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Property rights shouldn’t be relegated to second-class status. Yet 30 years ago, in Williamson County Regional Planning Commission v. Hamilton Bank, the Supreme Court pronounced a new rule that a property owner must first sue in state court to ripen a federal takings claim. As illustrated by Knick v. Township of Scott, this radical departure from historic practice has effectively shut property owners out of federal courts without any firm doctrinal justification.

Rose Knick owns 90 acres in Scott Township in western Pennsylvania, a state known for its “backyard burials.” In 2012 a new ordinance required all “cemeteries” be open and accessible to the public during daylight hours. It also allowed government officials to enter private property to look for violations. In 2013, township officials entered Ms. Knick’s property without her permission and—after finding old stone markers on her property—cited her for violating the cemetery code. Fines are $300-600 per infraction per day.

Ms. Knick took the township to court; the state court dismissed her claims as improperly “postured” because the township had not yet pursued civil enforcement to collect the fines. When she then turned to federal court, the district court dismissed her constitutional claims, citing Williamson County’s state-litigation requirement. The U.S. Court of Appeals for the Third Circuit affirmed this Kafkaesque process, but the Supreme Court agreed to further examine the case. Cato has now filed a brief supporting Ms. Knick, joined by Prof. Ilya Somin, the NFIB Small Business Legal Center, Southeastern Legal Foundation, Beacon Center, and Reason Foundation. (This follows an earlier brief that we filed in support of Supreme Court review.)

The failed attempt to gain meaningful judicial review of a facially unconstitutional ordinance showcases the unique challenges faced by property owners asserting takings claims. If filing in state court, the best they can hope for is review from a judge who may be friendly to the government defendants responsible for the taking. And when pursuing that state-court remedy, property owners face the possibility of “removal” by defendants to federal court—where that court then dismisses the claims precisely because the property owner failed to fully pursue state litigation! Adding insult to injury, if a property owner complies with Williamson County’s requirement by seeking redress in state court, but receives an unfavorable decision, a combination of procedural barriers prevents federal courts from revisiting the claims.

The Fourteenth Amendment, which explicitly protects life, liberty, and property, cannot tolerate this state of affairs. And there is no reason to believe that this anomalous treatment of takings claims is what the Reconstruction Congress had in mind when, in the face of pervasive state abuse, it enacted the federal statute (42 U.S. § 1983) that guarantees access to federal forums to vindicate federal constitutional rights.

As an unsound and impractical rule, Williamson County’s state-litigation requirement has earned a burial of its own in the graveyard of discarded precedent.        

A consistent criticism of Cato’s immigration-welfare research is that we compare the welfare consumption of all immigrants to all natives. Our method means that we consider the U.S.-born children of immigrants as natives, even when they reside in a household with foreign-born parents. Our critics contend that this undercounts immigrant welfare consumption because those children would not exist here without the immigrants coming in the first place. Thus, they claim, the welfare consumption of the U.S.-born children of immigrants should be combined with that of their immigrant parents in order to produce an accurate total assessment of immigrant welfare costs.

However, other researchers who combine first and second generation welfare-use do not combine these generations correctly. They use the Current Population Survey (CPS) data to measure immigrant household welfare use rates and benefit levels that includes the U.S.-born children of immigrants who live in the household, but they exclude tens of millions of U.S.-born children of immigrants who do not live in their parent’s households. Thus, counting only the children in the immigrant households produces a limited and biased estimate of first and second-generation welfare costs because the vast bulk of means-tested welfare targets households with children. If the second-generation must be included at all, a better approach would be to include second-generation adults as well.

Robert VerBruggen at National Review convinced us to estimate the welfare consumption levels and use rates for immigrants and their children of all ages (the first and second generations) relative to Americans in the third-and-higher generations in 2016. We initially intended to look only at immigrants who arrived in 1968 or later, which is the year that the Immigration Act of 1965 went into effect, but we were unable to limit the CPS sample and their children so precisely. We were also unable to estimate the welfare use rates or benefit levels for Medicaid or Medicare because of myriad data limitations. Figure 1 shows the result of the welfare use rates multiplied by the benefit levels for each generational group for four welfare and entitlement programs. This produces an average per capita welfare cost for each group for each program that combines adults and children.

People in the first and second generations consume an average of 33 percent fewer welfare benefits, per capita, than native-born Americans who are in the third-and-higher generations for these four programs (Figure 1).

Figure 1: Per Capita Welfare Costs by Program for Immigrants and Their Children Relative to Third-and-Higher Generation Americans, 2016

Source: Authors’ analysis of the 2017 Annual Social and Economic Supplement to the Current Population Survey.

We did not adjust Figure 1 for program eligibility. Only counting those aged 65 and above for Social Security means that each person in the first and second generations costs 17 percent less, on average, than each person in the third-and-higher generations.

Attributing the cost of welfare consumed by the entire second-generation to immigrants returns results that are similar to our previous findings. Immigrants, whether one includes their U.S.-born children or not, consume fewer welfare and entitlement benefits than native-born Americans in the third-and-higher generations.

Today’s exceedingly narrow decision in Masterpiece Cakeshop kicks all the big questions down the road. While it’s gratifying that, by a 7-2 vote, the Supreme Court reversed Colorado’s persecution of Jack Phillips – the baker who was happy to serve gay people but would not make a cake for a same-sex wedding – it did so only on the basis that the state commission charged with enforcing antidiscrimination law itself displayed anti-religious animus. That’s an unusual circumstance that’s not necessarily in play in the other wedding-vendor cases that periodically arise. Indeed, the petition of the Washington florist, Arlene’s Flowers v. Washington, is currently pending before the Court; with today’s narrow ruling, the justices can’t simply send that case back to the state supreme court for reevaluation – because, again, today’s rule of decision is case-specific rather than some clarifying First Amendment principle.

Although most of the briefing and commentary surrounding Masterpiece (mine included) focused on the free-speech aspect – Phillips’s main argument was that he was being forced to convey a message he didn’t agree with – the way this ruling ultimately came down wasn’t unexpected given the way that argument went. Indeed, Justice Anthony Kennedy, whom everybody assumed (correctly) was the key to this case, showed flashes of anger at the attitudes shown by certain members of the Colorado Civil Rights Commission. And so, Kennedy concludes in his short opinion (18 pages, most of which is basic recitation of factual and procedural background) that “the Commission’s treatment of Phillips’ case violated the State’s duty under the First Amendment not to base laws or regulations on hostility to a religion or religious viewpoint.”

That holding is joined not just by the so-called conservative justices (John Roberts, Clarence Thomas, Samuel Alito, and Neil Gorsuch), but two of the so-called liberals (Stephen Breyer and Elena Kagan). The other two justices (Ruth Bader Ginsburg and Sonia Sotomayor) disagreed, finding the commissioners’ anti-religious statements irrelevant to the ultimate application of the law.

But can an artistic professional be compelled to produce something for an event he disagrees with? How do we decide what kinds of professions get that kind of First Amendment protection? Does it matter that, unlike in the Jim Crow era, gay couples can get cakes, flowers, and other wedding products and services without having to travel too far? How do religious objections work in cases where the government hasn’t displayed antireligious animus? All of these questions are left for some future case – when potentially Justice Kennedy will no longer be the swing vote.

And on those big issues, when the Court is forced to “go for it” rather than punting, the real action is foreshadowed by the concurring opinions. Justice Gorsuch, joined by Justice Alito, expands on how the Commission was biased not just in commissioners’ statements, but in applying different standards to different cases, depending on whether they agreed with the viewpoint expressed. It’s a characteristically well-written exegesis that goes beyond Kennedy’s bare bones. 

Justice Kagan, joined by Justice Breyer, takes issue with Gorsuch’s characterization of how the Commission operates. While a government body can’t act with anti-religious animus, had the commissioners here not stated their bias “on the record,” it’s clear that Kagan and Breyer would have no problem in finding that someone in the business of making wedding cakes can indeed be forced to make them for same-sex couples (or anyone else).

Meanwhile, Justice Thomas, joined by Justice Gorsuch, goes into the free-speech aspect of the case, showing why Phillips was engaged in expressive behavior whose First Amendment protection can’t be blithely undermined. “Forcing Phillips to make custom weddings cakes for same-sex marriages requires him to, at the very least, acknowledge that same-sex weddings are ‘weddings,’” he explains. “The First Amendment prohibits Colorado from requiring Phillips to bear witness to these facts or to affirm a belief with which he disagrees,” Thomas concludes, citing the Hurley case where the Supreme Court ruled that a parade can’t be forced to allow any comers to march (I’ve cleaned up the quotes).

Oh how I wish that the Thomas concurrence had been the majority opinion. I guess we’ll have to wait for the next case for that.

It’s not a good thing when a random-assignment study—the research “gold standard” because it controls even for unobservable variables like motivation—finds that using a voucher tends to result in lower standardized test scores. All things equal, we’d like scores to go up. But in the second of the latest evaluations of the DC Opportunity Scholarship Program, we saw almost exactly the same results as last year: using a voucher resulted in lower math scores that were statistically significant, and reading scores that were lower, but that could have been due to chance.

Last year I wrote about several reasons the first evaluation in no way condemned school choice, and you can read that here. To quickly reiterate, given both DC’s close proximity to other school systems, and the abundant forms of choice within its borders—a huge charter sector and lots of choice among traditional public schools—the voucher program is but a choice minnow in a lake full of largemouth bass. The breakdown of where students in the control group—families who applied for a voucher and did not get one—ended up going to school starkly reveals this. Even without knowing how many went to chosen traditional public schools, we know a majority still attended schools of choice; 43 percent attended charters and 10 percent private schools.

It is also crucial to note that the voucher program has been repeatedly threatened and stifled politically so it has never had real stability, and it is funded at a small fraction of traditional public schooling in DC, getting well less than half of the per-pupil allocation of traditional public schools. As the report states:

The combination of elements—a program whose funding and support has shifted over time at the federal level, operating within a city that offers ample options for parents to choose schools—makes findings from this evaluation challenging to generalize to other settings, such as voucher programs operated statewide or in settings that currently have limited choice options.

There was one standout bit of good news for the program: As my colleague Corey DeAngelis tackles in depth in an upcoming piece in The Hillbe on the lookout for it in the next few days!—parents and students who used vouchers were much more likely than the control group to perceive that their schools were safe. And the negative test score effects come at a time of burgeoning attention to an apparent disconnect between test scores and other outcomes such as how much education students actually complete. And all of these outcomes ignore the most fundamental reason that choice is crucial: in a plural society, with diverse religions, cultures, ethnicities, and philosophies, true freedom and equality can only be achieved when all people can pursue on an equal basis education consistent with their identities and cherished values. A tiny, inequitably funded voucher program is but a halting shuffle in that direction.

Extreme speech, often called “hate speech,” is back in the news. College students and administrators want to ban it and punish those who utter it. Politicians say that the First Amendment does not protect such speech.  Advocates for minorities demand protection from it.

The prominent legal scholar Nadine Strossen has written a new book on this topic, Hate Speech: Why We Should Resist It with Free Speech, Not Censorship. Our next few blog posts will examine Strossen’s most important claims about hate speech. Be aware, however, that these posts are no substitute for reading the book itself. Strossen has written a book that should be widely read.

Strossen begins by roughly defining hate speech:

The term “hate speech” is not a legal term of art, with a specific definition; rather, it is deployed to stigmatize and to suppress widely varying expression. The most generally understood meaning of “hate speech” is expression that conveys hateful or discriminatory views against specific individuals or groups, particularly those who have historically faced discrimination.

Let’s posit, as we should, that hateful and discriminatory views are not acceptable in a liberal democracy. What should be done about them?

Perhaps the government should prohibit such speech either by preventing it from being uttered or punishing it severely if it is uttered. On the other hand, the government might allow such speech. The former is the way of the censor, the latter the liberal way of the First Amendment.

Strossen defends the liberal way. She shows that censorial measures are ineffective and do not promote equality. Instead, Strossen, an advocate of social justice, recommends forceful counter-speech and activism. Can counter speech work?

Counter-speech, which “encompasses any speech that counters a message with which one disagrees,” (158) is more powerful than one may think as it encourages reflection and a lasting change in beliefs in those who have made discriminatory remarks or posts.  Strossen shows that refuting discriminatory ideas through more speech, education and apologies can be more effective in curbing these harms of hate speech than censorial measures. For example, in 2009, Megan Phelps-Roper created a twitter to share the beliefs of the church that her grandfather founded, Westboro Baptist. Known for their hateful rhetoric, Megan had been a member since she was a child. On Twitter, she became engaged in several conversations with other users, leading her to question the teachings of the Church and eventually leave.

Today social media makes it even easier for an individual to make discriminatory speech whenever they please but also makes it even easier to instantaneously rebut the idea with counter-speech. Strossen notes:

In 2016, a report was issued about counterspeech on Twitter, coauthored by a group of scholars from the United States and Canada. The report, which included the first review of the “small body” of existing research about online counterspeech, concluded that hateful and other “extremist” speech was most effectively “undermined” by counterspeech rather than by removing it.

Other major platforms agree. Facebook encourages counter-speech, stating: “our key initiatives focus on empowering and amplifying local voices. This includes building awareness, educating communities, encouraging cohesion, and directly countering hateful narratives.”

The targets of such speech are more able than ever to talk back. Strossen notes, “…we have seen increasing social justice advocacy nationwide in recent years, with members of minority groups actively leading and engaging in such efforts” (164). This has happened because of upsurge in instances of counter-speech not the implementation of “hate speech” laws.

Consider also the recent Roseanne Barr incident. Her racist tweet cost her a television show and public humiliation. Counter-speech can shame as well as persuade, and both are effective responses that do not require risks of censorship.

Strossen makes it clear that to protect free speech, one must engage in counter-speech, giving us the opportunity to engage in thoughtful discussion and grow as a community. Her book recalls the famous words of Justice Louis Brandeis in Whitney v. California: 

The fitting remedy for evil counsels is good ones… . If there be a time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence.

After what had become a monthly ritual of delaying the Section 232 steel/aluminum “national security” tariffs for some countries, the Trump administration went ahead and imposed them on Canada, Mexico and the EU as of today. (Retaliation by these countries will follow soon.) There is also now an investigation into whether tariffs should be applied to automobile imports on the same basis. You may wonder, how can the term “national security” be stretched so far beyond issues related to actual national security? Commerce Secretary Wilbur Ross explains why:

Ross … cited an “elaborate definition” laid out in the Section 232 statute and said the tool “isn’t by any means confined strictly to military applications.”

“So, while the label is national security you need to look at the legislation itself, and the question isn’t ‘Is this mainly a military thing?’ It’s obviously mainly not a direct military thing but infrastructure and the economy are what gives you military security,” Ross said, reiterating prior comments.

“So, I know people like to wave the flag: ‘Oh, well you shouldn’t use that definition.’ That definition is what Congress enacted long before Donald Trump became president. And so, the fact that we are utilizing legislation that was passed quite a few years ago shouldn’t surprise anyone,” he said.

He’s right about the broad language of the statute. Take a look at a key provision, in particular the second sentence:

(d) Domestic production for national defense; impact of foreign competition on economic welfare of domestic industries

For the purposes of this section, the Secretary and the President shall, in the light of the requirements of national security and without excluding other relevant factors, give consideration to domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense, the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth, and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements. In the administration of this section, the Secretary and the President shall further recognize the close relation of the economic welfare of the Nation to our national security, and shall take into consideration the impact of foreign competition on the economic welfare of individual domestic industries; and any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive imports shall be considered, without excluding other factors, in determining whether such weakening of our internal economy may impair the national security.

Thus, under the statute, broad concepts of “economic welfare” get mixed together loosely with national security. Read as a whole, national security should still be the focus of the investigation, but the references to the economy could be abused by an administration looking for excuses to impose tariffs. (And that’s not just hypothetical anymore.)

Of course, the President and the Commerce Department are not required to apply this statutory language so broadly. But they do have the discretion to do so. This makes the fix here pretty obvious: Congress should revise the language in a way that takes away some of that discretion. There are two ways it could do this.

First, delete some of the language that refers to factors not closely related to national security. For example, the whole second sentence quoted above could come out. Such issues are already dealt with through “safeguards” laws (in the U.S., Section 201). There is no need to duplicate this in Section 232.

And second, the statute should make clear that imports from countries with whom the United States has a defense treaty/security alliance do not threaten national security. These countries are our allies, and trading with them does not impair our security. 

Now, it may be that, if Section 232 is amended, the Trump administration would simply move on to other avenues for protectionist abuse. Nevertheless, Section 232 is clearly a problem right now, and it’s worth taking the time to fix it.

The temporary exemptions to the Section 232 tariffs on steel and aluminum granted to Canada, Mexico and the European Union (EU) expire at midnight tonight, and the Trump administration has announced that it will now impose these tariffs. This action makes clear that in addition to flouting the rules based trading system the United States itself established, the Trump administration makes no distinction between foes and allies.

The EU announced its retaliation list earlier, with a 25% duty on 182 products. Today, Canada responded with an announcement that it would levy tariffs of its own, amounting to $16.6 billion. That figure includes a list of 127 potential products for retaliation, from steel and aluminum, to household products like yogourt, coffee, tomato ketchup, and toilet paper, which will face a 25% or 10% surtax. Retaliation won’t take place until July 1st, giving Canada some time to refine this list in the meantime. Mexico announced that it would also seek to impose equivalent measures on items such as steel, lamps, pork legs and shoulders, sausages and food preparations, apples, grapes, blueberries, and various cheeses, among others. Both countries have stated that their countermeasures would stay in place until the U.S. lifts its tariffs. 

Prime Minister Justin Trudeau was firm in calling the 232 tariffs “unacceptable,” going on to say that, “Canada will also challenge these illegal & counterproductive measures under NAFTA Chapter 20 and at the WTO. It is simply ridiculous to view any trade with Canada as a national security threat to the US and we will continue to stand up for Canadian workers & Canadian businesses.” Ridiculous is about right. It is also hard to see how the Trump administration would imagine any other type of response from its allies, whose patience they have surely tested. However, it’s worth remembering that Trump’s team appears to view reality through a rather distorted lens, and somehow thinks these tactics will produce results for the United States.

As a case in point, Commerce Secretary Wilbur Ross suggested that the imposition of tariffs should not prevent negotiations, citing China as an example. Surely, one would hope that the Commerce Secretary knows the difference between imposing tariffs on China as opposed to U.S. allies, but unfortunately, that does not seem to be the case. (As my colleagues and I have mentioned elsewhere, he doesn’t even seem to know the meaning of reciprocity or comparative advantage). In fact, what this episode reveals, in addition to the last year of trade policy uncertainty, is that the United States can no longer be trusted to negotiate in good faith. While Trump might think that keeping people on their toes and wondering “will he” or “won’t he” is somehow a viable strategy, this approach is likely to backfire in the long-run. 

For one thing, imposing tariffs on Canada and Mexico while negotiations on a new North American Free Trade Agreement (NAFTA) are ongoing is reckless. The three countries seemed to be getting very close to a deal this month, but this action may serve to further intensify discord among them. If delivering a truly modernized NAFTA that can better serve the American people was his goal, this strategy will likely do the opposite. Furthermore, our transatlantic partners are even less likely entertain negotiations, especially if they are approached, as French President Emmanuel Macron stated in March, “with a gun to our heads.” 

Yes, it’s true that the impact of the tariffs– even if our closest allies do impose retaliatory measures– may not be felt throughout the entire economy, making it seem like raising tariffs is no big deal. However, the tariffs and the countermeasures will inflict wounds on consumers, businesses, and on specific U.S. exporters, and lead our closest trading partners to look elsewhere for the things they want to buy, and enter negotiations with countries that do so in good faith. “Art of the Deal”? More like “How to Lose Friends and Alienate People.”

Various news outlets are reporting that, at midnight tonight, special U.S. tariffs on imports of steel and aluminum from Canada, Mexico, and the European Union will go into effect. This action stems (incongruously and capriciously) from two nearly yearlong investigations conducted by the U.S. Department of Commerce under Section 232 of the Trade Expansion Act of 1962, which found that imports of steel and aluminum “threaten to impair the national security” of the United States. This seldom used statute gives the president broad discretion both to define what constitutes a national security threat and to prescribe a course to mitigate the threat. On both counts, President Trump has abused that discretion.

In March, the president announced his intention to impose duties of 25 percent on steel imports and 10 percent on aluminum imports from all countries. But temporary exemptions were granted to some countries in an effort to extort commitments from them to do their part to reduce the U.S. trade deficit (by selling us less stuff and buying from us more stuff) or to agree to U.S. demands in ongoing trade negotiations (South Korea, Canada, Mexico). The Koreans succeeded by agreeing to limits on their steel exports and by upping the percentage of US-made automobiles that can be sold in Korea without meeting all of the local environmental standards. Ah, free trade…

Apparently, the Europeans, Canadians, and Mexicans haven’t bent sufficiently to Trump’s will, therefore those countries—those steadfast allies—constitute threats to U.S. national security and will no longer be exempt from the tariffs, which means that U.S. industries that rely on steel and aluminum (imported or domestic) will be hit with substantial taxes to mitigate that threat. Got it?

This announcement comes on the heels of one made earlier this week regarding the “trade war” with China, which is back on 10 days after Treasury Secretary Steve Mnuchin declared it to be “put on hold.” (I guess it was just a rain delay.) On June 15, the administration will publish the final list of Chinese products—about 1,300 products valued at about $50 billion—that will be hit with 25 percent duties. The Chinese government has published its own list of U.S. exports that will be hit with retaliatory duties in China.

So, as has been the case every day for the past 16+ months, the U.S. and global economies (even as they’ve strengthened) remain exposed to the whims of an unorthodox president who precariously steers policy from one extreme to the other, keeping us in a perpetual state of uncertainty. With the Europeans, Canadians, Mexicans, and Chinese all preparing to retaliate in response to these precipitous U.S. actions, at the stroke of midnight we may finally get the certainty of the beginning of a deleterious trade war.

In a recent Cato Daily Podcast with Caleb Brown, Cato adjunct scholar Andrew Grossman of Baker & Hostetler discusses the “legally aggressive” new round of climate change litigation, in which municipalities in California and Colorado, as well as New York City, have sued energy producers and distributors seeking to recover damages over the release of carbon dioxide into the atmosphere.

As Grossman notes, the idea of suing over the role of carbon emissions in climate change has by this point been tried many times. The most obvious approach would be to sue large industrial emitters of carbon, which is what some state governments did in one of the most prominent cases, filed against electric utilities. In its 2011 AEP v. Connecticut decision, however, the Supreme Court ruled that such outputs were regulated comprehensively and exclusively at the federal level through enactments like the Clean Air Act, and were not subject to an additional level of state regulation through public nuisance claims. Suits on other theories, such as Comer v. Murphy Oil from the Fifth Circuit and the Kivalina case in the Northern District of California, have been launched “to enormous bombast and press attention and they have all bombed out…. Those cases were the low-hanging fruit. Those were the more obvious legal theories if you were going to try to bring this kind of case,” he says.

Now the question is whether litigants can accomplish an end run by instead attacking upstream, pre-emissions activity, specifically the extraction and distribution of fossil fuels destined to be burned. Ambitiously, some of the new suits attempt to apply state common law to activities occurring around the world – to the doings of worldwide corporations such as Royal Dutch-Shell, for example, and to oil production from places like the coast of Norway and its subsequent use by European motorists. Needless to say, many of these processes are comprehensively regulated by the laws of the European Union and its member countries. Doctrinally, then, the new efforts get into even deeper water (so to speak) than strictly domestic claims. From the podcast:

If a court in California is going to go around telling Norway what to do, well, gosh, Norway may not really like that. And what do you do in that instance? It’s not apparent to me how this works. How does the court figure out what Norway’s regulations are and what Norway is doing about this? Who’s going to tell them? I don’t know. What if Norway disagrees with whatever it is that the court decides needs to be done in this case? Does Norway complain to the court? Do they send an ambassador to file a brief or something? I don’t know. This has never happened before. And what if Norway decides that they don’t like whatever it is the court is doing and they’re going to impose, say, reciprocal trade tariffs, or something like that, against the United States on the basis of one of these rulings? Does the court hold them in contempt?

Listen to the whole thing here.

President Trump has signed legislation restoring the right of some terminally ill patients to determine the course of their medical treatment. This “right to try” law builds on legislation enacted by dozens of states. The federal right-to-try law is an important victory for patients and individual liberty. But I worry these gains will not last. Here’s why.

Patients have a fundamental human right to choose their course of medical treatment. But how are patients to know which treatments work and which are just snake oil? The U.S. Congress attempts to solve this problem by empowering the U.S. Food and Drug Administration (FDA) to block drugs from the market until the manufacturers demonstrate, to the FDA’s satisfaction, that the drug is safe and effective for its intended use. At a glance, this seems a reasonable approach to keeping patients safe. In practice, it has been a disaster. 

There are lots of problems with this model of certifying drug safety and efficacy. First, it routinely violates the fundamental human right of all patients to choose the course of their medical treatment. If the FDA blocks the drug you want from the market, or requires so much testing that you cannot afford it, or erects such high regulatory barriers that no one develops the drug you need, the government has violated your fundamental human right to choose your medical treatment.

Second, the FDA faces information asymmetries that make that first problem even worse, as well as result in unnecessary morbidity and mortality. Any government agency charged with keeping drugs off the market until it is convinced they are safe and effective will get a flood of information about its Type I errorsi.e., the harms it causes by approving drugs that end up harming patients. But it will receive far less information about its Type II errorsthe harms it causes by delaying the approval or blocking the development of helpful drugs. This is only natural: it is far easier to identify patients who were harmed by a drug they did use than patients who were not helped by a drug they didn’t use. The latter patients might not even know a beneficial drug exists because it hasn’t been approved yet. Indeed, the drug might not exist, because the FDA made its development uneconomical.

As a result, the FDA focuses almost exclusively on minimizing Type I errors. It does so by requiring manufacturers to conduct expensive and time-consuming clinical trials, so it can more often prevent harmful drugs from going to market. The agency requires more safety and efficacy testing before approving a drug than it would if it had complete information about both types of error. It requires all that additional testing even though doing so results in more harm from Type II errors than the additional testing prevents by eliminating Type I errors. The result is that the FDA’s approval process becomes costlier and longer, and violates the rights of more and more patients.

This next part is crucial. The public, media, and policymakers also receive far more information about the FDA’s Type I errors than its Type II errors, and therefore complain about the former far more than the latter. What this means is: the political forces that determine how the FDA operates reinforce the agency’s bias toward demanding more testing and more-often violating patients’ rights. We can think of the FDA’s standard operating procedure of minimizing Type I errors at the expense of more (and more costly) Type II errors as a kind of political equilibrium created by the information asymmetry the agency and those who control it face with respect to these two types of error. 

So while it is wonderful that President Trump has restored the right of some terminally ill patients to access drugs the FDA has not yet approved, I worry these gains will not last. This legislation does nothing to correct the information asymmetry faced by those who determine whether and when new therapies can reach patients. Inevitably, some drug accessed through this legislation will hurt some patients. When that happens, the same cast of charactersthe FDA, Congress, the media, and the publicwill all focus on those easily identifiable Type I errors. They will demand reforms that prevent further Type I errors. But because they cannot see the even greater Type II errors those reforms will cause, patients will end up both less safe and less free. The pendulum will swing back to the current political equilibrium. 

The only way to protect patient rights and to strike an appropriate balance between Type I and Type II errors is through fundamentaland I mean fundamentalreform of safety and efficacy certification for medical technologies. Read more here.

Correction: The article “Trump’s New Insurance Rules Are Panned by Nearly Every Healthcare Group that Submitted Formal Comments” claimed the Trump administration proposes allowing short-term health insurance plans “to turn away sick people.” In fact, federal law already allows short-term plans to turn away sick people, and to our knowledge not even opponents of the administration’s actual proposal have proposed changing that feature. We regret the error.

The article claimed the Trump administration’s short-term plans proposal would weaken consumer protections. In fact, the proposal would strengthen consumer protections by allowing short-term plans to shield enrollees who fall ill from medical underwriting—a consumer protection the Obama administration prohibited these plans from offering. We regret the error.

The article described groups that advocate forced health care subsidies as “patient and consumer advocates,” but withheld that designation from patient and consumer advocates who oppose forced health care subsidies. We regret allowing ideology to creep into our reporting.

Finally (we hope), the article identified the financial interests of groups supporting the Trump administration’s proposals, but not the financial interests of groups opposing them. We regret our failure to follow the money.

Last year, Republican legislators stood up to the behemoth of housing lobbying groups which exert heavy pressure on the public process by curtailing the so-called third rail of tax policy, the mortgage interest deduction.

Last week’s Joint Committee on Taxation (JCT) tax expenditure estimates are a reminder last year’s tax reform effectively reduced the deduction. According to JCT, the mortgage interest deduction will decline 38 percent this year. By 2019 the deduction will fall almost 50 percent from its 2017 levels.

The reformed deduction applies to $750K in mortgage debt for loans. This is a change from its former configuration, where the deduction applied to $1.1 million in mortgage debt. The act grandfathers in existing homeowners who bought under the assumption they would be able to use the deduction before mid-December. 

Though industry lobbyists predicted the sky would fall, it hasn’t happened. That’s unsurprising if you follow economic research on the mortgage interest deduction.

For one thing, research suggests the mortgage interest deduction has no impact on homeownership rates. Last year Nobel Prize-winning economist and co-founder of the Case-Shiller housing index Robert Shiller argued capping the deduction would have a “rather small effect” on homeownership rates and the housing market.

Indeed, since tax reform U.S. homeownership rates have stayed flat and the number of houses sold this year is greater than the number sold during the same season last year. Meanwhile, “home-price growth showed no sign of slowing down” despite predictions by some economists home prices would fall as a result of reform. It makes sense housing market indicators haven’t changed, given very few homes are sold in excess of $750K and housing supply is tight even at the top of the market.

The sky isn’t falling, and JCT estimates show the mortgage interest deduction is on its way out. That’s good news for the housing market and prospective homeowners.

Gun control advocates like to accuse legislators of being “afraid of the NRA,” implying that reason and principle have nothing to do with their legislative decisions. In the same way, Jackie Kucinich, in a column in The Daily Beast, suggests that the failure of Congress to pass CARA 2.0 (Comprehensive Addiction and Recovery Act) is due primarily to the lobbying clout of the American Medical Association, pointing to its status as the “seventh highest lobbying spender in 2017.”  

The article quotes opioid reform advocate Gary Mendell as saying “the AMA will resist anything that regulates healthcare”—an interesting opinion about an organization that supported passage of the Affordable Care Act, one of the deepest regulatory intrusions into American health care in half a century. Over the years, the AMA’s seeming reluctance to mount a principled defense of patient autonomy and freedom of choice in healthcare—perhaps fearing it may jeopardize the cartel it lobbied so hard to establish over the past century and a half—has led to an exodus of many disillusioned members. It is estimated that less than 17 percent of the country’s doctors belong to the special interest group today.

But on this one, the AMA gets it right. It opposes the “one-size-fits-all” imposition of the 2016 opioid prescribing guidelines issued by the Centers for Disease Control and Prevention; guidelines that many noted addiction medicine specialists have criticized as not-evidence based. The AMA maintains the CDC expressly meant for its guidelines to be suggestive “rather than prescriptive.” Other scholars have pointed out that the CDC’s suggestions were based upon “Type 4 evidence,” defined as evidence in which “one has very little confidence in the effect estimate, and the true effect is likely to be substantially different from the estimate of the effect.”  The AMA emphasizes the guideline’s statement, “Clinical decision making should be based on a relationship between the clinician and patient, and an understanding of the patient’s clinical situation, functioning and life context.”

When health care providers read and interpret these guidelines, they understand them to be informational, nonbinding, and inconclusive. But that’s not how politicians “do science.”

There is no evidence that prescription limits reduce overdose deaths. In fact, as the prescription rate has dropped dramatically since its peak in 2010, overdose rates are in turn rising

Kucinich seems to agree with the politicians who interpret the CDC guidelines as implying that a more than 3-day supply of prescription opioids is a major force behind addiction. But that is not a precise and critical reading of the guidelines. In fact, as Dr. Nora Volkow, Director of the National Institute on Drug Abuse pointed out in a 2016 New England Journal of Medicine article, “Addiction occurs in only a small percentage of persons who are exposed to opioids — even among those with preexisting vulnerabilities.” Cochrane systematic studies in 2010 and 2012 show a roughly 1 percent incidence of addiction in chronic non-cancer pain patients, and a January 2018 study of 568,000 “opioid naïve” patients given prescriptions for acute post-surgical pain found a “total misuse” rate of 0.6 percent. 

The AMA is actually a little late to the party. Numerous other specialists in the management of pain and addiction have criticized for months the tendency of politicians to codify the recommendations of the CDC. Even the Food and Drug Administration Commissioner, Scott Gottlieb, has expressed concerns. Announcing plans to hold a public meeting on July 9 on “Patient-Focused Drug Development for Chronic Pain,” Dr. Gottlieb set forth “the goal of providing standards that could inform the development of evidence based guidelines.”  

The article quotes Sen. Joe Manchin (D-WV) accusing his colleagues of being “too scared to take on the AMA.” My hope is that they may be finally responding to evidence and accounts from health care practitioners and patients who have spent months appealing to reason over dogma.

If you aren’t paying attention to the debate over short-term health insurance plans, you should. It’s a mixed-up, muddled-up, shook-up world where Republicans are pushing to expand consumer protections, Democrats are fighting to block them, and the public debate has it exactly backward.

In this morning’s Wall Street Journal, I explain:

ObamaCare premiums keep skyrocketing. Rate hikes as high as 91% will hit many consumers just before Election Day. Maryland insurance commissioner Al Redmer warns ObamaCare is in “a death spiral.”

So-called short-term health plans, exempt from ObamaCare’s extensive regulations, are providing relief. Such plans often cost 70% less, offer a broader choice of providers, and free consumers to enroll anytime and purchase only the coverage they need.

But there’s a downside. When enrollees fall ill, either their premiums spike or they lose coverage, leaving an expensive ObamaCare plan as the only alternative. Markets solved that problem decades ago via “renewal guarantees,” which allow enrollees who get sick to keep paying the same premiums as healthy enrollees.

For more than two decades, Congress has consistently tried to prevent sick patients from being to medical underwriting. Yet in 2016, the Obama administration did exactly the opposite. It issued a regulation that exposed enrollees in short-term plans to medical underwriting after they got sick:

In 2016, in an effort to force people into ObamaCare plans, the Obama HHS shortened the maximum duration for short-term plans from a year to three months and banned renewal guarantees. The National Association of Insurance Commissioners complained this reduced consumer protections and exposed the sick to greater risk, including the risk of having no coverage.

The Trump administration has proposed reversing the Obama rule and allowing short-term plans to offer both 12-month terms and renewal guarantees that allow enrollees who get sick to keep paying the same premiums as healthy enrollees (i.e., no more underwriting). Both of these proposals are consumer protections that would protect the sick from medical underwriting and in some cases protect the sick from losing coverage entirely. 

Believe it or not, Democrats are opposing these consumer protections! I am tempted to say their opposition is inexplicable, but it’s all-too explicable. Democrats want to prevent short-term plans from offering these consumer protections because they fear consumers will find short-term plans more attractive than ObamaCare. Democrats are literally trying to stop Republicans from expanding consumer protections because they would rather protect ObamaCare. 

Democrats want to make short-term plans as unattractive as possible because they worry that otherwise, ObamaCare’s risk pools will suffer as healthy people leave ObamaCare plans for short-term plans. That was the purpose of limiting short-term plans to just three months. But back in 2016, the National Association of Insurance Commissioners explained the Obama rule’s attempt to cripple short-term plans won’t help ObamaCare:

If the concern is that healthy individuals will stay out of the general pool by buying short-term, limited duration coverage there is nothing in this proposal that would stop that. If consumers are healthy they can continue buying a new policy every three months. Only those who become unhealthy will be unable to afford care, and that is not good for the risk pools in the long run.

Indeed, Democrats’ opposition to allowing short-term plans to offer renewal guarantees betrays a fundamental misunderstanding of how renewal guarantees work. As I explain in my Wall Street Journal oped:

Prohibiting renewal guarantees hurts ObamaCare’s risk pools by forcing enrollees who develop expensive illnesses to switch to ObamaCare plans. Allowing renewal guarantees would improve ObamaCare’s risk pools by giving expensive patients an affordable, secure alternative—just as renewal guarantees kept expensive patients out of state-run high-risk pools before ObamaCare. 

How many expensive patients could renewal guarantees keep out of ObamaCare’s risk pools? More than you might think. Allowing short-term plans to offer renewal guarantees would also free insurers to sell renewal guarantees as a stand-alone product–at a cost roughly 90 percent below that of ObamaCare plans. Insurers could market these products not only to the 50 million or so non-elderly people without employer-sponsored insurance. They could also offer them, as they had just begun to do in 2009, to the 175 million Americans with employer-sponsored coverage. Renewal guarantees could thus improve the outlook of ObamaCare’s risk pools by keeping potentially millions of expensive patients out of ObamaCare plans.

Presented with the opportunity to expand consumer protections in a manner that could even save taxpayers money, many administration wouldn’t bother with annoying questions about whether they actually have the legal authority to do it. Fortunately, HHS has such authority, as I explain at length in comments I filed on the Trump administration’s proposed rule on short-term plans. Long story short, HHS can allow renewal guarantees in short-term plans because federal law grants the agency no authority to regulate renewal guarantees, much less to ban them. 

If HHS acts swiftly to allow short-term plans to offer renewal guarantees, it can make affordable, secure health insurance options available right about when ObamaCare’s next round of premium hikes will hit consumers. 


Reversing course yet again, this morning President Trump declared that he will indeed impose 25 percent tariffs on $50 billion of imports from China. He also announced plans to publish new restrictions on investments by Chinese persons and entities, which will take effect, presumably, in early July. The president seems to thrive on the uncertainty and chaos that his version of leadership churns out on a daily basis, but whether any of this actually happens is anyone’s guess.

The administration is right to be concerned about China’s mercantilist technology policies, but it seems to have no clue about how to mitigate the problem. Tariffs will do nothing to address China’s promotion of national champion industries, nor will it dissuade intellectual property theft of forced technology transfer policies. They will disrupt global supply chains and make Americans, Chinese, and many others around the world less well off than they are today.

For over a decade, Washington and Beijing have been waging a tit-for-tat technology trade war, which has come into clearer focus during the Trump administration. There are far better options than tariff wars to make competition in the technology space more market-oriented and mutually beneficial, including by negotiating a bilateral free trade agreement.

Our primary federal civil rights statute, colloquially called “Section 1983,” says that any state actor who violates someone’s constitutional rights may be sued in federal court. This remedy is crucial not just to secure relief for individuals whose rights are violated, but also to ensure accountability for government agents. Yet the Supreme Court has crippled the functioning of this statute through the judge-made doctrine of “qualified immunity.” This doctrine — at odds with both the text of the statute and the common law principles against which it was passed — immunizes public officials who commit illegal misconduct, unless they violated “clearly established law.” That standard is incredibly difficult for civil rights plaintiffs to overcome, because courts generally require not just a clear legal rule, but a prior case on the books with functionally identical facts.

In Allah v. Milling, 876 F.3d 48 (2d Cir. 2017), the Second Circuit used qualified immunity to shield prison officials who kept an inmate, named Almighty Supreme Born Allah, in dungeon-like, solitary confinement conditions for seven months — all because Mr. Allah had once asked a question about why prison inmates were being denied access to commissary. For this “offense,” Mr. Allah was placed in “Administration Segregation” for over a year, most of which he spent in solitary confinement. He spent 23 hours a day alone in his cell, was handcuffed and shackled anytime he was removed from his cell, and forced to shower in leg irons and wet underwear. To make matters worse, Mr. Allah was, at this time, merely a pretrial detainee who had yet to be convicted of a crime.

Mr. Allah brought a civil rights claim against these prison officials and won a judgment of $62,650 at trial. On appeal, the Second Circuit unanimously agreed that the defendants had violated Mr. Allah’s constitutional rights. The Supreme Court’s decision in Bell v. Wolfish, 441 U.S. 520 (1979), makes clear that pretrial detainees cannot be subject to punitive restrictions, and that extreme restrictions unsupported by any legitimate governments are inherently punitive. The Second Circuit held that the prison officials here lacked any legitimate interest in throwing Mr. Allah in solitary confinement, and thus violated his due process rights.

Yet a majority of the panel still granted immunity to the defendants — and denied Mr. Allah redress for his injuries — solely because “Defendants were following an established [prison] practice,” and “[n]o prior decision of the Supreme Court or of this Court … has assessed the constitutionality of that particular practice.” That analysis is flatly at odds with existing precedent; even the Supreme Court has rejected the idea that overcoming qualified immunity requires a prior case dealing with the very action at issue. Indeed, in Safford Unified School District #1 v. Redding, 557 U.S. 364, 377 (2009), the Court explicitly stated that “there is no need that ‘the very action in question [have] previously been held unlawful.’” 

But more importantly, this case throws into sharp relief the legal, practical, and moral infirmities with qualified immunity in general. Mr. Allah’s petition directly asks the Court to reconsider its qualified immunity jurisprudence, and the Cato Institute has filed an amicus brief in support of this request. This brief is part of Cato’s ongoing campaign to challenge qualified immunity — a doctrine that lacks any legal basis, vitiates the power of individuals to vindicate their constitutional rights, and contributes to a culture of near-zero accountability for law enforcement and other public officials.

Online election ads are the hot topic in Washington these days. From Russian Facebook ads featuring Jesus and Satan arm-wrestling or a multicolored, many muscled Bernie Sanders, to Cambridge Analytica’s probably bogus claims of dastardly psychological manipulation, there is great consternation as to whether social media is being abused to the detriment of democracy. These concerns are not limited to our shores: see, for instance, Facebook and Google’s controversial recent decision to remove ads related to Ireland’s constitutional referendum on abortion.

Into the fray now steps the Federal Election Commission, which proposes to define for the first time how election ads on social media and other internet platforms will be regulated under the campaign finance laws. The FEC has put forward a pair of options, one of which would require as a default that online ads ahead to the same strictures as radio, TV, and newspaper ads, with very limited wiggle room to adapt disclaimers to the nature of internet platforms. An alternative proposal would allow more adaptation but still take up as much as 10% of a given ad as a default. Cato has submitted a comment, expressing our view that the FEC should give special weight to the burden on First Amendment rights imposed by excessive disclaimer requirements. As Justice William Brennan (no right-wing extremist) explained, “compelling the publication of detailed … information that would fill far more space than the advertisement itself would chill the publication of protected … speech and would be entirely out of proportion to the State’s legitimate interest in preventing potential deception.”

The proliferation of online media has democratized the marketplace of ideas as quickly as an electron speeds down a wire. Unfortunately, our regulatory state still moves at an analog pace. The FEC should thus tread lightly in imposing strictures that will hamper innovation and clutter our screens with information that does little to actually inform the few who would even take the time to read it. The right of citizens to communicate the message of their choice is at the core of the freedom of speech. Any burden placed on it must intrude as little as possible. 

To the extent the FEC feels that guidance should be given, we encourage it to consider the least restrictive means available, consistent with the right of free expression protected by our founding document. We have confidence that the American people can fairly assess the arguments presented in the marketplace of ideas, and believe that drowning them in warnings and provisos will do more to the clutter up that marketplace than illuminate it. 

Washington Capitals fans (including this writer) were overjoyed last Thursday night when the team defeated the Tampa Bay Lightning to move onto the National Hockey League’s Stanley Cup Final. But for some Caps fans, that joy soured a bit the next morning when they discovered that Las Vegas oddsmakers have made Washington the underdog in the championship series against the Vegas Golden Knights (VGK).

The VGK have odds of 10/13 to win the series, meaning gamblers would have to bet $13 on the Knights to win $10 (plus the return of their original wager) if the Knights win the series. The Caps are $11/10, meaning a $10 bet would yield $11 if Washington captain Alex Ovechkin hoists Lord Stanley’s Cup. The numbers against the Capitals aren’t lopsided, but they’re a decided nod to the VGK.

Caps fans are a notoriously gloomy, self-afflicted lot given the team’s playoff history, so it’s not surprising they quickly found the cloud surrounding Thursday’s silver lining. Betting odds—basically, futures—are commonly thought to represent the collective intelligence of the marketplace and that wisdom apparently says the Caps’ history of playoff heartbreak will continue.

Or maybe not.

In an article in the forthcoming summer issue of my journal Regulation, economist Ike Brannon discusses bookmaking (the art of setting betting lines)—both legal and illegal—in light of the recent Supreme Court decision striking down a federal law prohibiting most states from legalizing sports gambling. (The article will be available at in a few weeks.) Borrowing from the work of Wake Forest University economist Koleman Strumpf, who has studied illegal sports gambling extensively, Brannon points out some features of bookmaking that should encourage Caps fans—and should interest anyone who is intrigued by this market-driven process.

One thing that observers should immediately notice is that if the Caps and VGK odds are converted to a standard probability scale between 0 and 1, the sum of those probabilities is greater than 1: 0.65 + 0.45 = 1.10. Part of that amount over 1 is the “vigorish” (also known as the “juice”), the cut that bookies take for providing their services. Stumpf’s research indicates the vig from illegal sports books is about 10% of the bet, while legal books’ is much lower—sometimes as little as 2%.

If we factor in a vig of 5%, the odds-equivalent that the VGK will win the Cup decreases to 0.62. Of course, the Caps’ odd-equivalent probability also decreases to 0.43. So, Caps fans still seem to be right to be gloomy.

But if we add up these two new probabilities, we still get a sum greater than 1. This is where things get very interesting—and possibly in a very important way for legal sports gambling. And, I might add, a bit more encouraging for Caps fans.

Brannon, again borrowing from Strumpf, explains that backroom bookies have long practiced “price discrimination” for hometown teams. That is, they tweak their odds to take advantage of passionate local sports fans who will bet on “their” team at odds or point spreads that are worse than a fair estimate of the probability that the team will win. I suspect bookies sometimes do the opposite for opponents of the hometown team, in an effort to attract some opposing-team money even at generous odds. As a result, bookies often have significantly different odds for a local game than Las Vegas does. These odds aren’t the pure wisdom of the local market, but also its passion for the hometown team.

Up till now, legal Las Vegas bookmakers have had no opportunity to borrow this practice from their black market brethren—at least, not at the major-league level because no major league teams operated in the city. Legal gambling in Las Vegas has been dominated by out-of-towners. But this is the inaugural season of the VGK and local residents have embraced the team—and are betting on them to win. So the VGK line likely reflects in part the Las Vegas bookmakers price-discriminating against their friends and neighbors.

There’s a bit of early evidence that this is happening. Offshore oddsmakers don’t have this opportunity to price discriminate on North American sports (unless they adjust their odds in light of location indicators of their online customers), so the offshore odds may be more “accurate” than the Vegas odds. I haven’t found a good online summary of offshore odds for the Caps-VGK series, but the documented odds for Game 1 are closer on the offshore books than the Las Vegas books (though they still favor the VGK, who will be the home team in that game).

This could have some interesting ramifications in the next few years. For instance, the National Football League’s Raiders franchise has announced that it plans to move from Oakland to Las Vegas as early as 2019. When that happens, Las Vegas will have to weigh the pros and cons of price-discriminating on games in one of the most gambled-upon sports.

The more important ramification involves the the expected legalization of sports gambling in locations across the United States. Will those locations likewise price-discriminate against their local teams? If so, it could create some profitable arbitrage opportunities.

Shrewd sports gamblers might try a strategy where they bet against a team in that team’s home market, AND bet against the opposing team in its home market. That way, the gamblers would be on the “good” side of the price-discriminated odds regardless of a game’s outcome, thus reducing their losses and increasing their winnings. In theory, this should be a money-making strategy.

Gamblers don’t use this strategy currently because the sizeable vig from black market bookies syphons off the arbitrage profits. But the much lower vig offered by legal sports books would seemingly make this strategy a winner. Of course, bookies—legal and illegal—are careful to avoid giving customers opportunities to regularly “beat the house”—so it will be interesting to see what they’ll do to block this strategy.

Returning to Capitals fans, here’s the good news: if we interpret the Las Vegas odds in light of Brannon and Strumpf, then it would seem the market actually has a much better appraisal of Washington’s chances of raising the Cup sometime in the next few week. So, Washington sports fans, buck up, and Let’s Go Caps!

The Stimson Center’s new study group report found that the federal government spent about $2.8 trillion on counterterrorism (CT) activities since 9/11.  The report seeks to account for all federal government spending on CT efforts divided into the four broad categories of defense emergency and overseas contingency operations, war-related state/USAID, other foreign aid, and government-wide Homeland Security.  The defense emergency and overseas contingency operations spending category accounts for about $1.7 trillion or over 60 percent of the $2.8 trillion spent.  War-related state/USAID and other foreign aid account for a relatively small $138 billion and $12 billion, respectively.  Government-wide Homeland Security spending makes up the rest at $978.5 billion since 9/11.

The big question the report does not attempt to answer is: Was all that spending worth it?  Did that spending result in fewer people killed by terrorists on U.S. soil?  One of the distinguished study group members is my Cato Institute colleague John Mueller who has spilled much ink trying to estimate the effectiveness of CT spending.  Mueller provides some back of the envelope estimates to answer the question of whether this CT spending was worth it in his recent panel discussion on the Stimson Center’s report.  After talking with Mueller, I decided to add some more analysis to show that an unreasonably large number of American lives would have to have been saved for the costs of CT spending to be justified.

For the costs of CT spending to equal the benefits in terms of the value of lives saved, it would have to have saved 188,740 lives, or 11,796 lives per year, since 9/11.  Narrowing down to just domestic CT spending on government-wide Homeland Security projects shows that spending on just that set of subprograms would have to have prevented the murder of 65,233 people, or 4,077 per year, to break even.  From 2002 through 2017, my latest estimate is that 172 total people were murdered on U.S. soil by all terrorists (Islamic, non-Islamic, domestic, U.S.-born, foreign-born, white supremacists, etc.).  Thus, all CT spending would have to have saved 1,097 times as many lives as were actually taken by terrorists in attacks on U.S. soil for the costs of CT spending to equal the benefits in terms of lives saved.  Focusing on just government-wide Homeland Security CT spending shows that it would have to have saved 379 times as many lives as were actually killed in terrorist attacks on U.S. soil to break even.  It is difficult to estimate a counterfactual but it would take a very creative imagination to honestly believe that post-9/11 CT spending actually saved that many lives by preventing terrorist attacks.


The first step is estimating the value of a statistical human life to compare with the cost of CT spending.  This is an emotional and fraught way to measure human life.  As a father and a husband, I understand this emotional reaction very well but the fact remains that if the government spends more than the statistical value of life to save a life through enhanced CT, then that means that other people died because of neglected safety in other areas.  As a hypothetical example, suppose the value of a statistical life is $15 million.  If the government spends $30 million to save one life by spending on X then that means that one person, at least, died who did not have to if that money was spent where it would save more lives.  Thus, spending that amount of money on reducing the risk of X results in more deaths than otherwise would have occurred.  Although emotional and hard to calculate, estimating the statistical value of life can help policymakers save more lives.  The death of human beings is the largest and most significant cost of terrorism but not the only one as other forms of destruction are also costly but relatively minor compared to death.  For the purposes of simplicity, I will focus on the cost in terms of human life.   

As I wrote in 2016, the Department of Homeland Security (DHS) produced an initial estimate that valued each life saved from an act of terrorism at $6.5 million, then doubled that value (for unclear reasons) to $13 million per life saved.  Adjusting for inflation raises that estimate to about $7.5 million.  Hahn, Lutter, and Viscusi use data from everyday risk-reduction choices made by the American public to estimate that the value of a statistical life is $15 million.  I use $15 million in this blog post as it is the largest number.

The second step is dividing the value of CT spending by the statistical value of life estimate to see how many lives would have to have been saved for that spending to equal the benefits.  I copy this method directly from Chasing Ghosts by John Mueller and Mark Stewart and their other important work on this topic

The third step is comparing the above results to the number of people who were actually murdered on U.S. soil in terrorist attacks.  Using the same methods as this policy analysis and including native-born attackers reveals that there were 172 people murdered in terrorist attacks on U.S. soil from 2002 through 2017.  That includes people murdered by terrorists of every ideology including Islamists, white supremacists, environmental extremists, and others regardless of where they were born.  


The first column in Table 1 shows that 188,740 lives would have to have been saved by all CT spending for the value of that spending to save an equivalent value in terms of human life.  The second column of Table 1 focuses on domestic Homeland Security CT spending, a subset of all CT spending, as it is most directly related to saving lives on U.S. soil.  To break even, domestic CT spending on Homeland Security would have to have saved 65,233 lives from 2002 through 2017 to break even (Table 1).    


Table 1

Number of Lives Saved for Counterterrorism Spending to Break Even


All CT Spending

Homeland Security CT Spending

Spending $2,831,100,000,000 $978,500,000,000 Statistical Value of Human Life $15,000,000 $15,000,000 Lives Saved to Break Even 188,740 65,233 Actual Terrorist Murders 172 172

Source: Author’s calculations.

If you assume that the value of statistical lives saved is equal to the cost of all CT spending, then you must also assume that all CT spending prevented at least 99.9 percent of all deaths that would have occurred in terrorist attacks on U.S. soil after 9/11 that were prevented.  If you just focus on domestic Homeland Security spending during that time and assume that the value of statistical lives saved is equal to the cost of CT spending, then you must assume that it prevented at least 99.7 percent of all deaths that would have occurred as a result of terrorist attacks on U.S. soil that were prevented. 

To put those numbers in context, about 250,000 Americans were murdered in non-terror homicides during that time.  There would have to have been about 1.4 murders in non-terror homicides for each person killed in a terrorist attack on U.S. soil for the cost of all CT spending to equal the value of human life saved in prevented attacks.  For only Homeland Security spending, there would have to have been about 2.9 murders in non-terror homicides for each person killed in a terrorist attack on U.S. soil for the cost to break even.  Does anyone believe that CT spending saved that many lives? 

Other Costs

The new Stimson Center study group report is a marvelous attempt to measure the nearly impossible-to-gauge extent of federal CT spending after 9/11.  Although the report is a good estimate of the direct amount of federal spending on CT, it does not represent the full cost.  Here are just a few additional costs that would have to be included to estimate such a number: 

  • State and local government CT spending.
  • The lost economic activity that would have occurred without expensive CT regulations.
  • The opportunity cost of this spending, including tax cuts or deficit reduction (the report hints at this as it mentions the death toll from opioids).
  • The trade and immigration restrictions promulgated after 9/11. 
  • The American military casualties in the War on Terrorism.
  • The foreign casualties in the War on Terrorism.
  • The increased numbers of deaths from consumers choosing riskier forms of travel rather than submit to the expensive, burdensome, and annoying demands of the TSA at airports.
  • Deaths that could have been prevented by redirecting CT spending toward other safety-enhancing policies.


The new Stimson Center study group report found that the cost of CT spending is gargantuan.  The cost of a government program is only one metric necessary to gauge whether it should exist as we must also consider the benefits it produces.  The number of lives that would have to have been saved for the cost of CT spending to equal the benefits, whether overall or just on Homeland Security, would have to be outrageously and unreasonably high for this expenditure to make sense.  By diverting government resources from other areas that would have boosted safety, even under the most negative conditions where the marginal cost saved is equal to the statistical value of life, assumes that hundreds of thousands of Americans died because of this increased CT spending who otherwise would have lived due to improved safety elsewhere.   










Herman Gundy stands convicted of violating a law that, for all intents and purposes, doesn’t exist. You may recall from high school civics that the Constitution separates the powers of the federal government among three coordinate branches. You may also recall from “Schoolhouse Rock” that a bill becomes a law after it’s passed by the two houses of the legislative branch and signed by the president. Unfortunately for Gundy, things are no longer so straightforward.

The Sex Offender Registration and Notification Act (SORNA) set up a national system of sex offender registration and made it a crime for sex offenders to fail to register with local authorities when they moved to a new state. While serving time on a federal drug charge, Gundy was transferred from prison in Pennsylvania to a halfway house in Brooklyn. According to the government, that counted as interstate travel sufficient to trigger reporting obligations of which he was never advised.

Gundy’s appeal of the conviction, to be heard by the Supreme Court this fall, addresses an odd facet of SORNA: while Congress laid out in detail those persons who would be required to register in the future, it did not determine who would have to register if the conviction occurred before SORNA was passed in 2006. Congress delegated that question to the Attorney General, and gave no guidance on how the determination should be made. Gundy’s sex offense is among those that predate SORNA, and therefore he was convicted of failing to register not based on anything Congress wrote in any law, but based on an administrative regulation written by the Attorney General.

Assigning such a determination to the executive branch raises a long-dormant canon of constitutional interpretation, the nondelegation doctrine. The basic idea is simple: the Constitution vests legislative power in the legislative branch and the legislature can’t delegate the power to write laws to a different branch. It’s a principle recognized by Chief Justice John Marshall in the first decades of the republic—indeed, its roots can be found in enlightenment thinkers such as Locke and Montesquieu—and reaffirmed in many Supreme Court opinions. The separation of powers means, at the very least, that the powers must remain separate.

But despite the Court often affirming the importance of the nondelegation doctrine in the abstract, the justices have disapproved of delegations in only two cases, both decided in 1935. While the doctrine is purportedly alive, many now treat it as the Black Knight of constitutional law, forever asserting “I’m not dead, yet.”

Perhaps this time is different. The Court’s cases say that delegations can be approved as long as Congress provides an “intelligible principle” to guide the delegated discretion, but here there is no principle, intelligible or otherwise. The statute empowers the executive branch to do as it likes, with no standards to follow. This case, therefore, presents an excellent opportunity for the Court to protect the separation of powers in an area where it has otherwise been skittish.

The doctrine of separation of powers is not some mere appeal to procedural formality, but a guarantee of our rights as citizens. The English jurist William Blackstone defined tyranny as the vesting in a single body of “the right both of making and of enforcing the laws…wherever these two powers are united together, there can be no public liberty.” It is this tyranny the Constitution was partially designed to prevent. The Cato Institute, joined by the Cause of Action Institute, has filed a brief supporting Gundy, arguing the Court should overturn his conviction and ensure that, as John Adams put it in his draft of the Massachusetts Constitution, “[t]he executive shall never exercise the legislative and judicial powers…to the end it may be a government of laws and not of men.”