Branding Ads ?

Another blast from the past, Pink Squares by Candy King duplicates the flavors near and dear to your pink taffy candy.

Remember the taffy that always got stuck between your teeth or roof of your mouth? Now you can grab that flavor you always enjoyed without the hassle.  Pink Squares recreates that smooth taffy taste in a vape in each inhale.  The great flavor tickles your taste buds with a smooth finish as well

Rango is a flavor in Cosmic Fog’s newest line, Crisp. Rango is a mixture of sweet succulent mango blended with tangy raspberries to deliver bursts of fruity flavors. A simple, and exceptionally well-balanced vaping experience.

Rango gets the unique name from the delicious combination of flavors. Inhale the succulent raspberries that taste freshly picked from the bush. Then bring in a juicy ripe mango when you exhale. Put it together and you get the Rango flavor that will rock your tongue

Remember the fluorescent green Jolly Rancher sour apple candies your teacher gave you as a treat in school?  Do you still yearn for that sweet and sour taste in your mouth again?  Well, wait no longer, Swamp Thang from Ruthless gives you that powerful flavor burst of sour apples coupled with a mild throat tickle.

This is a wonderful vaping juice that provides an overall excellent experience. The throat hit is amazing, a little sharp but smooth. It gives a tickling feeling to your throat. The inhale gives a delicious green apple taste. When you exhale, it gives a hard candy flavor. This is the perfect juice for vapers who want to have a sweet taste.

If you love candied sour belts, you will love Naked 100 Candy Berry Belts.  This vape combines the sweet and tart strawberry belt with a hint of citrus to finish off the puff.

If you want to have a sweet and sour vaping experience, Berry Belts is a perfect choice. Inhaling it will bring out the sweet and sour candy taste that will leave a great impression on your tongue. Exhaling it will bring out the strawberry gummy taste to complement the candy flavor. You will not experience any charring and burning sensation.

A vanilla custard e-liquid with a mildly sweet flavor profile, Colossus by Cyclops Vapor delivers notes of cream, egg yolks, vanilla and sugar without presenting any overbearing sugary or eggy flavors.

Cyclopes Vapor Colossus is a perfect choice for those who do not enjoy over-sweetened flavors. With the flavors of egg yolk, vanilla, and cream, this e-juice is surely going to become your favorite part of the breakfast. It gives a lasting taste, which is another feature that makes it a must-try e-juice

https://www.smokingthings.com/shijin-vapor-e-juice

Sour Green Apple from Its Pixy is manufactured by your friends at Shijin Vapor. A favorite of kids young and old, this vape brings together a sweet and sour flavor that is perfectly balanced to delight the taste buds. The sour is enough to give you that kick, but overly so.

When inhaling and exhaling this e-liquid, it will give a burst of sour and sweet flavor of green apple. A great thing is that the taste will not change of shift. It provides a consistent treat for your taste buds. The throat hit is subtle and refreshing. You will feel like drinking real fruit juice and there will be no chemical like sensation.

Another melon concoction, but a damn good one.  Watermelon, honeydew and cantaloupe wrapped up in a minty bubblegum.  This is Space Jam’s Pluto.

Pluto is a wonderful blend of flavors that brings the eastern and western cultures together in harmony.  Each inhale brings the sweetened melons popular in the east and combines it with a wonderful bubblegum flavor.  When you exhale prepare for a blast of cool mint to keep our taste buds refreshed.  Nobody will argue this isn’t a planet of flavor.

Propaganda has released e-liquids capturing just about all of the most popular flavor profiles in the vaping industry. With the release of The Hype Blue Slushee by Propaganda E Liquid, they’ve finally released a vape juice that captures the much-loved flavor of blue raspberry. It’s just like a trip to your favorite quick mart.

Are you a fun of slushees? If you are then then The Blue Hype Slushee would be ideal for you. The sugary taste of the sweet blue raspberry slushee in this flavor would conquer your taste buds with a good feeling. On inhalation you get a cool and refreshing flavor followed by an awesome blue raspberry exhale. It has a smooth throat hit that won’t leave you in irritation or cough.

Brewell Vapory’s Hard Apple Brew #45 is one of the more popular flavors in the line.  The flavor profile is of a tangy hard apple candy that is filled with a sweet jelly center.  This is a vape that you can hit all day.

Want to enjoy the taste of candy with a jelly containing the flavor of green apple to the maximum? Give Brewell vapory Hard Apple Brew a try. It is surely not going to disappoint you. Unlike other flavors, it isn’t harsh; it rather gives a pleasant and tasteful experience.

For all you custard lovers out there, Beard Vape Co No. 51 is for you.  The wonderful mixologists at Beard packed as much custard as they could possibly manage into the flavor and then when you thought that was all, they topped it off with even more custard.

Who doesn’t love vanilla flavored custards? It’s enriching taste you can get it in this delicious e-juice Beard Vape Co No 51. This flavorful e-juice that gives the taste of vanilla while exhaling has a strong aftertaste; thus, you can enjoy its flavor even after vaping.

FDIC Announces Completion of Experiment with Prepayment of Insurance Premiums: Was It Legal, or Just Good Policy?

At a formal meeting on Thursday, April 11, the Federal Deposit Insurance Corporation (FDIC) announced the end of an interesting and important experiment. The FDIC announced that it would reimburse to banks $5.7 billion in prepaid premiums. The amount is what remains of premiums that the FDIC required banks to pay in advance to meet the unusual cash needs faced by the FDIC during the recent financial crisis.

When the crisis began, the FDIC’s Deposit Insurance Fund (DIF) held over $50 billion in funds. By the end of 2009, the FDIC estimated the DIF to have a value of negative $20.9 billion. The major part of that negative number was not experienced losses but rather the FDIC’s estimate of losses that it would experience from the foreseeable future failure of banks, which its accounting rules required it to recognize immediately in valuing its books. That is to say that the FDIC at that time had not run out of actual cash on hand and in fact throughout the recession never came close to running out of cash to meet its operating needs.

Nevertheless, those estimates were enough to make any manager worried. And with the purpose of the FDIC being to reassure depositors that their bank deposits were safe (at least up to $250,000 per account), it was considered wise for FDIC to meet its future funding needs well in advance.

What to do? All of FDIC funding since its inception has been paid for by insurance premiums assessed the banking industry. Recognizing that emergency conditions could arise, the law allowed FDIC to ask the Treasury for a loan. FDIC leadership was reluctant to do that, perhaps most significantly for the message that might send to the market place, the deposit insurer needing to go hat in hand to the U.S. Treasury for help.

Instead, FDIC leadership tried a novel idea. Their assumptions were that the losses on the fund were the proverbial bulge going through the snake, that over time—and not over a long period of time—continued insurance premiums paid by banks would cover all of the FDIC’s needs. But “eventually” does not meet immediate cash needs. To meet immediate concerns FDIC leadership announced in 2009 the plan to have banks pay 13 quarters of premiums in advance. That transferred to the FDIC $45.7 billion in funds at the end of 2009. From then on and throughout the recession, the FDIC had adequate resources at hand to honor all of its obligations as it continued to resolve failed banks. In fact, the $5.7 billion announced last week are the excess funds from those prepaid premiums that the FDIC, as it turned out, did not need. Hard to blame the FDIC for being a bit conservative in its loss expectations.

That is to say that, rather than going to the Treasury, the FDIC went to the industry for its financial backstop. Since the purpose of the FDIC is to support depositor confidence in banks, and since banks have always paid all of FDIC’s costs, this may be seen as all very appropriate.

The question is, is it legal? And if legal, is there any legal limits to how much premiums in advance the FDIC could demand from the industry? Is 13 quarters the maximum? Why not 14, 15, or 30? What tests may apply? Paying for future years assumes that the bank will be around in those future years, and it requires estimates as to how large those banks might be (since premiums are related to bank size). There were many other operational issues that the FDIC had to work with, with little statutory guidance.

Or is all of this an exemplary exercise of regulator and industry working together to defuse a crisis and maintain financial confidence. Hopefully these questions are academic, as we all wish that the FDIC does not find itself in such a bind again. The Dodd-Frank Act, in fact, has raised the minimum ratio of funds against insured deposits that the DIF is required to have on hand, from 1.15% pre-crisis, to 1.35%.

Those percentages may appear to some as small, but they seem to have allowed the FDIC, with emergency bank support, to have weathered a very serious and real stress test. Estimates are that the DIF will hold in excess of $90 billion when it is fully capitalized under the new DFA ratio. It already holds $33 billion today (even after the planned reimbursement). Experience tells us that having large amounts of money sitting around in Washington apparently idle can be seen by Congress as a honey pot to fund unrelated spending (history has witnessed many proposals in Congress to use FDIC funds in the past for housing and other unrelated purposes). And in any event, those are funds pulled out of service to the economy. Knowing that the industry can be called upon through advance payment of premiums may avoid having to put more honey into those pots. But does the law allow it? And if so, under what conditions? Or is it best to leave this all alone to allow careful and reasonable solutions to be found in the actual event, as we witnessed with the FDIC in 2009?

Here is the link to the FDIC’s staff memo made public last week discussing the condition of the DIF and the completion of the advanced premium program.

http://fdic.gov/news/board/2013/2013-04-11_notice_dis_mem.pdf

Here is a link to an American Bankers Association comment on the FDIC report.

http://banksandtheeconomy.blogspot.com/2013/04/fdic-updates-deposit-insurance-fund.html

Are the Government’s Most Important Items Of Economic Data All Deceptive In Fundamental Ways? – Part I (Accounting For Government Spending In GDP)

Many categories of government economic data are compiled and defined in ways to make bigger government appear more desirable. Can the data be regarded as objective, or instead part of the government’s advocacy for increase in its own size and power? This series will consider three categories of economic data that are the most important in terms of their use in political arguments over economic policy. Those categories are: (1) GDP, (2) the rate of poverty, and (3) the cost of obligations to retirees for pensions and health care.​

GDP is the principal measure of the overall size of the economy, and of whether the economy is growing or shrinking and by how much. ​Some assert that there is a fundamental problem with the compilation of GDP data, which is that government spending on goods, services and salaries is added into GDP dollar for dollar . This fact arguably makes the GDP data useless in a debate over whether government spending should be increased or cut. That is the principal use to which GDP data are generally put.

The portion of GDP that comes from the private economy is based on the rationale that voluntariness and markets mean that transactions of equal dollar value should be given equal weight. That rationale does not apply to government spending. An assumption that a dollar of government spending on goods, services and salaries counts at 100% as an addition to GDP only has some validity with a small government that thinks thrift is a virtue. ​When the government starts spending money to “create jobs” or “stimulate the economy,” do we have a fallacy?

When you count every dollar of government purchases at full value, then pure wasted spending counts to “increase” GDP just as much as the very most necessary expenditure. Suppose you pay someone to dig holes and fill them in (an example actually extensively discussed in Keynes’ General Theory). At the end of a year he has produced exactly nothing — but the GDP numbers add in an amount equal to whatever the government paid him. If the government pays every one of 300 million Americans $50,000 each to dig holes and fill them in all year, they have produced absolutely nothing by the end of the year, and the government records a GDP of $15 trillion. If the government doubles everyone’s salary to $100,000, then it just doubled the GDP to $30 trillion, even though they are all starving (because they were too busy digging holes to produce any food).

These are extreme examples, but we live in a time when the acceptance of the GDP numbers as measuring real changes in the economy is so great that the government can spend hundreds of billions in stimulus and count that as a dollar for dollar increase in GDP. The media offers virtually no push-back to this practice. The same argument holds for “green” energy spending. That kind of spending also is measured as increasing GDP dollar for dollar.​ Hire double the number of airport screeners as needed? Also a dollar for dollar GDP increase. The cost of the drug war? Same. And so forth.

It also works the same way when there is any proposal to cut spending. Under GDP accounting, cuts in government spending, no matter how wasteful that spending, are recorded as reducing GDP dollar for dollar. Thus here we have President Obama in February 2013 opposing the upcoming sequester spending cuts:​

“Our top priority must be to do everything we can to grow the economy and create good, middle-class jobs,” Obama said during remarks at the White House, standing alongside a group of emergency responders. “That’s why it’s so troubling that just 10 days from now, Congress might allow a series of automatic, severe budget cuts to take place that will do the exact opposite.”

Under this logic, you can’t ever cut any government spending, because that will “shrink” the economy.

[A longer version of this post originally appeared at http://manhattancontrarian.com/blog/2013/2/22/all-of-the-governments-important-economic-data-are-fraudulent-part-i on February 22, 2013.]

The FTC and Innovative Business Models for Patented Innovation

On April 5, 2013, Google officially submitted a request with the Federal Trade Commission (FTC) that it sanction the activities of “patent trolls” as violations of the antitrust laws. Google was joined by several other high-tech firms, including RIM, a company that proves dynamic innovation is going strong, as its once-dominant Blackberry smart phone is almost a dead product after being superseded by iPhones and Androids, and Earthlink (who would have thought this company was still around?), among a few others.

This was not a shot out of the blue, as Google has long been complaining about “patent trolls,” which are also known in the patent policy debates as either “non-practicing entities” (NPE) or as “patent assertion entities” (PAE). (Given that these terms have negative rhetorical connotations and lack precise definitions, I prefer to identify these companies descriptively by their actual business model, and so I call them “patent licensing companies.”) Google even succeeded in prompting President Obama to complain about patent licensing companies in an exclusive Internet Q&A on Google+ on February 14, 2013.

Moreover, the FTC has shown a strong interest in the past couple years in patents and in the commercialization of patented innovation in the marketplace. The agency hosted a workshop with the DOJ in December 2012 on whether patent licensing companies are violating the antitrust laws, and it has received public comments on whether it should pursue § 5 actions against these companies. Moreover, the FTC recently required Bosch and Google to limit their rights to enforce their patents against infringers when these patents cover standardized technology used in products or services (these patents are called “standard essential patents”).

Google’s lobbying efforts and the FTC’s actions are prompted in part by widespread beliefs today that the “smart phone wars” are killing innovation and that “the patent system is broken.” Patent licensing companies are often identified as primary culprits in causing these ills. In fact, these complaints are now conventional wisdom today.

Others maintain that it is important not to rush to judgment based on emotionally-charged headlines about patent lawsuits or misleading articles and blog postings that get wrong even basic facts about the patent system. They counsel that the prudent approach is to research the issues fully. This is especially important when regulatory agencies like the FTC impact a legal system intended to promote and secure both new inventions and the new business models that convert these inventions into the innovation used by everyone, such as smart phones, tablets, and biotech’s radical advances in medical care in recent years, among others.

For instance, few people realize that “patent wars” have been occurring since the invention and patenting of the sewing machine in early nineteenth century, and occurred again with the invention of the telephone, the automobile, the radio, the airplane, medical stents, and even disposable diapers. Moreover, even fewer people realize today that the patent licensing business model has long been used by innovators who have secured their inventions via the American patent system. The patent licensing model was successfully used in the nineteenth century by Charles Goodyear, Elias Howe and Thomas Edison, to name just a few. In the twentieth century, it has been used successfully by IBM and by every university that makes money from its professors’ patents.

Notably, patent wars and the many new patent licensing models deployed throughout the years have been repeatedly attacked in similar rhetoric that we are now seeing today about the “smart phone wars” and other alleged problems with the patent system. For instance, the nineteenth-century term for “patent troll” was “patent shark.”

One of the most prominent participants at the FTC-DOJ workshop back in December, former DOJ antitrust official and UC-Berkeley economics professor Carl Shapiro, explained in his opening speech that there was still insufficient data on patent licensing companies and their effects on the market. This is true; for instance, a prominent study cited by Google et al. in support of their request to the FTC to investigate patent licensing companies has been described as being fundamentally flawed on both substantive and methodological grounds. Even more important, Professor Shapiro expressed skepticism at the workshop that, even if there was properly acquired, valid data, the FTC lacked the legal authority to sanction patent licensing firms for being allegedly anti-competitive.

Commentators have long noted that courts and agencies have a lousy historical track record when it comes to assessing the merits of new innovation, whether in new products or new business models. They maintain that the FTC should not continue such mistakes by letting its decision-making today be driven by rhetoric or by the widespread animus against certain commercial firms. Restraint and fact-gathering, institutional virtues reflected in a government animated by the rule of law and respect for individual rights, are key to preventing regulatory overreach and harm to future innovation.

Overcriminalization and Law Enforcement Theatricality Engender Disrespect for Our Criminal Justice System

A recent article in National Review Online highlighted the tragic consequences that can result when federal agents working for government agencies not normally associated with law enforcement (but who, nonetheless, are empowered to enforce obscure criminal statutes and regulations) show up with flak jackets and guns to arrest people suspected of committing non-violent offenses. While nobody would bat an eyelash if DEA agents showed up well armed and in force to arrest suspected drug dealers or FBI agents did likewise to arrest suspected terrorists or organized crime figures, it is almost never necessary for agents with the Food and Drug Administration to utilize such tactics when arresting a farmer alleged to have shipped unpasteurized milk to customers across state lines. (Yes, this really happened.) Do police officers really need to show up armed to the teeth to arrest a disc jockey suspected of — wait for it — copyright infringement? (Yes, this happened too.) When such incidents of enforcement overkill occur, this engenders disrespect for our criminal justice system.

In many such cases, the accused may not have the slightest idea that he or she committed an offense or had any intention to violate the law. Under the common law, there were only a handful of criminal offenses, each prohibiting conduct that was widely recognized as morally blameworthy, so called malum in se offenses. Today, buried within the United States Code and the Code of Federal Regulations, there are approximately 4,500 statutes and another 300,000 (nobody knows for sure) regulations with potential criminal penalties for violations. Most of these are malum prohibitum offenses, which on their face do not violate any moral code, and many of them lack an adequate (or any) mens rea requirement. And that’s just federal offenses.

Commenters have observed that many of these “offenses” are so arcane or incomprehensible that a reasonable person would not know that what he was doing was, in fact, a crime. When morally-blameless people unwittingly commit acts that turn out to be crimes (a phenomenon referred to as “Overcriminalization”) and are prosecuted for such offenses, not only are the lives of the accused adversely impacted, perhaps irreparably, but the public’s respect for the fairness and integrity of our criminal justice system is diminished.

On the other side, commenters argue that issues of prosecutorial and enforcement discretion are best, and by definition, left to the prosecutors and enforcers. They will, given the responsibilities of their offices, tend to act reasonably and in accord with the law. It is not part of a prosecutor’s constitutional function, however, to draw the line between lawful and unlawful conduct. That is the job of the legislature, and the prosecutor is hardly a disinterested player in the process. The government’s “Trust us” argument asks the public to bear the risk that a government official might not be trustworthy, might exercise poor judgment, or might just be mistaken as to what a vague law really means. This should not be permitted in a system premised on being a government of laws, not men.

In April 1940, Attorney General (later Supreme Court Justice) Robert Jackson, addressing a room full of prosecutors, stated:

It would probably be within the range of that exaggeration permitted in Washington to say that assembled in this room is one of the most powerful peace-time forces known to our country. The prosecutor has more control over life, liberty, and reputation than any other person in America. His discretion is tremendous.

As a former prosecutor, I am not meaning to denigrate the motives of the many dedicated public servants who endeavor to keep us safe and to uphold the rule of law. Much, if not most, of the blame for this problem lies at Congress’s doorstep for passing vague statutes and empowering bureaucrats to implement nebulous regulations with criminal penalties, and arming federal agents to enforce them. Unlike malum in se offenses, regulations do not prohibit morally-indefensible conduct. Rather, regulations allow conduct, but circumscribe when, where, how often, and by whom it can be done, often in ways that are hard for the non-expert to discern. When criminal penalties are attached to violations of those regulations, overcriminalization problems can ensue, especially when prosecutors need not prove that the accused had any intent to violate the law.

This problem is exacerbated when zealous agents enforcing regulatory programs act in a manner that appears to equate those accused of exceeding the limits of regulated conduct (e.g., a farmer selling unpasteurized milk) with those accused of engaging in clearly forbidden conduct (e.g., a heroin dealer). To FDA agents, there may be no greater threat to life as we know it than shipping unpasteurized milk across state lines, but it is hardly a reason to justify the creation, much less the deployment, of a SWAT team.

How prosecutors and federal agents exercise the tremendous authority and discretion they have been given has an enormous impact not only on the lives of those under investigation, but also how the American people (and the rest of the world) perceive our criminal justice system. When they engage in unnecessary theatrics or prosecute otherwise law-abiding people for “crimes” that no reasonable person would have known was a crime, they (no doubt, unwittingly too) do more harm than good.

The Consumer Finance Protection Bureau: Regulatory Overreach?

Note: This post has been updated by the author to reflect new research on the history of designation and handling of Federal Reserve profits

The Consumer Finance Protection Bureau (“CFPB”), a product of the Dodd-Frank legislation and the Obama Administration, is arguably designed contrary to our system of checks and balances in at least three important aspects – by circumventing Congress’ power of the purse, limits on and powers of the presidential appointments power, and by seeking to curtail the judiciary’s scope of review of its exercise of regulatory power.

Headed by former Ohio Attorney General Richard Cordray, whose appointment was rejected by Congressional filibuster, Cordray was installed by the Obama administration’s “recess” appointment – arguably made when Congress was not in recess and bypassing the Senate’s power to advise and consent to presidential appointments. The administration, relying on the Department of Justice Office of Legal Counsel, had determined that the Senate was in recess, and the President’s appointment was lawful. The validity of the recess appointment is one of the issues currently under consideration by the courts.

The CFPB bypasses Congress’s power of the purse to control governmental operations because the Dodd-Frank legislation specifies that its funding will be “determined by the director”, not from congressional appropriations, but from the Federal Reserve. Its budget is approximately $400 million dollars, over which Congress has no appropriations or other powers. This ignores the fact that the Federal Reserve’s profits have historically been handled as public funds as a way of avoiding reimposition of a franchise tax by Congress that had required the Federal Reserve from 1913-1933 to remit 100%, later 90%, of its profits to the Treasury– and as such, have been and should be deposited to the United States Treasury and expended only pursuant to lawful Congressional appropriation. Its director is appointed for a five year term, but stays indefinitely if no successor is confirmed, and cannot be removed for “policy reasons,” thereby constricting the normal and constitutionally important executive power to freely replace agency directors. Finally, Dodd-Frank directs courts to give “deference” to CFPB’s interpretation of consumer finance laws, thus constricting judicial review of its conduct.

The government argues that this vital consumer protection agency requires particular independence, given the nature of its duties. It has through Dodd-Frank, therefore very deliberately sought to insulate it from the political process involved in appropriations and congressional and executive oversight processes. Only in this way, the government argues, can CFPB’s duties be discharged without undue political influence.

Yet, critics argue that the unmooring of this agency from all three branches of government is an innovation in agency sovereignty not found in other government agencies. Evidence of what happens when a blank check is issued to an executive’s unchecked appointment of his minister swiftly ensued. Its budgets are notable for their brevity (one submitted on a single sheet of paper) and vagueness (the 2012 budget estimated $130 million for “other services”). Reports indicate that approximately 60% of CFPB employees make over $100K per year, and 5% exceed the salary of a Cabinet secretary. By mid-2012 it had over 900 employees, ten times more than GNMA, and that number is projected to be 1359 employees for fiscal 2013.

Vagueness in funding is mirrored by the language of its powers to “declare” practices to be “unfair, deceptive or abusive.” Cordray himself has stated that the term “abusive” is “a little bit of a puzzle.” Financial services and other industries face uncharted regulatory waters and their legal and compliance costs are sure to increase. This not only affects industry pricing to consumers, but inherently favors big banks better situated to absorb the costs and bear the regulatory risks. To the extent that the CFPB’s exercise of its enforcement and exception authorities impose unanticipated liabilities beyond those lawfully enacted by Congress, it represents Justice Cardozo’s delightful and prescient formulation of a roving commission to inquire into evils and then, upon discovering them, do anything it pleases.

Regulatory overreach that converts the executive’s responsibility to take care that the laws be “faithfully executed” into lawmaking powers discretionarily “enacted” or applied by bureaucrats insulated from the structural constitution’s checks and balances have arguably already ensued in the agency’s qualified mortgage rules, counterproductive borrower protections, and asset seizure regulations and prove the wisdom and vital importance of the original design.

Reducing Regulatory Burdens – One Step Forward & Two Steps Back?

The President’s 2014 Budget commits to “reducing regulatory burdens” asserting that the President’s “historic Government-wide review, or ‘look back,’ of existing rules” has “produced over 500 reform proposals across all Executive agencies,” and will “save more than $10 billion in the near term, with more savings to come.”

As GW Regulatory Studies Center Policy Analyst, Sofie Miller, has pointed out, one of these reforms, featured prominently in the Environmental Protection Agency’s January 2013 progress report on its look back initiative, is the “Tier 3” vehicle and fuel standard that EPA announced last month. The results of this particular review should give pause to anyone hoping to see real burden reductions emerge from the President’s look back initiative. In its search for ways to “reduce burden on industry with no expected adverse environmental impact,” EPA instead decided to impose new regulations that by its own estimates will cost Americans $3.4 billion per year when fully implemented.

The Tier 3 rule would establish new automobile tailpipe emission standards and reduce allowable sulfur content in gasoline, increasing the costs of new vehicles and the price of gasoline. Despite the rule’s $3.4 billion per year price tag, the administration claims burden reductions from this review, because “EPA intends to review … areas where recordkeeping and reporting obligations can be modified to reduce burden.” In other words, the new standards will add billions of dollars to the cost of cars and gasoline, but the silver lining is that energy companies may have to keep fewer records and be able to report information electronically.

The “Reducing Regulatory Burdens” section of the Budget concludes by promising that “in the coming year, agencies will continue to pursue the regulatory reforms identified in the review process, producing more in savings by simplifying rules, eliminating redundancies, and identifying more cost-effective ways of completing their mission and serving the American people.”

EEOC Probes Employer Use of Criminal Background Checks

The Equal Employment Opportunity Commission, according to recent news reports, is making a particular effort to restrict allegedly discriminatory use by employers of criminal background checks. Because African-Americans and Hispanics are more likely to be arrested or convicted of crimes than members of other racial and ethnic groups, the EEOC’s thinking goes, an employer policy that excludes job applicants based on past arrests or convictions will have a disparate impact on African-Americans and Hispanics and, if not job-related and justified by business necessity, may violate Title VII of the Civil Rights Act of 1964.

In April 2012, the EEOC issued a new Enforcement Guidance regarding such employer criminal background checks. Some civil rights advocacy groups praised the document, stating that it will help “remove unfair barriers for people who have moved beyond their pasts” and discourage employers from discriminating against employees who have paid their debt to society.”

But critics raised both substantive and procedural concerns about the new guidance. Substantively, critics noted that the new policy does not do enough to make clear in what circumstances an employer may use a background check; it notably contains no “safe harbors” and may chill some lawful use of checks. The Guidance was also criticized for claiming to pre-empt state laws requiring some types of employers to conduct criminal background checks, placing firms in “a damned if you check, damned if you don’t” bind. Because the Guidance may encourage employers to change their hiring procedures to benefit one racial group, it may also violate the Equal Protection Clause of the Fourteenth Amendment.

Some social science research also suggests that use of criminal background checks may actually lead to increased hiring of African-Americans. Employers barred from checking criminal histories may be inclined to wrongfully use race as a proxy for criminal history. (Disclosure: I work at the U.S. Commission on Civil Rights for Gail Heriot, one of the signatories to this letter. But the views expressed in this blog post are my own and not necessarily those of the Commission on Civil Rights or Gail Heriot.)

Procedurally, the EEOC voted for the Guidance without giving the public opportunity to comment on a draft, arguably getting full in terrorem effect while bypassing all procedural safeguards. Constance Barker, the only member of the EEOC who did not vote in favor of the new Guidance, discussed other procedural issues at some length in her dissent.

The EEOC appears committed to rigorous enforcement of the new Guidance. At a Chamber of Commerce luncheon, EEOC member Victoria Lipnic emphasized the EEOC’s commitment to pursuing these cases, noting that “Criminal background checks are ripe for the picking.”

Although the EEOC does not ordinarily make investigations public until a case has been filed, news stories about recent targets of EEOC investigation suggest that the agency is setting a fairly high bar for “business necessity.” Such investigations include a probe into the use of checks at a company that provides security services, and also an unnamed firearms retailer, although the employer believes that federal law requires him as a federal firearms licensee to conduct such checks.

The U.S. Commission on Civil Rights recently conducted a day-long briefing investigating the EEOC’s enforcement of this policy.

This post has been edited to include a link to a recently posted U.S. Commission on Civil Rights transcript.

Obama signing statements asserting authority to ignore congressional spending restrictions

Congressional control over the purse—the ability to authorize and restrict federal spending—acts as the principal check against executive overreach. Several Obama signing statements, from both his first and second terms, contest this traditional understanding.

For example, on January 2, 2013, upon signing H.R. 4310, the “National Defense Authorization Act for Fiscal Year 2013,” Obama objected to, among others, § 1027, which barred the use of appropriated funds to transfer Guantanamo detainees into the United States. Section 1027 renewed a prior fiscal year bar on such spending. The President signed the bill into law, but objected that it “would, under certain circumstances, violate constitutional separation of powers principles.” Although the statement did not specify any circumstance that would violate the separation of powers, he reserved a right to “implement [the spending restrictions] in a manner that avoids the constitutional conflict.” Notwithstanding the congressional spending restriction, an (as yet) unspecified saving construction would entitle the President to funding to transfer detainees into the United States.

Similarly, in April 2011, Obama objected to § 2262 of “the Department of Defense and Full-Year Continuing Appropriations Act of 2011,” which specified that no funding made available by the act “may be used to pay the salaries and expenses” for four designated “czar” advisory positions. Section 2262 did not prohibit the President from seeking advice on particular subjects. Obama signed the provision into law but asserted a constitutional “prerogative to obtain advice that will assist him in carrying out his constitutional responsibilities, and do so not only from executive branch officials and employees outside the White House, but also from [compensated] advisers within it.” He explained that “[l]egislative efforts that significantly impede the President’s ability to exercise his supervisory and coordinating authorities or to obtain the views of the appropriate senior advisers violate the separation of powers by undermining the President’s ability to exercise his constitutional responsibilities and take care that the laws be faithfully executed.” Thus, Obama asserted a constitutional entitlement to congressional funding for the particular advisory positions.

President Richard Nixon had asserted a power to impound appropriated funds, i.e. a power to decline to spend congressionally authorized monies. By contrast, the Obama White House claims the President has the more far-reaching power to spend without any congressional authorization as a matter of constitutional necessity or entitlement. This novel theory revises the traditional check-and-balance of congressional control over the power of the purse.