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A Better Way to Pay Federal Pensions

Rich Tucker - April 16, 2014

The federal government has a long tail. But to find it, you need to look underground.

There are about 2.5 million people getting federal retirement benefits. Some 2 million of them have pensions, the rest (those hired since 1984) have annuities. Each year, another 100,000 or so people retire from the federal workforce. That's when the old-fashioned paper chase begins.

Each retiree's paperwork is sent to a former mine in Pennsylvania, where it is put into storage. The mine contains 28,000 file cabinets and is staffed by 600 people. It takes roughly two months for the mine's employees to track down all the necessary paperwork, stick it in a folder, and file it away.

Decades into the digital age, the paperwork is still actually on paper. "We do print them out, right now. But we won't in the future," Doug Berger told the Washington Post. He's in charge of creating the paper records. But don't bet on the system changing. It takes exactly as long to process a claim today as it did in 1977.

And that's only because there are now more people toiling in the mine. "The Obama administration has now made the mine run faster, but mainly by paying for more fingers and feet," the paper writes. This adds to the long-term problem; all of those additional hires will eventually retire into the federal system, adding to the expense and the paperwork. USA Today has estimated that the federal retirement program is already almost as costly as Social Security.

There's an obvious solution: Computerize the records and the system. Some states have already done this -- Texas's system, for example, takes two days instead of two months. But the federal government can't seem to make it happen. The Post reports the feds have spent more than $100 million on modernization projects through the years, and haven't made any progress.

A better approach would be to contract the job out. Here's how it could work: Have the Office of Personnel Management put up a pot of money, perhaps $50 million. (That's a small part of the $80 billion the federal government spends on IT projects.) Make the bulk payable only when a contractor delivers a system that works, and make the contractor eligible to split the savings 50-50 with the government if the project comes in under budget. This would create an incentive for contractors to save taxpayers money, and ensure that taxpayers weren't on the hook for any overruns. That's a win-win.

There other benefits to this approach as well. For example, in the event of a disaster, the contractor would simply not be paid until it had fixed its mistakes. And the project would not involve hiring more federal workers, who eventually become federal retirees.

"Privatization" has become a dirty word in Washington, so that might make this plan harder to sell. Maybe all we need is a better term. Let's call it "job sharing," and get the work out of the hands of bureaucrats. We can save money and unbury the federal retirement process.

Rich Tucker is a senior writer in the B. Kenneth Simon Center for Principles and Politics at the Heritage Foundation.

NRA vs. Michael Bloomberg Smackdown!

Robert VerBruggen - April 16, 2014

The former New York City mayor is dedicating himself to a new group that will organize voters who support gun control; called Everytown for Gun Safety, it will subsume his existing groups (Mayors Against Illegal Guns and Moms Demand Action for Gun Sense), and it will focus specifically on expanding background checks. His previous approach was to fund ad campaigns in races where gun control was an issue.

Here's how he matches up with his arch-rival.


Bloomberg says he'll be putting at least $50 million into the project this year -- and according to the New York Times, he said this "as if he were describing the tip he left on a restaurant check." He continued: "Certainly a number like that, $50 million. Let's see what happens."

According to the NRA's 2011 990 form, it pulled in more than $240 million that year, but it's difficult to say how much of that money Bloomberg will be fighting against, because the NRA isn't solely dedicated to political activism and not all of its political activism is dedicated to gun rights. (It also involves itself in hunting rights, free speech, etc.)

Only $17 million was spent through the Institute for Legislative Action, the arm of the organization dedicated exclusively to politics, and another $33.5 million was spent on publications, which include legislation-related articles but also hunting tips and whatnot. (Members choose one of three magazine subcriptions; about half a million go with America's 1st Freedom, which focuses on gun rights, while 2 million go with the more general guns-and-shooting magazine American Rifleman. The group's hunting magazine claims a million readers as well.)

Looking specifically at political donations and lobbying, the NRA ranks a mere 53rd among interest groups -- its total since 1989 is a modest $20 million, and recently it has typically spent less than $3 million a year. The list, provided by OpenSecrets, does not include individuals, and it's possible for a very wealthy individual to match the efforts of entire organizations. As OpenSecrets notes, casino mogul Sheldon Adelson and his wife spent enough in 2012 alone to put them at No. 2: almost $93 million.

Public Opinion and Clout

Gun-rights supporters have chalked up some real victories in recent years. Not only did the Supreme Court rule that broad gun bans are unconstitutional, but the percentage of the population that supports banning handguns has reached record lows.

And the NRA's clout tends to far exceed its spending. It boasts millions of members, and the common perception is that gun owners are far more likely to base votes on the issue than are gun-control supporters. One study found that an NRA endorsement can boost a candidate's vote share by 3 percent for every 10,000 members in the district. Bloomberg's most recent push for background checks lost to a filibuster in the Senate.

But none of that means Bloomberg is wasting his money, especially since he won't be aiming for gun bans. Numerous gun-control measures still command majority support, most notably the universal background checks Bloomberg wants, but also, at least in some polls, assault weapon bans and limits on magazine size. And Bloomberg's groups already claim 1.5 million supporters of their own, though that just means people signed an online pledge.

Further, the political dedication of gun owners might be overstated. In one poll, gun-owning and non-gun-owning households were equally likely to say they couldn't vote for someone who disagreed with them on the issue.

The NRA is regarded, quite correctly, as a powerful political force. But it's not unthinkable that a well-orchestrated campaign for a popular position could make some real gains. For his part, Bloomberg is confident in his ability to connect with voters outside of New York. From the Times:

"I don’t know what your perception is of our reputation, and mine, the name Bloomberg around the country," he said, explaining that everyplace he goes, he hears, "You’re a rock star. People yelling out of cabs, 'Hey, way to go!'" They're not booing, they're saying, "Blooo-mberg."

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

The U.S. Government: Paying to Undermine Internet Security, Not to Fix It

Julia Angwin, ProPublica - April 16, 2014

The Heartbleed computer security bug is many things: a catastrophic tech failure, an open invitation to criminal hackers and yet another reason to upgrade our passwords on dozens of websites. But more than anything else, Heartbleed reveals our neglect of Internet security.

The United States spends more than $50 billion a year on spying and intelligence, while the folks who build important defense software -- in this case a program called OpenSSL that ensures that your connection to a website is encrypted -- are four core programmers, only one of whom calls it a full-time job.

In a typical year, the foundation that supports OpenSSL receives just $2,000 in donations. The programmers have to rely on consulting gigs to pay for their work. "There should be at least a half dozen full time OpenSSL team members, not just one, able to concentrate on the care and feeding of OpenSSL without having to hustle commercial work," says Steve Marquess, who raises money for the project.

Is it any wonder that this Heartbleed bug slipped through the cracks?

Dan Kaminsky, a security researcher who saved the Internet from a similarly fundamental flaw back in 2008, says that Heartbleed shows that it's time to get "serious about figuring out what software has become Critical Infrastructure to the global economy, and dedicating genuine resources to supporting that code."

The Obama Administration has said it is doing just that with its national cybersecurity initiative, which establishes guidelines for strengthening the defense of our technological infrastructure -- but it does not provide funding for the implementation of those guidelines.

Instead, the National Security Agency, which has responsibility to protect U.S. infrastructure, has worked to weaken encryption standards. And so private websites -- such as Facebook and Google, which were affected by Heartbleed -- often use open-source tools such as OpenSSL, where the code is publicly available and can be verified to be free of NSA backdoors.

The federal government spent at least $65 billion between 2006 and 2012 to secure its own networks, according to a February report from the Senate Homeland Security and Government Affairs Committee. And many critical parts of the private sector -- such as nuclear reactors and banking -- follow sector-specific cybersecurity regulations.

But private industry has also failed to fund its critical tools. As cryptographer Matthew Green says, "Maybe in the midst of patching their servers, some of the big companies that use OpenSSL will think of tossing them some real no-strings-attached funding so they can keep doing their job."

In the meantime, the rest of us are left with the unfortunate job of changing all our passwords, which may have been stolen from websites that were using the broken encryption standard. It's unclear whether the bug was exploited by criminals or intelligence agencies. (The NSA says it didn't know about it.)

It's worth noting, however, that the risk of your passwords being stolen is still lower than the risk of your passwords being hacked from a website that failed to protect them properly. Criminals have so many ways to obtain your information these days -- by sending you a fake email from your bank or hacking into a retailer's unguarded database -- that it's unclear how many would have gone through the trouble of exploiting this encryption flaw.

The problem is that if your passwords were hacked by the Heartbleed bug, the hack would leave no trace. And so, unfortunately, it's still a good idea to assume that your passwords might have been stolen.

So, you need to change them. If you're like me, you have way too many passwords. So I suggest starting with the most important ones -- your email passwords. Anyone who gains control of your email can click "forgot password" on your other accounts and get a new password emailed to them. As a result, email passwords are the key to the rest of your accounts. After email, I'd suggest changing banking and social media account passwords.

But before you change your passwords, you need to check if the website has patched their site. You can test whether a site has been patched by typing the URL here. (Look for the green highlighted "Now Safe" result.)

If the site has been patched, then change your password. If the site has not been patched, wait until it has been patched before you change your password.

A reminder about how to make passwords: Forget all the password advice you've been given about using symbols and not writing down your passwords. There are only two things that matter: Don't reuse passwords across websites and the longer the password, the better.

I suggest using password management software, such as 1Password or LastPass, to generate the vast majority of your passwords. And for email, banking and your password to your password manager, I suggest a method of picking random words from the Dictionary called Diceware. If that seems too hard, just make your password super long -- at least 30 or 40 characters long, if possible.

This piece originally appeared at ProPublica, where Julia Angwin is a senior reporter.

Robert VerBruggen - April 15, 2014

Here is some data from the White House on total tax receipts as a percentage of GDP. Numbers from 2014 forward are projections:

Here's a chart that includes outlays too, in case you needed a reminder that your tax bill isn't high enough to cover spending:

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Uncluttering State Tax Systems

Will Marshall & Paul Weinstein Jr. - April 15, 2014

Over the last week, as you've raced to file your taxes by the deadline today, you've no doubt been bombarded on talk radio, cable TV, and the opinion pages about how complex and anti-growth the federal income tax system has become. Tax reform is indeed long overdue, but it's not just the federal code that needs fixing: Many state tax systems are regressive, economically distorting, and mind-numbingly complex.

This month, the Progressive Policy Institute unveiled a unique study ranking the tax systems of all 50 states plus the District of Columbia -- the State Tax Complexity Index. The index measures complexity in terms of the number of loopholes lurking in the code. What we discovered surprised us.

First, it doesn't matter whether states rely on income or sales taxes, or whether they have a single rate or multiple rates -- all of these systems can be honeycombed with complicated tax breaks, despite what you may have heard from advocates of a national sales tax or "flat tax." For example, Hawaii and California, two states with very progressive income-tax systems (Hawaii has more marginal rates than the federal code) ranked among the least complex tax systems in terms of special tax preferences. Meanwhile, states with no individual income tax ranged all over the spectrum; for example, Washington ranked near the top of our complexity scale, Texas finished in the middle, and Alaska was toward the bottom. And states that have a flat tax clustered in the middle of our survey, with the exception of Utah, which tied for 37th.

Second, reducing complexity by eliminating tax breaks can finance lower tax rates and also increase progressivity, because such preferences mostly benefit higher-income individuals and businesses.

Choosing how to measure tax complexity across all types of tax systems was a challenge. The only feature that all systems shared was tax expenditures -- tax provisions that provide a targeted benefit to specific individuals and groups, and thereby reduce government revenue. Common tax expenditures include deductions, credits, exclusions, deferrals, and rebates.

Some progressive analysts view tax expenditures as an indirect and more politically palatable form of government spending that obviates the need for new programs and administrative bureaucracies. Conservatives usually see them as a way of chipping away at tax burdens on affluent families and businesses. Either way, the growth of tax expenditures greatly increases tax complexity, because they spawn a special set of regulations that multiply over time and often lead to growing inconsistencies and inequities.

How do we know tax expenditures add to complexity? According to the IRS, the average person filing a 1040 form (which includes those taxpayers who chose to itemize their deductions) devotes 16 hours, the equivalent of two full work days, to the task. The 1040EZ form (which limits the number of deductions, credits, and other tax expenditures), by contrast, takes just four hours.

Tax expenditures don't just clutter up the tax code; they also leak revenues and usually bestow their benefits upon the least needy among us. Federal tax expenditures cost the government over $1 trillion a year. Because you have to itemize to take advantage of deductions and credits, and because the value of deductions is tied to one's tax bracket, upscale taxpayers reap the lion's share of the benefits, whether we're talking about deductions for charity, for home mortgages, or for health care. One big exception to this general rule is the Earned Income Tax Credit, which is specifically targeted to minimum- and low-wage workers as an incentive and reward for work.

Whether at the state or federal level, the lesson is clear: If simplicity is your goal, you have to reduce the number of tax breaks. Switching to a flat or sales tax isn't the answer. Closing loopholes will also help governments pay their bills the old-fashioned way, by raising revenue instead of piling up public debt. Plugging revenue leaks will ease pressure for raising tax rates, which should be kept as low as possible. And eliminating tax breaks will reduce economic distortions and help channel capital investment to its most productive uses, rather than those favored by politicians.

That's just as true on the state level as it is in Washington, D.C. So if federal lawmakers ever do get around to serious tax reform, they should invite the nation's governors to the table, too.

Will Marshall is president of the Progressive Policy Institute. Paul Weinstein Jr. is a senior fellow at the Progressive Policy Institute and the director of the Public Management Graduate Program at the Johns Hopkins University.

Is There a Way Out of Taxifornia?

Joseph Fleming - April 14, 2014

Considering that James V. Lacy titled his critique of California's fiscal policies "Taxifornia: Liberals' Laboratory to Bankrupt America," it's no mystery what he thinks of the state's economic situation and whom he blames for it. Lacy doesn't mince words in targeting California's liberal officials and special-interest groups, or in painting a bleak picture of the state's affairs.

Lacy, a former California delegate to the Republican National Convention and member of the Reagan administration, is nothing if not detailed as he reveals the various flaws in California's approach to governance. Although there are many issues, each with its own distinct qualities, they all have something in common, as he sees it: liberal dysfunction.

According to Lacy, overregulation, overtaxation, mismanagement of state funds, favoritism, and perversion of democratic functions have left California with high rates of poverty, high unemployment, an exodus of both small businesses and the television and movie industries, a floundering public-education system, and a stifled energy industry. Businesses find it too difficult and too expensive to operate within California, which is bad news for a state grappling with an 8 percent unemployment rate (trumped only by Nevada, Illinois, and Rhode Island) and facing uninspiring job-growth figures.

The book's first chapter is a powerful condemnation of the state's tax policies; Lacy goes so far as to say that heavy taxation is destroying California's economy. Relative to other states, California has high income-tax rates, corporate tax rates, and state and local tax rates. (Lacy writes that California's sales-tax rate is the highest in the country, but that's before adjusting for local rates; after adjusting, it's the eighth-highest.)

Lacy characterizes California's liberalism as "kooky," radical, and out of touch -- the state is a place where liberals react reflexively to perceived problems without allowing for markets to self-regulate or impressing upon individuals the importance of personal responsibility. Though he gets a little too aggressive at times -- he refers to the "obvious" job-killing effects of minimum-wage hikes, but the evidence is certainly not cut-and-dried -- Lacy makes a broader point about how California has gotten itself into economic trouble.

The most pressing and important problem facing California, Lacy argues, is the state's underfunded and overly generous public-pension system. The fact that Lacy sees this is as an urgent issue is no surprise, given the widespread attention public pensions have received in the media and local government (in fact, I covered a forum on this issue back in October). Most notable, of course, is San Jose mayor Chuck Reed's Pension Reform Act, which happened to lose a major court battle last month. The author points to the bankruptcy of Stockton as proof of the failure of liberalism in California, with the city's gradual decline caused by "liberal spending policies and catering to public employee unions."

That, though, brings up an even bigger problem -- the power of public-sector unions -- and the California Teachers Association is the major player, according to Lacy. The CTA is a dominant force in political spending, and the biggest-spending interest group in California: According to Lacy's calculations, the group spent $290,000,000 between 2000 and 2013 on "influencing California elections and legislation," which is more than double the total of the next highest special interest spender, the California State Council of Service Employees.

The money goes, of course, overwhelmingly to Democrats, who wield immense power in California. The CTA uses its influence to push the state's compensation policies far to the left, often under the guise of education spending. Liberals and their "teachers' union allies," Lacy writes, push for more money by pointing to the state's troubling student-teacher ratios, lack of computers in classrooms, etc. But these problems occur, he says, because the money California is already spending never reaches the classrooms, but rather goes toward lining the pockets of California's well-compensated teachers. Even as spending rises, Lacy writes, test scores continue to spiral downward.

But union money isn't the only thing that works to the Democrats' advantage; in addition, the party's political dominance seems to be self-sustaining. Lacy quotes Howard Jarvis Taxpayers Association president Jon Coupal, who wrote that, because Democrats control the government, they can press "politically vulnerable industries for campaign contributions." Lacy says the Democratic party is so entrenched "that today a Republican has practically no chance at winning any statewide elective office."

As a result, California Democrats' resistance to reform extends beyond pensions and education; the energy sector, for example, experiences complex, duplicative, and anti-growth regulations. Lacy argues that the most important step that California can take to improve its economy is to "throw off [the] liberal clock of inaction" and allow for more oil and natural-gas extraction.

That kind of suggestion is typical of Lacy's approach: He provides much more detail when describing problems than when offering solutions. He does encourage certain relatively direct courses of action, such as implementing Common Core, but otherwise he keeps to general recommendations such as lowering taxes, bringing spending under control, and encouraging Democratic officeholders to embrace more moderate positions.

So, then, what does the path to improving California's economic situation look like? The state is in the unenviable position of needing a number of different answers to a number of different problems, and it's going to have to start with a top-down approach targeting its systemic issues. Given how Lacy portrays California's governmental machinations, that seems unlikely without greater political competition.

Joseph Fleming is a RealClearPolicy intern.

Robert VerBruggen - April 9, 2014

This new video from Slate explores the question:

Using some back-of-the-envelope math with data from various sources, the video claims that if Walmart raised its prices just 1.4 percent -- one cent on a 68-cent box of mac and cheese! -- it could pay all its employees enough ($13.63) that they wouldn't qualify for food stamps, without touching its bottom line. When all was said and done, Walmart customers would be out $4.8 billion a year, employees would be paid more, and taxpayers would save $300 million a year on food stamps.

Would this be a good outcome? We can't really say until we take a closer look at the three affected parties -- customers, workers, and taxpayers.

Last fall I pointed out an analysis from the University of California at Berkeley (whose work the video also cites) finding that, if Walmart hiked prices to fund a higher minimum wage for employees, "28.1 percent of the total price increase would be borne by consumers in families below 200 percent [of the federal poverty level]. In comparison, 41.4 percent of the benefits would go to Walmart workers in families below 200 percent FPL."

As a definition of "poor," 200 percent of poverty might be a little broad -- it describes about 40 percent of the population. (Walmart shoppers tend to be middle- and low-income, but richer shoppers spend more, so only 28 percent of its revenues come from the poor.) But let's put these numbers differently: Transferring $100 from Walmart customers to the lowest-paid Walmart employees is like taking $28 from some poor people and giving it to other poor people, taking $59 from some nonpoor people and giving it to other nonpoor people, and taking $13 from nonpoor people and giving it to poor people. Or, in the form of a crude illustration:

Further, we're not just transferring money from customers to employees, because taxpayers are taking a cut, too, in the form of slashing benefits for poor employees and collecting more taxes from richer ones. As I've also previously noted, a poor single mother with one kid -- like the mother who appears in the video -- can lose a big chunk of her gains as her income rises; Jeffrey Dorfman calculated last week that she'll lose about half of her raise if she goes from minimum wage to $10.10, and that more than a third of the damage is from programs other than food stamps.

Pairing Dorfman's numbers with Slate's own estimate for food stamps ($300 million out of $4.8 billion) allows us to do some rough math: If every dollar in food-stamp cuts is paired with 50 cents in other benefit cuts, 9 percent of the total transfer ($450 million) will go to taxpayers this way. And if the loss is concentrated among the 41 percent of employees Berkeley classifies as low-income, as it presumably is, our calculation above changes: Instead of taking $28 from poor customers and giving $41 to poor workers (in addition to transfers involving the nonpoor), we're taking $28 from poor customers and giving $32 to poor workers. Taxpayers save $9 (and collect some extra taxes from Walmart workers in richer households).

And let's not forget that taxpayers are a pretty rich bunch; if you cut $100 in federal taxes, and do so proportionately to the taxes that are paid, $71 will go to the top 10 percent, and only $2 will go to the entire bottom 50 percent. Or you can apply the savings to the deficit, but that just saves future groups of taxpayers, whose incomes will presumably be similarly skewed. Certainly, the typical tax dollar comes from a richer person than the typical Walmart dollar comes from.

Finally, if Walmart did this unilaterally (as opposed to the government forcing Walmart and all its competitors to do it), it would raise competitive concerns. The Berkeley study said Walmart could increase prices while maintaining an advantage over other retailers, but that might no longer be true.

So, Slate's scheme is a lot more complicated than it looks.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Rocky Mountain High or Reefer Madness?

Marshall Allen, ProPublica - April 8, 2014

I walked through clouds of marijuana smoke Friday night to get to the Denver Nuggets basketball game. The sweet smell lingering in the air reminded me less of a family event and more of the time I saw AC/DC on "The Razor's Edge" tour at the old McNichols Sports Arena.

I grew up in Colorado, but it's been a while since I lived in the state. When I returned for a recent conference, I found that a place settled by the Gold Rush is now mad about reefer. In 2012, Colorado voters became the first in the nation to approve recreational pot use. The good times rolled out Jan. 1, when stores started selling it.

I've never tried pot, but I graduated from the University of Colorado-Boulder, which is famous for its annual "4/20" public pot parties. At CU, you can practically get a contact high walking to class. But I saw more public pot use in my two-day visit to Lower Downtown Denver than in years spent at Boulder.

It's supposed to be illegal to smoke or consume pot in public. But then the day after the game, while jogging down the Speer Boulevard bike path, I passed a guy lounging under a tree lavishing his affections on a joint.

Anyone over 21 can walk into a dispensary and load up on bud, marijuana baked goods and candy.

The presence of legal pot right outside our hotel made people giddy at the conference I attended -- a meeting of the Association of Health Care Journalists. At a reception, one woman passed a friend gummy bears infused with THC, or tetrahydrocannabinol, the main psychoactive ingredient in pot.

And then there was a friend of mine at the conference -- I'll call him "Dude" because he shared his story on condition I didn't name him. He had a bad reaction after eating too many marijuana gummy bears.

There's a running debate about whether pot should be legal for recreational use, but the Colorado experiment is rapidly unfolding, and it could help determine whether other states follow or shy away. (Washington voters also have approved recreational marijuana, and the state expects to begin licensing retailers in July.)

Two things stand out after my visit.

First, legal pot is attracting new and possibly naïve users -- creating risks that some don't bargain for. Second, the public health system's desire to protect people may be well-intentioned, but regulation and efforts to track the health effects have a ways to go.

Dude had only smoked pot twice in his life, about 25 years ago, but he got curious and tried some pot gummy bears from a shop called the LoDo Wellness Center. Other than being infused with THC they looked and tasted like ordinary candy. Dude and his buddy paid $20 for a pack of 10.

Dude ate a bear before dinner but felt nothing. So he popped another during the meal. Nada. Ripoff, he assumed. So he ate a few more -- five total, he said -- but still felt nothing. He fell asleep in his hotel room at 11 p.m.

Two hours later, Dude awoke feeling like he was on a roller coaster. His entire body tingled, and he was light headed. He tried to stand, but his left leg was so numb he couldn't walk to the bathroom. His pounding heart strained his rib cage as waves of euphoria and anxiety washed over him.

He was terrified.

Was this the high? An overdose? A heart attack? A stroke?

Totally debilitated, Dude thought about calling an ambulance but feared ending up in the E.R. or a police station. So he stayed put, guzzled water, pulled a blanket over his head and clutched a pillow. The symptoms lasted two hours, but it took a full day to feel normal again.

Dude's experience and the open pot use I saw made me wonder about public health aspect of legalization. I called some experts to find out if there have been safety problems, how pot and gummy bears are being regulated and whether consumers are being educated about the risks.

The foods with pot -- typically baked goods but also sodas, candies and even lasagna and pizza -- cause the most unpredictable highs because the effects aren't immediate and potency varies, I learned.

In the case of gummy bears, one is considered a single serving. But Dude kept eating them because he didn't feel anything.

Haley Andrews, manager of the LoDo Wellness Center, said about half the shop's customers are marijuana novices, so the staff takes time to educate everyone who buys. Users should start with one 10 mg gummy bear, she said, and never consume more than 20 mg at a time.

Andrews said the gummy bear bottle's label listed the number of 10 mg servings inside and advises users to consume with caution because the product had not been tested for contaminants or potency. There is no mention of a delayed response, she said.

The Denver Post recently tested edibles and found that potency labeling was often inaccurate.

Accurate or not, labels are often ignored.

Dude said his buddy held onto the package so he never looked at it. He claims no one at the shop gave him any warnings about the gummy bears.

There were signs in the shop about how the different strains of pot would make users feel -- "calm" or "excited" -- but Dude said he saw no displays with advice for novice users, how many gummy bears are too many, or warnings about a delayed response.

Andrews said the staff makes every effort to ensure people use the products safely, but that it's possible Dude somehow slipped through the cracks.

Generally, using too much pot isn't life-threatening. But a reaction like Dude's could contribute to a heart attack or stroke for someone who has health problems, said Dr. Tista Ghosh of the Colorado Department of Public Health. She said recreational pot has been unexpectedly popular with the older crowd.

"There's a lot we don't know," Ghosh said. "I feel like in some ways we're like tobacco 50 years ago. More research needs to be done on this from the public health and individual health perspective."

Looking back on it, Dude said he was glad to be in his hotel room when the reaction hit him and not in a place where he could endanger others. According to reports in the Denver Post, pot use has contributed to car crashes and the recent death of a Wyoming college student, who on a spring break visit to Denver, began acting strangely and jumped from a fourth-floor hotel balcony.

Though ruled an accident, a coroner's report said "marijuana intoxication" from eating several pot cookies was a significant contributor to the 19-year-old's death, the Post reported.

Children are especially at risk. It's illegal to make candy or fruit-flavored cigarettes in the United States, but pot candies and cookies in Colorado have been some of the best-selling products. Although the packaging is child-proof, it doesn't stop kids once it's open.

Dr. Andrew Monte, a medical toxicologist at the University of Colorado Medical School and Rocky Mountain Poison and Drug Center, didn't have hard numbers but estimated that there is a poison control call every few days about a child accidentally eating marijuana products.

There also are reports from emergency room doctors, though no official numbers yet, of children showing up to hospitals in extreme states of drowsiness after accidentally consuming THC products, Monte said. Some end up getting expensive diagnostic work-ups like CT scans and spinal taps, he said.

"What kid doesn't want a brownie or a gummy bear?" Monte said.

So far there are no mandatory tests of the potency or purity of recreational pot or THC food products, but they are scheduled to roll out in the coming months under the rules to implement the new law.

The process is more complicated than it would be in other cases because state regulators have not been able to rely on the federal health agencies. The federal government deems marijuana an illegal substance, so it's not participating in the oversight, Ghosh said.

Ghosh said the Colorado regulators have had to start some things from scratch, including finding labs that can be certified to test pot products.

Michael Elliott, executive director of the Marijuana Industry Group, which represents marijuana centers, growers, and infused products manufacturers in Colorado, said there are clean kitchen standards in place now, and licensing of facilities, financial disclosures, security and more.

He said the industry is committed to robust regulation.

Elliott, Ghosh and Monte agree that more needs to be done to educate consumers.

The state has put up a website with information about the law and advice for parents and is running a "Drive High, Get a DUI" campaign, efforts that Elliott says are supported by the marijuana industry.

Included on the website is a page titled "Using Too Much?" aimed at people like Dude.

Public health also depends on people using common sense. My friend Dude is a smart guy, but he knows he was a dumb consumer when he gobbled the pot gummy bears. Now, he regrets assuming that because marijuana was legal nothing could go wrong.

"I was ignorant about the whole thing," he told me later. "I am embarrassed to admit that I just ate the gummy bears because it seemed like fun.

"It was not."

Marshall Allen is a reporter at ProPublica, where this piece originally appeared. It was co-published with The Cannabist.

Robert VerBruggen - April 7, 2014

... after steady increases over the past five years. The rate is now at its lowest point since 2008.

From Gallup:

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

NLRB Wants to Stop Businesses From Moving

Peter Schaumber - April 7, 2014

Richard Griffin, the new general counsel of the National Labor Relations Board, wants to give unions a veto over a unionized employer's decision to relocate. If Griffin has his way, and he most assuredly will, some unionized businesses will be pinned in place at the discretion of their unions.

The change Griffin is contemplating is unnecessary and inconsistent with both the law and the dynamics of our free-enterprise system. It will upset the balance mandated by the Supreme Court and should send a chill up the spine of unionized companies contemplating relocating an operation.

Griffin's intent was disclosed in a memorandum he sent the agency's regional directors ordering them not to act on cases presenting issues "of concern" to him -- and there were many such issues -- without receiving guidance from his office. Griffin's guidance will be to order an employer to be prosecuted not on the basis of what the law is but on the law as Griffin would like it to be. This will give the board an opportunity to change the law (though the change will be prospective -- the employer who is prosecuted will not be punished for violating the new rule).

Under current law, it is perfectly legal for a unionized employer to relocate some or all of its facilities and eliminate bargaining-unit work if the move is motivated by economic gain -- not by a desire to retaliate against employees for their union activities and support. A desire to escape the consequences of unionization, particularly high labor costs, is considered an independent, innocent motivation, not an unlawful one. Big Labor loathes this law; Griffin intends to help unions nullify it.

Under longstanding NLRB law, a unionized employer is not required to bargain with the union over a relocation decision that is motivated by labor-cost savings if the employer determines that bargaining would be futile -- that the union could not offer labor-cost savings that could change its decision. Unions can contest the employer's decision, but they have no right to participate in it or otherwise delay it absent a court order enjoining it.

Griffin intends to change this law by making bargaining mandatory. He will argue, as did a former board member whose views he cites, that mandatory bargaining is a modest change in the law that fulfills the National Labor Relations Act's central purpose of promoting collective bargaining. Why deprive the union of the opportunity to explore or influence an employer's relocation decision when labor costs, an area over which the union exercises some authority, are a motivating factor?

The question begets its answer: Because the goal of collective bargaining is labor peace. The board promotes collective bargaining not in the abstract but only when the subject of the proposed discussion is "amenable to resolution through the bargaining process" (as the board and the courts have put it). Requiring bargaining with the union over a work-relocation decision that will eliminate the union when one party to the bargaining process -- the party that has done the math -- knows that it will be futile, invites delay and conflict, not labor peace. One would have to be living on another planet not to know that the union will be tempted to abuse the bargaining process with endless requests for information, and even take the opportunity to foment workplace discord, to convince the employer to remain in place or simply to exact a price for its move.

Further, the Supreme Court has already established a fair way of balancing a union's desire to negotiate against a business's desire to run its operations free of interference. Decades ago, the court made it very clear that the board must respect "management's [need] to be free from the constraints of the bargaining process to the extent essential for the running of a profitable business." It admonished the board:

Bargaining over management decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective-bargaining process, outweighs the burden placed on the conduct of business.

Current board law involving work relocations achieves the proper balance and protects unions from unfounded claims of bargaining futility. If the union contests the employer's failure to bargain, the employer must show that the union could not have made concessions that could have changed the employer's decision. A 2002 study conducted by Northern Illinois University of more than 100 contested work relocations that occurred from 1992 through 2002 concluded that this test "overwhelmingly" favors a union outcome.

Employers are further deterred from avoiding a bargaining obligation by the severity of the remedies the board can impose if it finds against the employer: back pay from the date of termination until the date the displaced employees find substantially equivalent work, reinstatement at the employer's new location with reimbursement of moving and other relocation expenses, and an order requiring the employer to move back.

Current law was thoughtfully constructed decades ago by a unanimous board composed of Democratic as well as Republican members. It protects the interests of workers and their unions while allowing employers the freedom necessary to compete and prosper. Griffin's decision to seek a change in this law and construct a Berlin Wall of bargaining obligations around unionized businesses will hasten those companies' demise and harm the economy. It will undoubtedly be approved by the board's majority, however, which is made up of committed members of the labor movement whose passionate desire to hold the line on the loss of union jobs in the private sector matches Griffin's.

Such a change in the law is in the short-term interest of Big Labor but ignores the interests of the nation as a whole. It is the price we pay when control of a small but important federal agency is turned over to political appointees who are unable to fairly balance the interests of those it is charged with regulating and protecting.

Peter Schaumber is a former chairman of the NLRB, appointed by President George W. Bush.

FDA Suppresses Concerns About Indian Generics

Roger Bate - April 7, 2014

Are American patients taking unsafe medicines from Asia? Even posing that question is leading to unusually public confrontations between scientists and physicians on one side and the Food and Drug Administration on the other.

Six weeks ago I chaired a congressional briefing about the possibility that low-quality drugs are being sold here. There were several topics under discussion that day: corruption at India's drug regulator and the quality problems it ignores; the felonies admitted to by Ranbaxy, one of India's largest exporters to America; and increasing anecdotal evidence that American patients are taking inferior heart medications. But perhaps the most interesting points were covered by Preston Mason, a specialist in cardiological science at Harvard Medical School's Brigham and Women's Hospital. When Mason sampled atorvastatin (generic Lipitor) -- the world's most valuable drug -- from Europe, the U.S., and Asia, he found 36 different versions with impurities that would undermine their clinical efficacy.

Last week, Janet Woodcock -- the FDA's lead drug reviewer -- inexplicably told Bloomberg that Mason's team "didn't use the proper method to extract the active ingredient" from samples "and therefore contaminated it themselves." This is a major charge to level at a senior scientist with decades of research experience at a stellar institution -- and she is wrong. Mason's methods were perfectly sound according to credible independent scientists with whom I've spoken, such as Tadeusz Malinski, a professor of biochemistry at Ohio University in Athens who has been published extensively in the academic literature. Moreover, Mason followed the US Pharmacopeia method, the method any scientist, including those at the FDA, would normally follow.

More bizarrely still, in the Bloomberg piece linked above the FDA effectively defended the entirety of the U.S. supply of atorvastatin by saying samples from one pharmacy it surveyed -- yes, a single pharmacy -- were all fine and hence there is nothing to worry about. A detailed analysis of one pharmacy's atorvastatin is no doubt informative, but to draw policy conclusions we need a bigger sample size.

Had FDA officials bothered to speak to Mason prior to so publicly criticizing his methodology, they would have learned that most of the suspect samples came from Asia, and that all the drugs approved by the FDA for legal sale in the U.S. passed his testing. In fact he stressed many times at the briefing that the U.S.-manufactured samples he tested did not have the impurity in any meaningful volume -- but some foreign versions with impurities, notably from India, did make their way into the U.S. through unauthorized routes. No doubt this fact makes the FDA uncomfortable.

Perhaps even more insulting is the FDA's assertion to Bloomberg that physician concern over poor patient reactions to some generic medicines is all in the minds of the patients and doctors. Harry Lever, a cardiologist at the Cleveland Clinic in Ohio who has raised concerns about medicines made by several Indian producers, has rebuffed the FDA's dismissiveness: "My patient reactions are not all in the mind." After switching from U.S. brand name and generic products to Indian generics, his patients have had dangerous physiological reactions including major elevations of cholesterol levels, rapid weight gain, and blood pressure and heart-rhythm problems. One physician, like one pharmacy, can't provide enough information to drive policy decisions, but it should drive further study.

This isn't the first time the FDA has dismissed physician complaints about underperforming medicines. For five years it ignored increasing evidence that some generic versions of GSK's Wellbutrin, an antidepressant, didn't work. It eventually conducted its own studies and found that, indeed, some generic copies didn't work properly. A year and a half ago the agency issued a recall.

Cavalier and aggressive responses from the FDA are unusual and unexpected. Is the FDA both worried about drug quality, and at the same time trying to shut up any independent voices raising concerns about quality? Is dealing with repeated press inquiries about drug quality getting to the FDA?

Even for those who have considerable faith in the FDA, it should be stressed that it was not the FDA that found out about failing generic Wellbutrin -- and that, while the FDA finds plenty of problems with manufacturing sites, it is independent individuals who provide the evidence to catch the major frauds. FDA investigations did not unearth GSK's problems in Puerto Rico, or Ranbaxy's decade-long string of lies about quality; it was whistleblowers in the companies.

The FDA is ratcheting up its inspection activities overseas, notably in India, because of safety concerns. But knee-jerk attacks by the FDA on independent American researchers provide cover to India's entrenched industry and its incompetent and corrupt regulator. The market certainly interpreted the FDA's remarks as a complete vindication of companies like Ranbaxy.

The FDA is a very important agency, but it is not omniscient or infallible, and it needs all the external help it can get. It is doubtful that independent academics and critics will continue to voice their concerns so willingly if FDA persists in belittling their efforts in public. And while that may be good for the egos of power brokers at the FDA, it is surely not good for American patients, who increasingly depend on India's drug supply.

Roger Bate is the author of Phake: The Deadly World of Falsified and Substandard Medicines and a scholar at the American Enterprise Institute. 

Stop Cuts to Medicare Advantage

Norm Coleman - April 7, 2014

The president is celebrating the recent announcement that 7 million people have signed up for Obamacare. Who those people are, how many were actually uninsured previously, and how many enrolled because they'd had good policies canceled -- and now have higher costs and less extensive doctor networks on the exchanges -- are among the remaining unanswered questions.

The president thinks this is a win. Yet poll after poll after poll flies in the face of this delusion. And today, the Obamacare wrecking ball is swinging around again, targeting the nearly 16 million seniors who depend on Medicare Advantage for their health care.

The popular, privately administered Medicare Advantage program has seen strong annual growth in enrollment, and it now accounts for nearly one in three seniors on Medicare nationwide. In my home state of Minnesota, 47 percent of seniors are on Medicare Advantage. In addition to the safety net of out-of-pocket cost limits, Medicare Advantage often provides seniors with prescription drug, dental, vision and other needed benefits.

Unfortunately, it's exactly the kind of successful health-care program that Obamacare aims to destroy. According to the Congressional Budget Office (PDF), Obamacare requires direct cuts to Medicare Advantage of at least $156 billion over ten years to help pay for the health-care law. Some of these cuts have already gone into effect, and in February the Obama administration announced plans to finalize more; the details will be released today, and the cuts will go into effect in 2015. It's expected that these cuts will slash the program's payment rates by 3 to 6 percent.

What does this mean for America's seniors? Here are some ill effects Medicare Advantage enrollees are seeing thanks to the cuts that have already gone into effect:

โ— an average $464 increase in limits on out-of pocket costs this year

โ— the cancellation of 17 percent of Medicare Advantage Plans last year

โ— thousands of doctors no longer able to see Medicare Advantage patients

Unfortunately, this is only the beginning, as the Obama administration and its health-care law will bring round after round of cuts to Medicare Advantage. Cuts to seniors' health care is a strong reminder of how devastating Obamacare is for America and why we must fight to protect Americans from it.

It's not just Republicans who are concerned about the dramatic impact the president's cuts will have on senior citizens. Analysts have long warned of the consequences of Medicare Advantage cuts, noting, as the Associated Press paraphrased one expert, that "big cuts could wipe out smaller competitors and leave customers with less choice."

It doesn't have to be this way. Members of Congress on both sides of the aisle can step in and stop the president from raiding Medicare Advantage and further destroying a government program that actually works and provides much-needed care to seniors in the United States.

What has been lost in this entire Obamacare mess is the question of whom the president is ultimately trying to help with this law. Almost by definition, he isn't trying to help the Americans who are negatively impacted by Obamacare.

And his decision to unilaterally delay or not enforce provisions of Obamacare that Democrats in the House and Senate voted for, isn't intended to help the American people. It's intended to help Democrats in the upcoming midterm elections.

Rarely has such cynicism pervaded politics and policy in America. And rarely has the intersection between bad policy and bad politics collided with such intensity. If the administration were truly concerned about the negative impact of Obamacare on millions of America's senior citizens, it would work with Congress to stop gutting Medicare Advantage.

Norm Coleman is a former U.S. senator for Minnesota and current chairman of the American Action Network, a 501(c)(4) center-right issue-advocacy organization. AAN has spent $1 million this year opposing proposed Medicare Advantage cuts. 

Defining 'Sexual Violence'

Robert VerBruggen - April 6, 2014

Deja vu, I know, but there's a new study claiming that 27 percent of girls and 25 percent of boys are victims of "sexual violence" in middle school.

The problem is that the study defined "sexual violence" to include not only violence of a sexual nature, but also verbal harassment, rumor-spreading, and homophobic name calling. These things are worth studying and fighting. They are not what people think when they read the term "sexual violence" in a headline.

That said, educators and policymakers might find the results useful:

The most frequent experience was physical sexual violence, where 21.6% of students that experienced sexual harassment indicated being physically touched when they did not want to be. Some responses included "someone slapped my butt", "someone rubbed against me sexually", "[someone] forced me to kiss them", etc. Rumor spreading (18.9%), verbal sexual commentary (18.2%), and homophobic name-calling (17.9%), were the other themes that were the most common. Some responses coded as rumor spreading included "when someone wrote on the bathroom stall [that] I was a skank", "someone said I 'did it' with a guy [when] I didn't', or "people would sometimes write inappropriate messages on the chalkboard about me." Responses identified as verbal sexual commentary included "someone asked me if they could touch my breast" or "someone asked me to bend over to look at my 'parts'." Furthermore, responses indicating homophobic name-calling involve phrases like "people say that I am gay because I have lots of friends that are girls", "people tell me I am gay because my mom is", "people make fun [and say] that I'm going out with my best friend just because they know I'm bi[sexual]", "people call me lesbian just because I hang out with all girls."

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Presidents Use Pork Too

John Hudak - April 5, 2014

Discussions of "pork" typically focus on members of Congress who bring money home to their states and districts. But electoral interests drive presidents, too, to influence the distribution of federal funds. In my new book, Presidential Pork, I explain the extent to which this happens -- and explore the mechanisms through which presidents target funds toward swing states and the advancement of electorally strategic policy goals.

The numbers show definitively that presidents seek to get the most they can out of federal funding allocations. On average, swing states receive 5-7 percent more grants and grant dollars than do non-swing states. In advance of election years, those numbers increase even more. Within agencies where political appointees, rather than careerists, fill many high level positions and in agencies structured in ways that enable presidential influence (non-commission structures), the swing-state advantage can exceed 30 percent.

But how does this happen? The president is a lone individual charged with overseeing a bureaucracy that includes nearly 3 million civilian and 1.5 million military employees. One challenge he faces is getting this burgeoning branch of government to respond in ways that support his electoral (and other) goals.

Does the president’s immediate staff contact distributive agencies and explicitly inform them of presidential preferences in allocations? Do presidents give political actors final decisionmaking authority? Or is the process more subtle and varied, with presidents relying on layers of contacts to diffuse information throughout the bureaucracy? In evaluating presidents' ability to engage in pork-barrel politics, it is vital to understand the mechanisms that facilitate political or electoral control.

Distributors -- executive-branch personnel with direct spending authority -- have a critical role in helping presidents use federal largesse as a campaign tool. Distributors range from grant managers in regional offices of federal agencies to budget managers in Cabinet departments -- and many positions in between. Presidential Pork shows that with a few (predictable) exceptions, namely those involving more insulated, independent agencies, distributors produce policy outcomes that are consistent with the president’s goals.

As might be expected, the president's influence begins with an inner circle of appointed officials. But rather than playing an active and direct role in the daily affairs of agency offices throughout the country, these appointees may use frequent contact to discuss with career-level agency executives the preferences of the administration and the most efficient means of achieving its goals. By constantly relaying information on administration priorities to career executives, appointees can convey the president’s behavioral and policy expectations.

As in any organization, the executive branch's leadership can convey to staff its preferences and in an indirect way drive staff to promote leadership goals. In a federal agency, staff are reminded of whom they serve every time they walk into their office, as pictures of the president and department head are usually prominently displayed. Environmental politicization can be a highly effective means of promoting responsiveness, especially in institutions less likely to be responsive to the president.

Political control and presidential influence exist below the macro level as well. Unlike broad approaches such as politicization and centralization, the mechanisms I identify in Presidential Pork are flexible and can be employed quickly and efficiently, often behind the scenes, away from the prying eyes of Congress and the public. This can include implicit means such as structuring grant criteria in ways that can enhance the likelihood that certain recipients and certain geographic areas will fare better in the process. It can also occur more explicitly by working with applicants in specific states to ensure their proposals are high-quality and on time.

Congress's use of pork is well known and much discussed. But presidents, too, have ways of using taxpayer dollars to their own advantage.

This piece is adapted from Presidential Pork: White House Influence over the Distribution of Federal Grants. John Hudak is a fellow in the Center for Effective Public Management, as well as the managing editor of the FixGov blog, at the Brookings Institution. He holds a Ph.D. in political science from Vanderbilt University.

Robert VerBruggen - April 4, 2014

Total nonfarm employment up 192,000, unemployment rate steady at 6.7 percent. Get ready for a deluge of bland commentary about what that means!

My view is that the government clearly deserves credit or blame for something. If the government enacted the policies I prefer, things would be better, but any government policies I support are the reason things are as good as they are.

Okay, in all seriousness -- here's a chart of the unemployment rate:

See that little horizontal bit at the end? That's the breaking news. As you can see from the last few years' worth of data, it's not at all unusual for two consecutive months to have the same unemployment rate even though the overall trend is downward.

And here's the jobs number itself:

The Y axis is divided into units of 2.5 million. Employment fell more than three of those units because of the recession. Today's news is an improvement of less than one-tenth of a unit, and it's pretty much the same news we've been getting every month since jobs bottomed out in early 2010.

Update: Just in case the above didn't convince you that most jobs-report commentary is pointless, I ran a few more numbers. Starting with the increase from January to February of 2011, the mean number of jobs added has been 187,000. The median? 197,000. Last month's number is perfectly in the middle of those.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

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