(Let’s ignore the rank sexism of only covering birth control for women and not for men.)

Anyone with a bit of knowledge of American politics should have been able to predict that someone would complain. Maybe some Catholics, maybe some Baptists — but someone. But it is equally predictable that if they had decided that no plans would cover contraceptives, someone else would have complained.

So the White House, having adroitly placed itself on the horns of a dilemma, decided that annoying social conservatives would cost them fewer votes come November than annoying radical feminists. Such is the politicization of health care over the past few years — and it’s going to get worse.

Now comes Vice President and former Senator Biden offering a “compromise”. What Mr. Biden is saying is, you quit your complaining, and we won’t force you to buy contraception coverage — in other words, a bribe. No deal, Mr. Biden: If it’s wrong to force Catholics to buy contraception coverage, then it’s wrong to force anyone to buy contraception coverage. Indeed, if it’s wrong to force Catholics to buy contraception coverage, then it’s wrong to force anyone to buy any coverage.

In a free market, if you want contraception covered in your health care plan, you seek a plan that covered contraception, or add a rider, and that’s that. If you don’t, you seek a plan that does not include such coverage. Now there’s a concept so simple that only a politician can’t understand it.

The problem is completely artificial and completely of Obama’s making (OK, with some help from Reid, Pelosi and a cast of hundreds). The solution, as usual, is to repeal the command and control top down Soviet style legislation and let the American people buy their health care insurance across state lines, like they buy so many other insurance products. (See HB 119 in the 2012 legislative session.)

The problem with that plan, you see, is that it doesn’t let our betters in Washington run our lives.

The Trabant, a product of state-sponsored VEB Sachsenring Automobilwerke Zwickau, was the best-selling automobile in East Germany during the Cold War. Already outdated when production began in 1957, the Trabant featured body panels made of paper-cotton composites and gas tanks prone to exploding. Powered by a noxious two-stroke, 26 horsepower engine, the car took 21 seconds to go from zero to 62 miles per hour and had a top speed of 70. In 2008, Time Magazine sealed the Trabant’s place in infamy (alongside the Edsel, Corvair and the Yugo) by naming the car one of the 50 worst ever produced.

Contrary to the Trabant’s limitations, the communist East German government’s strategy of central planning ensured the automobile’s place in the market. Between 1957 and the fall of European communism in 1989, Trabant production topped 3 million. And although no upgrades to the engine or body were made during the final 28 years of production, waiting lists for Trabants often stretched years.

But then the Berlin Wall fell, and within a year of facing open competition, the Trabant died a quick death.

The end of the Trabant was a lesson in the failure of government sponsored industry. But in the United States, government subsidies and regulations designed to propel the ethanol industry are mirroring East German mistakes.

Over the past 30 years, U.S. ethanol producers have depended on government handouts and regulations to force their product on the open market. As described in a January article by Wyoming Liberty Group staff attorney Steve Klein, ethanol – a gas additive derived from corn — is propped up by federal requirements that ignore consumer costs, damage to cars and billions in government subsidies.

In 1995, facing a stagnant economy and high unemployment, Wyoming legislators agreed to provide tax credit (derived from highway funds) to the state’s lone ethanol producer, Wyoming Ethanol of Torrington – provided the company obtained at least 25 percent of its corn from Wyoming growers. In the 17 years since the program began, Wyoming Ethanol has received $33.7 million in state funds.

According to a Wyoming state report on the ethanol subsidy dated January 13, 2012: “The historical purpose of Wyoming’s ethanol production credit has been to create a gasohol market by offsetting the increasing cost of producing and blending gasohol and a lack of market demand… Thus, Wyoming state highways and county and municipal roads have foregone $33.7 million to subsidize the ethanol credit program.”

Signals, however, are being sent that the ethanol industry must learn to swim on its own, or risk sinking. In January, federal legislators allowed a 30-year, $20 billion subsidy to ethanol refineries to expire. And in Cheyenne, state legislators are now considering Senate File 8, a bill that would phase out the state subsidy going to Wyoming Ethanol by 2014.

“We want to give [Wyoming Ethanol] time to make the transition,” said Sen. John Schiffer, R-Sheridan/Johnson. “[Wyoming Ethanol] will walk prouder and walk faster.”

Sen. Schiffer also took issue with the lack of return for Wyoming’s investment. “They are required to have 25 percent of the corn come from Wyoming – they have met that just barely. I’m not sure we want to be providing assistance to Nebraska corn growers.”

Representing Wyoming Ethanol and its employees among his constituency is Sen. Curt Meier, R-Goshen/Platte. Predictably, Sen. Meier stands in opposition of the bill. “What’s on the plate is we should keep our word,” said Meier. “[Senate File 8] is going to drive this company out of business. You vote for this and you’ll pull the rug from underneath them.”

According to Sen. Meier, the effects of ethanol production in Wyoming extend beyond the refinery. “You have a lot of people with commitments; combine operators, truck drivers, suppliers of corn. Everyone has a dog in this hunt… The ethanol subsidy far outweighs the economic impact of highways.”

But according to Wyoming Liberty Group economist Sven Larson, ethanol subsidies dampen Wyoming’s economic growth and inhibit the industry from practicing better business methods.

“If a company can’t sustain itself without subsidies it shouldn’t be on the market,” said Larson. “If ethanol was forced to operate on the open market the same way as other companies they may get more creative and innovative… The question we need to ask is whether it’s the government’s job to produce ethanol.”

The Senate voted to pass Senate File 8 and the bill now moves to the House for consideration. Should the Representatives concur, Wyoming’s ethanol industry will be forced to survive on its own, or go the way of the Trabant.

Answer: You cannot legally buy either across state lines. (Unless you live in Georgia, where you can buy health insurance across state lines.) As many of us know, the reason for most, if not all, gun restrictions is that our benevolent rulers don’t trust the people with them. That’s because firearms ensure the ability to rise up against the rulers, take control of their own lives, and “to provide new Guards for their future security”.

So does this odd coincidence mean our benevolent rulers don’t trust us with health insurance either? Do they not want us to be able to control our own health outcomes? Do they want us to depend on them as wards of the welfare state? I’m just asking…

Pension plans come in two basic types: defined benefit and defined contribution. Defined benefit plans promise a defined payment when a person retires. Defined contribution plans, on the other hand, pay out depending on how much is contributed into the plan and how well the money is invested.

Defined benefit pension plans were the norm in days gone by. They were developed at a time when relatively few retirees took money out of the plan and many workers paid in. These plans held a gold-plated promise of retirement security that Bernie Madoff would have loved to sell. That is because they are nothing more than Ponzi schemes creating big financial risks for organizations, retirees and taxpayers.

The private sector has been moving away from defined benefit plans for a while now. According to the Bureau of Labor Statistics, in the Mountain geographical area to which Wyoming belongs, about 84 per cent of government workers have access to gold-plated plans, while only about 20 per cent of private sector workers do. In fact, only 48 per cent of private sector employees have a company pension plan at all. If a company in the private sector has a plan, it is most likely a defined contribution plan. Organizations that still have defined benefit pension plans face huge financial risks.

General Motors is a case in point. In the past, General Motors gave mostly unionized workers gold-plated defined benefit pension plans as a perk to maintain labor peace. In 2009, General Motors’ pension plan was short about $17 billion dollars. When the U.S. government bailed out General Motors, it saved the pensions of more than 120,000 retired salaried employees and 400,000 retired hourly workers with other people’s money. If the government hadn’t bailed out General Motors, the pension cupboard would have been bare and those pensioners left without a pension.

Defined benefit pension plans now exist mostly in the government sector and create financial risks for taxpayers and both current and future pensioners. For example, when the pension fund in the town of Pritchard, Alabama ran out of money in 2010, the town stopped sending pension checks to pensioners. Imagine the retiree standing at his mailbox waiting for the check that never arrives. Not even government workers are safe when government runs out of money — there will be no bailout.

In Wyoming, the shine is off the state’s gold-plated pension plan and people running the retirement system know it. The state’s Retirement System director Thom Williams, in a presentation to the Joint Appropriations Interim Committee, told legislators the existing defined benefit pension plan was short more than $1 billion and it would take decades before the fund was back in the black. To close this gap and make sure the pension plan has enough money to pay the pensions of retirees, Mr. Williams proposed creating a new tier of benefits within the existing defined benefit plan for new employees. However, this means new government employees will be forced to fund gold-plated benefits for current retirees and get less of a benefit in the future themselves. It also does nothing to remove the financial risk to taxpayers and retirees.

Legislators set aside HB0091 this time, but it will be back. Not only are government sector defined benefit pension plans leaving a legacy of debt and higher taxes to current and future generations, they may not even fulfill the promise of paying retirees. To ensure the financial sustainability of these plans, new government employees must be placed in a defined contribution plan, as called for in HB0091, just like employees in the private sector. Many taxpayers face an uncertain retirement future. Taxing them to fund bureaucrat retirement bliss, however illusory, is nothing more than taxpayer abuse.

Wyoming’s HCFA went through a long political process to reach ratification.  It reads as follows:

(a)   Each competent adult shall have the right to make his or her own health care decisions.  The parent, guardian or legal representative of any other natural person shall have the right to make health care decisions for that person.

(b)   Any person may pay, and a health care provider may accept, direct payment for health care without imposition of penalties or fines for doing so.

(c)    The legislature may determine reasonable and necessary restrictions on the rights granted under this section to protect the health and general welfare of the people or to accomplish the other purposes set forth in the Wyoming Constitution.

(d)   The state of Wyoming shall act to preserve these rights from undue governmental infringement.

Part (c) is the most dangerous portion of the HCFA because it gives the legislature the power to abridge health care freedom, but it is as cautious as possible against governmental infringement: legislative restrictions must be both reasonable and necessary to protect the health and general welfare of the people. (For a full analysis of the HCFA, see my Liberty Brief from last May.)

Although the HCFA has not yet been ratified by the people, the same Wyoming Legislature that passed it with 2/3 majorities last year makes up this year’s Budget Session.  Alas, one bill, Senate File 54 (SF54), would go against the purpose of the HCFA, and if justified under section (c) could work to nullify the HCFA in its entirety.

SF54 would require any college student in Wyoming to be vaccinated against meningococcal meningitis in order to attend.  The only exceptions are for religious objection or medical “contraindication” (i.e., an allergy to vaccines).  When introducing the bill, Senator Bill Landen stated that this is necessary because Wyoming colleges—the University of Wyoming in particular—draw students from many states and foreign countries.  This, he believes, makes colleges ripe for an outbreak.

Meningococcal meningitis is a serious disease, and is contagious.  However, this concern cannot trump health care freedom or the HCFA.  From 2001-2011, there were only 26 reported cases of the disease in Wyoming, or an average of 2-3 per year.  (For comparison, in 2010 two people were killed by lightning here in Wyoming.)  According to the Centers for Disease Control, meningococcal vaccines “do not prevent all cases.”  So, this law is far from necessary to protect the health and general welfare of Wyomingites, and it is also not reasonable.  If it were reasonable and necessary, just about any possible scenario of disease would justify forcing immunizations (or putting individuals in a position where they have to comply or sacrifice something like education).

Section (c) of the HCFA must be reserved for serious public health concerns.  If an outbreak of meningococcal meningitis (or another terrible disease) were to occur, it would be within the state’s police power to quarantine individuals or groups and immunize exposed individuals to protect the populace. What the state may not do under the HCFA is attempt to address every health concern before it’s actually a concern: that is, unfortunately, SF54 in a nutshell.

A similar bill to SF54 was introduced last year and failed 8-22 in the Senate.  This year, however, instead of appropriating tax money, the bill “merely” forces students to get the vaccine, adding to the already high cost of education.  Hopefully, with the HCFA in mind, SF54 gets the same reception as last year.  

Coincidentally, but not without irony, members of the Senate Judiciary Committee met Wednesday morning, with Bruce’s visage hanging above them, to discuss their assigned bills, including Senate File 23; an amendment allowing the Wyoming Department of Corrections the choice of new drugs for carrying out death penalty sentences. Strychnine though, was not among the options considered.

The bill is a reaction to a nationwide shortage of sodium thiopental (trade name Pentothal). According to Bob Lampert, director of the Wyoming Department of Corrections, Pentothal is an “ultra-short-acting” barbiturate that functions as the first ingredient in the three-part cocktail of drugs given to Wyoming inmates receiving the death sentence. Hospira, the manufacturer of Pentothal halted production and sales of the drug in the U.S. and Europe in January 2011, citing moral opposition towards its use in executions. States in need of Pentothal have been unable to find another source.

In reaction to the shortage, states are turning to alternative drugs for lethal injections. Pentobarbital (brand name Nembutal), another short-acting barbiturate developed in 1930 and commonly used by seizure patients and veterinarians, has emerged as the leading alternative. Several states, including Texas, Oklahoma and Louisiana have begun using pentobarbital for lethal injections. Lampert is hoping Wyoming will follow suit by passing Senate File 23.

“The drug [pentobarbital] has been used for other purposes, so that reduces the likelihood of drug manufacturers not selling it to us,” said Lampert.

However, Lundbeck – the primary manufacturer of pentobarbital — is not enthused by the prospect of states’ use of its drug for reasons other than its designed purpose. In a statement released last year, the company noted; “In our view the misuse of our product is a result of laws and social practices that we have little prospect of changing… therefore we have focused our efforts on assessing ways to prevent the distribution of pentobarbital for use in capital punishment.

“We have emphasized to the states that the use of pentobarbital outside of the approved labeling has not been established.”

Senate File 23 would allow Wyoming to shift to other proven drugs for execution should pentobarbital eventually become unavailable. This scenario, however, leaves the door open for future challenges to death penalty methods and legal quagmires. One option not discussed at the meeting, was returning to alternative methods of execution.

According to Lampert, Wyoming has the ability, and retains the right to execute prisoners in the gas chamber, should the state Supreme Court deem lethal injection unconstitutional. Of the 34 other states allowing the death penalty, all use lethal injection as the primary method of executions. However, 15 states offer secondary means of execution depending on circumstances. According to the Death Penalty Information Center; nine states have statutes allowing for electrocution, four could institute the gas chamber (Wyoming included), two allow for hanging (Washington allows prisoners to choose), and Oklahoma retains the option of firing squads should other methods become unconstitutional.

“I’ve always preferred the method of allowing the condemned the choice, be it hanging or other means,” said Sen. Bruce Burns, R-Sheridan, following the Judiciary Committee meeting.

The issue surrounding Senate File 23 is not ethical. Legislation revising the methods of execution in Wyoming may go farther in avoiding further legislation and litigation than just modifying the drug of choice. The crux of the situation is how Wyoming adapts to drug companies that do not wish to be associated with capital punishment. Without its preferred drug, Wyoming is akin to a junkie without a dealer.

“The very notion that Congress could force people to purchase any good or service it likes throws the principle of limited government right out the window,” said Benjamin Barr, counsel with WyLiberty. “This brief brings sane limits to Congress’s authority and refutes the idea that regulating inactivity is within its jurisdiction.”

The brief argues against Obamacare’s individual mandate, the requirement that most Americans purchase qualifying health insurance or pay a tax beginning in 2014.  Although the other requirements could remain in place if the individual mandate goes down, politically Obamacare would be a dead letter because the individual mandate is considered Obamacare’s keystone. 

“We’ve worked to stop Obamacare as it tries to creep into Wyoming through Health Insurance Exchanges while providing real solutions to lower health care costs without tyrannically forcing everyone into a bogus system that masquerades as a market,” said Steve Klein, WyLiberty staff attorney. “We believe this brief will remind the Supreme Court Justices that our founding principles are the very reason for the success of the American experiment and cannot be sacrificed”

Oral argument has been scheduled for March 26, 27, and 28, 2012 and a decision will issue this term.

 – 30 –

For more information, please contact:

Benjamin Barr, counsel, Benjamin.barr@gmail.com

Steve Klein, staff attorney, 307-632-7020

Today marks the filing of an amici curiae (friend-of-the-court) brief written by Timothy Sandefur of the Pacific Legal Foundation and Robert Levy, Ilya Shapiro and Anastasia Killian of the Cato Institute.  Wyoming Liberty Group has proudly joined this brief along with several of our fellow state think tanks.

The brief argues against Obamacare’s individual mandate, the requirement that most Americans purchase qualifying health insurance or pay a yearly penalty beginning in 2014.  This is largely considered the lynchpin of the entire program: Obamacare expands insurance coverage mandates, sets arbitrary price controls, and attempts to magically make this cost-effective by forcing everyone to purchase the product.  Although the other requirements could remain in place if the individual mandate is ruled severable from the rest of the Act, politically Obamacare would be a dead letter. 

The brief explains that the Commerce Clause of the Constitution, Congress’s power “[t]o regulate Commerce . . . among the several States” (Article I, Section 8, Clause 3), cannot force individuals into performing the activity that influences the commerce among the states.  To do so would make Congress’s power practically limitless, and would void the Tenth Amendment, which states “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or the people.” (Emphasis added.)  Furthermore, the brief counters the feds’ claim that Congress’s power “[t]o make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers,” (Article I, Section 8, Clause 18) expands the Commerce power to a borderless length, because once again this contradicts the very federalist structure of the Constitution.

Here at WyLiberty we’ve given extensive coverage and thought not only to combating Obamacare’s various facets as they try and creep into Wyoming (most notably its insurance exchanges), but also to providing market-based solutions that could incrementally lower health care costs without tyrannically forcing everyone into a precarious system that masquerades as a market.  We stand for founding principles and believe that this brief will remind the Justices of the Supreme Court that these principles are the very reason for American freedom and our success, and that to sacrifice the former would destroy the latter. 

Download the brief here.

The Stop Online Piracy Act (SOPA) and its fraternal twin, the Prevent Internet Piracy Act (PIPA) are bills intended to stop online purloining of intellectual property. Big names in the entertainment industry, such as Sony, Disney and Warner, fully backed the bills. However, similar legislation already exists, so we know what their unintended consequences will probably be: the suppression of free speech

In 2008 the PRO-IP Act started allowing the U.S. government to shut down Internet domains if an agency such as Homeland Security thought the site might be infringing on intellectual property rights – no due process required. This enabled the government to shut down companies that did nothing wrong. For example, Homeland Security shut down a music site, Dajaz1.com, because the site contained links to music. Never mind that Dajaz1.com had permission to post those links on its site. It was shut down for over a year with not even the whiff of due process.

The SOPA and PIPA would make life even more difficult for U.S. websites. A clause in the SOPA allows the U.S. government to shut down a U.S. website if it is used in any way to facilitate copyright infringement. SOPA would allow copyright holders to ask U.S. sites to take down links to foreign websites; ad networks and payment systems like Paypal to stop doing business with foreign sites; and Internet service providers to block traffic to foreign sites. If the U.S. website does nothing it could be sued. A judge could prevent a website from earning an income while the case weaves through the court system and this could put the company out of business. The PRO-IP Act has already put companies out of business that have done nothing wrong and the SOPA/PIPA will make it even easier.

A U.S. website doesn’t have to intend or even know some infringing activity is going on. For example, if someone uploads a video to YouTube containing copyrighted material, YouTube could be in trouble even if it had no idea someone uploaded this material. In the worst case, YouTube could be taken offline. In addition to the free speech implications, this could deprive thousands of YouTube uploaders of their property without due process.

The SOPA and PIPA not only threaten free speech by taking down websites that have done nothing wrong, their standards are so vague they can have a chilling effect. For example, what does “takes steps to avoid confirming a high probability” of copyright infringement mean? Website owners may worry they will get into trouble if they do not police infringement enough, and this could encourage them to be skeptical of lawful speech.

Although off the radar screen for now the big names in entertainment behind these two pieces of legislation designed to terminate piracy will, no doubt, be back. The core problem is an entertainment industry which does not know how to compete with new technologies. The entertainment industry showed this when television first came along and again when computers came along. Back then, the entertainment industry adapted using the economic means – it pulled up its socks and got down to business. It didn’t work to stifle free speech.

The entertainment industry’s behavior now makes it look more like a dinosaur on the brink of extinction. Like many businesses no longer able to adapt to a changing environment, it resorted to the political means – a loaded legislator – to solve its difficulties. But manipulating the political system for its own ends will not solve the entertainment industry’s underlying problems – arrogance, laziness and complacency – and has the unintended consequence of putting a chill on speech.

It is possible for Old Media to compete with New Media. iTunes is an example of how the entertainment industry can sell music and movies over the internet instead of invoking the dead hand of government to squash competition.

The solution to the piracy problem is simply stated but very difficult for the industry to carry out. The industry must stop living in the past and innovate to compete with the pirates. Compete on quality, compete on customer service and compete on price. People are willing to pay for value.

Adaptation to a new economic reality is never easy and not because it is technically difficult. It is because it requires a considerable attitude adjustment by the industry. But the industry, not the constitution, must adapt. We must not permit dinosaurs to squash our fundamental liberties.

 It is always good to know that the state government’s finances are in good shape, at least compared to other states. The JAC spent some of its time hearing suggestions about how to improve returns on the state’s considerable financial investments. The committee apparently also believes that the state can afford to set aside an extra $150 million to mitigate revenue shortfalls as a result of dropping natural gas prices.

 At the same time, it is a small but nevertheless bad sign that the JAC would consider adding cash to the state’s already well-stuffed coffers, even if it is for contingency purposes. The need for these extra funds is not caused by swings in natural gas prices, but by the fact that the state has taken on spending commitments that exceed its ability to safely and predictably pay for those commitments.

 A far better strategy for avoiding a future budget deficit is, therefore, to reduce the state’s structural spending commitments. These are spending programs where the expenditures are defined not by what revenues the state might have at hand, but by political decisions. Another word for these programs is “entitlements.”

 Based on what has come out of the JAC, one cannot help but wonder in what economic reality the committee dwells. Every day brought new discussions about, relatively speaking, minor details in the state’s appropriations, and avoided – skillfully one might add – to talk about the impact of these appropriations on the Wyoming economy.

At the same time, the private sector in Wyoming is suffering under their burden. While the minerals industry, which is independent of Wyoming for its sales, has done fairly well over the past ten years, the non-minerals private sector has not. Between 2000 and 2009, total earnings in the non-minerals private industry grew at a rate 0.5 percentage points slower than government, on average per year.

 This abstract number may not seem like much, but over time it means a notable erosion in the tax base that, one way or the other, is supposed to fund a good part of state and local governments. Simple arithmetic dictates that this revenue shortfall will mean higher taxes at some point. When severance tax revenues, seemingly stable over the past few years, now prove to be an unreliable revenue source, this excessive growth in government becomes an even more urgent problem.

 Our state legislators have a lot to think about when they go in to the budget session. The first thing that should be on their minds is how to rein in the growth of government short term and, over the longer term, how to reduce government to its essential functions.