Fw: NCPA Policy Digest 11-23-98

H. C. Covington (ach1@sprynet.com)
Tue, 24 Nov 1998 07:26:15 -0600


National Center for Policy Analysis
DAILY POLICY DIGEST
November 23, 1998

IN TODAY'S DIGEST

   o   THE BUDGET SURPLUS IS DUE TO SOCIAL SECURITY, say
       economists, and thus tax cuts could require offsetting
       spending cuts....NCPA

   o   THE MILWAUKEE SCHOOL CHOICE PROGRAM did not need to be
       reviewed by the U.S. Supreme Court -- because it has
       spoken for 50 years, according to attorneys....WALL STREET
       JOURNAL

   o   THERE IS NO NEED FOR MORE REGULATION OF DIETARY
       SUPPLEMENTS, says the industry, since there is little
       evidence they are unsafe....USA TODAY

   o   CRITICS QUESTION THE NEED FOR MORE HATE CRIME LAWS, since
       there do not appear to be many bias-related
       homicides....INVESTOR'S BUSINESS DAILY

   o   DEFLATION IS OCCURRING IN UNREGULATED MARKETS, say
       economists, while prices in regulated industries are
       flat....INVESTOR'S BUSINESS DAILY

IN TODAY'S NEWS

TAKING SOCIAL SECURITY OFF BUDGET

Speaker of the House-designate Bob Livingston (R-La.) has said
that his first priority in the new Congress will be to remove
Social Security from the budget.  "Under the new budget rules, we
will no longer use Social Security proceeds to mask the budget
deficit," he said.  At the same time, however, Livingston also
promised that he will push hard for tax cuts next year as well.
Unfortunately, these two proposals are in conflict.

The problem is that revenues from Social Security payroll taxes
are now greater than current Social Security expenditures.
Hence, viewed in isolation Social Security is running a large
surplus-- $54 billion next year.  In addition, the Social
Security trust fund receives interest on Treasury securities held
by the fund.  Including interest on Treasury securities held by
the fund raises the surplus to $107 billion in 1999.

Social Security also includes the Medicare program which is
financed by a separate tax, but runs a cash deficit.  Next year
it is expected Medicare will pay out $13 billion more than it
takes in.  Including Medicare in the Social Security calculation,
therefore, lowers the cash surplus to $41 billion in 1999.

The broadest definition of the Social Security surplus uses up
more than 100 percent of the total federal budget surplus for
many years to come -- meaning further spending cuts will be
necessary just to balance the budget (see figure
http://www.ncpa.org/oped/bartlett/gif/pd112398.gif ).  Even the
narrowest measure of the Social Security surplus uses up most of
the projected total budget surpluses, leaving very little for tax
cuts.

Thus taking Social Security off-budget may force Congress to cut
spending if it wants to cut taxes.

Source: Bruce Bartlett, senior fellow, National Center for Policy
Analysis, November 23, 1998.

For more on Budget Process Reform
http://www.ncpa.org/pd/budget/budget-3.html

50 YEARS OF SUPREME COURT PRECEDENTS ON SCHOOL CHOICE

Teachers unions are belittling the importance of the Supreme
Court's decision not to review a lower court decision upholding
the Milwaukee school choice program, says the attorney who
successfully argued the case before the Wisconsin Supreme Court.

The teachers and the American Civil Liberties Union (ACLU) are
trying to forestall similar reforms around the country by
predicting the U.S. Supreme Court will declare them
unconstitutional the next time around.  Currently, low-income
Milwaukee students are the only in the nation who are guaranteed
the opportunity to use public funds for education vouchers to
attend public, private or religious schools.

However, 50 years of Supreme Court jurisprudence refutes the
contention that school-choice plans violate the Establishment
Clause's separation of church and state.  As long as the benefits
are available to religious and nonreligious schools alike, and as
long as the funds aren't paid directly to the religious schools,
the court has approved them.

   o   In 1947, in Everson v. Board of Education, the court held
       that a state may reimburse parents for the cost of
       transporting their children to and from religious schools.

   o   In 1983, in Mueller v. Allen, the court approved a
       Minnesota law that permitted parents to take a tax
       deduction for expenses related to private sectarian
       schools.

   o   In 1986 in Witters v. Washington Department of Services,
       the court unanimously upheld a state grant to a blind
       student to attend a theological seminary.

   o   In 1993, in Zobrest v. Catalina Foothills School District,
       the court said Arizona should provide a sign-language
       interpreter to a deaf student attending a Catholic high
       school, just as it did for nonsectarian schools.

   o   In 1995, in Rosenberger v. Rector and Visitors of the
       Univ. of Virginia, the court ruled a state university
       couldn't deny a student organization's religious newspaper
       funding.

   o   And most recently, in 1997, in Agostini v. Felton, the
       court upheld a federally funded program to provide
       remedial instruction by public school teachers at
       religious schools.

Thus there was no need for the court to review the Wisconsin
case: it has spoken.

Source: Jay P. Lefkowitz, "Supreme Court on School Choice: 50
Years of Precedents," Wall Street Journal, November 23, 1998.

For more on School Choice & Tax-Funded Vouchers
http://www.ncpa.org/pi/edu/edu3.html#a

ARE FOOD SUPPLEMENTS SAFE?

More than 100 million Americans are using dietary supplements,
and there has been greater scrutiny regarding the safety of such
products and calls for greater regulations.

But there are two assumptions being made that are faulty, says
the supplement industry:  that dietary supplements are unsafe and
that more regulation is the cure.  For instance, the industry
claims there has been only a minuscule number of reports of
adverse reactions to supplements.

   o   The Food and Drug Administration has tracked adverse
       reactions to dietary supplements since 1993 and has a
       total of approximately 2,500 in its database.

   o   By the FDA's admonition, there is "no certainty that a
       reported adverse event can be attributed to a particular
       product or ingredient."

   o   And, in any event, regulation does not necessarily equal
       safety; for instance, a recently published study found
       that reactions to prescription medications caused more
       than 100,000 deaths and 2.2 million injuries in a single
       year.

Industry representatives note that Jane Henney, recently
appointed FDA commissioner, was quoted as saying during
confirmation hearings that the current law "provides adequate
statutory authority to protect the public health."

Source: Michael Q. Ford (executive director, National Nutritional
Foods Association), USA Today, November 23, 1998.

For more on Food & Drug Administration
http://www.ncpa.org/pd/regulat/reg-6.html

DO WE NEED MORE HATE CRIME LAWS?

A number of critics are questioning the need for more hate crime
laws, which President Clinton and Attorney General Reno are
urging Congress to pass in the form of the Hate Crimes
Prevention Act.  The law would expand the FBI's power to
investigate crimes against homosexuals, women and the disabled;
crimes based on race and religion are already covered.

But many wonder why they are needed.

   o   They represent a departure from individual responsibility
       and equality under law.

   o   They will burden the FBI without helping bringing
       criminals to justice -- and they'll increase Washington's
       intrusion into local law enforcement.

   o   States already vigorously prosecute murderers, no matter
       who the victims are -- including Wyoming, where the murder
       of a homosexual college student set off the most recent
       reports of a hate crime "epidemic."

Another problem is the lack of solid data on the number of hate
crimes.

   o   The Southern Poverty Law Center reported 21 people were
       murdered in 1996 because they were homosexuals -- but the
       FBI put the number at two.

   o   But law professors James Jacobs and Kimberly Potter argue
       the FBI's data "are all but useless for discerning trends,
       because of the variation in the number of states and
       police departments reporting."

   o   For example, the feds reported 8,759 hate crimes in 1996,
       up from 4,500 in 1991.

   o   But the number of agencies reporting hate crimes also went
       up, from 32 states in 1991 to 49 states in 1996.

Jacobs and Potter report that while hate may spark vandalism or
intimidation, very few homicides are motivated by bias.

Source: Editorial, "Hate Crimes, Thought Police?" Investor's
Business Daily, November 23, 1998.

For more on Crime go to http://www.ncpa.org/pi/crime/crime.html

HIDDEN DEFLATION

Some economists contend that we are experiencing deflation, since
prices for a variety of goods from farm products to cars keep
dropping.  Others note that service prices keep going up -- and
say we aren't experiencing deflation.

But the deflation side has an explanation for this seeming
mystery: regulation.  In industries facing market competition,
prices are dropping.  In regulated industries, they aren't.

Labor Department statistics on the transportation business
demonstrate their point.

   o   Over the past two years, regulated public transportation
       costs (buses, trains, taxicabs, subways)  have gone up 1.1
       percent.

   o   Meanwhile private (unregulated) costs have dropped 2
       percent at an annual rate.

   o   Airfares dropped 4.8 percent in 1997, and although they
       went up 5.7 percent more recently, analysts note they are
       still more market-driven than public transportation, with
       which they are commonly lumped.

   o   Elsewhere, in the private, unregulated markets, new
       vehicle prices have fallen two years in a row, apparel
       prices are down 5.4 percent in the past four years and
       commodity prices have fallen to near nine-year lows.

Economists argue that a combination of tight money policy and
improved productivity has created sustained deflationary
pressures -- but increased costs of government regulation in such
areas as health and education make it appear that inflationary
pressures are actually at work.  But it is a mistake, analysts
say, to assume that because some industries experience higher
prices that deflation doesn't exist.

Source: Brian Wesbury (Griffin Kubik Stephens & Thompson Inc.),
"Deflation Denial," Investor's Business Daily, November 23, 1998.

For more on Deflation http://www.ncpa.org/pd/economy/econ8.html

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