Think Tanks Wrap-up

April 17, 2002 at 7:12 AM
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WASHINGTON, April 17 (UPI) -- The UPI think tank wrap-up is a daily digest covering brief opinion pieces, reactions to recent news events and position statements released by various think tanks.

National Center for Public Policy research

(NCPPR is a communications and research foundation dedicated to providing free-market solutions to public policy problems, based on the principles of a free market, individual liberty and personal responsibility. NCPPR was founded to provide the conservative movement with a versatile and energetic organization capable of responding quickly and decisively to late-breaking issues, based on thorough research.)

CHICAGO -- Ten Second Response: Bush Administration and House Democrats Oppose Bill to Restrict Federal Land Acquisition, by Gretchen Randall.

Background: H.R. 3962, the "Good Neighbor Act" was the subject of a U.S. House Forests and Forest Health subcommittee hearing April 10. Under the bill's provisions, if more than 50 percent of a county's land is owned by the federal government no new acquisitions of land can be made by federal agencies unless the federal government sells some of its existing holdings. The federal agencies affected would be the National Park Service , Fish and Wildlife Service, Bureau of Land Management and U.S. Forest Service.

Both the U.S. Forest Service and Rep. Tom Udall, D-N.M. spoke in opposition to the bill at the hearing. Elizabeth Estill, representing the Forest Service, said in some cases, "...we would lose the opportunity to obtain the land." Udall claimed the federal government owns less land than it did in the 1960s and therefore this issue is not a problem.

Ten Second Response: Why is the Bush Administration's Forest Service advocating more government land control when it's private property owners who helped elect him?

Thirty Second Response: While this bill would affect only 6 percent of all U.S. counties, it would help address problems caused by the loss of tax money to the local economies. The federal government only pays an average of 33 cents per acre in lieu of taxes to the counties while the owners of privately held land pay between $1 and $3 per acre. The federal government hasn't been paying its fair share. This is harming the economies of rural counties.

Discussion: Under H.R. 3962, if the federal government owns between 50 percent and 65 percent of the land in a county, federal agencies are required to get the governor's approval and have local hearings in the county before acquiring more land. If the federal government owns 66 percent or more of the county, the governor and county elected officials must approve the acquisition of additional land.

Rep. John Peterson, R-Pa., sponsor of the bill, has disputed Udall's figures on federal land ownership, according to Environment and Energy News. Peterson claimed the NPS has increased its holdings 179 percent since 1964 and the FWS's holdings are up 285 percent. Furthermore, the Bush administration has requested $45 million less than was funded in 2002 for payment-in-lieu of taxes -- a program that is to offset the loss of tax revenue to counties for the federal land in these counties. Many congressional members complain that this loss of income to counties has led to high unemployment in the rural areas.

(Gretchen Randall is the director of the John P. McGovern, M.D. Center for Environmental and Regulatory Affairs at the National Center for Public Policy Research.)

The Cato Institute

WASHINGTON -- DOJ brief offers powerful reasons to reject states' claims against Microsoft, scholar says.

Tuesday, the Department of Justice filed a brief commenting on Microsoft's motion to dismiss the antitrust case against it. Robert A. Levy, senior fellow in constitutional studies at the Cato Institute, had the following remarks:

"Nine holdout states and the District of Columbia have concluded their arguments in favor of punishing Microsoft more severely than the Justice Department thinks is appropriate or necessary. Now it's Microsoft's turn to present its case.

"But first, the court will be considering a motion by Microsoft to dismiss the states' lawsuit altogether. Judge Colleen Kollar-Kotelly, if she grants the motion, will be promoting innovation and competition, eliminating duplicative federal and state antitrust enforcement, and reining in opportunistic behavior by nine attorneys general who believe they are entitled to two bites at the Microsoft apple.

"Microsoft's motion argues that the non-settling states, because they have not shown injury unique to their residents, do not have legal standing to bring a separate suit. Relying on the same trial, the same facts, the same conclusions of law, and the same injuries to the same people, the holdout states want to override the judgment of the federal government and 41 out of 50 states.

"The Justice Department, asked by the judge to comment on Microsoft's motion, did not believe the law compels that the case be dismissed. Nonetheless, the Justice Department offered four powerful reasons why the states' claims, as a matter of equity, should be rejected.

"First, 'the United States is the sole enforcer of the federal antitrust laws on behalf of the American public.' Second, the states' remedies would affect competition and consumers outside of their borders--raising 'for the very first time the prospect that a small group of states, with no particularized interests to vindicate, might somehow obtain divergent relief with wide-ranging, national economic implications.'

"Third, many of those remedies 'appear unrelated to the theories of illegality advanced by the United States and the plaintiff States at trial and the findings of liability sustained by the Courts.' Indeed, the remedies extend to 'new products, new services (and) new markets.'

"Fourth, the proposed settlement will provide all the relief needed to protect consumers against future antitrust injury. Any doubts in that regard, according to the Supreme Court, should be resolved in the federal government's favor.

"Essentially, said the Justice Department, the nine states 'have neither the authority nor the responsibility to act in the broader national interest, and the plaintiff with that authority and responsibility (that is, the United States) has taken a different course.' Judge Kollar-Kotelly, having solicited the Justice Department's guidance, would do well to give it great weight."

WASHINGTON -- Deposit insurance overhaul plans are misguided: automatic premium increases serve to protect taxpayers, study concludes.

Legislation recently introduced in the House of Representatives and the Senate, and supported by the Federal Deposit Insurance Corporation, would significantly change the coverage, premium structure, and administration of the federal deposit insurance system in a way that would increase the government's potential liability for losses from bank failures.

In a Cato Institute study, "FDIC Reform: Don't Put Taxpayers Back at Risk," Loyola University Banking and Finance Professor George Kaufman warns that the legislation now before Congress would encourage regulatory forbearance and compromise the safety and soundness of the U.S. banking system. In particular, the legislation would:

First, remove the statutory requirement that forces the FDIC to increase premiums whenever losses to the insurance fund reduce the FDIC's reserves to an insured deposit ratio below 1.25 percent, and that requires the FDIC to increase automatically premiums to at least 23 basis points if the 1.25 percent ratio is not achieved within one year.

Second, increase the ceiling on insured deposits from $100,000 to $130,000, which would weaken market discipline.

Third, allow the FDIC to charge premiums to banks at all times, regardless of the risk individual banks pose to the FDIC fund or of the size of the fund, thus allowing the FDIC to charge a constant tax on deposits to all banking institutions.

As an alternative, Kaufman proposes maintaining the current system of rapid required ex-post premium increases to fund losses to the FDIC fund with greater flexibility in the reserve ratio. Giving the FDIC more discretion in determining the speed at which the insurance fund is returned to its statutory minimum level is undesirable because "the longer premiums are not increased ... the more likely the fund is to go into deficit and the taxpayer again become liable," according to Kaufman. Also, "the threat of a premium increase of 23 basis points serves to encourage banks to pressure the FDIC to resolve insolvencies more quickly and efficiently" and thus avoid regulatory forbearance or negligence.

The author also proposes a system in which banks play a greater role in the management of the FDIC because "the separation of liability for losses from the management of the fund weakens the incentive to reduce losses and minimize premiums charged."

Given recent bank failures and a deteriorating situation for banks, which could cause more failures and losses to the FDIC fund, Congress should be careful not to revert to a system of unlimited taxpayer liability, Kaufman says.

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