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CPP Loses Its Steam

The Supreme Court, in a 5-4 decision, has slammed the brakes on President Obama’s Clean Power Plan (CPP). It’s a major setback for the administration, which held up the CPP at last December’s Paris climate summit as proof of America’s commitment to sharply reduce greenhouse gas emissions by 2030. The White House believes the plan helped to persuade China and India to promise large reductions of their own.

The ruling bars the Environmental Protection Agency from putting into effect regulations that would cut greenhouse gas emissions from power plants. That’s to give the U.S. Court of Appeals for the DC Circuit time to consider challenges to the CPP from 26 states and energy companies that have opposed the regulations on several grounds, including whether the EPA has the legal authority to impose such comprehensive regulatory requirements on existing power plants under the Clean Air Act.

After Congress failed to pass carbon cap and trade legislation in 2010, President Obama decided to use his executive powers to direct EPA to regulate carbon as a pollutant. It now appears that the White House erred in putting all of its carbon reduction eggs in the basket of an executive order. Top-down rulemaking by the EPA was always the fallback or second-best choice, after a carbon tax or cap and trade system. Now, depending on what happens in the courts, Obama may leave office without having a clear proposal for curbing U.S. emissions.

PPI supported the CPP on the basis that something is better than nothing. But we have always believed that a market-based solution that puts a price on carbon is more efficient and more comprehensive than command and control regulation from Washington.

In fact, the EPA has a history of making rules that trail behind market developments. It imposed Acid Rain rules after electric utilities had begun to comply with air quality controls. Similarly, the CPP rules come amidst a dramatic transformation of the electricity sector brought about mainly by cheap natural gas and distribution wind and solar generation. These factors already are cutting greenhouse gas emissions and are likely to go on doing so.

The Clean Power Plan was envisioned as a “worst case” scenario that the electric utility sector could avoid by pressing Congress instead to pass cap and trade or a carbon tax. But the utilities recognized that, because the CPP wasn’t sanctioned by Congress, it would always be vulnerable to legal challenge. And that’s where we are today.

Even if the CPP survives in the courts, it will not enable the United States to meet its Paris commitments because it only covers emissions in the utility sector, as the CPP alone is only expected to account for a quarter of the carbon reductions outlined in those commitments. In the end, there’s really no substitute for putting a price on carbon, which will both discourage the use of fossil fuels across the entire economy and drive investment to renewable energy and clean tech.


Student Rights, Judicial Precedent and Why 2016 Could See a Profound Shift in Education Law

A feature for the Center for Civil Justice.

Can America’s courts deliver better schools for disadvantaged students?

Some students and teachers seem to think so. In Massachusetts, five student plaintiffs who were unable to secure seats in charter school lotteries intend to file a lawsuit challenging the state’s cap on charter schools. In California, veteran teacher Rebecca Friedrichs objected to her annual union dues being used to protect ineffective colleagues; the Supreme Court is hearing arguments in Ms. Friedrichs’ case this week. If Ms. Friedrichs prevails, teachers’ unions will be compelled to better represent the many teachers who want significant changes to the profession.

Do these disparate cases amount to a trend? Some judicial scholars scoff at the idea. After all, judges preserve their authority by deferring to precedent, not by transforming bureaucracies. Education decisions tend to side with school systems, not individual students or teachers. Bureaucratic lawsuits against reform continue to be filed in numerous states.

The optimists, however, may finally be right that the judicial tide is turning. Judges have dealt setbacks to union-backed lawsuits against school reform in FloridaLouisiana, and New York City. Pro-student lawsuits have won surprising victories; for example, nine California students recently won a trial court ruling that public schools unconstitutionally denied them a decent education by assigning them ineffective teachers. After nearly 150 years of anti-student rulings, students have a real shot at legal relief that will not merely defend a few individuals, but improve equity, access and choice to the entire public education system.
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PPI to Congress: Scrub the SCRUB Act

House Republicans this week are expected to take up the ponderously titled Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB) of 2015 (H.R. 1155). The Progressive Policy Institute, a strong advocate for regulatory improvement, urges progressives to oppose this highly partisan bill.

Over the last three years, PPI has worked with reform-minded Democrats and Republicans in Congress, as well as Independent Senator Angus King, to develop a more effective way of dealing with the problem of “regulatory accumulation,” the relentless buildup of rules over time. Sadly, House Republicans have chosen to ignore a bipartisan bill—the Regulatory Improvement Act of 2015 (H.R. 1407)—in favor of the SCRUB Act, a conservative favorite that stands little chance of winning Democratic support.

Both bills have in common the creation of an independent commission charged with winnowing outdated, duplicative or overly burdensome federal regulations. There, the similarities mostly end. And while the House’s latest version of the SCRUB Act clearly has been tweaked in response to criticism from regulatory experts, it still fails on three grounds:

First, the bill caters to conservative demands to roll back existing regulations and make it harder to issue new ones. Rather than mandate careful consideration of rules widely thought to be in need of elimination or improvement, it requires the commission to cut regulatory costs by 15 percent—an arbitrary goal with no clear policy rationale. And while SCRUB’s vague, nonbinding language gives priority to examining “older major rules,” it could open the door to fresh assaults on favorite conservative targets: rules implementing Obamacare, the Dodd-Frank financial reforms, and the Environmental Protection Agency’s Clean Power Plan. The Regulatory Improvement Act, on the other hand, explicitly prohibits consideration of rules less than ten years old by its commission.

Second, the SCRUB Act enshrines a foolishly impractical “Regulatory Cut-Go” mandate. Under this procedure, no federal agency could issue a new rule unless it cut old ones that impose equal “costs” on the economy. The idea is to offset the cost of new regulations by killing old ones. This attempt to make regulation a zero-sum game would create pressures to target cost-effective rules for elimination based on highly imprecise estimates of what a new rule might cost—and with no consideration of the many public benefits of regulation.

Third, the SCRUB Act has zero support among House and Senate Democratic leaders or within the Obama administration. As a conservative “message” vehicle, rather than a serious legislative proposal, the bill will likely die in the Senate before it can be vetoed. In contrast, the House version of the Regulatory Improvement Act introduced by Congressmen Patrick Murphy (D-FL) and Mick Mulvaney (R-SC), has an equal number of Democratic and Republican co-sponsors. Defying the logic of polarization, it builds political support for smarter regulation from the center out.

At the core of this legislation is the Regulatory Improvement Commission—an independent, bipartisan commission under Congressional authority ensuring there is no hidden regulatory agenda. Consisting of nine members appointed by the president and Congress, the commission, after a formal regulatory review, would submit a list of regulatory changes to Congress for an up-or-down vote without amendment. This approach would build political trust and lay the groundwork for further rounds of regulatory review and revision.

Most important of all, the Regulatory Improvement Commission would lift the burden of regulation accumulation from the backs of U.S. workers, businesses, and taxpayers. It would reduce compliance costs and—most crucially—the opportunity costs that accrue when entrepreneurs and business managers spend their energies on complying with unnecessary rules rather than creating value.

PPI urges progressives to support a more politically viable mechanism for improving the regulatory environment for economic innovation and growth—the Regulatory Improvement Act.


The Best and Worst of 2015

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Presidents and Presidential Candidates

Best: Barack Obama

Barack Obama had one of the best second-term years of any President in living memory.

1*BQhBUPezveHchxjjKVgC1ARecall that the central worry about Obama, both as a candidate and as a President, was that he would fail to make the tough decisions necessary to drive America forward. Recall further that, like every other modern President in their seventh year, Obama has been dogged by an aggressive opposition party in Congress. Against that backdrop, Obama’s profiles in courage include:

  • Standing up to the speech police. In a direct rebuke of one of his core constituencies, Obama scolded as “coddled” those liberal college students who opposed conservative speakers, or topics that might cause offense to women or people of color. Obama’s words directly challenged the accelerating spread of illiberal speech codes across college campuses.
  • Global climate leadership. While the specifics of global climate change remain controversial, the broad outlines are clear to almost all scientists and rational observers: manmade emissions pose enormous risks. In Paris, Obama’s leadership helped 196 nations sign a deal that gives humanity a fighting chance to address those risks. How many leaders in history have successfully orchestrated deals that significant?
  • Standing up to teachers unions. When Arne Duncan decided to resign as Education Secretary, Obama appointed as his successor John King, a lifetime educator committed to maintaining and extending Duncan’s reforms. In doing so, he directly repudiated pressure from the teachers unions, one of the wealthiest interest groups in the Democratic Party.
  • Standing up to nativists. America was built from people who struggled to come here, from the Bering land bridge sixteen thousand years ago, to the Pilgrims in the 1600s, through waves of other ethnicities whose economic and cultural vitality helped make our nation great. Periodically, xenophobic movements have risen up against immigrants, threatening our strength and our values, but brave patriots have always stood up for our ideals. In this context, in 2015 Obama stood on the side of American optimism and courage. As described in The Atlantic, Obama met the nativist hysteria sparked by the attacks in Paris with an impassioned, enraged rhetorical barrage on behalf of the admission of Syrian refugees. He’s done so even though polls show that a clear majority of Americans now oppose admitting any Syrians. And even though, last Thursday, 47 House Democrats broke with him to help overwhelmingly pass a bill that would make admission of Syrian refugees virtually impossible. Nonetheless, Obama has been unyielding.
  • Standing up to Netanyahu. For decades, Israel and America had a close partnership based upon a balance between toughness and diplomacy. The deepest US-Israeli ties came when strong Israeli leaders used their political capital to push for peace, as with Yitzhak Rabin prior to his assassination by a right-wing Israeli in 1995. America’s greatest presidents have consistently used tough love to push Israel toward negotiated peace, as when Ronald Reagan told Prime Minister Menachim Begin in 1982 that US-Israeli relations were at stake due to Israeli shelling of Lebanese positions in 1982. Obama acted in Reagan’s tradition when he backed a negotiated settlement with Iran to reduce its nuclear capability, despite hardline opposition from Likud politician and current Israeli Prime Minister Bibi Netanyahu. Obama’s stance required political courage, despite the fact that retired Jewish lawmakers, some Israeli advocacy groups, and many Israeli generals supported the settlement, because one of the most powerful lobbying groups in America, the American Israel Public Affairs Committee (AIPAC) decided to ally itself with Netanhayu. AIPAC launched a national bipartisan campaign to oppose the deal with Iran. Obama stayed firm, and won. If the deal’s supporters are correct, Obama substantially increased the prospects for regional and global peace and prosperity by making a gutsy political call.
  • Standing up to big labor. Obama also faced down a well-financed global campaign by labor unions and their environmental allies  — again, core Obama constituencies — in pushing the Trans-Pacific Partnership, a Pacific Rim trade agreement that promises to promote United States industries and global prosperity. Republican and business interest groups have given him little support or credit, while Democratic groups have attacked him, yet Obama enters January 2016 with a strong chance of congressional approval for this historic agreement.

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