Friday, July 19, 2019

U.S. House of Representatives should be enlarged

Gordon L. Weil

There was once a legislative district shaped like a salamander. Its creator was a man named Gerry and making more weirdly shaped districts has come to be known as gerrymandering.

Every ten years, the U.S. conducts a census and, in most states, the party that controls the state legislature then gets to draw the congressional district map for the next ten years. Last month, the Supreme Court decided it could do nothing when states gerrymandered for political purposes.

That's not all. Even if states stopped setting district boundaries for partisan purposes, many people would still be denied an equal vote. Combined, the practices cheat many voters.

Gerrymandering can be fixed by states. Improving voter equality can be fixed by Congress simply by enlarging the U.S. House of Representatives.

In many states, Republican legislatures skillfully packed Democrats into as few districts as possible, allowing the GOP to win more seats than their share of the state's vote would give it. The Democrats have done the same in one state.

Even in Maine with only two congressional districts, last time around the Republicans tried to reshape them to boost their chances.

Some states are moving to fix the districting process. In Pennsylvania, for example, the state's top court ruled that the GOP lawmakers had violated the state constitution. In Arizona, a referendum took control over districting away from the GOP legislature, giving it to an independent commission.

More states are likely to use their own laws to reduce political gerrymandering. And the Democrats have increased their focus on winning state legislative elections in 2020, so they can halt GOP mapmaking. Killing the gerrymander is good hunting for them.

Even with better districting, the country still misses "one person, one vote" in House elections. Each state gets one automatic House seat, no matter its population. As the population exploded in some states and the total number of House members didn't, truly equal representation across the country was steadily reduced.

At the moment, the district with the largest population has just about twice the number of people as the smallest. That means some voters count almost twice as much as others in House elections.

To come close to eliminating the excessive influence of some voters and also make progress in ending political gerrymandering, the size of the U.S. House of Representatives should be increased. That would lead to a major redistricting shakeup.

Congress sets the size of the House, but the last time it increased the number of members was 1911, more than a century ago. Since then, the American population has more than tripled.

Of course, the House should not grow so large as to be unmanageable. But with five new states added since then and huge population growth, it ought to be somewhat larger.

The best solution would be to make the target population of all House districts equal to the size of the small state that receives only the single, automatic vote – Wyoming. The preferential effect of the automatic vote would be eliminated.

The size of the House would then increase from the current 435 to 547. Britain, France and Germany each have larger legislatures.

The current system favors small, rural states, while holding down equal representation for California and Texas voters. Enlargement would add representatives in 39 states, and no state would lose a seat. It would reduce the overrepresentation of states that has given outsized legislative influence to the Republicans.

The result would be districts far more nearly equal in population, bringing the country closer to one person, one vote. Smaller district populations could bring representatives closer to their constituents. New seats would account for the growth of urban America.

More House members could lead to splitting up today's large, unwieldy House committees so that each member could become more expert and more active. They would not be spread over multiple committees. New members could give the House new power.

The effect on the national budget would be almost invisible. Even now, the entire Congress accounts for only about one-twentieth of one percent of federal spending.

Increasing the size of the House would require significantly redrawing district lines in all but the smallest states. Beyond state action, Congress might find it had previously unused powers to ensure compact districts and kill the gerrymander.

Concern about political gerrymandering is now mounting, showing the need for the states and Congress to act. But redistricting won't be enough. For the first time since 1911, the House should be enlarged to help preserve rule by "We, the People."

Note: This is the first of a series on how to reform the federal government without amending the Constitution.

Friday, July 12, 2019

Trump wants Fed to cut already low rates, but that could harm seniors


Gordon L. Weil

Donald Trump's strongest political case for re-election is the success of the American economy.  It's also a big risk, and he knows it.

That's why he lambasts the Federal Reserve for not lowering interest rates.  He believes that lower rates will stimulate more growth, keeping the historic Obama-Trump recovery going.

His demands for lower interest rates and his frontal attacks on Jerome Powell, his own choice as Fed chair, have created an open war between the president and the independent Fed.  
Short-term political demands can conflict with the Fed's role to protect the economy long-term.  That's what seems to be what's happening now.

The recovery from the Great Recession has been long but not especially strong.  The benefits have not been the same for all Americans.

Republicans blocked President Obama's effort for a second economic push, leaving the Fed to handle the recovery.  It cut interest rates and made money available for borrowers, successfully stimulating economic activity.

The GOP tax cut and Trump's cutback on environmental regulation have helped sustain the recovery.  But its long life, the president's strongest political argument, carries considerable risk.  Trump needs it to last even longer, through to the November 2020 election.

He has long believed in low interest rates, partly because of his experience as a borrower for real estate investments.  He argues that growth would have been higher if interest rates had been cut, and they should be slashed now to juice up higher growth.

Trump openly believes that the Fed should follow his policies.  Yet, like other central banks in free market economies that manage major world currencies, the Fed is supposed to operate independently of the politics of the day.  That's one reason its members' terms are 14 years, well beyond even two presidential terms.

Central banks take a long view of their role in promoting a stable currency and economic conditions that will increase employment.  The Fed, now composed primarily of Republican economists, has done that consistently since the Great Recession of 2008.

By cutting interest rates, it made investment and home buying easier.  As the recovery continued, it gradually began increasing rates, though they still remain well below the rates of the past 60 years. 

Taking care that its small steps would not harm the recovery, the Fed began increasing rates so that it would have a tool – its ability to again cut rates – if there were signs of a recession.  Trump ignores that longer range concern and focuses on his desire for higher growth now.

If there is any reason the Fed might cut rates, it is the uncertainty created by the president's trade moves that unsettle world markets.  Wobbles elsewhere could spread to the U.S.

Trying to impose his will on the Fed, Trump has openly sought ways to dump Powell.  He would like the powers of the near-dictator Turkish president, who just fired his central bank chief.  And he envies the Chinese ruler's day-to-day economic control.  He ignores the need to protect the stability of the dollar, the standard world currency.

Two recent picks to fill Fed vacancies were obviously unqualified and were dropped.  One of the next two named openly displays her vast ignorance of monetary policy.

Unqualified nominees who do not support the Fed's independence are unlikely to be confirmed by the Senate, though it is under GOP control.  Republican resistance is similar to its unwillingness to eliminate the requirement for 60 votes to end debate on most bills, though Trump demands it.

The Republicans recognize that the Senate majority will almost inevitably shift one day to the Democrats.  They are likely to continue to protect Fed independence and require more than a simple majority.  It's not that they oppose Trump.  But they worry about what the Democrats would do.

Beyond these policy concerns, there's a practical reason to worry about unnecessary rate cuts.  When the Fed lowers interest rates, payouts are reduced on bonds, the fixed investments on which many retirees depend, whether its obvious to them or not.  The interest rate paid on bank savings also falls.

Maine has the highest median age in the U.S.  Lowering interest rates can cut retiree income.  Because the effects of any national economic policy are not evenly distributed, lower interest rates could harm older Mainers and not be offset by a small increase in national economic growth.

With its broad, long-term focus, the Fed can take such facts into account.  Trump's focus on how to force the Fed to help him win in 2020 doesn't do that.

Friday, July 5, 2019

Cutting taxes vs. health care for all: the voters' choice


Gordon L. Weil

Here are three statements made last week.

In a Democratic debate, Sen. Bernie Sanders said he wants a national system in which the government provides health care and there is no insurance.

Washington Post columnist Marc A. Thiessen commented on the Democratic debates and concluded, "[T]here was one clear loser – the American taxpayer."

Billionaire Eli Broad wrote in the New York Times, "I am in the 1 percent.  Please raise my taxes."

Their statements focused on taxes and the role of government – two sides of the same coin.

Obviously beyond their notice was a popular vote in one Maine school district.  Voters in all four towns of SAD 75 added $600,000 of new spending to raise teacher pay beyond the school board's own proposed increase.

This vote demonstrated what can happen when people take government spending into their own hands.  They raised their own taxes, but did not see themselves as "losers."  They simply set government policy, weighing both the costs and benefits.

Thiessen's conservative view makes taxes the enemy and assumes that any action to increase taxes will be unpopular no matter what the purpose.  People would rather make their own decisions about how to spend their money, which means turning as little as possible over to government.

Behind this position is basic opposition to government itself.  If you pay less in taxes, you get less government.  A conservative view is that people are better individually at making choices than through a common effort by government.

Ultimately, the free market, driven by competition to make money, will produce the results people need and want, the theory goes.  That's better than public policy made by legislators who may impose their views and be out of touch with what people really want.

The wealthiest people have the money to drive market growth, so cutting their taxes makes sense, according to this conservative view.  Because they pay most of the taxes, they should get most of the tax cuts.  That has led to what the news agency Reuters calls "an ever-widening chasm between the unfathomably rich and everyone else."

Opposing more taxes to pay for more government, critics often distort proposals for government action.  They have also increasingly resorted to labeling as "socialism" almost any proposal for increased government.  "Socialism" is a foreign system designed to crush free enterprise, they suggest.

Problems arise.  The America health system, run by hospitals and private insurers, left tens of millions without adequate care.  Veterans and older people were given greater assured access, but many remained outside the system.

To cover the uninsured, Congress adopted the Affordable Care Act, providing government aid to allow more people to purchase private insurance.  But the GOP blocked a public, non-profit insurer, which might have provided lower-cost competition and limits on drug prices.

Sanders and some other Democrats argue that only a public insurer and care provider can bring costs under control and prevent the drug industry from raising prices to boost its profits and advertising budget.  The Democrats' proposed system would be taxpayer supported.

That would require a big tax increase.  However, its opponents ignore the elimination of insurance premiums.  Medical and drug costs could be controlled.  This year, Maine took the first step toward cost controls, which Congress has banned for Medicare, and the free market fails to produce.

If there is a net taxpayer cost for including the millions still outside the health care system (or for any other policy), perhaps voters would pay it.  That's a choice to be made or rejected, but it is hardly socialism to provide a public health care option and more help for the uninsured. 

Increased public spending should be financed by new taxes.  Both parties readily adopt measures, from tax cuts to social spending, without paying for them.  They create more debt and pass the bill to future generations.

Broad wants the wealthiest to pay more taxes, just as the not-so-wealthy school district voters decided.  He offers neither a blank check nor to be the sole payer.  Like the district voters, he likely wants to know the purpose of any tax increase, like debt reduction, and that others are also paying.

In light of all the tax-cutting loopholes and the sharp curtailment of inheritance and estate taxes, he proposes an annual two percent tax on wealth above $50 million.  A businessman and philanthropist, Broad is hardly a socialist.

Broad, Thiessen and Sanders focus on what may be the central debate of this election: what is the proper role of government and are we willing to pay for it?  

Friday, June 28, 2019

Trump policy-making: a new version of 'Whack-a-mole'


Gordon L. Weil

"Whack-a-mole" is an old arcade game that's an exercise in futility.  It has come to mean that each time you try to solve a problem, another problem pops up.

In the original game, players would hit the mole on the head, forcing it back into its hole.  Another would pop up, and players had to move fast to hit each new one.  Satisfaction from whacking each mole did not last long.

Much American policy under President Trump is like playing Whack-a-mole.  In trying to fulfill his campaign promises, each problem Trump attacks seems to create another. 

Take China.  It pursues unfair trade policies and has a trade surplus with the U.S.  It also steals American trade secrets and forces U.S. companies to turn them over, if they want to do business in the huge Chinese market.

Trump whacked China by raising tariffs on its exports, a move reducing trade by making their goods more expensive.  He believes that will bring them to the bargaining table, where the U.S. can win concessions.

But higher tariffs raise prices for American consumers.  U.S. agriculture loses markets in China when it retaliates by increasing its own tariffs and buys elsewhere.  The trade deficit with China has grown a little worse, according to official statistics.

More moles.  Quit the Trans Pacific Partnership and lose allies opposing China and farm exports to Japan.  Meet with the North Korean leader without result, but boost his international standing.  Force a North American trade deal, creating hostility with neighbors. 

Taxes are too high, stifling economic development, Trump says.  They should be cut, notably for the middle class and for business, which will invest the money with the profits yielding offsetting tax revenues.  Smack that mole.

In 2017, the GOP lowered taxes on the biggest taxpayers, also supposedly the biggest investors.  It also allowed corporations to bring foreign profits home and cut the corporate tax rate.

But the tax bill's economic effect faded by 2019.  Corporations used added funds to buy back their stock and increase executive pay, with only a portion going into new productive capacity.  Federal debt grew faster than the promised new tax revenues.  That's the new mole.

Or immigration, Trump's signature issue.  He warned that Mexican gangsters and rapists were streaming into the U.S.  Building a wall, paid for by Mexico, would end the problem.  Meanwhile, separating immigrant families is stepped up, supposedly to serve as a deterrent.

But keeping his promise depended on Congress and Mexico, and neither agreed with him.  Immigrants arrived in even higher numbers.  They were not Mexicans, but mostly from Central America and Africa.  Instead of U.S. aid to slow the flow at the source, it was cut.  Americans were shocked by immigrant family separations. 

Undeterred, Trump promised to sweep up millions of undocumented immigrants and deport them.  But his immigration agencies were caught by surprise and were unready for the task.  The president backed off, saying he wouldn't carry out the threat if the Democrats agreed to his demands to change the immigration laws.

The mole: Iran.  The nuclear deal with Iran was unsatisfactory, because 15 years later Iran could choose to resume its production of nuclear fuel.  Also, the deal did not halt Iran's aggressive moves in the Middle East.

The U.S. withdrew from the deal and has put strong economic pressure on European participants to force them to stop buying Iranian oil.  No direct talks with Iran.

Iran announced that, if the U.S. stops its oil exports, it will restart nuclear fuel development that would have been forestalled under the deal.  The situation became more tense than it was under the now-rejected agreement, as both sides rattle their sabers.

When Iran shot down an American drone, which the U.S. says was over international waters, Trump readied a retaliatory strike, but then backed off.  He said the U.S. did not want to cause 150 deaths.  Is it possible the U.S. was not absolutely sure of the drone's location?

Trump has had some big successes.  He has set a new record in sustaining President Obama's economic recovery.  He has induced European countries to increase NATO-related spending.  He now has China's attention.

But he usually announces immediate solutions – Whack-a-mole – instead of traditionally less dramatic, incremental measures, creating new problems. 

Will the oncoming campaign and what he has learned as president lead Trump to cut back on playing the game?

In his recent immigration and Iran reversals, Trump may have begun to recognize that his sudden policy announcements raise new issues and don't finally settle matters.