Israel-focused bill passed 366–58, with the vote mixed across party lines. Although Democrats have led criticism of Israel's treatment of Palestinians and Republicans have traditionally taken a hawkish pro-Israel line, a few Republicans took a stand against spending taxpayers' money on the Israeli military.

"If Congress wants to send money to Israel, then we should defund the United Nations first," Rep. Matt Gaetz (R–Fla.) said on social media. "I have concerns about all deficit spending when sending money to any country, even if that country is a great ally or under attack."

The libertarian-leaning Rep. Thomas Massie (R–Ky.), who is now supporting an effort to oust Johnson, told Fox News that the military spending package was Johnson's "third betrayal" of his base, after helping pass an omnibus spending bill and reauthorize mass surveillance.

"He's the uniparty speaker now," Massie said.

The post Democrats and Republicans Unite To Give Weapons Manufacturers $59 Billion appeared first on Reason.com.

Rep. Jim Banks (R–Ind.) announced yesterday that he will introduce a bill to defund National Public Radio (NPR). Marsha Blackburn (R–Tenn.) has said she hopes to do the same in the Senate. We live in strange times, anything can happen in politics, and there may be no faster route to looking like a fool than to issue a prediction. With that throat-clearing out of the way: No, of course Congress isn't about to defund NPR.

This latest wave of Defund NPR! sentiment follows an article by Uri Berliner in The Free Press, in which the NPR editor and reporter—make that former NPR editor and reporter, since he has since resigned—argues that the network "lost America's trust" by shutting out opinions disfavored by the center-left hivemind. I think Berliner's piece wavers between claiming too much (it would have been more accurate, though probably less SEO-friendly, to replace "lost America's trust" with "saw its niche grow somewhat smaller") and claiming too little (it ends with a plea not to defund public radio, since Berliner believes there's "a need for a public institution where stories are told and viewpoints exchanged in good faith"). But at this point the specifics of his essay are almost beside the point, since the debate it has unleashed goes far beyond what the article says. The proof is that people have been using it as a springboard to call for cutting off NPR's federal dollars even though Berliner goes out of his way to stress that that's not the result he wants.

And now the anger has spread, with NPR CEO Katherine Maher under fire for her history of left-wing tweeting. The troops are ready for battle. So why don't I expect Congress to stop the funds?

For three reasons. The first is the obvious one: The Democrats control the White House, and there aren't enough Republicans in Congress to override a veto, so at the very least this is unlikely to become law before 2025. A second reason is that it's difficult to devise a bill that cuts off NPR while leaving the rest of the public-broadcasting ecosystem alone. As the network's defenders never tire of pointing out, NPR doesn't get much direct support from the federally funded Corporation for Public Broadcasting (CPB). It gets far more money from its member stations, which NPR does not own, and which receive their own cash from the CPB (and, frequently, from other government sources, since many of them are run by state universities).

This shell game isn't an insurmountable problem, but it's the sort of thing that has tripped up legislators before. Last year, for example, Rep. Ronny Jackson (R–Texas) introduced a bill to prevent federal funds from flowing "directly or indirectly" to NPR, its TV cousin PBS, or "any successor organization." Well, how do you define "successor organization"? There are already several public radio networks out there, some of them pretty old. If the Morning Edition team drops its NPR affiliation and starts distributing the show through Public Radio Exchange, are they in the clear?

The easiest way around such tangles, of course, would be to write legislation that doesn't try to single out NPR and instead just cuts off the Corporation for Public Broadcasting entirely. That would keep the money from moving. But it also leads us to the third and biggest reason I don't think a defunding bill will get anywhere anytime soon: No matter how much it huffs and puffs, most of the GOP has no serious interest in defunding public broadcasting.

Yes, there are a few Republican officeholders who would rather see an openly liberal NPR that supports itself than a "balanced" system that relies on tax dollars. I'd bet a libertarian-leaning legislator like Rep. Thomas Massie (R–Ky.) would vote for that. But Massie is an outlier. If history has taught us nothing else, it's that the most powerful Republican officials aren't usually bothered by the idea that Americans are being forced to subsidize views they dislike. They just want the subsidies to go in a different direction.

Why do I say that? Because we've seen this process play out again and again, and it always ends pretty much the same way. In 1971, President Richard Nixon proposed a "return to localism" that would have effectively overthrown the crew running PBS, and a year later he vetoed a CPB appropriations bill; then PBS canned most of the programs that the president didn't like, the CPB brought a bunch of White House–friendly figures onto its board, and the president signed a budget increase. In 1994, House Speaker Newt Gingrich (R–Ga.) suggested that he might "zero out" the CPB's money; the chief long-term result was that several conservatives got public TV gigs. In 2005, a House subcommittee actually voted to cut the CPB budget by 25 percent and wipe out the rest over the following few years; that time things ended with a former chair of the Republican National Committee becoming chair of the CPB—which landed a higher appropriation, not a lower one. I could list more examples, but I've already written that article more than once and I don't want to write it again. Suffice to say that the CPB invariably survives these battles, that its federal support almost always increases, and that its rare budget cuts don't last long.

And—here's where we come back to Uri Berliner's article—one reason this keeps happening is because the attack so often comes down to the idea that NPR and PBS are unbalanced. That's true, of course: The big public-broadcasting operations have always tilted toward the dominant views of the social milieu that produces them, and Berliner is surely correct that this has intensified at NPR in the years since Donald Trump was elected president. But when bias is your chief complaint, you give the folks who run the networks an easy out. They would almost always prefer to gesture toward balance with some hires or fires than to see their money axed.

Is there a way around that? I think there is, but it would take a different approach to the fight. Instead of a narrowly partisan battle, bring together an alliance of people (mostly on the right) who are sick of subsidizing opinions they dislike and people (mostly on the left) who are sick of seeing those subsidies used as an excuse to insert the government into broadcasters' editorial choices. Adopt a plan to transform the CPB from a semi-governmental body into a fully independent nonprofit, bringing the federal role in noncommercial broadcasting to an end.

There was serious talk of doing this right after the Gingrich attacks shook up the broadcasters. In 1995, the New York Daily News even reported that a CPB spokesman had "confirmed that all the groups agreed on the need to establish an independent trust fund that eventually could replace federal funding." Then the CPB's subsidies started creeping upwards again and the idea moved back to the edges of the political spectrum. So a push like this has failed once before. But the partisan approach has failed to detach these operations from the government far more times than that. It can be hard to assemble a transpartisan alliance, but sometimes it's the only thing that can get the job done.

And yes, it's possible to bring people around on these issues. Back when I spent a lot of time covering the radical Pacifica radio network, I often encountered leftists who saw the CPB as a back door for government influence and felt they'd be better off without it. On the other side of the spectrum, after I wrote a blog post on this subject in 2011 I got a couple of emails from Ken Tomlinson, who had chaired the CPB for two years under President George W. Bush. Tomlinson had gone after public broadcasting for being unbalanced, a crusade that led to a lot of reshuffling of the system but no reduction in its federal support. He didn't care for how I had characterized his efforts, but he was friendly, and he seemed to have come around to the idea that the underlying problem was the purse strings, not the bias. "Bottom line, get tax money out of CPB," he told me. "Not just NPR. CPB."

Maybe someday we'll get there. But if Banks and Blackburn manage to pull it off this year, I'll eat an NPR tote bag.

The post Another Day, Another Doomed Plan To Defund NPR appeared first on Reason.com.

President Joe Biden did not dwell long on the question of how to solve the serious entitlement crisis facing America during Thursday's State of the Union address before pivoting to discuss obviously more serious problems like the size of snack food packages.

Still, one point he made is worthy of deeper analysis.

In trying to draw a contrast between his own plans and what he claimed Republicans are aiming to do, Biden claimed that "working people who built this country pay more into Social Security than millionaires and billionaires do. It's not fair."

Moments later, he promised to "protect and strengthen Social Security and make the wealthy pay their fair share."

Though he did not spell it all out in Thursday night's speech, those two comments seem to be pointed toward the same aspect of how Social Security is funded. Under current law, the payroll tax that funds Social Security is capped so that, for this year, only the first $168,600 in earnings are subject to it.

Raising that cap—or eliminating it—is frequently discussed as one possible solution to Social Security's approaching insolvency. That seems to be the idea that Biden was gesturing towards in his speech.

On its face, this isn't necessarily the worst idea. The cap is completely arbitrary, so there's no principled reason why all earnings shouldn't be treated equally. And there's no doubt that raising the cap would generate more revenue to help keep Social Security afloat. The Congressional Budget Office estimates that applying payroll taxes to higher income levels could raise $1 trillion in revenues over a 10-year period (though the amount of revenue would depend on how the cap was altered, and whether benefits increased as well).

But there are also serious trade-offs. For one, this would be a tax increase on working Americans to fund a transfer of wealth to retirees. That's not great. A significant portion of that tax increase would fall on people making less than $400,000 annually—remember, the cap is currently set around $168,000—a cohort that Biden promised again in Thursday's speech would not face tax increases.

Perhaps most importantly, raising or eliminating the payroll tax gap doesn't come close to solving the long-term Social Security shortfall. It might generate $1 trillion over 10 years, which is a lot of money, but it doesn't come close to the $2.8 trillion deficit the program is expected to run over the next decade.

"Eliminating the tax cap would either raise benefits as well (reducing the proposals' savings), or—if the accompanying benefits are canceled—turn Social Security into a true welfare program by delinking contributions and benefits," writes Brian Riedl, a senior fellow at the Manhattan Institute and former Senate budget staffer, in a recent piece debunking some common myths about Social Security reform. "Moreover, eliminating the cap would not bring permanent solvency or avert the need for benefit changes….The system would return to deficits by 2029. Lawmakers would still need to reform benefit levels and the eligibility age."

Ah, but Biden also used Thursday's speech to kneecap any discussion of making those other changes.

"If anyone here tries to cut Social Security or Medicare or raise the retirement age," he vowed, "I will stop them."

It's nice to see the president at least acknowledge one of the difficult choices that lie ahead for policymakers grappling with the coming insolvency of America's entitlement programs. On that count, he's at least marginally ahead of his prospective electoral opponent, former President Donald Trump, who maintains that Social Security needs no reforms.

Still, Biden's a long, long way from anything that sounds like a workable proposal—and the lack of details in Thursday's speech suggests the White House would prefer to stay away from this topic during an election year.

The post Biden Says He'll Make the Wealthy Pay More To Fix Social Security. Here's Why That Won't Work. appeared first on Reason.com.

The Republican chairman of the House Budget Committee made news recently by announcing that if his party is serious about changing the fiscal path we are on, they'll have to consider raising taxes. Politics is about compromise, so the chairman is right. Every side must give a little. However, "putting taxes on the table" is not as simple a fix to our debt problems as some think.

Looking at recent Congressional Budget Office reports, one can have no doubts about the fiscal mess. Annual deficits of $2 trillion will soon be the norm. Interest payments on the debt will exceed both defense and Medicare spending this year and become the government's largest budget item. With no extra revenue available, the Treasury will have to borrow money to cover these expenses. Meanwhile, we're speeding toward a Social-Security-and-Medicare fiscal cliff that we've known of for decades, and we'll reach it in only a few years.

Talking about the need for a fiscal commission to address Washington's mountain of debt, the committee chair, Rep. Jodey Arrington (R–Texas), told Semafor, "The last time there was a fix to Social Security that addressed the solvency for 75 years, it was Ronald Reagan and Tip O'Neill, and it was bipartisan. It had revenue measures and it had program reforms. That's just the reality." He made these comments after some people warned that a fiscal commission is a gateway only to raising taxes.

I understand the worry. That's what the most recent deficit reduction commission tried to do. And while I don't believe this is what Arrington is planning, I offer a warning to the chair and to the future commission: If the goal is truly to improve our fiscal situation, as defined by reducing the ratio of debt to gross domestic product (GDP) or reducing projected gaps between revenue and spending, increasing tax revenue should be limited to the minimum politically possible.

For one thing, our deficits are the result of excessive promises made to special interests—mostly seniors in the form of entitlement spending—without any real plans to pay. The problem is constantly growing spending, not the lack of revenue and taxes. The common talking point from the left that rich people don't pay their fair share of taxes is a distraction. Not only is our tax system remarkably progressive, but there are not enough rich people to fleece to significantly reduce our future deficits.

Furthermore, the work of the late Harvard economist Alberto Alesina has established that the best way to successfully reduce the debt-to-GDP ratio is to implement a fiscal-adjustment package based mostly on spending reforms. A reform mostly geared toward tax increases will backfire as the move will slow the economy in the short and longer terms, causing it to ultimately fail to raise enough revenue to reduce the debt relative to GDP. Legislators, unfortunately, have made this mistake many times without learning any lesson—at least until the deal that was cut in 1997.

As a 2011 New York Times column by Catherine Rampell reminded us, until then, all deficit-reduction deals were very tax-heavy. What the article didn't mention is that they failed to reduce the deficit. What distinguishes the 1997 deal is that it cut both spending and taxes. The result was the first budget surplus in decades helped by a fast-growing economy. Now, this lesson doesn't mean that a fiscal commission must cut taxes, but it does caution against attempting to reduce the debt largely by raising taxes.

Another risk looms in the idea of a tax-and-spending compromise; that the tax increases will be implemented while the spending cuts won't. We have many examples of this pattern, but I'll recount just one: In 1982, President Ronald Reagan made a deal with Congress (the Tax Equity and Fiscal Responsibility Act) which would have raised $1 in revenue for every $3 in spending cuts.

There were tax hikes, indeed. But instead of spending cuts, Reagan got lots of spending increases. Remembering the story years later in Commentary magazine, Steven Hayward wrote, "By one calculation, the 1982 budget deal actually resulted in $1.14 of new spending for each extra tax dollar."

The moral of this story is that putting revenue on the table to reduce the debt has a bad track record. As such, the chairman, who I believe is serious about putting the U.S. on a better fiscal path, will have to be careful about whatever deal is made.

COPYRIGHT 2024 CREATORS.COM.

The post A Bipartisan Tax Hike Won't Fix This Deficit appeared first on Reason.com.

Earlier this week, lawmakers on the House and Senate Appropriations Committees put forward six spending bills that would fund the government through the end of the year. In a press release, Republicans on the House committee bragged that the bills would "save taxpayers more than $200 billion over the next ten years"—a period of time over which the Congressional Budget Office predicts the national debt will expand by $20 trillion and eclipse the nation's gross domestic product.

Some of those savings come from cuts to federal law enforcement agencies, including the FBI and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Unfortunately, even those cuts are much more modest than they appear.

In their press release, House Republicans boasted that the appropriations package "utilizes the power of the purse to address the weaponization of the growing bureaucracy within the FBI and ATF." Specifically, they do this by "reversing [ATF's] anti-Second Amendment overreach…by significantly reducing its overall funding by $122 million, a 7% decrease" from 2023, as well as holding the FBI "accountable for targeting everyday Americans by reducing its overall operating budget by $654 million and cutting its construction account by 95%."

But these already-meager cuts don't involve very much actual cutting.

The FBI's salaries and expenses totaled over $10 billion in 2023, and it requested over $11 billion for 2024; the appropriations bill would grant $10.6 billion—a bit less than the FBI wanted but only about one-half percent less than last year's budget and certainly nothing approaching the 6 percent cut Republicans bragged about.

Republicans get around this with some tricky math: In a 2022 omnibus spending bill, the Bureau received $652 million toward the construction of a campus in Huntsville, Alabama. Republicans include the $652 million when touting a 6 percent cut, even though the money apportioned for salaries and expenses barely budged.

In fact, when Republicans bragged about "cut[ting] the FBI's construction account by $621.9 million"—for a whopping 95 percent decrease—that precipitous drop uses the one-time Huntsville cash as its starting point. Besides, the FBI only asked for a $61.9 million construction budget, which would have constituted a 90 percent decrease on its own.

Meanwhile, the ATF received $1.672 billion for salaries and expenses in 2023, while the appropriations bill would apportion $1.625 billion—a decrease of just 2.8 percent, not the 7 percent drop House Republicans claimed. That supposed 7 percent cut of $122 million comes from adding the $47 million cut in salaries and another $75 million cut from construction costs. The ATF did not request any construction money in its 2024 budget, so boasting that this a cut is laughable. Just like with the FBI, judging salaries and expenses in an apples-to-apples comparison yields a much more modest cut.

Any sort of fiscal discipline should be welcomed, of course. But it's not like Republicans are dedicated to pruning federal law enforcement agencies across the board.

"The Drug Enforcement Administration was an outlier in the bill, as it would receive a modest funding bump," writes Eric Katz at Government Executive. The bill would fund the DEA with $2.57 billion; when accounting for revenue from diversion control programs, Republicans say the department would receive "$42.4 million more" than it did in 2023.

The bill also directs not only the DEA but also the FBI to prioritize the policing of fentanyl. The FBI is directed "to allocate the maximum amount of resources" to target the "trafficking" of fentanyl and other opioids. There's no sign of any recognition that prohibition is exactly why fentanyl has proliferated in the first place and that harm reduction measures would be much safer and more effective than a law enforcement solution.

In fact, Republicans openly state in their press release that the cuts are not intended to save taxpayers money, noting that the bill "right-siz[es] agencies and programs and redirects that funding to combat fentanyl and counter the People's Republic of China."

Clearly, when the federal government consistently spends much more than it takes in, there is room to cut and an imperative to do so. It's unfortunate, then, that Republican lawmakers are bragging about plans to cut $200 billion over 10 years—1 percent of the anticipated federal debt accrued in that time—and it's even more disturbing to know that they're fudging the numbers to even get that much.

The post Republicans Use Fuzzy Math To Claim Large FBI, ATF Cuts in Budget Bill appeared first on Reason.com.

Voters in California went to the polls this week for a primary election that's the first step towards picking a permanent replacement for the late Sen. Dianne Feinstein, who died nearly six months ago.

In Washington, meanwhile, Feinstein is still wielding influence from beyond the grave. Her name is attached to 256 different earmarks included in the budget bill working its way through Congress this week. Those pork projects will cost taxpayers about $1.1 billion if the bill passes in its current form, the Washington Examiner reported Tuesday.

And that only scratches the surface. The partial budget deal—which contains six of the 12 appropriations bills that make up the discretionary portion of the annual federal budget—is overflowing with earmarks to fund lawmakers' pet projects. All told, there are more than 6,000 earmarks in the bill, costing taxpayers more than $12.7 billion, according to Sen. Mike Lee (R–Utah), who has urged Republicans to vote against the package.

Many of the earmarks in the package seem like things that would be better funded by local or state taxpayers, who at least might stand to benefit from projects like new sewer systems, new runways and other upgrades for tiny rural airports, and a plethora of highway projects. Some are truly head-scratching, like Sen. Tammy Baldwin's (D–Wis.) $1.4 million earmark for a solar energy project in Wisconsin, one of the places in America least well suited for a solar farm.

Plenty of others make no sense for the public to be funding at all. Like a $3.5 million earmark secured by Sen. Debbie Stabenow (D–Mich.) for The Parade Company, which runs Detroit's annual Thanksgiving Day parade. Or the $2.5 million earmark that will help build a new kayaking facility in Franklin, New Hampshire, curtsey of Sen. Jeanne Shaheen (D–N.H.), as well as $2.7 million line item to help build a bike park in White Sulfur Springs, West Virginia, a town with a population of less than 2,300 people.

For that amount of money, "you could buy EVERY resident a $1,200+ bike" Sen. Rick Scott (R–Fla.), who has become a vocal critic of the earmarks in the bill, posted on X (formerly Twitter). "There's no way they need this much of YOUR money for this."

The same could be said for several Republican-based earmarks too. Sen. Lindsey Graham (R–S.C.) has inserted at least eight earmarks into the bill, forcing federal taxpayers to put up more than $33 million for things most will never use, like a new trail at Coastal Carolina University and an ROTC facility at the University of South Carolina. Among the dozens of earmarks inserted by Sen. Lisa Murkowski (R–Alaska), perhaps the strangest is the $4 million grant for the "Alaska King Crab Enhancement Project."

Wait, you might be thinking, didn't Congress ban the use of earmarks when tea party-era Republicans controlled the government? Yep, they did. But like fiscal responsibility and concern about America's ballooning entitlement costs, those efforts to limit pork barrel spending are now distant memories. Democrats voted to reinstate earmarks in 2021, and Republicans soon followed suit.

To Congress' credit, earmarks are now handled more transparently than they used to be—which is why you can view the full list of earmarks included in the budget bills here.

Still, some things never change. Earmarks remain expensive, wasteful exercises in cronyism—and with the country $34 trillion in debt, Congress should not be putting taxpayers on the hook for frivolous handouts to politically connected friends.

The post The Budget Deal Is Overflowing With $12 Billion of Earmarks appeared first on Reason.com.

President Joe Biden announced Friday that the U.S. military will work with Jordan to begin airdropping aid to starving Palestinians in the Gaza Strip. Ever since it was proposed, this idea has attracted criticisms from experienced humanitarian workers, who say the airdrops are an expensive, wasteful gimmick to avoid addressing the political problems causing the starvation.

The charity Oxfam America, for example, issued a statement Thursday arguing that airdrops "would mostly serve to relieve the guilty consciences of senior U.S. officials whose policies are contributing to the ongoing atrocities and risk of famine in Gaza." Instead, it said, Biden should "cut the flow" of American weapons to Israel.

Jeremy Konyndyk, the president of Refugees International and a former disaster relief official in the Obama and Biden administrations, outlined the problems with airdrops in a PBS interview a day before Biden's announcement.

"We only used them when we had absolutely no other option, because they're the worst way to get aid in. They cost a lot of money, they're difficult to mount logistically, and they get very little volume," Konyndyk said. "We're only resorting to airdrops because of the blockages by the Israeli government."

Airdropping food costs about $16,000 per ton, as opposed to $180 per ton on average to move food aid by truck, according to a U.S. Air Force study from 2016.

Under pressure from the Biden administration, the Israeli government has opened a land crossing into the Gaza Strip—but Israeli nationalist protesters have physically blocked the crossing several times. Meanwhile, goods entering Gaza from Egypt must still go through the arduous Israeli border inspection process.

Sen. Chris van Hollen (D–Md.), who visited the Egyptian side of the Rafah crossing in January, told The New Yorker that some shipments were being held at the border for 20 days, and that he saw entire shipments turned back because they contained just one banned item, such as a tent with a metal pole.

The U.S. government itself has admitted that the starvation is a political problem, although it blames Hamas rather than Israel.

"It is not a question of aid going in," U.S. State Department spokesman Matt Miller told reporters on Thursday. "There is a distribution problem inside Gaza right now because there are police officers—some of whom are members of Hamas—who have been providing the security for that distribution inside Gaza. And what Israel says is that they have a legitimate right to go after Hamas. We would obviously prefer to see members of a security force inside Gaza who are not Hamas members."

Inside the Gaza Strip, distribution has been chaotic. Riots have broken out around aid convoys, and Hamas-affiliated police shot a teenager in a December incident. Israeli forces have also bombed the police officers guarding aid convoys. U.S. official David Satterfield said last month that the attacks on police in Gaza have made it "virtually impossible" to protect aid from "criminal gangs."

The deadliest aid-related incident of the war, known as "flour massacre," took place Wednesday, when Israeli forces opened fire on a crowd of Palestinians seeking aid. According to the Palestinian health ministry, 112 people were killed. The Israeli military claims that its troops opened fire when Palestinians approached them in an unsafe way, that their gunfire caused only 10 casualties, and that most of the deaths were produced by a stampede.

That day, the war's Palestinian death toll reportedly crossed 30,000 deaths. Half a million Palestinians in the Gaza Strip, a quarter of the population, are facing imminent starvation, according to U.N. officials.

In addition to announcing the airdrops, Biden said that he was seeking an "immediate" six-week ceasefire and a "surge" of aid on the ground. He has so far resisted calling for a permanent end to the war. When the war resumes, the aid that cost Americans so much to fly in may soon be bombed by American weapons.

The post Airdropping Aid to Gaza Is an Expensive Gimmick appeared first on Reason.com.

America is celebrated for its economic dynamism and ample and generously paid employment opportunities. It's a nation that attracts immigrants from around the world. Yet Americans are bummed, and have been for a while. They believe that life was better 40 years ago. And maybe it was on some fronts, but not economically.

Surveys repeatedly demonstrate that Americans view today's economy in a negative light. Seventy-six percent believe the country is going in the wrong direction. Some polls even show that young people believe they'll be denied the American dream. Now, that might turn out to be true if Congress continues spending like drunken sailors. But it certainly isn't true based on a look back in time. By nearly all economic measures, we're doing much better today than we were in the 1970s and 1980s—a time most nostalgic people revere as a great era.

In a recent article, economist Jeremy Horpedahl looked at generational wealth (all assets minus all debt) and how today's young people are faring compared to previous generations. His findings are surprising. After all the talk about how Millennials are the poorest or unluckiest generation yet, Horpedahl's data show them with dramatically more wealth than Gen Xers had at the same age. And this wealth continues to grow.

What about income? A new paper by the American Enterprise Institute's Kevin Corinth and Federal Reserve Board's Jeff Larrimore looks at income levels by generation in a variety of ways. They find that each of the past four generations had higher inflation-adjusted incomes than did the previous generation. Further, they find that this trend doesn't seem to be driven by women entering the workforce.

That last part matters because if you listen to progressives and New Right conservatives, you might get a different story: that today's higher incomes are only due to the fact that both parents must now work in order for a family to afford a middle-class lifestyle. They claim that supporting a family of four on one income, like many people did back in the '70s and '80s, is now impossible. Believing this claim understandably bums people out.

But it's not true. One of its many problems, in addition to the data evidence provided by Corinth and Larrimore, is that it mistakenly implies that single-income households were the norm. In fact, as early as 1978, 50 percent of married couples were dual earners and just 25.6 percent relied only on a husband's income. I also assume that there are more dual-income earners now than there were in the '80s. While this may in fact be true for married couples (61 percent of married parents are now dual-earners), because marriage itself has declined, single-earner families have become relatively more common.

Maybe the overall morosity on the economy has to do with the perception that it's more expensive to raise a family these days than it used to be. Another report by Angela Rachidi looks at whether the decline in marriage, fertility, and the increase in out-of-wedlock childbirths are the result of economic hardship. She finds that contrary to the prevailing narrative, "household and family-level income show growth in recent decades after accounting for taxes and transfers." Not only that, but "the costs of raising a family—including housing, childcare, and higher education costs—have not grown so substantially over the past several decades that they indicate an affordability crisis."

So, what exactly is bumming people out? We may find an answer in the 1984 Ronald Reagan campaign ad commonly known as "Morning in America." It begins with serene images of an idyllic American landscape waking up to a new day. It features visuals of people going to work, flags waving in front of homes, and ordinary families in peaceful settings. The narrator speaks over these images, detailing improvements in the American condition over the past four years, including job creation, economic growth, and national pride.

I believe this feeling is what people are nostalgic about. It seems that they are nostalgic about a time when America was more united and it was clearer what being American meant. Never mind that this nostalgia is often based on an incomplete and idealized memory of an era that, like ours, was not perfect.

This is a serious challenge that we need to figure out how to address. One thing that won't help, though, is to erroneously claim that people were economically better off back then and call on government to fix an imaginary problem.

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The post The Economy Is Doing Way Better Than Many Believe appeared first on Reason.com.

On Wednesday, the Biden Administration announced $1.2 billion in additional student loan forgiveness for more than 150,000 borrowers. This particular round of forgiveness was previously announced last month, though the exact cost of the debt relief was not previously known.

"The Biden-Harris Administration has now approved nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through more than two dozen executive actions," a Wednesday press release stated. "From Day One of his Administration, President Biden vowed to fix the student loan system and make sure higher education is a pathway to the middle class—not a barrier to opportunity."

This latest slate of forgiveness is part of the Education Department's sweeping changes to how the federal government handles student loan repayment. As part of the Biden Administration's original attempt to forgive up to $20,000 in federal loans per borrower, they also made several major changes to other student loan programs. Most notably, they introduced the Saving on a Valuable Education (SAVE), a new income-driven repayment (IDR) program designed to be much more generous than previous IDR plans.

For example, under the REPAYE plan, which was the most popular IDR plan before SAVE replaced it, monthly payments were set at 10 percent of borrowers' discretionary income, defined as earnings above 150 percent of the federal poverty line, with forgiveness coming after 20 years of consistent payments. 

For borrowers in the new SAVE plan, their monthly payment is only 5 percent of their discretionary income, which is now defined as income above 225 percent of the federal poverty line. If the borrower's balance is less than $12,000, they'll now get forgiveness after just 10 years.

As part of the SAVE plan rollout, the Education Department announced last month that any borrowers who have been paying back their loans for 10 years or more, under any program, and have a remaining balance of less than $12,000 can enroll in the SAVE plan and get automatic forgiveness. While the original announcement did not estimate how much forgiveness would be dolled out, Wednesday's update released the staggering $1.2 billion price tag.

This recent glut of loan forgiveness shows how, even if Biden's attempt at blanket loan forgiveness was defeated at the Supreme Court last year, that doesn't keep his administration from spending billions on student loan forgiveness. Biden's one-time student loan forgiveness proposal was estimated to cost taxpayers more than $500 billion, but the estimated cost of the SAVE plan over the next decade is almost as much, coming in at $475 billion. 

While the Supreme Court halted Biden's most outrageous attempt to forgive massive amounts of federal student loans, the Education Department's wide authority to make sweeping changes to student loan policy means that widespread debt forgiveness—and the huge bill to taxpayers—is here to stay.

The post The Biden Administration Has Forgiven Another $1.2 Billion in Federal Student Loans  appeared first on Reason.com.

This week's featured article is "The Real Student Loan Crisis Isn't From Undergraduate Degrees" by Emma Camp.

This audio was generated using AI trained on the voice of Katherine Mangu-Ward.

Music credits: "Deep in Thought" by CTRL and "Sunsettling" by Man with Roses

The post <I>The Best of Reason</I>: The Real Student Loan Crisis Isn't From Undergraduate Degrees appeared first on Reason.com.