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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 22: May 31, 2017

  1. Trump’s Budget in Three Numbers
  2. States’ Role in Replacing Obamacare
  3. Say “No” to Nuclear Power Subsidies
  4. Are Sanctuary Cities a Nullification Crisis?
  5. Independent Updates


1) Trump’s Budget in Three Numbers

On May 23, the White House released its first complete budget proposal, one that President Trump said “returns us to economic prosperity” and “allows us to fund additional priorities, including infrastructure, student loan reform, and initiatives to help working families such as paid parental leave.” The $4 trillion budget comes with 10 summary tables filled with scores of numbers, but as Independent Institute Research Fellow Craig Eyermann explains in a piece at MyGovCost News & Blog, three are particularly important: 0, 66, and 1.7 trillion.

Zero usually doesn’t count for anything, but in the budget proposal it’s the most interesting number of the lot, according to Eyermann. That’s because it means the budget is supposed to zero-out the nation’s federal budget deficits—an ambition lacking in every budget proposal since 2007. For this reason alone, the Trump budget is very special indeed, despite its questionable accounting and optimistic assumptions. The second interesting figure—66—refers to the number of federal agencies the budget would defund. Although the targeted agencies collectively account for only a James Bond fraction (0.007) of the $4 trillion budget, their elimination is highly welcomed because, Eyermann writes, “what they do is either unnecessary or is duplicated more effectively by other federal spending programs.”

What about the third interesting number, 1.7 trillion? That refers to the total number of dollars Trump proposes we spend above the projected spending for 2017, in order to reach the president’s proposed budget for 2027. This is highly significant. It implies an annual spending growth rate of 3.5 percent over the next ten years, as compared to 4.1 percent annual spending growth over the past ten years. In other words, Eyermann writes, “President Trump’s proposed pace for increasing federal government spending is just 0.6 percent slower!” Although the budget proposal is in some respects extraordinary, in other ways it’s pretty much business as usual.

President Trump’s First Budget, by Craig Eyermann (MyGovCost News & Blog, 5/27/17)

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2) States’ Role in Replacing Obamacare

States have an important role to play in healthcare reform. Unfortunately, Congress and the press have largely overlooked this role. In a recent piece at Forbes, Independent Institute Senior Fellow John C. Goodman examines several key policy changes that state governments can help bring about.

Many of Goodman’s pieces are difficult to summarize with precision; when you build up 30 years’ worth of expertise on a topic as complex as healthcare policy, you’re bound to have ideas that take more than a few paragraphs to explain. Consequently, we urge readers of The Lighthouse to digest the entire piece for themselves. Then share it. That said, Goodman argues that a sensible Obamacare replacement bill would enable the states to help make the individual coverage market work better; to help integrate the individual and group markets; to help make risk pools and reinsurance work; to help make insurance more affordable to people of modest means; and to help integrate Medicaid and private insurance.

If the necessary reforms are made, according to Goodman, the American public can expect to see their premiums drop to pre-Obamacare levels, their policy options better reflect their circumstances, their plans become portable as they change jobs, their insurers compete for consumers facing cancer and chronic conditions such as diabetes, and their local safety-net institutions receive government funding “based on need (number of insured) and not based on arbitrary formulas.”

To Replace Obamacare, Don’t Overlook the Role of the States, by John C. Goodman (Forbes, 5/15/17)

A Better Choice: Healthcare Solutions for America, by John C. Goodman

Priceless: Curing the Healthcare Crisis, by John C. Goodman

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3) Say “No” to Nuclear Power Subsidies

Atomic-powered corporate welfare—up to $10 billion worth—may be coming to a utility company near you. More than half the states in the nation have a nuclear power plant, and several of them may follow New York and Illinois and decide to support them with taxpayer funds. As Independent Institute Senior Fellow William F. Shughart II explains in an op-ed for the Washington Times, it’s a foolish move that would throw good money after bad.

Cheap natural gas and wind power have given the nation’s largest nuclear power operator—Illinois-based Exelon—a run for its money. The nuclear industry has lobbied hard to try to stop what may be inevitable. The bad economics of nuclear power has forced the closure of six nuclear plants since 2015. Unlike the lobbyists, consumers and taxpayers are better off riding the wave of methane and shale, not fighting a changing economic tide by propping up technologies that no longer meet the market test, according to Shughart.

“Utilities should compete to provide electricity without government assistance,” Shughart writes. “The best way to create even more jobs in manufacturing and other industries is to keep electricity costs down. Propping up unprofitable nuclear power plants does the opposite.”

Why Nuclear Power Subsidies Must End, by William F. Shughart II (The Washington Times, 5/23/17)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

Nature Unbound: Bureaucracy vs. the Environment, by Randy T Simmons, Ryan M. Yonk, and Kenneth J. Sim

Re-Thinking Green: Alternatives to Environmental Bureaucracy, edited by Robert Higgs and Carl P. Close

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4) Are Sanctuary Cities a Nullification Crisis?

Is the United States facing a nullification crisis? The answer is emphatically yes, if some conservative pundits are to be believed. They say cities that refuse to enforce federal immigration statutes—San Francisco, Los Angeles, and New York—constitute a movement akin to the Confederate states’ nullifications during the Civil War. Not so, according to Independent Institute Research Fellow William J. Watkins, Jr.

“In trying to discredit the sanctuary city movement, conservatives show an ignorance of history and mislead the public,” Watkins writes in a piece for the legal website Law360.com. They are wrong on several counts. The Confederates did not invoke the doctrine of nullification, Watkins argues. Moreover, nullification isn’t inherently problematic, but rather “was meant to be a mechanism of appeal.”

Nullification, as understood by Jefferson and Madison, requires popular consideration—a special state convention—something that no sanctuary cities have convened. Yet to many of today’s conservative pundits, “it’s all nullification.” In other words, the pundits “don’t want anything to interfere with expanding federal power,” Watkins writes. “There are many legitimate criticisms one can raise about the sanctuary city movement, but nullification is not one of them.”

Sanctuary Cities Are Not the New Nullification Crisis, by William J. Watkins, Jr. (Law360.com, 5/23/17)

Crossroads for Liberty: Recovering the Anti-Federalist Values of America's First Constitution, by William J. Watkins, Jr.

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5) Independent Updates

The Beacon: New Blog Posts
MyGovCost: New Blog Posts
Featured Video
News Alert

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  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org