Katie McAuliffe

Circus at the Antitrust Hearing

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Posted by Katie McAuliffe, Laurel Duggan on Thursday, July 30th, 2020, 3:03 PM PERMALINK

Congressional hearings of tech CEOs Sundar Pichai (Google), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), and Tim Cook (Apple) devolved into an hours-long circus as Democrats used the opportunity to create reelection campaign fodder.

The purpose of this hearing was to investigate alleged anticompetitive behaviors of dominant tech companies. About 25% of the questioning was somewhat related to antitrust policy—and this is a generous estimate. The remainder of questions revolved around partisan talking points like online hate speech, YouTube radicalization, and conservative censorship.

Antitrust law under the consumer welfare standard is designed to protect consumers from harm by monopolistic companies, not to protect companies from each other. None of the companies called before the Antitrust Subcommittee can be considered monopolies. Each one of them competes with other companies, tech or otherwise, both small and large, for revenue. And they are not using their strong positions in the market to harm consumers. Rather, they have each been using their resources to provide better products and slash prices.

Representative Armstrong (R-N.D.) wisely noted the harms of sweeping expanses of government power targeting certain companies, rather than going through the Federal Trade Commission’s already existent enforcement authority under the consumer welfare standard that operates on a case by case basis:

“When we try to hurt large companies, we entrench large actors and lock out new, smaller competitors."

On the rare occasion that Democrats’ questions were related to antitrust, the line of questioning belied the entire premise of the hearing: that concentration in tech is harming consumers. Time and time again, members of Congress asserted that Amazon and Facebook’s competitive strategies were harming their competitors by driving down prices. But the purpose of antitrust is to protect consumers, not competitors.

The mere fact that Apple was called to testify tells us that the hearing is not about antitrust; the hearing is about anger. Anger at tech for a number of reasons, but mostly because they are big.

Apple is in no way a violator of competition policy. Their primary business is hardware and software, not advertising, not data. They only hold 20% of the smartphone market13% of the personal computer market, and 28% of the tablet market. Tablets are the only personal device market in which Apple is dominant, and their share of that market is shrinking. As for operating systems, Android has more than double the market share as compared to Apple.  

“Apple does not have a dominant market share in any market where we do business. That is not just true for iPhone; it is true for any product category." ~Tim Cook

Apple created the entire App environment. Rather than keeping it as a closed system, they allowed individuals to create Apps which, once in line with certain conditions that provide security and support, can be downloaded by anyone on the App store. Some have complained that Apple’s App store discriminates against Apps that are not its own, but that opinion can’t be held for very long after looking into Apple’s policies, which they are very transparent about.

If Apple is a gatekeeper, what we have done is open the gate wider. We want to get every app we can on the Store, not keep them off.” ~Tim Cook 

In a particularly misguided line of questioning, Rep. Cicilline (D-R.I.) harangued Jeff Bezos for Amazon’s treatment of third-party sellers. “You say Amazon is only focused on what’s best for the customer. How is that possible when you undercut your prices and compete directly with third-party sellers?” Rep. Cicilline sees a conflict of interest between hosting outside retailers and offering low prices to consumers. He somehow fails to see that the diversity of retailers on Amazon drives down their prices, making products cheaper for consumers. 

Rep Cicilline went on to accuse Amazon of a litany of abusive business practices against retailers on its own site. He, along with several other members of Congress, claimed that Amazon exploited the small businesses it hosts through predatory pricing, and claimed that these businesses had no option other than Amazon.

There are 1.7M small & medium-sized businesses selling in Amazon’s stores. 200,000+ entrepreneurs surpassed $100,000 in sales in our stores in 2019. We estimate that third-party businesses selling in Amazon’s stores have created over 2.2M new jobs. ~Jeff Bezos 

In reality, Amazon has to compete with all retail, including Target, Costco, Kroger and Walmart, in addition to numerous online platforms that host third-party retailers, including Etsy, Facebook Market, EBay and Google Shopping. Even if this wasn’t the case, Amazon would have no obligation to host retailers on its privately-owned platform, and retailers have no obligation to use their services.

Like any retailer, Amazon could have chosen to keep their stores a closed system, selling only their own products. Instead, they opened the platform to hundreds of thousands of third-party retailers, many of whom are small businesses.

20 years ago, we welcomed 3rd-party sellers into our stores & enabling them to offer their products alongside our own. We didn’t have to invite third-party sellers into the store. We could have kept this valuable real estate for ourselves.” ~Jeff Bezos

Rep. Raskin (D-Md.) complained that Amazon’s Alexa was a monopoly, since it holds a 60% share of the smart speaker market. But if you define any market this narrowly, you’ll find monopolies everywhere you look. If you define your neighborhood as a market, your local gas station is a monopoly. Of course, Alexa devices compete in a much broader market than that; the device competes with smartphones, tablets, and personal computers, all of which conduct most or all of the same functions.

Rep Jayapal (D-Wash.) and Rep. Neguse (D-Colo.) both incorrectly called Facebook a monopoly. Not only is Facebook not a monopoly, they are not even the dominant firm in their market—the largest social media platform is YouTube. Additionally, Facebook’s primary revenue source is advertising. They aren’t dominant in that market either; Google beats them out by a wide margin.

In many areas, we are behind our competitors. The fastest growing app is #TikTok, and the largest messaging app is iMessage.” ~ Mark Zuckerberg

To provide one example, the cost of online advertising has plummeted 40% in the last decade. If Google has monopolistic power in the advertising realm, why aren’t they raising prices? The obvious answer is that there is robust competition in online advertising. Google competes with Facebook, Twitter, Pinterest, Comcast, and countless others for ad revenue. 

“Competition in ads — from Twitter, Instagram, Pinterest, Comcast & others — has helped lower online advertising costs by 40% over the last 10 years, with these savings passed down to consumers through lower prices.” ~ Sundar Pichai 

Democrats were also hostile to acquisitions and mergers, which they claimed were harmful to both consumers and competitors somehow. Rep. Neguse questioned Zuckerberg about acquisitions, condemning how successfully Facebook had acquired and improved various products and services. Never mind that these acquisitions improved the apps’ privacy and security features while making more apps free to the public. If the success of American businesses makes Democrats uncomfortable, then by all means we should let them weaponize antitrust law to beat private businesses into submission.

Those who want to expand government power favor a narrow definition of tech markets because they have no real evidence in terms of demonstrable consumer harm or rising prices. It allows them to build an antitrust case out of bitterness, and little else.

The presence of four companies—all of which compete with each other—should be sufficient evidence that there is no risk of monopolization. Competition in tech—from hardware to software to advertising—is robust. 

Photo Credit: POMED


The 4th Amendment is a Right - No Need to EARN IT

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Posted by Katie McAuliffe, Laurel Duggan on Monday, July 27th, 2020, 2:44 PM PERMALINK

It is easy for those in power and the broader public to see new technologies—the telephone, email, cloud storage, or end-to-end encryption—as somehow exempt from the privacy laws which govern other communications. But as technologies become more widely used for business and personal communication, we all come to understand the need to protect our interactions from surveillance.

Encryption is not a force for evil. It is used by businesses across the country to prevent online attacks and theft. It is common practice for hackers to target retailers in the U.S. to steal customer data and access their bank accounts, but attacks like these are largely impeded by encryption. When hackers stole the banking information of millions of customers in Target’s infamous data breech, the victims’ bank accounts were protected because their PINs were encrypted.

Encryption also promotes innovation. Businesses and individuals have little incentive to create and discover if their intellectual property will simply be stolen by criminals or foreign actors.  Innovation requires protection of proprietary data.

Building in a systemic weakness, while it may make law enforcement’s job easier, does not make anyone safer. Creating backdoors for law enforcement to get around encryption would weaken the technology as a whole; backdoors can be exploited by criminals to access users’ personal data.

The tension between the Fourth Amendment and Law Enforcement goals is not new and is important to preserve. Officials claim that encrypted data is “warrant-proof,” but this misrepresents the purpose of a warrant. Search warrants allow law enforcement to search for evidence, but do not guarantee that they will find evidence supporting or leading to any conclusions.

Encryption doesn’t just protect us from criminals; it protects us from the prying eyes of the government. The FBI has waged a years-long battle against encryption, which it views as an impediment to investigations. The federal government has been intercepting electronic communications for as long as it has been possible; federal agents began wiretapping phone calls in the 1920s. It tends to take the government years to adjust to changes in communications technology; it took decades for the Supreme Court to place limits on warrantless electronic surveillance.

Following years of unsuccessfully pressuring tech companies to give the government a backdoor to encrypted data, Congress and the Department of Justice changed their strategy. A high profile letter sent by U.S. intelligence agencies and numerous international allies linked end-to-end encryption with child sexual exploitation, claiming that Facebook would be harming children by offering encryption on its messaging services.

Reframing the encryption debate around the most heinous crimes imaginable is dishonest; it posits that, because criminals use their privacy to exploit the most vulnerable people in society, no one has a right to privacy. This line of thinking also presupposes that Big Brother is unfailingly benevolent; the FBI will have a backdoor to all online communications, but not to worry: they will only spy on you if you deserve it.

In a misguided attempt to address the very real problem of online child exploitation, Senators Lindsey Graham (R-S.C.) and Richard Blumenthal (D-Conn) introduced the EARN It Act. The legislation has honorable goals, but in practice would limit the ability of tech firms to offer encryption to users. This would restrict the ability of all Americans—including survivors of abuse—to protect their privacy and personal safety while online.

After a firestorm of criticism from across the political spectrum, the Senate Judiciary Committee approved a manager’s amendment to the EARN It Act. The amendment resolves the aspects of the original bill that would have threatened encryption most seriously: businesses cannot be held liable simply for failing to take actions that would undermine encryption services, and offering encryption will not be automatic grounds for liability for child sexual abuse material (CSAM). Critics point out that the amendment provides only a defense against liability, not immunity; the threat of litigation will still be sufficient to discourage tech companies from providing secure end-to-end encryption.

The amendment removes the legal authority initially granted to the commission created in the bill; the commission’s standards will be recommendations, not legal requirements. It also extends the amount of time that providers can preserve the contents of a report, which will help with the development of algorithms made to detect CSAM. 

However, the manager’s amendment brings a new set of problems to the table. It allows states to penalize companies with both civil and criminal liability. In addition to balkanizing the legal landscape for a business model that naturally crosses state lines, this would leave American tech businesses vulnerable to a firehose of destructive lawsuits. Endless litigation would likely lead to the end of America’s global leadership in tech. 

The amendment also revokes tech companies’ liability protection based on “actual knowledge” of the existence of CSAM. This is a step up from the “recklessness” standard in the earlier version of the bill, but it still creates perverse incentives that discourage tech companies from investigating CSAM. When knowledge triggers liability, companies will avoid learning about potential CSAM cases. This will lead to less, not more, action by tech companies to stop the spread of CSAM.

The ability to use privacy services provided by a private business is part of what makes our country great and distinguishes us from authoritarian countries like China, where the government is entitled to the private data of citizens. Efforts by the government to weaken encryption should raise red flags and inspire a continued effort to protect encryption.

Photo Credit: Jonathan McIntosh


Coalition Supports Digital Goods and Services Tax Fairness Act

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Posted by Katie McAuliffe on Tuesday, July 21st, 2020, 4:33 PM PERMALINK

Americans for Tax Reform has released a coalition letter with 19 signers supporting the Digital Goods and Services Tax Fairness Act. The full letter can be read below, and here.

 

Support S. 765 & H.R. 1725 the “Digital Goods and Services Tax Fairness Act of 2019”

Dear Majority Leader McConnell, Minority Leader Schumer, Speaker Pelosi, and Republican Leader McCarthy,  

We urge you to support the Digital Goods and Services Tax Fairness Act of 2019, introduced by Senators John Thune (R-SD) and Ron Wyden (D-OR) and Representatives Steve Cohen (D-TN) and John Ratcliffe (R-Texas) as S. 3581 and H.R. 7058 respectively. This legislation would set up a framework for states to prevent duplicative and discriminatory taxation on the digital economy, if and only if, a state chooses to tax such commerce.

It is important to clarify that this bill would not mandate any state to tax a digital good or service, nor would it establish any sort of national sales tax on digital commerce. The framework provides legal certainty for how and when state and local taxes can be applied to the digital economy. The state in which a customer legally resides would determine the tax status of the digital transaction. It would also eliminate confusion for consumers and businesses by ensuring the taxation of a digital song or software downloads is the same as the tax rates imposed on music or software CDs purchased at the local store.

Given the unique way digital commerce is transacted, it is currently possible for multiple states to claim the right to impose taxes on a given digital transaction, leaving the consumer potentially subject to multiple and duplicative taxes. Congress has previously addressed a very similar disruptive tax situation with the use of mobile phones by clearly identifying which state has the right to tax wireless services. The existing state laws governing interstate commerce are outdated to the point where they cannot adequately address the complexities that surface in digital sales. Considering how rapidly the digital market is growing, the need for this legislation is imperative to provide a clear roadmap for states to follow, if they so choose, to fairly impose taxes on digital goods and services in today’s new economy.

This bill would also prevent discriminatory state and local taxes that single out digital goods and services merely because they are transmitted over the internet. Right now, states can choose to impose higher tax rates on digital subscriptions than are imposed on physical subscriptions. For example, a state could tax an online newspaper subscription at 5% and a physical subscription at 3%. If a product is subject to tax collection, it should not matter whether it is received digitally. This type of tax discrimination unfairly penalizes people participating in the digital economy.

Accordingly, we urge you to enact the Digital Goods and Services Tax Fairness Act of 2019 before the end of this Congress.

 

Respectfully,

 

Grover G. Norquist

President

Americans for Tax Reform 

 

Lisa B. Nelson

CEO

ALEC Action

 

Steve Pociask

President / CEO

American Consumer Institute

 

Ryan Ellis

President

Center for a Free Economy

 

Andrew F. Quinlan

President

Center for Freedom and Prosperity

 

Curt Levey 

President

Committee for Justice

 

Matthew Kandrach

President

Consumer Action for a Strong Economy

 

Tom Shatz

President

Council for Citizens Against Government Waste

 

Katie McAuliffe

Executive Director

Digital Liberty

 

George Landrith

President 

Frontiers of Freedom

 

Mario H. Lopez

President

Hispanic Leadership Fund

 

Bartlett Cleland

Executive Director

Innovation Economy Institute

 

Andrew Langer

President

Institute for Liberty 

 

Seton Motley

President

Less Government

 

Pete Sepp

President

National Taxpayers Union

 

Karen Kerrigan

President & CEO

Small Business & Entrepreneurship Council

 

David Williams

President

Taxpayers Protection Alliance

 

James L. Martin

Founder & Chairman

60 Plus Association

 

Saulius “Saul” Anuzis

President

60 Plus Association

Photo Credit: Marco Verch


Coalition Opposes SCRIPT Act

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Posted by Katie McAuliffe on Wednesday, July 15th, 2020, 1:39 PM PERMALINK

Americans for Tax Reform has released a coalition letter with 16 signers opposing the SCRIPT Act. The full letter can be read below, and here

 

July 15, 2020

RE: Stopping Censorship, Restoring Integrity, and Protecting Talkies Act, SCRIPT Act, S. 3835

Dear Senators:

Conservatives and libertarians are rightly concerned about censorship. While we must be zealous in guarding our 1st Amendment rights at home, conservative and libertarian leaders are also right to be deeply concerned about totalitarian regimes around the world and the restrictions they impose on freedom of thought -- from the Great Firewall of China to social media censorship in the Middle East to Russian threats to freedom of the press.

As a part of this justified vigilance, some have expressed concerns that China’s role in American filmmaking may result in censorship that extends even beyond China’s borders. This worry is most clearly expressed in S.3835, the SCRIPT Act, introduced by Senator Ted Cruz. 

The SCRIPT Act would sever all federal government cooperation for at least three years with any production company found by the Department of Commerce to have edited a film for any reason, no matter how innocuous, in order to exhibit it in China. 

While we share the Senator’s concern with reports about Chinese censorship of American films, we think this legislation will do more harm than good for two main reasons: first because the remedy suggested would have a negative effect on the interests of the US military, and second because the legislation itself uses as its remedy the application of a government penalty toward artists, which ironically would impinge at least on the spirit of our freedom of expression.

Filmmakers rely on cooperation with the government for basic production needs – not just access to fighter jets and battleships. For example, filming with drones is subject to Federal Aviation Administration rules, and filming on public lands requires permits from the Department of the Interior. These and other unglamorous – but commonplace and vital use cases – would be jeopardized by the SCRIPT Act.

The military’s involvement with Hollywood is not guaranteed. The DoD regularly denies requests from filmmakers to allow access to bases, training or equipment. However, sometimes the DoD does choose to assist in filmmaking and when it does, it is reimbursed for its time and provides valuable portraits of American military achievements that are both more realistic and engaging for audiences, while safeguarding classified or sensitive information. These accurate but vetted depictions, and the resulting favorable treatment of the US military, benefit our military recruitment and is conducive to fostering an American culture that looks favorably on military service. Withholding this cooperation for any reason would not be in the interests of the United States military.

It should also be considered that this bill itself ironically directs government action regarding the decisions filmmakers make on the cutting room floor. Bringing this coercion, however mild, and for whatever reason, to bear on this process from the United States seems ill-advised in our effort to tear down the walls of censorship erected by totalitarian regimes. 

China admits very few films into its market, but when it does, scenes that many Americans take for granted - plentiful grocery stores, assembled protests, university experiences, dinners out - present the benefits of democracy and capitalism in ways that are both understandable and relatable to international audiences. These scenes have been effective historically in influencing populations around the globe, for example in the former Eastern Bloc. 

These new regulations would handicap one of America’s leading export industries into all international markets, including regimes practicing censorship, to the benefit of their foreign competitors. Today, the U.S. film and television industry accounts for a $9.4 billion trade surplus, more than telecommunications, transportation, insurance, or health services. This policy would ultimately weaken America in the long-term economic competition with our international rivals.

Censorship internationally is a legitimate concern and we support efforts to address these issues. However, solutions should honor American free-market and limited government principles. It is China, after all, that routinely intrudes on the private dealings of business and suppresses private sector success.

We respectfully oppose the SCRIPT Act, and instead suggest lawmakers focus on stronger more direct solutions to the economic, cultural and geopolitical challenges represented by China and other totalitarian regimes.

 

Sincerely,

 

Grover Norquist

President

Americans for Tax Reform

 

Phil Kerpen

President

American Commitment

 

Krisztina Pusok

Director of Policy Research

American Consumer Institute

Center for Citizen Research

 

Andrew F. Quinlan

President

Center for Freedom and Prosperity

 

Jeffrey Mazzella

President

Center for Individual Freedom

 

Ashley Baker

Director of Public Policy

The Committee for Justice 

 

James Edwards

Executive Director

Conservatives for Property Rights

 

Matthew Kandrach

President 

Consumer Action for a Strong Economy

 

Thomas Schatz

President

Council for Citizens Against Government Waste

 

Katie McAuliffe

Executive Director

Digital Liberty

 

Hance Haney

Senior Fellow

Discovery Institute

 

George Landrith 

President & CEO

Frontiers of Freedom

 

Mario H. Lopez

President

Hispanic Leadership Fund

 

Tom Giovanetti

President

Institute for Policy Innovation

 

Brandon Arnold

Executive Vice President

National Taxpayers Union

 

David Williams

President

Taxpayers Protection Alliance

Photo Credit: Vincent Diamante

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ATR Supports Reconfirmation of Mike O'Rielly to FCC

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Posted by Katie McAuliffe on Tuesday, June 16th, 2020, 2:45 PM PERMALINK

​​​​​ATR President Grover Norquist has released a letter in support of the reconfirmation of Commissioner Michael O’Rielly to the Federal Communications Commission.

 

June 16, 2020

The Honorable Roger F. Wicker

Chairman United States Senate Committee

on Commerce, Science, and Transportation

555 Dirksen Senate Office Building

Washington, DC 20510

 

Re: Support of Nomination of Michael P. O’Rielly, Federal Communications Commission

Dear Chairman Wicker & Member of the Senate Committee on Commerce, Science and Transportation.

I write in support of Michael O’Rielly’s re-nomination to the Federal Communications Commission.

Since his first nomination in 2014, he has proven his commitment to American leadership in communications. He has a strong record of defending American interests globally and promoting economic development domestically, and his leadership will be essential to American efforts to win the race to 5G in the coming years. 

Free market principles and American leadership have been central to Commissioner O’Rielly’s work at the FCC. He has successfully pushed to make more C-Band spectrum commercially available, allowing the United States to come out ahead of China in the race to 5G. This is of vital importance both economically and in terms of national security. He also been a leader in many other spectrum proceedings, including TV white spaces, 6 GHz, 5.9 GHz, and 900 MHz.

Commissioner O’Rielly’s regulatory policy is grounded in Constitutional principles. He has promoted regulatory modernization efforts which emphasize economic freedom and limited government. Regulatory reform efforts have facilitated broadband expansion across the United States and allowed our industries to become globally competitive. The success of these efforts had been evident throughout the COVID-19 crisis, as our networks supported record internet traffic. Commissioner O’Rielly’s work in recent years set up our country for a rapid transition to telehealth, remote work, and distance learning.

While at the FCC, Commissioner O’Rielly has reduced waste and fought against corruption, abuse, and fraud. He demanded increased accountability from the International Telecommunication Union, shed light on states’ misuse of 911 funds, and drew attention to the abuse of the USF Lifeline Program.

Among the commissioner’s most important achievements at the FCC is his fight against the misuse of 911 funds by state governments. Several states habitually diverted money from 911 funds to pay for unrelated expenses in violation of the law. The abuse was egregious, with New Jersey diverting over 90% of its 911 funds to its general fund. Corruption on this scale damages public safety and erodes the public’s trust in our institutions. By shedding light on this issue, Commissioner O’Rielly has proven his commitment to fighting corruption and advancing government transparency.

Commissioner O’Rielly has proven himself to be a principled and effective leader. He has a vital role to play in the implementation of 5G and the modernization of communications regulation in the coming years. Americans for Tax Reform urges the reconfirmation of Commissioner O’Rielly to the FCC. 

 

Onward,

Grover Norquist
President, Americans for Tax Reform

 

Photo Credit: Gage Skidmore

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ATR President Grover Norquist Submits Testimony in Support of EQUAL Act

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Posted by Katie McAuliffe on Tuesday, June 22nd, 2021, 10:52 AM PERMALINK

Americans for Tax Reform President Grover Norquist submitted testimony to the Senate Judiciary Committee for a hearing being held in support of the EQUAL Act. This act would eliminate a sentencing disparity that currently exists between crack and powdered cocaine. This disparity has needlessly given individuals possessing crack cocaine jail sentences 100 times longer than its powdered counterpart.

You can read the testimony below or in a pdf by clicking HERE

Dear Chairman Durbin, Ranking Member Grassley, and Members of the Committee on the Judiciary:

Thank you for the opportunity to submit written testimony in support of S. 79, the EQUAL Act  during this hearing entitled: Examining Federal Sentencing for Crack and Powder Cocaine.

Americans for Tax Reform is dedicated to reducing the influence of government in our lives. The first and most obvious way that ATR works toward this end is by reducing the burden of taxation on all taxpayers, but for years ATR has also fought the creeping federal regulatory burden and otherwise sought to promote individuals’ control of their own lives.

To this affect, ATR has taken a strong interest in reforms to the criminal justice system. In 2009 I testified before the House Judiciary’s Subcommittee on Crime, Terrorism, and Homeland Security that mandatory minimum sentencing polices, relating to drug offenses, do not enhance public safety and are not worth the high cost to justice involved individuals and America’s taxpayers.  Since my 2009 testimony suggesting a review of federal crimes and sunsets on any law including a mandatory minimum is still relevant today, I have included it as part of this submission.

While we haven’t yet set up a sunset policy on federal mandatory minimums, the EQUAL Act sets us on the right path by equalizing the mandatory minimums for crack cocaine and powder cocaine. It seems that from 1986 to 2010 to 2018 to now 2021 we are reviewing this particular mandatory minimum on somewhat of a sunset schedule. A sunset clause on any mandatory minimum requiring Congress to review, say every four or five years, as I suggested in my 2009 testimony, might get us to this place of reassessment of punishments and costs sooner.

The 1986 Anti-Drug Abuse Act set up the initial disparity we seek to right today: the 100-to-1 rule required a five-year mandatory minimum sentence for trafficking in 500 grams of powder cocaine or five grams of crack. 

The enhanced punishments for crack cocaine were designed to target “kingpins” and “middle level dealers,” however research conducted by the U.S. Sentencing Commission found that it primarily impacted low level dealers.  Additionally, research has shown that these different mandatory minimums for crack cocaine resulted in significantly higher sentences for African Americans and Hispanic Americans.

In 2010, the Fair Sentencing Act changed the crack-to-powder-cocaine ratio regarding the amount required to impose an equal sentence from 100-to-1 to 18-to-1,  thereby increasing the amount of crack necessary to result in the minimum sentence and eliminated the five-year mandatory minimum sentence for simple possession of crack. As of now, it takes 18 times as much powder cocaine as crack to trigger the same mandatory minimum sentences for trafficking with the sentences involved being five and 10 years.

We were strong supporters of the First Step Act,   which overwhelmingly passed with an 87-12 favorable vote in the Senate, a 358-36 favorable vote in the House, and was signed into law by President Trump in December 2018. The law included retroactive application of the Fair Sentencing Act of 2010 and the many other reforms included were the product of nearly a decade of justice reform advocacy efforts resulting in the most sweeping set of reforms since 2010.

Excessively long sentences are not only unjust but extremely expensive and wasteful. The federal government simply cannot afford to continue to house so many nonviolent prisoners for such lengthy sentences. In FY 2015, the average cost of incarceration of a federal prisoner was just under $32,000. That cost is steadily rising.  In FY 2017 it was $34,704.12 per year or $94.82 per day , and in FY 2018 data from the Bureau of Prisons estimated that it cost $37,449.00 per year per inmate which comes to $102.60 per day.  Fortunately, thanks in part to the bipartisan First Step Act, the number of federal inmates is decreasing. As of June 10th, 2021, there are 153,047 total federal inmates, with 129,219 of which in BOP custody (facilities), whereas in FY2012 the number of inmates under BOP jurisdiction had ballooned to 219,000.  The economic cost of the prison population remains staggering. Since FY 2000 the federal prison budget of about $3.5 billion continues to rise, to about $5 billion in 2006 up to about $7 billion in 2017.

Even without a sunset clause on mandatory minimums, the EQUAL Act continues the trajectory to lower the total number of nonviolent incarcerated individuals by finally equalizing the treatment of crack cocaine and powdered cocaine offenses. Importantly, the bill also makes this relief retroactive following individualized case review by federal courts in order to address in some degree the unjust punishments of the past.

On an entirely separate note, I would also like to express our support for S.998, the Driving for Opportunity Act.  This legislation would improve public safety by reducing the amount of time police have to spend acting as tax collectors, thousands of hours can go towards a better use of time than enforcing these unnecessary suspensions.  Further, the legislation does not prevent the suspension of an individual’s license on the basis of road safety – such as accumulating too many strikes or driving while under the influence. The legislation does not require state to make this change, but simply encourages them to pursue a better policy. Because, put simply, withholding an American’s driver’s license to force payment of fines and fees is combination of debtor’s prison and house arrest.

Thank you again for the opportunity to submit testimony in support of S. 79, the EQUAL Act. Should you have any questions or comments on this matter, please reach out to me, or our Director of Federal Policy, Katie McAuliffe, kmcauliffe@atr.org.

Onward,

Grover G. Norquist
President
Americans for Tax Reform

 

Enclosure:

Statement of Grover G. Norquist

President, Americans for Tax Reform Subcommittee on Crime, Terrorism, and Homeland Security House Committee on the Judiciary

July 14, 2009

Mr. Chairman, my name is Grover Norquist, and I am the President of Americans for Tax Reform. Thank you for inviting me to testify today on the subject of mandatory minimum sentences.

Americans for Tax Reform is dedicated to reducing the influence of government in our lives. The first and most important way that ATR works toward this end is by reducing the burden of taxation on all taxpayers, but for years ATR has also fought the creeping federal regulatory burden and otherwise sought to promote individuals’ control of their own lives rather than government.

We tend to view each and every federal program skeptically. We want to know if its benefits are worth the cost both in terms of money - that is, the taxes that are necessary to subsidize the program - and in terms of freedom - that is, is this an activity that free people should be doing for themselves or is this something only the government can do?

Taking the second consideration first, I think maintaining public safety and order is a legitimate function of government. But while fighting crime might be a responsibility of the state, my skepticism about government action extends even to popular-sounding anti- crime initiatives. I think it goes without saying that the Justice Department is no less interested in accumulating power than are the IRS, EPA or FDA. As a result, I don’t think every law purportedly designed to protect us from terrorists or homegrown criminals is justifiable. Indeed, I have spoken out in the past against major provisions of the Patriot Act and against the use of secret evidence.

Against this backdrop, I would like to share my thoughts on mandatory minimum sentencing laws. I recognize that these laws might not constitute a government program per se, but their use certainly constitutes government policy.

To begin with, their pedigree makes them highly suspect. As with so many other federal programs, mandatory minimums were hatched by the Left, later embraced by the Right, and have been maintained by a bipartisan majority.

The Left’s support for mandatory minimums was well-intentioned if ill-conceived. Their goal was to eliminate disparities in sentencing and thereby make the criminal justice system fairer. The idea that one judge might give two drug traffickers completely different sentences was questionable on its face. But what made it intolerable was that the disparity too often seemed to be a product of the color of the defendant’s face. The Left’s answer was to eliminate judicial discretion and force all judges to give the same sentence.

Conservatives later saw virtue in mandatory minimums not only as a tool for stopping a few errant liberal judges from handing down light sentences, but as a means to increase sentences across the board. Thus, the minimums established by Congress- especially in the 1980s during the height of the crack cocaine scare - were not really minimums at all, but rather uniformly tough sentences.

We should know by now to beware of easy solutions. As H.L. Mencken said, “There is always an easy solution to every human problem – neat, plausible, and wrong.” Today, a generation later, it is increasingly clear that adoption of mandatory minimums, while a neat and plausible response to sentencing disparities, was the wrong solution.

First, the discretion exercised by judges was not extinguished but simply transferred to prosecutors. Prosecutors now have control over sentencing through their charging decisions. Unsurprisingly, politically-appointed and elected prosecutors are no less foolproof than judges. Both sides of the political aisle can point to examples of abuse in prosecutorial discretion, including, most recently, the decision to seek lengthy prison sentences for the Texas border agents. President Bush fixed that error before he left office by granting commutations to both men, but it would be preferable to have judges with the authority to review and check prosecutorial decisions.

The biggest problem from the perspective of the taxpayer, however, is that mandatory
minimum sentencing policies have proven prohibitively expensive. In 2008, American
12 taxpayers spent over $5.4 billion on federal prisons, a 925 percent increase since 1982.
This explosion in costs is driven by the expanded use of prison sentences for drug crimes and longer sentences required by mandatory minimums. Drug offenders are the largest category of offenders entering federal prisons each year. One third of all individuals sentenced in federal courts each year are drug offenders. And these convicts are getting long sentences. In 2008, more than two-thirds of all drug offenders receive a mandatory minimum sentence, with most receiving a ten-year minimum.
 

The jump in corrections costs at the state level has been equally dramatic. State corrections spending has ballooned from $6 billion in 1982 to over $50 billion in 2008. These skyrocketing costs are hitting states at a time when they are already being forced to cut back due to the bad economy.

The benefits, if any, of mandatory minimum sentences do not justify this burden to taxpayers. Illegal drug use rates are relatively stable, not shrinking. It appears that mandatory minimums have become a sort of poor man’s Prohibition: a grossly simplistic and ineffectual government response to a problem that has been around longer than our government itself.

Yet all is not lost. Center-right governors like Rick Perry of Texas are trying new approaches. A couple of years ago, Texas started sending low-level, first-time felony drug users to mandatory drug treatment rather than prison. Before Governor Perry, it was Republican Governor – John Engler of Michigan – who signed into law the first major repeal of state mandatory minimum sentences. Engler’s action saved Michigan taxpayers $40 million in prison costs without jeopardizing public safety.

In closing, I want to note that questioning the wisdom of mandatory minimums has nothing to do with being soft on crime. I believe in strong and swift punishment when appropriate. I support the death penalty for murderers. But the government has a responsibility to use taxpayer money wisely. Viewed through the skeptical eye I train on all other government programs, I have concluded that mandatory minimum sentencing policies are not worth the high cost to America’s taxpayers.

Photo Credit: Louis Velazquez

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ATR Tells Congress Symmetrical Broadband Speed Requirements Waste Taxpayer Dollars

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Posted by Katie McAuliffe on Tuesday, May 18th, 2021, 12:10 PM PERMALINK

WASHINGTON – Today, Americans for Tax Reform sent a letter to the House Appropriations Subcommittee on Financial Services and General Government to provide simple alternatives to many of the wasteful proposals of the Joe Biden infrastructure plan.

You can read our letter below by clicking HERE and you read more about what the Committee has been doing HERE.

Dear Representatives:

If Congress intends to address broadband connectivity for those currently unserved, we urge you to do so in a targeted manner, with a results-based approach to ensure Americans who want broadband have access.

Congress should avoid overly restrictive definitions of what constitutes broadband. Calls for symmetrical speeds at 100 up and 100 down in the Biden infrastructure plan end up mandating only fiber and doesn’t take into consideration the asymmetrical needs of individual broadband users or the ability of private networks of to upgrade to meet demand over time.

Fiber is not the only option for broadband and in many cases, it is not the most efficient or best option for populations currently unserved. Cable, wireless, fixed wireless, and satellite are all capable of achieving speeds that meet the needs of Americans now and into the future for working remotely, telehealth, remote learning, and entertainment. According to Zoom, only 2 Mbps is required for high-quality video calling for both upstream and downstream, while Netflix requires only 0.5 Mbps per second.

Similar programs, like the Broadband Technology Opportunities program (BTOP), have been tried and failed. The $4 billion dollars given to expand broadband went to overbuilding infrastructure in places where it already existed. Again, it was found BTOP had no positive increase on the adaptation of broadband.

The government should not continue to misuse taxpayer money in tried-and-failed models of supporting broadband. In the limited spaces where the government will need to provide support, it should look towards successful approaches to dispersing aid. The Federal Communications Commission has used reverse auctions to deliver billions of dollars in aid to unserved Americans. This approach brings results by competitively placing funds in the hands of the best suited provider, instead of handing money to anyone who fills out the right form first.

Municipal or government run networks are also not the answer, especially ones that compete with private networks already in place. These networks can charge below market rates, which would be illegal for a private provider to do, because they receive tax subsidies. Even with these advantages they still fail as projects because they receive fewer subscribers than hoped and require constant updates to keep pace with the needs of subscribers. Taxpayers should not be forced to subsidize an ineffective service they may not even want to use. Studies have found that municipal broadband has had no positive increase on the adaption of broadband.

While the government may be suggesting an influx of $100 billion for broadband is revolutionary, it is not. A one-time spend, on a chosen technology, with a preference for government operators who will likely compete with existing private networks will not address the remaining digital divide. The private sector has invested over $1.6 trillion into wireline broadband since 1997, and after the lifting of several government restrictions, the private sector invested $80 billion in 2018 alone. The US’s prioritization of investment through both the public and private sector instead of the burdensome government regulation seen throughout Europe lead to better broadband results hands down.

We believe the best thing Congress can do to address the digital divide is reform the lifeline program at the FCC to be a sustainable solution to lack of connectivity due to cost, rather than returning to the failed programs of the past. Doing away with the Universal Service fee, which continues to put extreme pressure on a small segment of the population and moving to a Congressionally approved appropriation possibly attached to spectrum proceeds could be a viable solution. Congress should also do away with the Eligible Telecommunications Carriers requirement and move to a voucher program rather than a carrier directed program to increase options to individuals struggling to get online.

Should you have any questions or comments on this matter, please reach out to me, or our Director of Federal Policy, Katie McAuliffe, kmcauliffe@atr.org.

Onward,

Grover G. Norquist
President
Americans for Tax Reform

 

Photo Credit: Eleven Photographs

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A Performance Right is Not a Tax, Congress should Exit the Music Business

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Posted by Katie McAuliffe on Monday, May 10th, 2021, 4:15 PM PERMALINK

Americans for Tax Reform send a letter to the Senate and House sponsors of the Local Radio Freedom Act, that reasserts our long-held position that the government should not insert itself into markets.

You can read the full letter below and linked to here.

Dear Congressman:

I am writing today to clarify Americans for Tax Reform’s position on licensing and copyright, especially as it pertains to what does and does not constitute a tax.

As language circulates concerning music distribution, we urge the consideration of the entire universe of music distribution and how copyright is applied. Artists and distributors, including broadcasters, should have the opportunity for free-market negotiations, as do other businesses.

When Congress considers reform, it should support market forces rather than increased government intervention as the best tool for unleashing innovation and fostering creativity.

All parties, e.g., writers, artists, recording companies, broadcasting companies and others, should be allowed to negotiate mutually agreeable terms. There is no way, ultimately, for a legislator to decide what the fair market value of a product or service is.

We should move toward a market where setting prices; forbidding actions on one side or another; preventing the acceptance of payment for one service or another; or prohibiting collection of compensation for the use of property, are things of the past. We should not prevent compensation for work created or compensation from promotion supplied. This should not be a regulatory issue. This should be the work of a functional market.

The debate on performance rights is an interesting and important one. Ultimately, it should be made in the marketplace, not in House and Senate office buildings. Prior private agreements between music creators and record labels demonstrate that the performance rights issue is better addressed through private contracts than a broad government mandate.

By definition, charging for content is not a tax. Specifically, a performance right is not a tax. We often correct tax proponents who try to call a new tax something (anything) other than a tax, however, the term “tax” doesn’t apply in this case.

We believe in an open and free market, and the vigilant protection of property rights. Government should extract itself from this debate to allow an environment for negotiations to develop among broadcasters, record companies, artists, and other interested parties.

Moving forward, I urge you to enact reforms that protect intellectual property, nurture the private sector and allow the free market to determine prices and compensation for labor and intellectual property.

Onward,

Grover Norquist
President,
Americans for Tax Reform

 

Photo Credit: Firmbee.com

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ATR Tells Congress Don't Waste Taxpayer Dollars on Broadband Failures

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Posted by Katie McAuliffe on Thursday, May 6th, 2021, 11:25 AM PERMALINK

WASHINGTON – Today, Americans for Tax Reform sent a letter to the House Energy and Commerce Subcommittee on Communications and Technology urging them to avoid the Biden Administration impulse to throw taxpayer dollars into broadband subsidies that are already proven failures.

Our letter highlights policies that Congress should follow if taxpayer dollars are to be spent closing the digital divide. Some our recommendations include: 

  1. Follow a technology neutral approach to broadband delivery.  
  2. Continue to champion private-sector investment over government-owned networks (GONs). 
  3. Continue our light-touch regulatory framework that put us ahead of our European counterparts. 
  4. Enact meaning reform to the Lifeline program. 

 

The Subcommittee will be holding a hearing today on this issue today. You can read the letter below or click HERE  to view it as a pdf. 

May 06, 2021

The Honorable
Michael F. Doyle, Chairman
U.S. House of Representatives
Subcmte on Communications & Technology
2123 Rayburn House Office Building
Washington, DC 20515
The Honorable
Robert E. Latta, Ranking Member
U.S. House of Representatives
Subcmte on Communications & Technology
3222-A Rayburn House Office Building
Washington, DC 20515

 

Dear Representatives:

If Congress is to address broadband connectivity and cost issues, we urge you to do so in a targeted, cost-effective way that considers the entire broadband universe, rather than the narrowly defined, non-technology neutral view proposed by the Biden Administration.

Congress should avoid overly restrictive definitions of what constitutes broadband. There are more choices than fiber. Cable, wireless, fixed wireless, satellite are all acceptable methods for achieving speeds that meet the needs of Americans now and into the future for working remotely, telehealth, remote learning, and entertainment. According to Zoom, only 2 Mbps is required for high-quality video calling for both upstream and downstream, while Netflix requires only 0.5 Mbps per second. Calls for symmetrical speeds at 100 up and 100 down end up mandating on fiber and doesn’t take into consideration the asymmetrical needs of individual broadband users or the ability of private networks of to upgrade to meet demand over time.

While the government may be suggesting an influx of $100 billion is revolutionary, it is not. A one-time spend, on a chosen technology, with a preference for government operators who will likely compete with existing private networks will not address the remaining digital divide.

The private sector has invested over $1.6 trillion into wireline broadband since 1997 and after the lifting of several government restrictions, the private sector invested $80 billion in 2018 alone. The US’s prioritization of investment through both the public and private sector instead of the burdensome government regulation seen throughout Europe leads to better broadband results hands down.

Looking only at wireline broadband connections the US beats out the EU when it comes to provider competition. In 2019 86% of all US households had a choice of two or more providers, while only 46% of Europeans had that choice. In rural areas, 49% of US residents had multiple access points while only 11% had choices in the EU. This isn’t surprising because between 2012 and 2018, US investment in broadband was about 40% higher than in the EU; US broadband providers invest about $708 per household which is about three times higher than in the EU’s $230 per household.

Municipal or government run networks are also not the answer, especially ones that compete with private networks already in place. They can charge below market rates because they receive tax subsidies and they still fail as projects. Taxpayers should not be forced to subsidize an ineffective service they may not even want to use. Similar programs, like the Broadband Technology Opportunities program (BTOP) have been tried and failed.

We hope you will look towards reforming the lifeline program at the FCC to be a sustainable solution to lack of connectivity due to cost, rather than returning to the failed programs of the past. Doing away with the Universal Service fee, which continues to put extreme pressure on a small segment of the population and moving to a Congressionally approved appropriation possibly attached to spectrum proceeds could be a viable solution. Congress should also do away with the Eligible Telecommunications Carriers requirement and move to a voucher program rather than a carrier directed program to increase options to individuals struggling to get online.

Should you have any questions or comments on this matter, please reach out to me, or our Director of Federal Policy, Katie McAuliffe, kmcauliffe@atr.org.

Onward,

Grover G. Norquist
President
Americans for Tax Reform
 

 

Photo Credit: Louis Velazquez

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ATR Supports Equal Act

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Posted by Katie McAuliffe on Friday, April 30th, 2021, 9:43 AM PERMALINK

Americans for Tax Reform supports the EQUAL Act  – a measure that promotes equality under the law by eliminating unequal mandatory minimum sentences between crack cocaine and powdered cocaine.     

Equal and fair treatment under the law is a sacred tenant in the United States. This legislation creates a more equal system by establishing consistent punishments for abusing the same chemical substance, regardless of physical form. That is why a coalition of 28 organizations wrote a letter supporting this legislation. 

In 1986, Congress passed the Anti-Drug Abuse Act, which enhanced penalties for drug crimes. This law included separate provisions for cocaine in the powdered form and cocaine in the crack form. Five grams of crack cocaine had the same mandatory minimum sentence as 500 grams of powder cocaine. A ratio of 100:1.   

This sentencing ratio was narrowed to about 18:1 with the bipartisan Fair Sentencing Act of 2010. However, any such disparity for possessing a chemically identical substance serves no real-world purpose. The EQUAL Act would eliminate any disparity in the punishment between powdered and crack cocaine.  

The enhanced punishments for crack cocaine were designed to target “kingpins” and “middle level dealers,” however research conducted by the U.S. Sentencing Commission found that it primarily impacted low level dealers. Additionally, research has shown that these different mandatory minimums for crack cocaine has resulted in 65% higher sentences for African Americans and Hispanic Americans.   

The EQUAL Act also provides the opportunity for pending and past cases to apply for a reduced sentence based off this new change by Congress.  

You can learn more about the bill HERE.  

Photo Credit: Mayu

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