Declaring Russia an Enemy

July, 2018

Lincoln and Washington -- My U.S. Senator, Ben Sasse, has suggested that President Trump declare Russia an enemy of the United States.

That would be a good idea but it won't happen, as the senator knows. It would trigger the clause in the Constitution that defines treason as giving aid and comfort to an enemy. This the last thing the president would do.

Rather, Senator Sasse and other senators should introduce a concurrent resolution* for Congress to declare Russia an enemy. Passage of such a resolution would clarify grounds for impeachment. It would constrain the president from giving further aid and comfort to Russia, which has tampered in our elections and is surely doing so again, threatening our very democracy.

It would also provide the special counsel in the Russia probe with more options. The president would not have to be indicted for a criminal act, as some people believe is necessary, in order to face impeachment. The special counsel would not have to put the president before a grand jury, always a messy situation; the House would not have to wrestle with the meaning of high crimes and misdemeanors, but only look at what constitutes aid and comfort.

Most of all, passage of such a resolution now would deter the president from giving even more aid and comfort to Russia. It would be a way for Congress to assert itself meaningfully and constructively, in our system of separation of powers and checks and balances.

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* Concurrent resolutions are not subject to veto by the president.

How Vulnerable are these Four Senators

July, 2018

Washington -- Senators Manchin, Donnelly, Heitkamp, and McCaskill, if they were entertaining the notion of voting for Supreme Court nominee Brett Kavanaugh, just got a splash of cold water in the face from the estimable Jane Mayer, who suggested they might be more vulnerable for voting for Kavanaugh than voting against him.

Look what happened to Senators Dixon and Fowler, who voted for Clarence Thomas in a similar situation. They were defeated at the next election.

Moreover, surveys* of voters in the applicable red states suggest that narrow majorities would approve a Democratic senator opposing Kavanaugh so as to provide a check on presidential power. This is before such a position has even been well articulated.

If Kavanaugh's "originalism" is unmasked as contrary to Madison's and Jefferson's views of the Constitution, those majorities will increase substantially. A key element of originalism, the idea that unenumerated rights are not protected, is blind to Madison's explicit Ninth Amendment** in the Bill of Rights itself. As I suggested in the previous blog, no one has ever gone down in an election by being too closely associated with James Madison.

We Americans take our checks and balances seriously. What with the American president's questionable – some will say treasonous – performance alongside the Russian president, more and more people will want to take a step back on the Kavanaugh nomination. The nominee is well known for his position that a president should not be bothered by an investigation until his term is over. That matter could soon come before the Supreme Court.

There is also every reason for the four senators in question to wait until hearings can be held on the nomination. It is well known that Brett Kavanaugh was instrumental in providing, on behalf of Kennent Starr, selective information to selective press during Starr's Clinton investigation. Red state voters may not be pleased to learn that this typical Washington swamp behavior is his background.

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* "The survey shows that fifty-four per cent of voters polled in these states said they would approve of a Democratic senator opposing Trump’s choice for the Supreme Court if it protected the independence of the Court as a check on Presidential power."--Jane Mayer

** Amendment IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Originalism Indeed: Madison Versus Trump

July, 2018

Washington -- If history is any guide, Democratic senators are preparing questions for the Supreme Court nomination hearings that may make for good television but for bad political strategy.

The nominee, Brett Kavanaugh, will surely be well prepared for Roe and Fisher and wedding cakes, likely targets of Democratic inquiry.

He will not be so well prepared for questions of political theory, of Montesquieu* and Madison,** of constitutional checks and balances. If he is only asked.

If no one has noticed, the country is on the verge of being taken over by one-party government with all the danger that entails. Republicans hold power in all three branches at the national level, weakening the separation of powers; the same goes for a wide majority of states, weakening the division of powers provision in the federal system.

Survival of our checks and balances is shaping up to be the issue of our time. It is also the issue where Kavanaugh and his fellow "originalists" are weak. Judicial activism in several cases and timidity in others by so-called originalists are emasculating the true original genius of the Constitution.

Appropriate questioning will draw attention to this situation in the confirmation hearing. Democrats should be ready to go nouveau-originalism one better in citing Madison, to show how judicial activism in Citizens United and Shelby County stepped over the line of legislating from the bench, and how Hawaii dangerously empowers the executive. These are concerns of conservatives and liberals alike. Activist judges are now much more a problem from the right than from the left. See Justice Kagan's comment about "black-robed rulers overriding citizens choices" in Janus.

The nominee could say, of course, that the remedy is at the polls. But that particular check and balance is also being closed off by the Supreme Court because of its indifference to the 14th Amendment's requirement for equal protection in the gerrymandering cases. Such is the refinement of the science of gerrymandering that a party can win widely at the polls but lose badly in the struggle for representation.

Moreover, it has become decidedly murkier as to just what policies and parties voters are to choose among in elections. Historic Republican positions on trade, foreign affairs, fiscal policy and so many other areas have been victims in a through-the-looking-glass rush to one-party power. Voting now is becoming up or down on a cult leader.

Especially troubling with this nominee is his tying the judiciary to the executive power, as Montesquieu warned against, in the nominee's view that the executive should be immune from legal prosecution while in office.

Voters of all ideological persuasions hold our constitutional principles dear and, if Democrats ask the right questions, voters in red states with Democratic senators will be patient with their senators as they deliberate their senatorial check and balance, the power to confirm or deny confirmation to a Supreme Court nominee. In my recollection, no elected official has ever gone down for being too Madisonian.

If the matter becomes, for all forty-nine Democratic senators, one of Madisonian originalism versus Trumpian originalism, it's possible the nomination could go down, or at least be held over to the next Congress, if the Republicans splinter on other issues. I am not predicting this, as most senators and their staffs these days care only about the news cycle and social media, and little of the Enlightenment. They are the product of colleges that increasingly teach political management over political theory, so I'm not holding out hope.

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* "When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.
"Again, there is no liberty if the judiciary power be not separated from the legislative and executive. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control; for the judge would be then the legislator. Were it joined to the executive power, the judge might behave with violence and oppression.
"There would be an end of every thing, were the same man, or the same body, whether of the nobles or of the people, to exercise those three powers, that of enacting laws, that of executing the public resolutions, and of trying the causes of individuals."

--Montesquieu, Spirit of the Laws, Book XI

** "A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions. This policy of supplying, by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public. We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other that the private interest of every individual may be a sentinel over the public rights. These inventions of prudence cannot be less requisite in the distribution of the supreme powers of the State."

-- Madison, The Federalist, No 51

Memories of SOJ Operations off North Korea

July, 2018

Washington -- It being the Fourth of July, patriotism is a good subject to consider. And North Korea.

An image is sticking in my mind, a photo from the Singapore summit three weeks ago. Kim Jong-un is shepherding Donald Trump into a room; his hand is on the middle of Trump's back, guiding him, a show of who's in charge. Trump is about to get taken, it seems. Trump will lower military readiness for a Kim promise to de-nuclearize North Korea. Within days, however, satellite photos will show North Korea enhancing its nuclear facilities.

Perhaps somehow it will all work out. Diplomacy has risks worth taking. Doubtless it was wise to step back from the brink of a senseless and catastrophic war.

Some of us on this Fourth of July must be excused if we turn our eyes away from the summit spectacle and look instead to photos of the USS Pueblo (AGER-2), a Navy ship still in commission and held in a North Korean port. Its crew was captured in 1968 by North Korea, tortured for a year, then released.

I was in the Navy at the time, between ships. My orders were to join the USS Arlington (AGMR-2) in Sydney, Australia. When I got to the Philippines, suddenly the orders were changed, as I was somehow to get to the ship in the Sea of Japan (SOJ), operating off the North Korean port of Wonsan. I flew to Okinawa, then to Tachikawa Air Base outside Tokyo, then to the Naval Air Facility at Atsugi, where I boarded a COD (carrier onboard delivery) flight to the USS Enterprise, which had just been rushed to waters off the North Korean coast.

It was snowing when we reached the big aircraft carrier; the deck was white and slippery. The pilot missed the arresting wire four times. Each time he missed, he went full throttle out over the sea to circle and try again. We landed on the fifth attempt. If that one had not succeeded, a cable net barrier would have been put across the flight deck to crash-land us. I spent the night on the Enterprise. The next morning, I was helicoptered over to the Arlington, which was on the scene to provide communications between Washington and the U.S. Navy ships off Wonsan.

Our ships were there to invade the port and rescue the crew of the Pueblo, if the signal was given to do so. It was not given, mostly out of concern that the crew would immediately have been killed by their captors, if we even knew where they were being held. Sixty-eight days later, Arlington steamed back into Yokosuka, Japan.

What are those who have served to deter North Korean totalitarianism supposed to think about new bonhomie with the brutal North Korean leaders? It certainly puts a damper on this Fourth of July for some of us.





Tackling the Student Loan Cancellation Dilemma

July, 2018

Washington -- This blog post will throw caution to the wind and take on the issue of wholesale student loan cancellation as a way to help the economy and simultaneously get millions of borrowers out of financial trouble. The Levy Institute has recently looked at cancellation's effect on the economy and finds considerable merit in the idea; and it is abundantly clear that student loans are the cause of unending financial distress for wide swaths of the U.S. population. To an alarming extent, the mess is attributable to fundamental consumer protection failures.

The idea of student loan cancellation came up before in the aftermath of the Great Recession, as a way to put money into the economy to aid recovery. No one advanced an acceptable plan. The proposal came up again in the 2016 election but quickly was dropped in favor of airy candidate promises for "free" college sometime in the distant future. This naturally built resentment among those with current debt.

Now some political candidates are talking about it again but with little substance as to hows and whys.

A major problem that must be overcome is "equity." It seems unfair to cancel the large existing debt of one person but to do nothing for another person who has struggled mightily and just paid off debt. It seems unfair to cancel a large debt of a person who chose to attend an expensive college but cancel only a small debt for someone who chose a low-cost, and perhaps lesser quality, institution. It seems unfair to students who worked two or three jobs and took extra years to graduate so as to avoid debt. Inherent perceived inequities will likely sink any universal loan cancellation plan.

A different way to approach the problem would be to address equity concerns first, above other considerations. The amount of debt relief would not be based on amount borrowed or debt remaining, but would be based on other criteria that are more fundamental to the creation of the problem in the first place.

The increase in student loan debt has been due in significant part to dimished public support for higher education. There was once a consensus* that individual students should pay about one-third the cost of higher education, public tax support should provide another third, and the remaining third would come from charitable efforts and miscellaneous grant, contract, and enterprise receipts. That was understood to be a rough split of support based on the idea that whoever benefited should pay proportionately.

But by the beginning of this century, individuals were often picking up much more than a third, and borrowing heavily to do it.

A solution would be to have society step back in to equalize between generations. Consider a simple illustration: if the cost of education (instruction and related) was an inflation-adjusted $21,000 per year, under the old consensus the individual would be responsible for $7,000 and others for $14,000. But as we moved into this century, the responsibility became more the reverse.

So why not provide a tax credit of $7,000 per individual per year of post-secondary education (using the example above) with the rationale of generational equity, to make up for the unfairness of abandoning the old consensus? The credit would provide look-back up to thirty years. Its actual amount in any year would be calculated on national averages of cost and share. Claiming the credit would require only proof of attendance in credit hours (available in transcripts) at a HEA Title IV participating post-secondary institution, not an amount borrowed, paid, or due.

This would help many individuals immensely and allow them to get on top of their debt quickly. It would not be "forgiveness" of the debt, in the sense that the term is often used interchangably with other debt relief measures. The forgiveness involved would be society's own asking for it, from a generation of individuals it wronged and for which we are all paying, individual and society alike. Even the Federal Reserve chief has expressed concern about student loan debt's drag on the economy.

Yes, the tax credit would be refundable if taxable income was too low to take full advantage of the credit, but the refund would be paid first to reduce principal loan balance. There should also be a means test for so-called vertical equity. Those with high incomes and high debt are not the issue that needs to be addressed. Bankruptcy relief should become available as it was before 1998** for those with intractable problems. To forestall price-gouging by institutions, Congress should put a moratorium on the collective amount of loans any institution can put into students' financial aid packages, enforced through HEA Title IV gatekeeping.

These measures would enhance a sense of urgency to replace them with broad post-secondary finance reforms and move the U.S. toward better models, like Australia's for example.

This approach could also be considered a "tax cut" due the lower and middle classes, which did not benefit much if at all from the 2017 federal tax cut, as it largely benefited corporations and individuals at the higher income levels.

I would not be surprised if this idea, or something like it, quickly gained popular support as a way of dealing with the nation's crippling student debt crisis. It would have many of the same positive effects on the economy as described in the Levy study; it would avoid many of the inequities of earlier proposals that doomed them; it would save countless families from continued financial ruin brought about by foolish, counterproductive federal student loan policies. (Not to mention inept and sometimes fraudulent student loan administration.)

It gives me pause to suggest any plan that would increase the federal deficit, but the Levy Institute's study ameliorates that concern substantially.

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* The consensus is best explicated by the Carnegie Commission, 1973.
** 2005 for private student loans


Test of Leadership in Nebraska

June, 2018

Lincoln -- The best thing that could happen right now to help Nebraska's faltering agricultural economy would be for our three congressmen – Bacon, Smith, and Fortenberry – to tell their Republican House leadership to support the just-passed Senate farm bill and consign the terrible House farm bill to history.

The House version is a partisan, divisive bill that wastes money needlessly and counterproductively; it cuts conservation programs to do so; it futher squeezes farmers at a time of low commodity prices and high property taxes. The bill's farm policy provisions are adamately opposed by left, center, and right. Its transparent purpose is to create an election-year wedge issue over food stamps; in other words, farmers' need for a decent farm bill will be held hostage to demagogic attacks on the poor.

The Senate version is a bi-partisan effort that maintains programs such as the Conservation Stewardship Program, much used by Nebraska farmers. The House version zeros it out in favor of giving taxpayer help to more CAFO developments (Concentrated Animal Feeding Operations), which citizens in many Nebraska counties are vehemently opposing.*

The Senate version limits the number of non-farm managers who can benefit from farm subsidies, in the form of the Grassley Amendment. Excessive subsidies to non-farmers drive land prices upward and keep them there, not only burdening real farmers with high property taxes but limiting the entry of young farmers into agriculture. (Unfortunately, the similar Durbin-Grassley amendment was not included in the Senate bill, which would have means-tested crop-insurance subsidies to further take pressure off property taxes.**)

The Senate bill also gives support to local and regional agricultural programs, where there is huge potential for job development according to the St. Louis Fed in its encouraging report, Harvesting Opportunity. Nebraska could be in the forefront if the Senate bill passes.

All Nebraska eyes should be on Senator Deb Fischer, a member of the Senate Agriculture Committee which produced the Senate-passed bill, to see if she will try to unite the Nebraska congressional delegation in favor of the bi-partisan and clearly superior Senate bill. So far, her record both as a state and U.S. senator leaves much to be desired in terms of Nebraska agriculture. She now has a chance to remedy at least part of that unfortunate legacy by telling her Nebraska colleagues in Washington not to sacrifice the future of the state to a shameless scheme that is now unfolding in all its ugliness.

This could also be a test of Governor Rickett's leadership. Will he advise the Nebraska House delegation to drop their support of the House bill, and also weigh in for our state with the Speaker and the President?

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* Colfax, Washington, and Lancaster counties are the latest to witness citizen uprisings against CAFOs. If you want to see what goes on in a pountry CAFO, watch the new documentary movie "Eating Animals." Despite its unfortunate name, it is worth a watch. (My own family – Oberg Hatcheries – goes way back in the poultry industry, when chickens were raised on small farms as a part of diversified farming.)

** Senator Durbin had too little company from his fellow Democrats on the farm bill, as their strategy is to be bi-partisan at all costs and not put forth a Democratic vision of what rural America needs. I think this is a big mistake. Rural America is hurting in so many ways; the farm bill would have been a chance for Democrats to get back into winning in states like Wisconsin, Michigan, Pennsylvania (and holding Minnesota), where rural voters hold the balance of power. Many of these voters would be attracted to Democratic initiatives on conservation, nutrition, opioid control, diversified farming, and jobs from the growing local and regional food markets. Yet the Democrats' "Better Deal" is silent on all these issues, giving the impression that Democrats are content in doubling down on their failed 2016 bi-coastal, popular-vote strategy and conceding the heartland and the electoral college to the other party, perhaps in perpetuity.

AVA Colleagues in the News

June, 2018

Washington -- How good to open the New York Times today electronically and see an op-ed from the German entertainer-activist Wolf Bierman, writing on the difficult decisions of Angela Merkel. I especially liked that the newspaper gave us the original German version as well as English, so we can compare the two.

How daunting it must be for the translator to know that millions of bilingual people may be second-guessing him or her while reading the paper over their morning coffee. Bierman himself is a lyricist, so turning a phrase of a phrase-maker is a challenge.

Then I saw who did the translation: Isabel Cole, none other than our fellow member of American Voices Abroad (AVA) in Berlin. Well done, Isabel.

Isabel Fargo Cole has recently written a novel, Die grüne Grenze, which won notice from German reviewers not least for the idea that an American could write it so well.

Another AVA member also has published a new, important book in German, Worauf wir stolz sein dürfen. That would be our friend, the indomitable Gretchen Dutschke, who is now on tour around Germany discussing it.

Isabel and Gretchen are both midwesterners, from Illinois.



Remorse and Ranked Choice Voting

June, 2018

Washington -- Maine has now approved ranked choice voting (RCV). The RCV victory may have been helped by a strong New York Times editorial in its favor.

Australia and Ireland use this voting method, as do several local governments in the United States. Bills have been introduced in nineteen states to replace winner-take-all elections with ranked choice voting.

The reason I favor RCV is that it deals with often legitimate voter complaints. Many voters feel they are forced to choose between the lesser of two evils. Even if their favorite candidate is on a multi-candidate ballot, in a winner-take-all election voting their actual preference can be a "wasted" vote. Voters often feel manipulated by spoiler candidates who split popular candidates' support, resulting in victories by candidates that most voters actually reject. Many voters stay home because they don't like the choices presented to them, or they think their votes make no difference if their spouses vote differently, cancelling each other out.

Many voters want to "send a message" with their vote, but can't for some or all of these reasons. And if they do vote, their desired message is often misinterpreted or deliberately twisted.

With RCV, each voter is invited to send several clear, unmistakable messages through thoughtful voting. Dislike a candidate intensely? Place that candidate last. Really like a minor candidate and want to send a message of encouragement? Place that candidate first and mark a major candidate you can tolerate second. Dislike candidates who sling mud? Reward those who don't by ranking them higher.

Once more people understand that RCV is message-voting in spades, more states will adopt it. It could also be called no-more-excuses voting.

Now is the time to give RCV* a try. There many voters who are experiencing remorse or even shame at the turn of events resulting from the 2016 national elections. Conservative voters especially sent their messages but did not want or expect outcomes to include trade wars, the breakup of the Western Alliance, cozying up to dictators, and forceably taking children from parents who legally seek asylum. Their excuse for enabling all this? That they had no choice, as it was unthinkable to vote for the other side. Leaving aside the thought that they were duped by Russian manipulation of social media, they have a point. They voted (or chose not to vote) in a system that can produce such outcomes, and it did.

Perhaps these voters will lead the charge for RCV voting. They should.

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* RCV has its detractors, and not just those who benefit from the current system of electing by mere pluralities. Some voting experts and mathematicians demonstrate that different ways of counting can result in different RCV outcomes. These almost never happen, however, and hardly outweigh all the RCV advantages. Where RCV has been used, the usual result is higher voter turnout, election of more candidates who can compromise on issues, and encouragement for outsiders who can test their ideas with voters and prevail over time.




Loss of a Friend

June, 2018

Washington -- Last month I lost a friend, Harold, in Maryland. No, he didn't pass away. Rather, he acted in such a manner that friendship between us henceforth is unlikely if not impossible.

Harold (not his real name) and I had shared several good times over the years around Chesapeake Bay, including at least two Thanksgiving dinners at the home of mutual friends. I thought he was a decent fellow, always doing the right thing despite challenges from within a troubled family.

But at a gathering last month he gravely insulted his former Thanksgiving hostess with vulgarities and obscenities. Knowing she held a dim view of our country's current president, he let her know he was a strong supporter. Among his reasons: he likes how the president speaks – crudely – which gives license to people like himself to do so as well.

When his former hostess tried to change the conversation to a happier subject, the British royal wedding, Harold let loose with a stream of invective about how terrible it was that British royalty was allowing n-----s into it. (Apparently he was unaware that Queen Charlotte, wife of George III, was partly of African descent.)

What is our country coming to when an American president is encouraging behaviors such as Harold's? I was surprised and disgusted when I learned of Harold's actions. He is college educated, a retired former federal employee. I inquired of a witness to these outbursts if Harold had ever served our country in the military. He had not. Often such service, in my experience, knocks nonsense like Harold's out of people. It also makes those who serve reflect on what kind of a country they are risking their very lives for: one founded on the proposition that all men are created equal, with unalienable rights, or a country of blood and soil, ruled by despots committed to the very opposite.

Are we a country full of Harolds, who put their own prejudices, grievances, and unexamined fears above the heritage passed down from the Declaration of Independence? Is the president's bestowed license more important to them than (1) two centuries of ongoing work toward a more perfect union and (2) a decent respect to the opinions of mankind? Increasingly, it seems so.

Germany's Options to Save the Western Alliance

June, 2018

Berlin -- Western Europe is looking to save itself from a rogue U.S. president who seems bent on disrupting if not destroying the defense and economic alliances that have served our common interests so well since World War II.

European leadership in this crisis must come from the German government in Berlin.

Germany could do as Gaullist France did in 1966: assert itself by removing U.S. troops from the country. Or Germany could embark on a trade war. But these options only weaken all parties and make the alliances even more vulnerable.

A move that would make Western Europe's point and actually strenghten all the parties in our alliances would be for Germany quickly to fulfill its pledge to increase its defense spending to 2% of GDP. Currently it is at about 1.3%.

But the increased spending would not be for conventional NATO purposes; it would be for increased cybersecurity, to fend off hacking and social media threats from both the east (Putin) and the west (Trump).

In addition to increasing spending for security measures along an east-west axis, Germany should also be prepared to spend more to defend itself and Western Europe along a north-south axis. This will require investments and new defense and economic alliances with the countries of North Africa, to stem the flow of dispossessed peoples into Europe.

Such bold moves by Germany would make an indelible impression around the world. They would be welcomed by its Western European partners and by many if not most Americans, who likewise are troubled by the crisis needlessly fomented by our own president.



One Reform to Save America

June, 2018

Washington -- The conservative pundit David Brooks and I would not agree on everything, but I can't say enough good about his recent column on how voting reforms are the most promising cure for our increasingly destructive two-party polarization.

Ranked-choice voting and multimember congressional districts have much to offer. Maine voters are leading the way on ranked choice voting this month. Let this adage once more come true: As Maine goes, so goes the nation.

Eight years ago I wrote in favor of voting reforms that would bring the advantages of proportional representation into our national politics. There is nothing in our Constitution that mandates political parties and winner-take-all voting. These matters are under the jurisdiction of states. In fact, many local governments already utilize ranked choice (instant run-off) voting and multimember districts, so these concepts are hardly new.

Brooks' column is titled "One Reform to Save America." This is not hyperbole. We should get on with it.

Exploiting Veterans and the Military

May, 2018

Washington and Lincoln -- It's Memorial Day and a time to think of veterans past, present, and future.

The New York Times led off the day with a harsh but truthful look at how veterans are being exploited by predatory colleges. It is shameful; it is corrupt, there are no other words for it. As a veteran myself, I assist as much as I can those who are in the fight to protect veterans, but it is a difficult struggle when so much of the country willfully turns a blind eye to it.

Then there is the news that my U.S. senator, Ben Sasse of Nebraska, supports taking money out of the federal Impact Aid program to support private elementary and secondary schools for the children of those in the military. Impact Aid now supports public schools to make up for the loss of taxable property in locations where there are large military bases. Bellevue and Papillion in Nebraska are examples of school districts where there are many military schoolchildren but a small tax base due to the presence of Offut Air Force Base.

When I worked in the U.S. Senate many years ago, Impact Aid was targeted for cuts by Ronald Reagan. The cuts had no real rationale behind them other than that Nebraska should be happy to have the presence of Offut and that state, not federal, taxpayers should be responsible for equalizing property tax bases among districts.

Bellevue and Papillion school boards approached Nebraska Senator Jim Exon about fighting the cuts to Impact Aid. He was a member of the Armed Services Committee and well-positioned to lead the fight. And lead he did, organizing a hearing at which he was joined by his committee colleagues Sam Nunn of Georgia, John Warner of Virginia, John Tower of Texas, and others to keep Impact Aid intact.

If memory serves (I assisted with the testimony), John Chafee of Rhode Island, a former Secretary of the Navy, and James Abnor of South Dakota also fought the cuts vigorously. Abnor was particularly concerned about the effect of the cuts on South Dakota counties with Indian Reservations.

The effort succeeded. Impact Aid survived intact.

How times change. Now my Nebraska senator would take funds from Impact Aid with the rationale that military families will choose to take their children out of public schools, so districts like Bellevue and Papillion will have fewer pupils and therefore need less support.

If I were still writing testimony on Impact Aid, I would raise another question. Is it good to promote, with federal funds, an educational system in which military families are incentivized to leave the the public schools? The public schools are institutions that bring communities together, where civilians and military families mix and learn from each other. The public schools are places where our common heritage and common values are taught. Increasingly, non-public schools and home-based schools are teaching their own versions of our country, promoting nativist and sectarian ideologies. Many military children go into military service themselves. Is it for support of such ideological causes our future military is being prepared?

Looking at these matters from a veteran's viewpoint, I think we are on dangerous ground here at all levels of education, from elementary school through college. What are we becoming as a nation, when veterans and those in military service are not so much to be honored as exploited?



Don Bacon's Farm Bill

May, 2018

Lincoln -- On April 30, 2018, a dust storm swept across central Nebraska. Visibility was so bad that traffic on Interstate 80 was halted after a twenty-nine vehicle pile-up that caused one fatality. The source of the dust? Blowing farm fields, inadequately protected by conservation measures.

On May 18, Nebraska Republican Congressman Don Bacon, a member of the House Agriculture Committee, voted for a farm bill that kills the Conservation Stewardship Program (CSP), the nation's largest conservation program for working farms. Nebraska, moreover, has been the nation's largest beneficiary of CSP in terms of acres covered, almost eight hundred thousand in 2017. But clearly not enough.

This could not have been an easy vote for Don Bacon, hurting Nebraska so hard, assuming he understood what he was voting on.

Historically, farm bills have been developed on a bipartisan basis with the needs of different parts of the country taken into account. This one, however, was a partisan product of the Republican leadership, for which conservation is a low priority. Congress being what it is these days, Don Bacon saw no option but to put partisanship above soil health. Let the fields blow.

Fortunately, the bill did not pass. It is widely seen as the worst farm bill in memory. Conservative organizations such as the Cato Institute, the Club for Growth, and Heritage Action oppose it. So do many farmer-led organizations. Conservation and natural resource groups are dead set against it to the point of outrage.

Unfortunately, Speaker Paul Ryan will try to bring the bill up again, to force it through the House on a party-line vote. The Republican leadership wants political talking points about putting more work requirements on food stamp (SNAP) recipients, sensing (perhaps correctly) that it can take rural America voters for granted and need not address rural America's needs. The major media seem happy to play along, as there has been scant coverage of anything that is actually in the farm bill beyond the SNAP issue.

Apologists for the bill say some of the savings from killing CSP will be redirected to other conservation programs, such as EQIP, the Environmental Quality Incentives Program. This is good if you want taxpayer dollars moved from land stewardship to helping feedlots and huge chicken farms expand across the countryside, as is now happening around Fremont. Maybe that's the future Don Bacon sees for the remaining rural areas of Douglas County.

Adding insult to injury, the bill does not modernize and reform crop insurance as it should, to encourage farmers to plant cover crops to protect the soil. Instead, it wastes $3.4 billion (over ten years) in unnecessary subsidies (according to CBO scoring) and even retreats from the crop insurance reforms that were enacted in the 2014 Farm Bill. Think what $3.4 billion could have done for soil conservation.

Cogent reviews of the House farm bill and its conservation issues have been written by the National Sustainable Agriculture Coalition and the Rural Advancement Foundation International.
For a broader look, check out Farm and Food File; if you can stand to be really appalled about what is happening to the Great Plains, read "Kansas Is Dying."

Because this is not a partisan blog, I should note that Democrats are hardly being helpful in bringing the farm bill's shortcomings to public attention. House Democratic leader Nancy Pelosi visited an Iowa farm on May 7 and said nothing about how the troubling provisions in the bill are hurting rural America. Although Democrats have pointed out the bill's lamentable attempt to end bipartisan farm bill cooperation over food stamp issues, at the national level they have been silent as to what they stand for in the rest of the bill, if anything.

It remains a mystery as to how Democrats think they can win elections in rural America by ignoring it. Rural voters may develop suspicions about whether the Don Bacons of the world are watching out for their interests (clearly not), but they will ask Democrats what they are for, and Democrats need to be ready with answers, rather than silence.



Iron Triangles: Part VII

May, 2018

Washington -- Secretary of Education Betsy DeVos has twice this year admonished Education Department employees that they must not communicate with others outside the department. The first was a crackdown of communications between budget and appropriations officials. The second is more general warning that employment at the department is a "public trust" and all outside communications must be cleared, even by departmental attorneys if necessary.

All I can say is that if there is any breach of the public trust going on, it is being committed by the Secretary and her appointees, who are rife with conflicts of interest and whose policies are inimical to the very concept of public trust. The latest violation of such a trust is the disestablishment of the office to police fraud by for-profit colleges. As one victim of the DeVos reign put it, “Those people who are in those high positions — they need to look at themselves....I don’t know how you can sleep at night.”

Viewed historically, however, this behavior is typical of what happens when outside interests capture the government and turn it to their own ends through establishment of an iron triangle. Currently the for-profit college industry has its people in control at both the Education Department and at the House Committee on Education and the Workforce. They are dismantling consumer protections everywhere they find them.

It is not the first time. From 2002-2006 the House committee was led by Congressmen John Boehner and Buck McKeon. McKeon owned stock in a for-profit college (Corinthian) when he presided over higher education policy. The Assistant Secretary for Postsecondary Education at the time, Sally Stroup, had been a lobbyist for the for-profit college industry as well as a former member of the committee's staff. Together, they pushed through repeal of a previous consumer protection statute known as the fifty-percent rule.

The rule had been put in place after Senator Sam Nunn's hearings on corruption in the for-profit sector in 1990. The idea was that a college could not offer more than fifty percent of its programs online, in order to discourage fly-by-night online operators. When McKeon and Stroup got the consumer protection repealed, the for-profit industry boomed.

In 2012, Senator Tom Harkin opened more hearings on fraud in the for-profit college industry. Two years later, McKeon left the House, but not before had taken advantage of the iron triangle to recover from his California western-wear store's bankruptcy, in part by using political campaign contributions from the for-profit college industry to pay his wife to be his campaign manager. In the meantime, after Stroup's departure from the Education Department, she went back to work for McKeon in the House and eventually returned to her position as a very well paid lobbyist for the industry through 2015.

The DeVos threats against Education Department employees who speak up against iron triangle behavior of any kind will likely succeed, I'm afraid. One reason is that federal employees are kept in the dark about the Lloyd-Lafollette Act, under which they may legally and properly share their concerns about waste, fraud, abuse, and mismanagement with Congress and its agencies. It would be good to see Education Department employees take the "public trust" argument and turn it right back against iron triangle behavior wherever and whenever it occurs. The DeVos administration is nothing if not a gross abuser of programs intended to help students and families, not to ruin countless lives with worthless degrees and unmanageable student debt.






Farm Bill in Trouble, As It Should Be

May, 2018

Lincoln -- Today the U.S. House of Representatives voted down the 2018 Farm Bill, but for the wrong reason: the House Freedom Caucus wanted a vote on immigration first.

Republicans have now gone on record that they would rather play politics on immigration than pass the Farm Bill for rural America. Apparently it is a calculation that Democrats are so weak in rural America that Republicans can neglect heartland voters with impunity, and get by with it. They may be right, as Democrats have shown no savvy in crafting their own version of the legislation that would signal a return to political competitiveness in the heartland.

This particular Farm Bill, let it be noted, deserves to be voted down on its own accord, politics aside. It is a remarkably bad bill. The non-partisan National Sustainable Agriculture Coalition offered this:

“This bill is an insult to the American family farmers and rural communities who are responsible for putting food on our families’ tables each night,” said Greg Fogel, NSAC Policy Director. “For over 30 years, our coalition has been fighting for a stronger, more sustainable and equitable food and farm system – and we’ve seen real progress being made. Congress has advanced many important issues in recent years, including efforts to strengthen working lands conservation and increase support for beginning farmers and ranchers. The farm bill before the House today, however, will go down in history as being one of the most anti-farmer bills ever seen.It is a shame that the bill drafters have thrown away the bipartisan legacy of the farm bill, and instead chosen to provide unlimited subsidies to mega-farms, undermine rural entrepreneurship and make it more difficult for farmers to access new markets, and decimate our natural resources by cutting support for working lands conservation programs and eliminating the Conservation Stewardship Program completely. We sincerely hope that Members will do the right thing this week, and vote on this bill."

NSAC is right, which raises the question of how Nebraska House members Don Bacon, Adrian Smith, and Jeff Fortenberry could have voted for it. It should be an albatross around each of their necks in November.

I expect Kara Eastman, the new Democratic nominee in Nebraska's second congressional district, will be all over Bacon for his vote for this insult to farmers. Bacon beat Brad Ashford in 2016 with strong support in rural areas around Omaha, but is this the Farm Bill those rural voters will support? Not if they know what's in it.* Bacon has no excuse for it, as he is even a member of the committee that brought the bill to the floor.

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*H.R. 2 has also been panned by a multitude of conservation and rural-advocacy organizations, including the National Farmers Union and the Nebraska-based Center for Rural Affairs. Organizations on the right of the political spectrum don't like it either: Heritage Action for America, The Club for Growth, and FreedomWorks said in a letter, “The House Agriculture Committee farm bill, which is expected to be debated on the House floor in May, is unacceptable." Religious groups have also weighed in: “Providing food for those suffering from hunger is central to our Christian faith. The United Methodist Church understands this call not simply as a matter of charity, but of responsibility, righteousness, and justice,” said the Rev. Dr. Susan Henry Crowe, general secretary of the United Methodist Church General Board of Church and Society.

Academic Program Cuts at UNL

April, 2018

Lincoln -- The UNL chancellor has announced cuts to several academic programs in response to the Nebraska legislature's reductions in university appropriations. The fact that the reductions could have been much worse should not take attention away from the implications of the new rollbacks.

In a previous post, I suggested that the governor and the legislature should be demanding more from the university to help the state's agriculture sector, as opposed to trying to cut appropriations as a way to prosperity. The UNL college of agriculture should be a particular focus.

It is therefore not a good signal that the chancellor's first cut is to eliminate the Rural Futures Institute, launched in 2012 to considerable fanfare. Unless, of course, the RFI interdisciplinary approach to reviving rural Nebraska has not measured up and indeed should be on the chopping block. My sense of RFI is that it has had an impossible task given national and state trends in agriculture. On top of that, its approach was too much cheerleading and not enough sober assessment of the fundamentals of rural economies as they now exist given failing national agriculture policy.

Another cut that raises eyebrows is the downsizing of the Survey Research and Methodology Program and a concomitant re-arrangement of funding for the department of statistics. At a time when the integrity of academic research is threatened as never before by funding sources who want to skew findings favorable to their interests, universities need strong efforts in research methodology and statistics.*

The other cuts are more understandable. Universities must constantly update, which requires cutting as well as adding. Sometimes funding pressures can actually be good for institutional renewal.

The chancellor doubtless was tempted to cut the English department, as it has been attacked by a few in the Nebraska legislature who do not approve of its curriculum. Commendably, he did not succumb.

I must relate an anecdote about English teachers from two days ago, when I attended the annual Ron Ridenhour awards ceremony at the National Press Club in Washington, sponsored by the Project on Goverment Oversight. Ridenhour was a courageous Vietnam veteran and reporter who first chronicled the My Lai massacre, fifty years ago. His eyewitness source was Army helicopter pilot Hugh Thompson, who stopped the massacre by use of force against his fellow servicemen who were committing it. After Hugh Thompson left the Army he sought guidance about whether he should participate in a cover-up of the massacre. His old Boy Scout leader and his old football coach advised him to stay quiet. His English teacher told him of his moral duty to speak up. We are a better country for that English teacher.

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* If any statistics faculty are losing their jobs, they could get a measure of poetic justice on their way out the door by instructing the chairman of the board of regents and the president of the university about how to calculate and describe percentages. Both the chairman and the president, during this year's budget battle with the legislature, claimed that UNL administrative costs were "125% lower" than such costs at peer institutions in other states. Meaning what, exactly? That they were less than zero? The actual numbers, it turns out, are these: UNL, $52 million; peer group, $117 million. The former is not "125% lower" than the latter. Correctly expressed, one can say the peer group is 125% higher than UNL, or UNL is 44% of the peer group. The same error was made in describing UNO against its peer group, claiming that it was "100% lower." Again, meaning what, that UNO had no administrative costs whatsoever? What was meant, apparently, is that UNO costs are 50% of its peer group, or its peer group is 100% higher than UNO; that is, twice as high. UNO is not "100% lower." This is embarrassing for a research university.







Two 'Debficits'

April, 2018

Lincoln -- The Nebraska Legislature is adjourning without providing property tax relief, further stressing the hard-pressed agriculture sector. The state budget simply can't sustain even the paltry amount half-heartedly offered by the governor. Now the state is facing a voter referendum on property taxes that may throw the state into fiscal chaos not seen in decades.

At the federal level, the Congressional Budget Office has just projected this year's federal deficit to exceed one trillion dollars, with many more such deficits projected far into the future. This is a huge reversal in the fiscal condition of the federal government, which in recent years had actually been cutting deficits.

These two dangerous conditions would not have developed had elected officials – one in particular – only abided by basic tenets of fiscal responsibility.

At the state level, when times were momentarily flush for agriculture, and when state revenues were growing nicely in 2011 and 2012, the legislature took a portion of the sales tax base and dedicated it to highway construction. This was a risky move as it violated a commonly accepted principle of public budgeting and finance: user taxes should pay for roads and sales taxes for general government. Rather than raising gas taxes, which for many years had been declining as a percentage of gas prices and construction needs, the legislature took tens of millions of dollars annually away from sales tax revenue, a textbook source of local property tax relief. The predictable happened: the farm economy faltered, land prices did not decline commensurately, and the state became crippled, unable to respond to the property tax crisis squeezing Nebraska's all-important agriculture sector.

At the federal level, Congress passed an unfunded tax bill in December of 2017, followed by a huge spending bill in early 2018. The combination is sending the federal deficit to unprecedented and dangerous levels.

One elected official has been instrumental in all three acts of breathtaking fiscal irresponsibility: Deb Fischer. As a state senator, she led the raid on the state sales tax base, which should have been preserved for property tax relief. As a U.S. senator, she voted for both the tax bill and the spending bill, sending the annual federal deficit over a trillion dollars.

Her name is now synonymous with deficits at both state and federal levels. Henceforth in Nebraska the word "deficit" should be called "Debficit."

It is no wonder that Deb Fischer has many challengers this election year, and that her re-election chances have been declining somewhat. Particularly in the Third District she may be weaker than many people assume. Nebraskans in this district especially want property tax relief and want their candidates to support federal fiscal responsibility, if not outright balanced budgets. Deb Fischer has a terrible record on both.




Demanding More from NU Investment

April, 2018

Lincoln -- The 2018 Nebraska legislative session is over and the University of Nebraska budget escaped with only relatively minor cuts. The governor and several state senators had wanted much deeper reductions, given state government's bleak revenue outlook.

A question was tossed my way when I was in Lincoln during the session: as a person who once worked on such matters for many years, would I cut the NU budget?

The short answer is no, but I would demand more from the university in areas crucial to Nebraska's future. Let me explain.

A case can be made that Nebraska spends more on higher education compared to other states and, therefore, cutbacks might be in order, especially in times of state revenue shortfalls. But a case can also be made that Nebraska ranks high as a good place to live and that its overall educational system is among the top ten in the country.

I'd venture that there is some level of causality at work here, not just fortuitious correlations. Nebraska's investment in higher education may be somewhat high, but so are the returns.

Looking at the Nebraska economy, we see the Omaha and Lincoln urban areas doing well. I think it's reasonable for the university – UNL, UNO, and UNMC – to take a considerable measure of credit for it. The engineering and business colleges, the professional schools of medicine, dentistry, law, and pharmacy, and especially the departments in the arts and sciences that do the heavy intellectual lifting, should be recognized for their roles in this good fortune.

Rural Nebraska is another story, however. The agricultural sector is doing poorly and is responsible for the state's revenue woes. Which raises the question of the responsibility of the state's college of agriculture.

Of course it's not just Nebraska's ag economy that is suffering; the nation's whole farm belt is in crisis. So it's hardly fair to target one college for falling short, let alone single it out for budget cuts.

Rather, I believe, more should be demanded of this college, and of other such colleges of agriculture across the country at land-grant universities. What does it take to get the agricultural economy healthy again? This should be the burning question at both the Nebraska statehouse and at the university.

And is it even appropriate to think in terms of making Nebraska agriculture "healthy again"? The state's rural areas (and its towns and cities) have been depopulating for decades. Some say it is unavoidable and inevitable; others say it is the legacy of the ag economists who were the hand-maidens of those who would turn agriculture from a way of life for many into a business opportunity for few. I lean toward the latter explanation.

There is a way out. At last the spell of Earl Butz ("Get big or get out") is being broken by those who recognize the promise of new, emerging markets. See, for example, Harvesting Opportunity by the Federal Reserve Bank of St. Louis, which sees substantial local and regional market potential. The "feed the world" school of thought has also been dealt a blow by the NYT series on world obesity; to what end has American agriculture's "fencerow to fencerow" production been put? The answer to that does not bode well for the current Nebraska agricultural economy, but it may stimulate moves toward nutrition-based rather than calorie-based production, which would be good for all of us, here and abroad.

At a minimum, Nebraska legislators and taxpayers should be looking to the state's agriculture college and demanding a Plan B based on Nebraska's own comparative advantages of land, water, and human resources. Agronomists trying to squeeze another bushel of yield out of corn or Extension agents instructing farmers in the use of dicamba are not going to solve the sector's problems. In fact, they may worsen them. Bolder thinking is in order.

It's long past time not to slash away at the university's budget indiscriminately, but to demand more from our investment, especially in agriculture-related areas.












Readers' Reactions and Questions

April, 2018

Lincoln and Berlin -- This blog admittedly jumps around with regard both to its geographical perspective ("Three Capitals") and its subject matter. I am often taken by surprise myself at what can pop up as a topic at any given time.

Contacts with readers are important determinants of the varied subjects of these blog posts. For example, several readers have appreciated the recent six-part Iron Triangle series; likely there will be more such.

Today's post takes note of recent, unexpected but welcome reader questions about posts from a few years ago.

One reader, having read my post about Edith Schwartz Clements, wanted more information about her. Several exchanges later, I was delighted to see two new references (here and here) to the pioneer ecologist's remarkable life and work.

This was not the first time I was contacted about Edith Clements, as another reader's curiosity helped lead to an excellent Wikipedia entry about her. This led to yet another short biography of Edith Clements, who is finally getting recognition long overdue.

Another reader, a New York publisher, having read my posts about the books of Gretchen Klotz Dutschke, recently asked for her contact information. Gretchen, a good friend who knows Germany as no one else possibly can, has a new book out that made its appearance last month at the Leipzig book fair. I hope that putting the publisher in touch with her will soon lead to a book in English for an American readership.

As noted in the author profile sidebar (above), I welcome comments and questions from researchers and others with an interest in the subjects covered in this blog. It is especially gratifying to have had questions that led to a wider appreciation of noteworthy people like Edith Schwartz Clements and Gretchen Klotz Dutschke.

Iron Triangles VI

April, 2018

Washington -- Fifty Massachusetts state senators and representatives asked the Massachusetts Education Finance Authority (MEFA) a good question. Why is the state agency MEFA paying dues to the National Council of Higher Education Resouces (NCHER), when NCHER is working in Washington to undermine consumer protections for Massachusetts' student loan borrowers?

MEFA quickly dropped out of NCHER. The state senator who first posed the question was gratified with the response and expressed the hope that MEFA's action would create a cascading effect across the country. Indeed, why are these state-associated agencies, created ostensibly to help students, so intent on undermining state consumer protection efforts?

The letter to MEFA and its attachments have to be read to be believed. Hats off to the teacher organization that defended the interests of former students, now teachers, who are being victimized by sloppy if not fraudulent student grant and loan servicing in the federal TEACH program. I'd not call NCHER a secretive organization of "zombies," as the AFT did, but if that's what it takes to make the point that thousands of teachers' lives and careers are being disrupted, so be it. Click on this report from National Public Radio to get a sense of how teachers have been betrayed. The Washington Post has also noted the problem, with a good explanation of the financial motivations involved.

To observers of Iron Triangle behavior, however, this development is no surprise. See previous Iron Triangle posts, Parts I - V. NCHER is an arm of the student loan industry. Its president, James Bergeron, has been in the revolving door of government and industry for many years, coming to the organization after working in another corner of the triangle, committee staff in the House of Representatives. Bergeron's letter to the Department of Education on behalf of NCHER, proposing to do away with state consumer protection for student loan borrowers, was sent to Kathleen Smith, who has had a career in all three triangle corners.

The Bergeron letter is of special note because it reprises a tactic used once before by its predecessor organization, NCHELP, to great industry advantage. It attempts to leverage the Department's Office of General Counsel into its cause, without actually having any determination that Department counsel agrees with the industry position.

In the 1990s, the Department of Education made a decision that student loans transferred by loan holders from one bond estate to another would retain the same federal taxpayer subsidy it earned when originally funded. This was done to prevent gaming of subsidies by moving loans around among different funding sources. At the time of the determination, interest rates were fairly high. The Department's concern was that lower subsidy loans might be moved to bond issues with higher loan subsidies, resulting in a big windfall for the loan holder if the old subsidy rate didn't accompany the loan. An NCHELP representative, Sheila Ryan, raised a question with OGC about what would happen in a low interest environment if older, higher subsidy loans were moved to new funding sources but retained the same subsidies, and the proceeds of such transactions were used to refill the old, high subsidy funding source and to fund yet more high subsidy loans. She said the Department should write rules anticipating that scenario or, preferably from NCHELP's viewpoint, drop the attempt to stop loan holders from moving loans around among bonds.

The Department did not take such action, because it did not have to. Existing rules already covered the situation: proceeds of such transfers were not qualifying sources under the law for the higher subsidies. Nevertheless, Sheila Ryan took her experience of having merely discussed the issue with OGC as license to advance a scheme to make money at federal taxpayers' expense. When interest rates plunged after 9/11, she teamed with Lawrence O'Toole, a former colleague, to form Aurora Consulting. They offered their consulting services to a for-profit lender in South Dakota, Student Loan Finance Corporation (SLFC), with the condition that if the lender would move loans around among bonds as they prescribed, Aurora Consulting would get a kick-back percentage of the additional taxpayer subsidies.

Sheila Ryan-Macie, under oath in a trial in December, 2017, confirmed that she had no document from the Department of Education indicating that it agreed with her that there was any shortcoming in the regulations. In fact, in 2007, the Department's OIG and OGC had determined that the Aurora Consulting scheme, like that of several other student loan holders, was simply illegal. SLFC repaid some of its ill-gotten gains in 2012 in a settlement, but the re-payment represented only a relatively small percentage of the millions of dollars it took illegally from taxpayers. Aurora Consulting repaid nothing.

Sheila Ryan-Macie is now chief of staff at Navient, a for-profit student loan servicer that has been sued by the U.S. Consumer Financial Protection Bureau for failing to protect the interests of student loan borrowers at every step of the lending and collection process. She is responsible for company strategy.

As for NCHER, it is going back to the same playbook, hoping for another outcome that is not based on law but what it would like the law to be. A 2016 OGC determination, attached to the Massachusetts legislators' letter to MEFA, confirmed the longstanding rule that student loan servicers must comply with state as well as federal law. NCHER's action represents a shameless exploitation of borrowers and taxpayers made possible by the recent emergence of another Iron Triangle at the Department of Education. It may work: the 2016 OGC letter is apparently being ignored or circumvented*, as was the law when Aurora Consulting and others were making their money in the previous decade. When an Iron Triangle is in place, mere law does not stop the victimizing of borrowers and taxpayers.

Two recent lawsuits brought by student loan borrowers have alleged racketeering under RICO, the Racketeer Influenced and Corrupt Organizations act. One was settled without dealing with the racketeering charge, the other was denied for "lack of particularity" as to racketeering.

Someone's not looking hard enough.

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* Secretary of Education Betsy DeVos is attempting to preempt state law. See previous posts. Twenty-six state attorneys general, Democrats and Republicans, have challenged the move. Massachusetts Attorney General Maura Healey reacted: “Secretary DeVos can write as many love letters to the loan servicing industry as she wants, I won’t be shutting down my investigations or stand by while these companies rip off students and families."










Couldn't Have Said It Better

March, 2018

Washington -- The New York Times is as perturbed as I am about the Betsy DeVos attempt to preempt state laws on consumer protections for student loan borrowers. The attempt is downright unconstitutional.

At a hearing Tuesday in the House of Representatives, Secretary DeVos was at a loss to explain who made the decision to try to preempt. She could have said "I did," but that would not be true. She is the instrument of the governing Iron Triangle, but that is also not something to admit. See Iron Triangle, Part V, as to how the decision came about.

The Sunday NYT editorial:

Education Secretary Betsy DeVos made clear even before taking office last year that she was more interested in protecting the companies that are paid by the government to collect federal student loan payments than in helping borrowers who have been driven into financial ruin by those same companies.

Ms. DeVos’ eagerness to shill for those corporate interests is apparent in a craven new policy statement from the Education Department. The document claims that the federal government can pre-empt state laws that rein in student loan servicing companies if such a law “undermines uniform administration of’’ the student loan program.

This legally baseless policy statement could easily have been written by the servicers, who will no doubt use it as a smoke screen when they are sued by states for using deceptive practices. The statement clearly is intended to intimidate state legislatures across the country that are considering proposals to curb well-documented abuses by this industry. Curbs are already being applied in California, Connecticut, Illinois and the District of Columbia, where loan servicers are required to have state licenses and submit to state regulation.

The servicers are working on the legislative front, too, pushing a particularly destructive House bill that would pre-empt the right of the states to oversee companies that originate, service or collect student loans — essentially neutralizing reforms that are underway across the country.

The loan servicing industry’s longstanding failures came into sharp focus three years ago when an analysis of consumer complaints by the federal Consumer Financial Protection Bureau found that some companies were pushing struggling borrowers toward default — which essentially ruins their financial lives — by giving them misinformation, by making it difficult for them to refinance their loans and pay lower rates, and by withholding information about affordable payment plans.

Among other things, borrowers reported that servicers sometimes applied a larger portion of a borrower’s monthly payment to a lower-interest loan, so as to leave a higher-interest loan with a larger balance. By keeping the borrower in debt longer, the companies could make more money. Beyond that, student rights advocates argued plausibly that the servicers’ business model relied on getting borrowers off the phone as quickly as possible, leading customer service employees to suggest payment options that could be explained quickly but that were sometimes not in the borrower’s interest.

These findings showed that the servicers were aggravating the student debt crisis, unfairly driving up debts that could dog student borrowers into their retirement years, when they are least able to make good on their debts.

Last year, the Consumer Financial Protection Bureau and the attorneys general of Illinois and Washington State filed lawsuits against Navient, the country’s largest student loan servicer, which handles roughly one in four student borrowers. The federal lawsuit contended that the company had failed borrowers at every step of the repayment process and was particularly remiss when it came to enrolling distressed borrowers in income-based repayment plans, under which monthly payments can fall to zero.

The Massachusetts attorney general has sued another loan servicer, the Pennsylvania Higher Education Assistance Agency, charging that it mismanaged a program under which students were entitled to have their loans forgiven after 10 years in public service occupations like nursing, social work, policing and the military. Earlier this month, a state court in Massachusetts ruled that the case could go forward, despite the Trump Justice Department’s claim that the federal Higher Education Act pre-empted the state’s right to sue the servicer, which is under contract to the federal government.

What’s striking is that the Education Department released the pre-emption statement even after leading regulatory experts had condemned the idea as harmful and legally unsustainable. Earlier this month, the Conference of State Bank Supervisors, which represents regulators in all 50 states, shredded the legal arguments behind the pre-emption idea, pointing out that education officials were not empowered to strip the states of their traditional — and primary — authority over debt collection and other aspects of the financial services industry.

Beyond that, a bipartisan group of 25 state attorneys general warned in a strongly worded letter last fall that the department could not legally abridge powers that the states have long had to protect citizens from fraudulent business practices. Last week, an even larger group of attorneys general warned against the pre-emption bill pending in the House, which they said would block the states from combating fraud and abuse in the student loan industry. At a time when student loan debt has soared to nearly $1.4 trillion, the attorneys general said, the federal government should be working hand in hand with its state partners — instead of trying to sideline them.

The pre-emption statement shows the extent to which the Education Department has been captured by an industry it is meant to regulate. Fortunately, state regulators have made clear that they will continue to prosecute servicers that violate state law — and will challenge the federal government in court if it tries to interfere. Meanwhile, the dangerous pre-emption legislation pending in Congress deserves to die a swift death.

Secrertary DeVos Goes Too Far

March, 2018

Washington -- According to excellent reporting by Michael Stratford at Politico, Secretary Betsy DeVos is trying to stop Department of Education employees from communicating with their counterparts in the legislative branch.

In particular, she is forbidding all communications except those that go through the Office of Legislation and Congressional Affairs (OLCA), and she is breaking up the department's Budget Service by transferring its employees to other units of the department.

Three observations are in order.

First, I can speak from direct personal experience on the matter, as I was once the gatekeeper at OLCA for all communications, in the realm of higher education, between department employees and the Hill. This necessarily included budget and fiscal matters. This did not mean, however, that there couldn't be direct communication between, for example, the Budget Service and the appropriations committees'staffs, or the Congressional Budget Office (CBO). It only meant OLCA would be kept the loop. I always encouraged as much direct communication as possible. If something came up that might be a problem, then OLCA would get involved.

Second, the action by DeVos to move the division responsible for cost estimation and analysis to the Office of Federal Student Aid (OFSA) demonstrates that DeVos wants a tight grip on this particularly sensitive subject area. OFSA, which was established two decades ago to be a "performance based organization" headed by a professional administrator (with a term overlapping political administrations) has now become a political instrument of the Secretary. OFSA is a reliable component of iron triangles controlled by outside interest groups. (See earlier posts on iron triangles, Parts I through V.)

Third, it is important to note that there are limits to what DeVos can do to stop communications between federal employees and the legislative branch. Federal employees have every right under the Lloyd-Lafollette Act to share information without interference. They do not lose their rights as citizens and taxpayers just because they are federal employees. This is particularly true when it comes to matters of mismanagement, waste, fraud, and abuse.

Fourteen years ago, working in the Department's National Center for Education Research (NCER), I observed fraud and abuse taking place in the student loan program and tried to stop it through regular departmental channels. Then, as now, the department was in the grip of an iron triangle and did not want to hear about it. I therefore sought advice from the department's Office of Ethics about how I might bring this to the attention of others outside the department in order to stop it. The answer was the Lloyd-LaFollette Act. Here, from my records, is a notification I gave to NCER that I was working on ending an illegally claimed subsidy in the student loan program:

I am gratified that others beyond the Department have valued my findings. I have continued my work under the guidance of the Office of Ethics, which has advised me that, on my own time as a citizen and taxpayer, I am free to conduct analyses independent from my duties as a federal employee. This office has also advised me that under the Lloyd Lafollette Act (5 USC 7211), "The right of employees, individually or collectively, to petition Congress or a Member of Congress, or to furnish information to either House of Congress, or to a committee or Member thereof, may not be interfered with or denied." Accordingly, I have assisted the Government Accountability Office with their September, 2004, report on 9.5 subsidy abuses as well as Congress on both the Taxpayer Teacher Protection Act of 2004 and the newly introduced Student Loan Abuse Prevention Act of 2005.

Many federal employees, if they read this, will be surprised to know that they have such rights. Secretary DeVos, of course, is not going advise departmental employees that this option is available to them. But it is. And if this attempt at suppressing the flow of information from the department to the Congress in any way involves evidence of mismanagement, program abuse, waste of taxpayer funds, racketeering, and the like, then it is the obligation of federal employees to speak up and to exercise their rights.

Let the information flow.

Iron Triangles, Part V

March, 2018

Washington -- Secretary Betsy DeVos's attempt to claim exclusive federal jurisdiction over student loan servicing has hit more roadblocks. States are not about to back away from consumer protection efforts to assist the legion of aggrieved borrowers who have been wronged by the loan servicers.

• The Conference of State Bank Supervisors has written to oppose the move: "This effort at preemption by regulatory fiat runs counter to the Congressionally mandated state-federal balance in financial regulation and exceeds the Department’s authority."

• In the state of Washington, legislation is moving ahead to create a Student Loan Bill of Rights, modeled after those implemented in other states.

• A state court has permitted the Massachusetts Attorney General to proceed with her lawsuit against a student loan servicer, PHEAA, also known as Fed Loan Servicing and AES. The court, we are gratified to note, cited this case twenty-six times: United States ex rel. Oberg v. Pennsylvania Higher Educ. Asst. Agency, 804 F.3d 646, 676-677 (4th Cir. 2015), cert. denied, 137 S.Ct. 617 (2017).

Twenty-five state attorneys general wrote the Secretary to oppose preemption. The AGs pointed out that the attempted preemption is fundamentally illegal and unconstitutional.

• A legal scholar has called the preemption attempt "not itself a law, it's essentially a glorified press release."

From the standpoint of political science and public policy, this preemption attempt must be viewed as another in the ongoing series of Department of Education's actions consistent with Iron Triangle behavior. See previous posts on Iron Triangles, as found in the right column of these pages, especially Part I, which identified the role of the Education Finance Council. This lobbying organization was instrumental in creating an Iron Triangle in the Department from 2002-2006, and is eager to re-establish another for the benefit of its members.

An EFC letter of June, 2017, suggests the preemption attempt. It not only asks Secretary DeVos to preempt states, but also to preempt "the public" from imposing on federal student loan servicers, an apparent reference to borrower lawsuits and civic organizations that support them.

Note to whom the letter was copied: Department officials Matthew Sessa, Kathleen Smith, and James Manning. Sessa is a former PHEAA employee. Kathleen Smith, a former PHEAA employee and also a former EFC director, took action two months later to terminate the Department's agreement to share information with the Consumer Financial Protection Bureau, which had received tens of thousands of borrower complaints against loan servicing contractors.

James Manning in 2007 relieved PHEAA of having to pay back over $100 million in false claims against taxpayers. Although Manning in the same decision found that these claims were indeed illegal (as determined by the Department's lawyers at OIG and OGC), that finding was treated by PHEAA as inconsequential. A PHEAA official, testifying in November, 2017, said of the Manning 2007 letter, "We got the joke."

Returning now to the department from her several years of work for for-profit colleges (see Part II) is Diane Auer Jones, who was Assistant Secretary for Postsecondary Education at the time of the 2007 Manning letter and would have been in the position to approve what PHEAA called the joke. She will have no trouble fitting once again into the latest Iron Triangle iteration (see Part IV).

So far, Secretary DeVos apparently has been given pause by all the objections, from coast to coast, to her preemption plan, as she has not issued it. But because all the parts of an Iron Triangle are in place, thanks to the revolving door between industry and government, a way to protect the loan servicers from the public and the states will be likely be found, and soon. Iron Triangles are all about the use of power; they are oblivious to matters of federalism, good policy, legality, and in this case, even constitutionality.





Ironic and Misguided Preemption*

March, 2018

Washington -- The Trump Administration's Secretary of Education, Betsy DeVos, is about to attempt federal preemption of laws and regulations pertaining to student loan servicing.

This is at the request of the servicers, who do not want to deal with state consumer rights laws and especially with state attorneys general, who seek to protect their citizens from improper and downright shoddy loan servicing.

The servicing is so bad that several states have taken legal action against Navient and PHEAA, two of the major servicers. So has the federal Consumer Financial Protection Bureau, in the case of Navient. Borrowers individually are losing thousands of dollars (and millions collectively) to servicer incompetence, manipulation of regulations, and sometimes outright deceit about whose interests they represent, not to mention inept Department of Education oversight.

Read the CFPB charge against Navient, to get the flavor of the issues.

There is not much hope that the Department of Education can right the regulatory ship, or is even trying to. For all practical purposes it has been sunk irretrievably into the mud of conflicts of interest and abuse of recusal. The top managers at the Department come right out of the industry the Department is supposed to be regulating.

The irony is that the Trump Administration, and its supporters in Congress, often tout the benefits of state rather than federal administration. This is not one of those cases. This preemption is all about making bucks off the powerless, and taking away borrower remedies.

The reason this preemption attempt is misguided, and should fail when tested in court, is that the states are often trying only to enforce federal laws and regulations on the servicers. Unless there is a conflict between state and federal laws, the supremacy clause of the U.S. Constitution, upon which preemption arguments are based, is not an issue.

The case that has precipitated the DeVos preemption attempt is Massachusetts Attorney General Maura Healey's suit against PHEAA. Massachusetts alleges servicing violations contrary to both Massachusetts law and U.S. law. Inasmuch as the Massachusetts consumer protection standards are somewhat different than federal standards, the U.S. Department of Justice has filed a memorandum in the case taking note. But there is nothing in the memorandum that suggests the Attorney General is prevented from protecting her borrowers from servicing that violates federal law. Indeed, Massachusetts cites violations of the U.S. Code as a basis for the lawsuit.

It would be a mistake to try to justify preemption over the totality of student loan servicing based on an exception rather than the rule.

Even if this misguided attempt at preeption should succeed, there is still a role for state consumer protection offices in student loan servicing. Borrowers themselves have the right to sue all the major student loan servicers, and states can help their consumers navigate the process. A good public policy remedy for borrower abuse would be for state consumer protection agencies to act as clearinghouses and assistance centers for class action and other direct borrower actions.

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* Minutes after this was posted, a Massachusetts court ruled that the Healey suit against PHEAA could move forward, citing the reasons expressed above.



Soil Health and the 2018 Farm Bill

February, 2018

Washington -- On Capitol Hill again this week, I attended a forum on soil health sponsored by another unusual combination of interests: producers and processors.* A farmer from Oklahoma and another from Minnesota shared the dais with a representative from General Mills. The session was moderated by an agronomy professor from a land-grant university. The common concern was the future of soil health.

The Minnesota farmer, Jon Jovaag, told us Minnesota's biggest export, by far, is topsoil, in the form of soil erosion. He is active in the Land Stewardship Project and an advocate of better farming practices.

The Oklahoma farmer, Jimmy Kinder, whose family farms 8,000 acres, called for an effort to "rebuild the nation's topsoil." He participates in USDA's Conservation Stewardship Program (CSP) and would like to see much more research on soils, including their capacity to sequester carbon dioxide.

This discussion took place against the backdrop of the release of President Trump's proposed 2019 budget, which disfavors all such efforts, and imminent House action on the 2108 Farm Bill, in which soil health and conservation are likely to get short shrift.

As usual, a lot of the best take-aways happened in individual conversations before and after the forum.

Meeting with a soil health advocate before the forum, I offered that it was hugely helpful that his organization published Congressional Budget Office (CBO) scoring of options in the upcoming Farm Bill. He said both House and Senate Agriculture committee staffs disapproved in no uncertain terms with his release of the information. I told him that when I worked in the Senate many years ago, staffs were often faced with such quandaries, but many of us felt that if the information was paid for by taxpayer dollars, and it was not classified for national security purposes, the public had a right to see it. In the current case, CBO's scoring of options on the federal crop insurance program are upsetting interest groups that do not want the public to see waste in the program. This is waste that could be cut and the savings re-directed to soil health and conservation efforts.

Meeting with the agronomy professor after the forum, I asked about his remark in open session about how a soil health event in his state will draw a hundred farmers, compared to the usual Extension Service event that might draw twenty. What does this say about the Extension Service? He offered a none-too-charitable account of Extension personnel, estimating that only about half are committed to dealing with soil health issues. Whereupon I went a step further and asked about the commitment of Home Extension agents to better nutrition. Again, he was not sanguine about the effort. The 2018 Farm Bill presents a good opportunity to get the Extension Service back on mission.**

I am part of a small group of citizens and taxpayers, volunteers with no attachments to interest groups, who are trying to advance the public interest in the always-parochial Farm Bill. Good luck with that, you may say, but we are not of the sort that gives up easily. We are advancing ideas that are getting good reviews; maybe some will even get into legislation.

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* Last week it was CAP and the R Street Institute. This time it was the National Sustainable Agriculture Coalition; General Mills; the Soil Health Institute; and the Land Stewardship Project. We met in the Veterans' Affairs Committee hearing room in the Cannon Building, where the original GI Bill was written, according to the remarks of Congressman Tim Walz of Minnesota, a member of both the House Veterans' Affairs Committee and the House Agriculture Committee.

** In Nebraska, the Extension Service and the state Department of Agriculture are currently devoting much time and many resources to address Dicamba dangers. This should not be a taxpayer responsibility, in this taxpayer's opinion, but fully paid for by the producers of the product. A good amendment to the Farm Bill would prohibit the Extension Service from using taxpayer dollars to relieve responsibility for product liability.

Say No to Deficits; Time for Schuldenbremse

February, 2018

Washington -- Is it time to dust off the proposed Balanced Budget Amendment to the U.S. Constitution and put it back into the national debate? Deficits are dangerously high and neither the President nor Congress seems to care.

The December tax cuts were largely paid for by additional federal borrowing, as were the latest spending increases for both military and domestic spending. The President's 2019 budget proposal gives up on achieving a balanced federal budget anytime soon, if ever.

This time the concern about fiscal responsibility must come from Democrats. Republicans have no more credibility on the issue. Republicans have not really cared about deficits since the time of President Gerald Ford, except rhetorically. Even lip service to the concept was conceded when Vice President Dick Cheney told the country that deficits don't matter. The last Republican president to achieve a balanced budget was Dwight Eisenhower.

Democrats have a coherent argument that they are the more fiscally responsible party. It is unfortunate that they have not made more of the issue over the years: liberal Democrats like Governor Jerry Brown and Senator Paul Simon fought years for a Balanced Budget Amendment; President Bill Clinton actually balanced the federal budget and started using surpluses to pay down the federal debt.

In these Democrats' views, deficit spending is to be avoided whenever possible because interest payments on the debt amount to a transfer of wealth from average taxpayers to the better-off lending class. It increases inequality. And it is not only the American lending class that buys U.S. debt and makes money off the interest, but also foreign entities, like China. It is one thing to keep interest payments within our own borders; it is quite another when national security is imperiled because the debt is held by foreign adversaries.

Democrats wary of excessive deficit spending also recall that it was the venerable John Maynard Keynes himself who cautioned against running deficits in times of economic prosperity. Those were the times to run surpluses and pay down debt, Keynes advised. Cyclical deficits as economic stabilizers in hard times, yes; structural deficits year after year (current Republican policy), no.

Add to that the experience of recent years in Europe. Switzerland in 2003 adopted a constitutional amendment called a Schuldenbremse, or "debt brake." Germany followed in 2009, as did Austria, France, and others as part of an EU economic effort against structural deficits. The key concept is the differentiation between necessary cyclical deficits and structural ones. Germany's limitation, for example, is a structural deficit of no more than 0.35% of annual GDP.

It is not by coincidence that European economies are thriving, even more than the U.S. economy. They are using revenues to pay down structural debt. It's time to see how Schuldenbremse might translate into new U.S. balanced budget language.

How does this relate to, say, Nebraska and the 2018 elections? Republicans Deb Fischer and Don Bacon, who both voted in December and February to pay for tax cuts and new spending by ballooning the federal deficit, have given their Democratic opponents a golden opportunity to campaign against them on grounds of utter fiscal irresponsibility.

Although the conventional wisdom would be that this is unlikely, as it would amount to trying to run to the right of Fischer and Bacon, it is anything but. There is a long history (see above) of Democrats holding forth against excessive deficit finance, which is perfectly consistent with Democratic advocacy of federal investment in human capital. The conventional wisdom, as usual, is wrong; there is no more connection between the political right and balanced budgets. That's been clear for years, but now Fischer and Bacon have driven a stake through its long-dead heart.

When one looks at competition in the federal budget, interest on the debt is a great threat not only to social programs, but to everything else as well. Debt interest is clearly a competitor against defense spending, which Fischer and Bacon claim to support but are endangering by relying on China* to pay for it.

This is the time for Democrats to start running political commercials centered around the proverbial family kitchen table, talking about how families have to make responsible choices, and how it is now truly time for action to stop current, incredibly reckless fiscal policy. That would be first by removing incumbents, and second by taking another look at budget reforms, including a responsible constitutional amendment that can be informed by the positive experiences of European democracies.

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*Still very Red, still totalitarian, still freedom's formidable adversary.