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					Winter 2005

INSIDER
Conservative Solutions For Advancing Liberty

THE

Shifting the BALANCE
How Power for People Can Bring Generations of Prosperity

INSIDE:
Changing Congress’s Spending 4 Culture Social Security Gets Personal 8 Eminent Domain Without Limits? 24

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hifting the balance. It’s a challenge, especially when the massive federal government is the counterweight. But conservatives have been working at it for years. Moving power and resources from the federal government back into the hands of citizens has

EDITOR’S NOTE
been a gradual process, but there have been a few moments when that process surged forward. One of those moments came 25 years ago. President Carter’s first term was coming to an end and conservatives hoped for success with a right-of-center candidate. They were right to hope. Ronald Reagan turned out to be much more than just a right-of-Carter candidate— he was the principled leader a movement needed to change America and the world. But before the candidate became a legend, back when a President Reagan was just a hope, conservatives realized he would need their help.

So, in an effort headed by a young Washington think tank, conservatives came together to create a guidebook for the incoming President. The Heritage Foundation’s Mandate for Leadership mapped the route to concrete, meaningful, conservative changes in government, and the Reagan administration followed the map. Though the first Mandate and the Reagan administration made their share of changes, government largesse and entitlement spending continue to threaten economic growth and individual liberty. But there is a chance to surge forward once again. Today, Mandate is in its fifth edition, and it urges a bigger shift than ever before—a Taxpayers’ Bill of Rights, personal retirement accounts as part of Social Security, and a simple flat tax. All three ideas, featured in this issue of The Insider, shift power from government to citizens. From the environment to eminent domain, the people are the solution. After all, the public sector is enormous. The only way to shift the balance is to outweigh it with the full force of the American public. Bridgett Wagner Director of Coalition Relations Mary Katharine Ham Editor of The Insider and InsiderOnline.org

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THE INSIDER

Winter 2005

Edwin J. Feulner, Publisher • Bridgett Wagner, Director, Coalition Relations • Mary Katharine Ham, Editor, The Insider • Teri Ruddy, Deputy Director • David Barnes, Project Coordinator • Jeremy Thompson, Intern • Becky Norton Dunlop, Vice President, External Relations The Insider is published quarterly by The Heritage Foundation’s Coalition Relations Department. Begun in 1978, The Insider brings together knowledge and news from all parts of the conservative movement. The Coalition Relations Department serves as Heritage’s liaison to a network of some 500 policy groups and over 2,000 leading scholars and activists worldwide. Features for The Insider are picked by the Editor and Director, but studies and other publications can be submitted for consideration and publication on InsiderOnline.org to: The Editor, The Insider, The Heritage Foundation, 214 Massachusetts Avenue, NE, Washington, DC 20002-4999, (202) 546-4400, fax (202) 544-0961, e-mail insider@heritage.org. Interested in advertising with The Insider? E-mail insider@heritage.org for more information.
Note: Nothing written here is to be construed as necessarily reflecting the view of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

THE INSIDER Winter 05

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What We Believe
Curbing Federal Spending
Strategies for changing the spending culture of Congress

Who We Are
4 The First Mandate
An experiment in guiding government

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Reforming Social Security

How personal retirement accounts can give us solvency and liberty

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Eminent Domain Without Limits? 24
Just what can’t the government take?

Assuring Economic Liberty and Strong 12 Economic Growth
Moving the government barriers to economic expansion

What We Do
Pounding the Pavement
Turn abstract ideas into concrete policy with a little activism

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Government 2.0

How technology can bring power face-to-face with the people

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Mandate for a New Environmentalism
Free markets—good for business, good for the Earth 20
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THE INSIDER Winter 05

Curbing Federal Spending
by Brian Riedl and Alison Fraser
MandateForLeadership.org

F

ederal Spending is surging out of control. The growth of spending

programs, especially middle-class entitlements, is a direct threat to the economy and will lead to huge deficits and debt, drastic cuts in other

spending, or sharply higher taxes. Yet Washington seems paralyzed, unable to say “no” to new spending and unwilling to restrain and reform entitlements.

Besides a general failure of leadership in addressing entitlements, inaction is almost guaranteed by an outdated budget process that hides future program costs and fails to require lawmakers to make serious choices. This must change.

If it does not, a growing government will steadily erode economic performance only with a new budget process that discloses the true long-term costs of pro-

What We Believe

and personal freedom. A properly limited federal government can be achieved grams, limits total spending, and forces real choices among priorities, together while improving the programs.

with a serious reform of Medicare and Social Security that reduces liabilities

obligations, and force PRINCIPLES Congress to plan to meet The focus of budget these obligations. control policy should be on Federal programs reducing spending as a proshould be held to measurportion of national income, able standards, and failed not on reducing the deficit. and obsolete programs The deficit is not the threat to the economy, but should be eliminated. rather a symptom of the The effectiveness of all real problem of high and federal programs should climbing federal spending. be subject to independent The deficit is not the threat to the A balanced budget does evaluations to determine economy, but rather a symptom not necessarily require coneffectiveness based on of the real problem of high and results, and funding levels trolling spending because it climbing federal spending. should be adjusted accordcould also be accomplished through higher taxes and ingly. higher spending. Higher federal spending removes resources from the OBJECTIVES productive private sector. Enact a new federal budget process. Entitlement programs should be curbed The outdated budget process no longer reflects America’s current budget priorities. through reform or eliminated. Entitlement programs unfairly obligate Four key reforms are needed to transform future taxpayers, and middle-class entitle- the budget process into one that requires and ments—such as Medicare—are growing at rewards fiscal restraint and long-term planunsustainable rates, threatening huge tax ning: increases on future generations and threat• Impose spending caps. ening the economy. These problems must be There are no constraints on federal spendaddressed now so that orderly reforms can ing under the current system. Lawmakers can simply add up the cost of their preferred curb their growth. The budget process should force Congress discretionary programs and pass legislation to make real choices among appropriate pri- to fund them. Mandatory programs, such as orities and to consider the long-term costs of Social Security and farm subsidies, are placed on autopilot, growing automatically without programs. Federal spending priorities should be any oversight. Spending growth should be based on core constitutional functions, such limited through caps on total federal spendas defense. Subsidies and corporate welfare ing. This would force lawmakers to do what do not meet these criteria and should be families as well as state and local governments eliminated. The current budget process was do: set priorities and make trade-offs. designed 30 years ago and does not effectively • Include long-term obligations in the budforce Congress to limit spending by requiring get. priority setting or trade-offs or to reconsider Although families can see every month obligations created by federal programs such how much they owe on their mortgage or cars, as Social Security or Medicare. The budget and stockholders can see the cost of employshould contain measures of liabilities and ee retirement packages in legally required
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law that restricts spendcorporate reports, the federal budget does not include ing increases to the inflathe cost of long-term finantion rate plus population growth. Such a limit is not cial commitments. Consetoo much to ask within a quently, lawmakers enter federal budget that, after into long-term financial a 25 percent expansion in commitments without three years, is overflowplanning how to pay for them. The federal budget ing with wasteful, outshould include these longdated, duplicative, and term costs and require that unjustified programs. TABOR would require lawlawmakers produce a plan TABOR would save taxmakers to set priorities, reduce payers $4 trillion over the to pay for them. wasteful spending, and reform next decade and could be • Transform the annual entitlement programs. It would enforced by requiring a budget resolution into a also protect the family budget two-thirds supermajority binding act of Congress. from the federal budget. to pass the budget resoluBudget resolutions are intended to set a budget tion or any spending bill framework early in the annual budget process. that exceeds the TABOR allowance. Such a Yet budget resolutions are not binding, so bar is low enough to clear during a national Congress can simply override them and spend emergency or war, yet high enough to premore. Furthermore, the exclusion of the Presi- vent abuse. Budget surpluses could be split dent from the budget resolutions means that automatically between tax rebates and debt contentious issues between the White House reduction. Colorado enacted the first TABOR law and Congress are not settled until the end of the budget process, when delays can cause in 1992. Since then, the state government’s government shutdowns. Converting the bud- growth rate has been reduced to 3 percent, get resolution into a binding law signed by the and taxpayers have received $3.3 billion in President would help to avert these problems. tax rebates. By 2002, the average Colorado • Implement laws to achieve better enforce- household was paying $3,729 less in state taxes than if spending had continued growing ment. Even when lawmakers do enact restraints, at its pre-TABOR rate. A federal TABOR would require lawmaklarge loopholes typically render them irrelevant. For example, lawmakers can exceed ers to set priorities, reduce wasteful spending, even modest spending limits simply by label- and reform entitlement programs. It would ing programs “emergency” or by voting (with also protect the family budget from the feda simple majority) to ignore their own rules. eral budget. To enforce fiscal restraint, emergency spending Reform Social Security and Medicare to should be restricted and at least a two-thirds reduce liabilities while improving retirement supermajority should be required to bypass programs. The $44 trillion shortfall in Social Security budget spending rules. and Medicare represents the most important Enact a Taxpayers’ Bill of Rights. Federal spending should be capped economic challenge of our time. The first baby through a Taxpayers’ Bill of Rights (TABOR) boomers will reach early retirement on JanuTHE INSIDER Winter 05

Defense and homeland ary 1, 2008, at which point security spending, which Social Security and Meditogether comprise over half care costs will begin rising of the discretionary budto levels that will crowd out every other federal get, should be established program. The new drug as priorities. benefit worsens Medicare’s Programs should then finances. The Medicare be reviewed to assure that trustees estimate that the every dollar is spent effidrug benefit faces an $8.1 ciently. To fund defense trillion shortfall over the and homeland security Congress should repeal the Medinext 75 years. Within four priorities, lower-priorcare drug benefit, which was decades, these programs ity discretionary programs enacted without any plan to deal will require tax increases should be eliminated. with its huge unfunded liabilities. that, at today’s prices and Lawmakers could start incomes, would exceed this process with the $23 billion spent annually on special-interest pork$10,000 per household. Lawmakers should begin changing Social barrel projects, such as grants to the Please Security from a pay-as-you-go system into one Touch Museum and the Rock and Roll Hall in which individuals set aside funds for their of Fame. own retirement. Over the long run, placing Establish a “base-closing”commission on these funds in personal retirement accounts wasteful programs. should lead to substantially higher benefit To make it easier for Members to elimilevels than under the current system. Unlike nate programs, Congress should appoint a current Social Security benefits, individuals commission, similar to the successful military would own these accounts and could pass base-closing commissions of the late 1980s, to them on to their children. create a list of all wasteful, outdated, duplicaCongress should repeal the Medicare tive, and unnecessary programs that should drug benefit, which was enacted without any be eliminated. Lawmakers should then be plan to deal with its huge unfunded liabili- required to cast an up-or-down vote to elimities. Lawmakers should delay or repeal the nate all programs on the list, preventing indinew entitlement scheduled to go into effect vidual lawmakers from amending the list to in 2006 and instead reform the whole pro- protect their special-interest projects. The gram to curb costs and increase choice and large savings should justify each lawmaker’s vote to give up one or two special-interest competition. Freeze total discretionary spending, making subsidies. trade-offs between defense and lower-priority Brian M. Riedl is Grover M. Hermann Fellow programs. Congress should demonstrate its commit- in Federal Budgetary Affairs and Alison ment to restraining federal spending by start- Fraser is Director of the Thomas A. Roe ing with annual appropriations. Discretionary Institute for Economic Policy Studies at The spending should be frozen, and Congress Heritage Foundation. This article is reprinted should trade off spending for priority pro- from The Heritage Foundation’s Mandate for grams with cuts in lower-priority programs. Leadership.
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THE INSIDER Winter 05

Reforming Social Security
by David C. John
MandateForLeadership.org

T

he debate over the future of Social Security is really a debate about two

connected issues that are of fundamental importance to Americans.

The first issue concerns how we should make commitments to future

retirees when today’s promises mean huge costs to our children and grandchildren. While some want to ignore this question, the responsible approach is to require Congress to present Americans with an honest picture of liabilities and to take prudent action now. The second issue is how to modernize a program save for retirement. Creating personal retirement accounts within Social Secufinances back on track. that is giving steadily worse returns to workers and does nothing to help them

rity is crucial to modernizing the system and to getting the system’s long-term

once through existing payroll taxes and again PRINCIPLES The promised benefits of current retirees through additional taxes or contributions. Participation in new personal retirement and those close to retirement should not be accounts should be voluntary. reduced. No one should be forced into a system of The government has a moral contract with those who currently receive Social Security personal retirement accounts. Instead, workretirement benefits, as well as with those who ers must be allowed to choose between today’s are currently close to retirement. These work- Social Security and one that offers personal ers no longer have the abiliretirement accounts. ty to adjust their retirement Any Social Security reform plan should reduce planning. Creating personal retirement t h e c u r r e n t s y s t e m ’s Personal retirement accounts within Social Security is accounts would improve unfunded liabilities. crucial to modernizing the system the rate of return on a True Social Security and to getting the system’s longworker’s retirement conreform will reduce Social term finances back on track. Security’s huge unfunded tributions and provide at liabilities by more than the least an adequate minimum “transition” cost needed to retirement income. Workers, especially those who are younger finance benefits for retirees during the reform. or have lower income, should be allowed to Like paying points to obtain a better mortincrease the poor rate of return offered by gage, Social Security reform should lead to a today’s Social Security by investing a portion net reduction in liabilities. of their payroll taxes into a personal retirement account. In addition, retirees must be able to OBJECTIVES count on at least a reasonable and predictable Create Social Security personal retirement minimum level of monthly income, regardless accounts that workers would own and could of what happens in the investment markets. use to build nest eggs for retirement. Americans should be able to use Social The Administration and Congress need to give a high priority to the rapid passage of Security to build a nest egg for the future. Workers should be able to use Social Secu- real Social Security reform that allows workrity to build a cash nest egg that can be used to ers to invest a part of their payroll taxes in increase their retirement income or to build a personal retirement accounts. The new sysbetter economic future for their families. This tem should include carefully controlled basic must be a priority in establishing a system of investment options available through a lowcost central management and should include a Social Security personal retirement accounts. Workers should be allowed to fund their default account if the worker fails to make an Social Security personal retirement accounts alternate choice. by allocating some of their existing payroll tax However, a reform effort should focus on more than solving Social Security’s impending dollars to them. Congress should allow Americans to direct fiscal crisis. It should give an equal weight to a portion of the taxes that they currently pay allowing workers of all income levels to build for Social Security retirement benefits into per- a nest egg that retirees can use to improve sonal retirement accounts. Workers should not retirement income, meet unforeseen emergenbe required to pay twice for the same benefits— cies, or leave to their families as part of their
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students so that they can estate. True Social Security better handle retirement reform should also reduce and other investment plans. the massive benefits promHowever, these programs ised to future generations should not be federally that today’s system will be unable to pay. mandated or financed. Improve the information In addition, definedthat workers receive about contribution pension plans Social Security. need to be simplified to Workers need better make it easier for workers information about the state to make the right decisions True Social Security reform will of Social Security’s finances for their future. Congress reduce Social Security’s huge and the level of benefits and regulators should unfunded liabilities by more than that they can realistically make it easier for plans the “transition” cost needed to expect to receive. The existto include an appropriate finance benefits for retirees durdefault fund that working annual Social Security ing the reform. statement should clearly ers’ money would go into and simply explain the sysif they fail to designate tem’s coming fiscal problems and include a another investment. To boost participation, measure of the worker’s rate of return on his workers should automatically be enrolled in pension plans unless they explicitly choose not or her payroll taxes. In addition, an improved annual statement to participate. would provide a clear discussion of the true The Administration also needs to encournature of the Social Security trust fund and age the development of low-cost, flexible what sacrifices will be required to repay the annuities that can be used upon retirement bonds that it contains. It should also include to pay for all or part of a worker’s retirement estimates of what monthly benefit amounts benefits. Workers also need more accurate and the worker can expect once the system’s trust understandable information about the financial status of any plan to which they currently fund has been depleted. In the future, Social Security needs to belong. In addition, the Administration and develop a combined statement that includes Congress need to encourage the development projected benefits from both Social Security of “hybrid” pension plans with some of the and any occupational or other pension plan characteristics of both defined-benefit and in which the worker participates. This com- defined-contribution plans. This should facilibined statement would both provide a better tate the conversion of existing defined-benefit picture of a worker’s projected total retirement plans to this model to reduce taxpayer liabilincome and serve as an incentive to increase ity and provide workers with a more secure retirement future as current defined-benefit retirement savings. Encourage better financial education and retirement systems continue to fail. improve the regulatory climate for definedFederal budget rules that have the unintended effect of making Social Security percontribution pension plans. Employers and school districts should be sonal retirement accounts a huge expense to encouraged to offer simple, practical financial the federal government should be changed. In education to current workers and to school addition, the federal accounting system needs
THE INSIDER Winter 05

to reflect the cost of Social Security and other entitlement benefits that have already been earned in all longer-term financial statements. As an example, current federal budget rules would treat money that goes into a personal retirement account as an expenditure, artificially increasing the size of federal spending despite the fact that the accounts would greatly reduce future benefit payments. Similarly, federal accounting practices fail to show either Social Security or Medicare benefits that workers have already earned but that will not be paid until some time in the future. Both budgetary rules and the federal accounting system need to reflect any reduction in Social Security’s unfunded obligations that would result from entitlement reform. Reform the long-term benefits structure of Social Security to reduce the unfunded liabilities imposed on future generations and to

focus available funds on the most needy. Social Security’s benefit formula needs to be revised to reduce the cost that future generations will have to pay to honor benefit promises made today. Among other adjustments, past earnings should be more realistically weighted by indexing them to inflation rather than to wage growth. Other benefit formula changes may also be necessary. At the same time, lower-income workers who have worked a full career must be able to receive at least a certain minimum monthly benefit. David C. John is Research Fellow in Social Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. This article is reprinted from The Heritage Foundation’s Mandate for Leadership.

In November, Politicians Made Their Promises. Here’s How To Keep Them.
Voters have once again delivered a mandate to Washington to govern conservatively. But sadly, commitment to principle has been missing in Washington politics for some time—and it remains to be seen whether all the conservative campaign promises will become reality in the coming years. Mandate for Leadership will help you hold politicians to their promises. This free guide from The Heritage Foundation provides conservative solutions to issues ranging from free trade to Social Security reform to reducing federal spending. In 1980, Ronald Reagan used our first Mandate to develop many of his policies. Make Mandate for Leadership your handbook too.

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For a copy, call 1-800-544-4843, or download it for free at MandateForLeadership.org. Visit InsiderOnline.org

Economic Liberty and Strong Economic Growth
by William W. Beach, Alison Fraser, Tim Kane, Ph.D., and Daniel J. Mitchell, Ph.D.
MandateForLeadership.org

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THE INSIDER Winter 05

Assuring
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economic class warfare.

merica’s economic success has been due to lower taxes and fewer government-inspired obstacles to enterprise than is true in most other countries. But that favorable climate for economic growth has been

maintained only by vigilance in resisting politicians’ temptation to micromanage the economy. Regrettably, many lawmakers are once again focused on moving money from one pocket to another and favoring one industry over another rather than on fostering growth. This must be resisted, and Washington must instead be urged to concentrate on creating the most favorable climate for enterprise by reducing and simplifying taxes, reducing red tape, and avoiding

encourage stronger economic growth is to PRINCIPLES Since economies grow fastest when gov- make sure the federal tax code is simple and ernment interferes least, public policy should encourages savings, investment, and work. allow the private sector the greatest leeway for Nobody should need to hire high-priced improving efficiency and spurring innovation. accountants and spend hundreds of hours The freedom to use one’s labor and capi- each year just to pay federal income taxes. tal as one pleases while respecting the equal Moreover, millions of people making decisions freedom of others to do the same produces the about their own lives yields better social and economic outcomes for greatest economic good for everyone than a few polieveryone at the least cost to society. Government ticians trying to engineer America’s economic success has plays a facilitating role in everyone else’s lives. been due to lower taxes and fewer the growth of an economy. Tax competition among government-inspired obstacles However, beyond these core nations is a powerful liberto enterprise than is true in most functions, federal fiscal and alizing force in the world other countries. monetary policies should be economy. Governments as economically neutral as are much more likely to possible. In addition, all levels of government adopt good tax policy—and much less likely should focus on only those programs that are to increase tax burdens—when politicians constitutionally within their purview and pro- understand that labor and capital can escape vide goods and services that cannot or should to jurisdictions with pro-growth fiscal policy. Tax competition is also a vital component not be produced by the private sector, such as in the battle for fundamental reform since it a justice system and national defense. Government should not try to pick eco- pressures policymakers to lower tax rates and nomic “winners and losers,” nor should it pur- reduce double-taxation of saving and investment. Regrettably, uncompetitive high-tax sue policies to reallocate income and wealth. The private, competitive marketplace does nations do not like tax competition and are a much better job of allocating resources than working through international bureaucragovernment does. If a company fails to use its cies such as the Organisation for Economic capital in a way that creates value for its cus- Co-operation and Development (OECD) and tomers and investors, customers go elsewhere European Union (EU) to pursue tax harmoniand investment follows sales. The same is true zation policies that would hinder the flow of for wealthy families. This is why the Forbes jobs and capital to low-tax jurisdictions. list of the top 400 wealthiest individuals bears Vigorous international trade enhances little resemblance to the same list 20 years domestic economic growth, especially when ago. Free and open markets reward those that trade is free of tariffs and regulations who enhance economic well-being and strip that reduce the variety and volume of foreign resources from those who do not. goods and services. The tax system should be simple—with tax Free trade helps economic growth by rates as low and flat as possible and with no pressing domestic producers to improve their income taxed more than one time—and taxes products and reducing their operating costs. should be collected to finance needed govern- It provides consumers with a wider array of products and services at lower prices than ment programs, not for social engineering. One important way that government can would otherwise prevail in the absence of free
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trade. Thus, it is emblematic of the benefits Enact legislation to reform or repeal the that everyone receives from open and competi- alternative minimum tax and the corporate tive markets: more choices and enhanced eco- profits tax. Congress introduced the alternative mininomic well-being. A dynamic economy is fueled by a vibrant mum tax (AMT) for individuals more than 30 and innovative workforce. Labor laws should years ago as a means of ensuring that a small not constrain workers or employers in a grow- number of very wealthy taxpayers could not ing and changing work environment, but use tax preferences to avoid any tax liability. This provision has grown should advance freedom and into an alternative tax uniaccountability to provide the greatest opportunities verse that is now affectUnleashing the productive potenfor increasing productivity. ing millions of Americans. tial of the U.S. economy requires Employers and workers The AMT does not allow that Congress reform today’s should have as much flextaxpayers to take credits enormously complex, increasingly or deductions, taxes their ibility as possible to create burdensome tax system. income at the relatively a workplace that is produchigh rates of 26 percent tive and rewarding. U.S. labor laws, written in the 1930s, should reflect and 28 percent, and does not adjust their tax the dramatic changes in the economy and the brackets for inflation. Today, thanks to years workforce that have occurred since then, and of providing middle-class taxpayers with spegive workers and employers the ability to cial credits and deductions, over 1 million taxrespond to these and future changes. At the payers are paying the AMT. The U.S. Treasury same time, labor law should ensure that unions forecasts that over 40 million taxpayers will be serve the interests of workers. Workers benefit paying AMT taxes within 10 years. Congress when unions are strictly accountable to the should repeal the AMT as part of a major promen and women whom they seek to represent. gram of tax reform. Reform the tax code by adopting a single rate, flat income tax that taxes all income once OBJECTIVES Enact legislation to make the tax cuts of and at its source. Unleashing the productive potential of the 2001 and 2003 permanent. The tax cuts of 2001 and 2003 shortened U.S. economy requires that Congress reform and softened the recession and the economic today’s enormously complex, increasingly burblow of the terrorist attacks. The 2003 tax densome tax system. Congress should adopt a bill was especially effective since it not only tax system that eliminates all multiple layers reduced the double-taxation of dividends and of taxation by taxing all income once, at its capital gains, but also accelerated the income source, and at one low rate. Such a “flat tax” tax rate reductions from the 2001 tax bill. As system would increase the incentives to work, a result, America is now enjoying a strong eco- save, and invest and vastly reduce the current nomic expansion. However, these tax policy barriers to economic growth raised by today’s changes are scheduled to expire by 2011. If tax system. Congress lets the tax cuts expire, taxes will Lawmakers should vigorously defend the rise and the economy will slow down. Making principle of fiscal sovereignty by rejecting tax the tax cuts permanent will send a signal that harmonization schemes being advocated by Congress values continued economic growth. the EU and the OECD.
THE INSIDER Winter 05

The need to compete in the global econo- amendment to the FLSA would allow employmy is a powerful reason why the United States ers and workers to agree to just that. Comp should lower tax rates and shift to a territorial time is a pro-worker, pro-family law that tax system—the common-sense notion of not allows greater cooperation between employdouble-taxing income earned outside U.S. bor- ers and employees and reflects the reality of ders. Congress and the President should not the modern workplace. This would reduce accept any agreements or enact any legislation employer overtime costs and increase producthat would harmonize the U.S. tax system with tivity. that of any other country or Make unions more accountable to the rank group of countries. and file. Unions will Congress and the PresiMillions of people making decialways play a vital role in dent should adopt energy sions about their own lives yields the American workplace, and environmental policies better social and economic outbut they should always be that enhance the quality of comes for everyone than a few strictly accountable to the life while facilitating the politicians trying to engineer workers they represent. To growth of national income. everyone else’s lives. strengthen union accountAn environmentally sound national energy polability, two changes should icy would also encourage the growth of new be made to U.S. labor law. First, an external energy supplies and smarter energy use, both audit should be a required part of the finanof which contribute to increased economic cial reports that unions file under the Laboractivity and greater national income. Con- Management Reporting and Disclosure Act. gress should adopt a comprehensive energy Workers are entitled to know that their union policy that enhances domestic energy supplies is using its resources wisely, and auditing will by opening access to oil and gas reserves that reduce the risks of fraud and abuse. Second, are currently off-limits or restricted. Further, no employer should be allowed to recognize a Congress should promote diverse energy sup- union without a secret-ballot election. Workplies including coal, nuclear, and hydropower, ers should always have the final say on union employing new, safer, and cleaner technolo- recognition, and a secret-ballot vote is the best gies to reduce dependence on foreign imports way to ensure that workers’ desires are accuof oil and gas to meet increasing demand for rately represented in this critical workplace energy. Likewise, Congress should reform decision. restrictive regulatory regimes contained in the Clean Air Act and Clean Water Act, which William W. Beach is John M. Olin Fellow increase costs and restrict energy access and in Economics and Director of the Center for supplies but in fact do little to improve the Data Analysis, Alison Fraser is Director of the environment. Thomas A. Roe Institute for Economic Policy Amend the Fair Labor Standards Act Studies, Tim Kane, Ph.D., is Bradley Fellow (FLSA) to allow workers to take compensa- in Labor Policy, and Daniel J. Mitchell, Ph.D., is McKenna Senior Research Fellow tory time off in place of overtime pay. In this era of two-income families, many in the Thomas A. Roe Institute for Economic workers, especially those with children, would Policy Studies at The Heritage Foundation. prefer to take additional time off in exchange This article is reprinted from The Heritage for working overtime. A compensatory-time Foundation’s Mandate for Leadership.
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Government 2.0
by William Eggers

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century ago, starryeyed Progressives sought to remake government in the image of a private sector revolutionized by technology. America had transformed herself from a sleepy agrarian nation into a roaring industrial powerhouse. Through mass movement of goods, railroads introduced businessmanagement procedures to corporations run by new managerial classes who used telephones, telegraphs and typewriters to master an ever-expanding data flow. The nation embarked on an efficiency campaign led by people like Frederick Taylor, whose “scientific management” advocated finding the “One Best Way” to do everything from growing roses to shoveling coal. Progressives like Teddy Roosevelt and Woodrow Wilson wondered why Americans couldn’t apply the new rules of industrial efficiency to government as well. Thus, the government-as-machine

metaphor was born. Today’s governments are relics of that Progressive era. They are built for an economy and society that have largely disappeared. In the private sector, mass production is giving way to personalization and customization. The “One Best Way” mentality is yielding to individual choice and personalized services. The organization man is being displaced by the free agent. Public bureaucracies, by contrast, with their vertical information flows, rigid practices and strict division of labor, are still organized according to the top-down models created for the industrial economy. As government has grown, its procedures, structures, and controls have become ever more complicated and elaborate. Until only recently, the main function of technology in government was to encode outdated procedures in software and run them on huge mainframes.

THE INSIDER Winter 05

The machine-age model that’s epitomized the public sector for the past 100 years is in dire need of a makeover. In the parlance of computer software programs, it’s time to upgrade from Government 1.0 to Government 2.0. The Progressive Era, “Government 1.0” in this manner of speaking, gave us the civil service system, the city manager, independent public authorities, administrative agencies, and the Federal Reserve. Our own Information Era requires similarly sweeping changes, many of which involve unmaking much of what the Progressives wrought. A NEW WAY OF THINKING In the last years of President Clinton’s second term, and during the presidency of George W. Bush, in city halls, statehouses, schools, federal agencies, and at election booths, we began to see the first stirrings of the public sector applying digital technology in innovative ways. Vowing to achieve “friction-free government,” Pennsylvania officials used e-government tools to reduce dramatically the number of forms new business owners were required to complete. Florida Governor Jeb Bush opened an online high school. The New York City Police Department installed kiosks where 35,000 low-risk probationers could use hand scanners to prove that they were still in town, leaving probation officers free to focus on higher-risk cases. In late 2002, Congress passed the E-Government Act, designed to accelerate the federal government’s digitization. Yet this first stage of digital government, by and large, meant merely putting

a pretty face on a slothful, clunky edifice. Most of the public sector has yet to be transformed. Today’s technologies can play a crucial role in fixing the problems of modern government, changing how we get to work, how we pay our taxes, how we register our businesses, and how our kids learn. For example, by tying together different computer databases and facilitating the quick exchange of information, technology can help tear down the walls between government agencies. By cutting the operating costs of government—for activities ranging from processing taxes to delivering benefits—e-government can return huge savings to taxpayers. By slashing the costs of regulatory compliance, digital tools such as electronic permitting and reporting could potentially return billions of dollars in lost productivity back to the economy. By opening up the cloistered world of bureaucratic regulation-making, electronic rulemaking can offer ordinary people access to a degree of information and individual influence hitherto accessible only to the most powerful citizens. And while the Internet won’t “save” democracy, digital democracy and online campaigning do have the potential to bring back democracy’s rich history of vigorous public discourse, updating the agora and the town meeting for the digital age (picture online democracy forums where the guy who runs the Jiffy Lube can talk with the mayor about leash laws) and turning your computer into a no-lines, no-bureaucrats government office (or even, someday, a polling place).

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And then there’s the matter of using the quipped: “You can see the computer age Internet to open up government to create everywhere but in the productivity statisgreater scrutiny by regular citizens. They tics.” want to see the full picture, the one that It was not until the late 1990s and the includes the recent surge in the rat popu- early years of this decade that productivity lation and the slacking sanitation crews. growth from IT investments finally started to materialize, climbing to Achieving real 3 percent in 2000, holding transparency is at nearly 2 percent during about much more Our own Information Era the 2001 recession, and than just slapping requires sweeping changes, many then soaring to more than a few friendly stats of which involve unmaking much 7 percent in the summer on a public Web of what the Progressives wrought. of 2003. The reason for site. This requires the lag: it takes time for a total mindshift— one in which public officials permit suc- companies to figure out how to reorganize cesses and embarrassments to be both their operations in order to fully reap the online and searchable. Sound utopian? In benefits of new technologies. Government has been especially slow to realize the full fits and starts, it’s already happening. The failure to fully imagine how to potential of digital technology. make the best use of new technologies is unique neither to government nor to PRIVACY PERILS modern times. Throughout history there Every great shift has unintended consehas almost always been a lag between quences, and the transition from Industrithe introduction of a new technology and al Age to Information Age government is its transformative use. Case in point: the no exception. Even as they promise better, nearly 1,570-year lapse between the Alex- more responsive, and more participatory andrian Greeks’ invention of the steam government, information technologyengine around 200 AD, and James Watt’s enabled changes also pose difficult new 1769 brainwave about what to do with it. questions whose answers will likely define New technologies also don’t automati- life in a 21st-century democracy. cally raise productivity. It took years after Least predictable are the implications electric power was introduced for produc- of many of today’s advanced technolotivity gains to materialize. More recently, gies on personal privacy, a debate that has during the 1980s and 1990s, economists only heated up as the nation remakes its continually spoke of a productivity para- domestic defenses to combat the terrordox: no one could find any evidence that ist threat. Biometric technologies such as the billions of dollars companies were thumb-print, iris and facial recognition, spending on IT was having any affect along with neural network pattern recogon productivity. As University of Chi- nition systems and increased government cago economist Robert Solow famously data-sharing all offer astounding new law

THE INSIDER Winter 05

enforcement capabilities —in fact, they are ment of TIA-derived technology by any fast becoming the new weapons of choice federal agency. This approach, the blunt for the military, the police and intelligence instrument of a total ban, reflects a failure agencies. But these digital tools also raise to update our thinking to correspond to the prospect of an Orwellian 1984-style new Information Age realities. We prosociety. Already, 80 percent of America’s tect our liberties not by prohibiting gov19,000 police departments ernment agencies are using surveillance camfrom using the lateras; coming soon are robot est technologies, This requires a total mindshift— but through our cams and “Smart Dust.” one in which public officials persystem of checks The dangers to primit successes and embarrassments and balances, our vacy from some of today’s to be both online and searchable. Constitution, and technologies are real. Few our Bill of Rights. Americans want to live in a society where government tracks our In our increasingly security-conscious every movement, in-depth profiles of world, the key to protecting our privacy is every citizen reside in giant federal data- identifying and promoting the technologibases, and we’re subjected daily to a form cal, legal, and cultural practices that allow of electronic strip search. But the answer us to reap the benefits of new technologies shouldn’t be knee-jerk opposition to every without descending into a stultifying Big government attempt to use technology Brother-like world. Every entrepreneur frustrated by that could potentially be abused. Take the 2003 congressional ban on the paperwork, every parent who’s sick of Department of Defense’s “Total Informa- being surprised by bad report cards, every tion Awareness” (TIA) research program. commuter stuck in traffic, every activist TIA had sought to improve information trying to fight City Hall, and every taxsharing in the fight against terrorism by payer who cares about the future has a developing software that would search stake in modernizing government. through billions of transactions to look for patterns of terrorist activity by linking William Eggers is a Senior Fellow at the government databases in real time to one New York-based Manhattan Institute for another and to certain private-sector data- Policy Research and the Global Director bases to which government investigators for Deloitte Research-Public Sector, where he is responsible for research and thought already had access. To be sure, there are some grave pri- leadership for Deloitte’s public-sector vacy risks in an approach like TIA, but practice. This article is excerpted from rather than weigh these risks against the his new book Government 2.0: Using benefits to security and then adopt safe- Technology to Improve Education, Cut guards and restrictions to prevent abuse, Red Tape, Reduce Gridlock, and Enhance Congress chose to bar any and all deploy- Democracy.

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Mandate for a New

Environmentalism

by Jane S. Shaw and Bruce Yandle

e have selected four areas in which the government could make visible changes that will reveal the environmental benefits of private property rights, markets, and decentralization. The Bush Administration should toss out the old and adopt the new environmentalists’ way of framing issues. Above all, the Administration should reject the old environmental activists’ notion that economic progress and environmental protection are mutually exclusive. Decades of research plus the obvious evidence that developed countries such as the United States have cleaner air, water, and more protected land show that environmental quality goes hand-in-hand with economic progress. Free-market environmentalism seeks to improve environmental quality while recognizing that private property owners tend to be good stewards, that voluntary trading achieves cooperation, and that decentralized decision-making brings in valuable local information. Here are a few ways the current administration can turn these principles into policy: 1. TRANSFERABLE FISHING QUOTAS. The federal government regulates coastal fisheries, but at least one third of the nation’s fisheries are excessively fished. A solution is individual fishing quotas (IFQs, also called individual transferable quotas or ITQs). Fishermen are allocated a percentage of the total allowable catch—say, one tenth of one percent of an 8 million ton seasonal catch. Assured that they will be able to catch this amount, fishermen stop the destructive “race to fish” that leads to over-fishing, waste, and even injury and death to fishermen. The Bush Administration
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supports IFQs but doesn’t designate them as property rights, which limits their effectiveness. The Bush Administration should recognize these quotas as property rights and start implementing them. 2. WATER QUALITY. For years, controlling water pollution has meant setting very tight standards on contaminants that sewage treatment plants and industrial companies discharge into rivers and lakes. (These are called point sources of pollutants.) It is very expensive to clean up these sources fur-

ther. But little has been done about the pollution that enters bodies of water from rain that washes off farmers’ fields or dirt from city streets (called non-point sources). Environmental laws are not very strict for these sources of pollution. Recently, the EPA encouraged point sources such as factories to pay non-point sources such as farmers to cut back on their pollution. It would cost the companies less, while achieving better results. The President should push for legislation that expands these markets. 3. TRANSFERABLE GRAZING PERMITS. Although grazing on public land is a “western” issue, national environmental groups have long lobbied to get livestock off the range. Conflict could turn to cooperation if the federal government allowed trading of existing grazing permits between willing sellers and willing buyers. If environmental groups want to buy the permits and retire them, they should be able to try. Voluntary trades require people to back romantic wishes with actual funds. The trades that result will lead to more justice and greater efficiency.

4. WATER MARKETING. Allocating water by buying and selling is mostly a western issue, too, but growing demands for municipal water around the country are moving it into the national consciousness. The Administration should identify areas, such as the Klamath River basin in southern Oregon, where clearer definition of rights to water could form the basis for trades. As water users weigh the value of the bids they receive, they will reconsider some of the more wasteful uses of water. More water will be available for those who really want it. These are our nominations for immediate environmental action. With them, the President could toss out the old environmentalists and go with the new to get a return on his political capital. We could see greater environmental improvement along with greater freedom and prosperity. Jane S. Shaw is senior fellow at the Property and Environment Research Center in Montana, and Bruce Yandle is interim dean of Clemson University’s College of Business and Behavioral Science.
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The First Mandate
by Dr. Lee Edwards

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here are only 10 weeks between a presidential election and a presidential inauguration, and yet, in that brief period, a president-elect must pick his cabinet and his chief advisers, including his national security adviser and his chief budget officer; write his inaugural address setting the tone for his administration; and decide which of his campaign pledges he is going to implement in his first hundred days. He must shift, literally overnight, from a politicking to a governing mode and become the president, not just of the political coalition that elected him, but of all the people. So complex a task is made even more difficult when the incoming president is of a different political party and governing philosophy from that of the outgoing chief executive. Several trustees of The Heritage Foundation had been involved in this very experience in 1968. It was Jack Eckerd, head of the General Services Administration under President Nixon, who first suggested at a trustees’ meeting in October 1979, that the foundation should help the process by drawing up a plan of action for a possible conservative administration in January 1981. While no one could
THE INSIDER Winter 05

say with certainty who the Republican nominee would be, he was bound to be to the right of President Carter, and stood an excellent chance of being elected. Heritage should take on this enormous task because, it was argued, the new administration, preoccupied with electoral politics, would have given little thought to governing. Robert Krieble proposed that the foundation produce a manual that would help policymakers “cut the size of government and manage it more effectively.” “Our strong feeling,” explained Ed Feulner, “was that the people of the new and hopefully conservative administration should have some source of information and guidance other than what you get from the incumbents you replace.” In the Nixon transition, he pointed out, “Republicans were briefed by Democrats, the very people whose jobs were at stake and who had a vested interest in maintaining the status quo.” The status quo was the last thing The Heritage Foundation wanted to preserve. Feulner, Phil Truluck, Willa Johnson, and other Heritage staff, went to work. Charles Heatherly, a former field director of the Intercollegiate

Who We Are

Studies Institute agreed to undertake the overall direction of the Heritage study, beginning November 15, 1979. Heritage staff began by drawing up a list of key conservatives to talk to, starting with Paul Weyrich and experienced Senate staffer Margo Carlisle, who joined Heritage in the late 1980s as vice president and director of government relations. They also began listing people in the Nixon administrations, like William Simon and Caspar Weinberger, from whom they could draw lessons.While Heatherly concentrated on the policy blueprint, Willa Johnson was tasked with “organizing a Talent Bank for the new administration.” All agreed from the beginning that policy and personnel had to fit together. At the trustees meeting in December 1979, Feulner submitted a general plan based on the notion that conservatives had to be prepared to answer the question, “What is the conservative agenda, particularly for the First Hundred Days?” As Feulner later explained in the foreword to Mandate for Leadership, the recommendations were concrete proposals which if implemented would help “revitalize our economy, strengthen our national security and halt the centralization of power in the federal government.” In late January 1980, Heatherly wrote a five-page outline titled Mandate for Leadership. He proposed a team approach that would “scope out” every key department and agency of government. Each team would have a chairman and a co-chairman, and would include academics, conservatives who had been Nixon and Ford appointees, and congressional staff. Ultimately, more than 250 experts served on twenty teams, while dozens more contributed ideas and information. Heatherly wrote to both the Reagan-Bush and Carter-Mondale campaigns, offering to meet with them on the Heritage project. No one from Carter-Mondale headquarters ever called back, but Reagan-Bush quickly responded.

By June [of 1980], having won twentynine of thirty-three primaries and received 60 percent of the popular vote, Reagan had far more than the 998 delegates he needed for the nomination. He turned over the major responsibility for what he should do if elected to his longtime aide Edwin Meese III, who was also serving as deputy campaign director under William Casey. Meese visited Heritage in the early spring and was briefed on Mandate. In July, Heritage decided to hold a dinner for the team chairmen and co-chairmen at the University Club in Washington. Ed Meese was a surprise guest and gave Mandate “his blessing,” removing any doubt as to how the study would be received by the administration. By now, everyone realized he was working on an unprecedented document, unprecedented for Washington and unprecedented for Heritage. Indeed, never before had such a critical mass of conservatives come together to debate and determine their positions on such a wide range of subjects. The process gave the Reagan administration and the conservative movement itself a running start in going to bat for the initiatives. The New York Times dubbed the mammoth report “a guideline [for] the Reagan team.” The Washington Post called it “an action plan for turning the government toward the right as fast as possible.” And United Press International described it as “a blueprint for grabbing the government by its frayed New Deal lapels and shaking out 48 years of liberal policies.” Lee Edwards is Distinguished Fellow in Conservative Thought at The Heritage Foundation. This article is excerpted with permission from his book, The Power of Ideas: The Heritage Foundation at 25 Years. His latest book is The Essential Ronald Reagan: A Profile in Courage, Justice and Wisdom.
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Eminent Dom Without Lim
by Scott Bullock and Dana Berliner

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hen Susette Kelo purchased her two-bedroom, pink house in 1997 along the Thames River—a beautiful stretch of waterfront property in New London, Connecticut—she thought she had her work cut out for her just restoring the house and designing the garden. That turned out to be the least of her worries. Unbeknownst to Susette, the City, a private development corporation (New London Development Corporation), and a pharmaceutical company had reached an agreement. The pharmaceutical company would build a new facility nearby. The NLDC would take all the land in Susette’s neighborhood and transfer it to a private developer who would in turn build an expensive hotel for the pharmaceutical company’s visitors, expensive condos for its employees, an office building for biotech com-

U.S. Supreme Court to Curb Nationwide

panies, and other projects to complement the facility. The State and the City would contribute millions of dollars. The only thing standing in the way was Susette and her neighbors. Susette Kelo is not alone. All across the country, state and local governments are abusing the power of eminent domain to take private homes and businesses for the benefit of other, more politically favored private businesses who promise more jobs and taxes. In

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main mits?
“If the taking of our property were for a bridge, road, or firehouse, I would be prepared to sell without a fight. But the government should not be able to force me to sell for just any purpose. This is for private profit, not public use.” —Homeowner Susette Kelo, pictured at left, New London, Conn.

t Asked e Abuses

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just five years, the government filed or threatened condemnation of more than 10,000 properties for private parties. In the face of such statistics, the Institute for Justice, a public interest law firm in Washington, D.C., has waged a national campaign in court and in the court of public opinion to restrain government’s abuse of eminent domain and to restore constitutional protection for private property. According to the Connecticut Supreme Court, the mere fact that your city is strapped for cash justifies condemning your home. After all, richer people could be living there and paying more taxes. Office buildings could be built there, and pay more taxes. Taking your home is for the good of the city—it’s “economic development.” Using eminent domain for “economic development” alone is a new phenomenon. Usually
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governments try to at least claim that the area is a “slum” or “blighted,” but Connecticut has dispensed with that pretense and admits outright that if another business could make a profit on your land, the government can take it. The U.S. Constitution specifically prohibits this kind of taking, limiting the power of eminent domain to “public use.” The Connecticut Supreme Court decided that “public use” just means that it could have some benefit to the public, like more tax money in city coffers. The Connecticut Supreme Court’s reasoning effectively reads the Constitution’s protections out of existence. Whose land wouldn’t produce more taxes if it were an office building instead of a home? Allowing condemnation for “economic development” just allows cities and developers to pick whatever land they want, without regard to the people who live or work there. Now before the U.S. Supreme Court, Kelo v. City of New London gives the nation’s highest court the opportunity to address this radical departure from the language of the Constitution. The Court’s last case involving private development was 50 years ago, and it allowed the clearance of an area so blighted that most buildings lacked plumbing. For the last 50 years, without further guidance, it’s been up to states to set their own rules. Not surprisingly, the states have reached conflicting conclusions. Some states, like Connecticut, allow condemnations for “economic developTHE INSIDER Winter 05

ment.” Other states, like Washington, South Carolina and Maine, do not. The Constitution is supposed to apply to all United States citizens, and U.S. Supreme Court guidance is desperately needed to prevent the continuing and growing abuse of eminent domain. The Court heard oral argument in Kelo in February and will issue a ruling by the end of June. COVETING THY NEIGHBOR’S LAND IN NEW LONDON In early 1998, a pharmaceutical company announced that it would build a $270 million research facility in New London, purchasing the land along the Thames River from the State for $10 million. The company and other development groups associated with the project are slated to receive at least $118.2 million in federal and state subsidies over 13 years.

Matt and Sue Dery, pictured at left, may lose their home of 20 years.

The plant, which was completed in 2001, bordered a well-established neighborhood called Fort Trumbull. The neighborhood is also along a scenic stretch of waterfront property connected to Fort Trumbull State Park. In January 2000, the New London City Council approved a Municipal Development Plan for the 90-acre Fort Trumbull neighborhood. The intent of the City of New London is to acquire all the remaining properties through eminent domain to build a hotel, private office space, high-income private housing, and other unspecified development projects that will enhance the plant. PRIVATE PARTIES WITH GOVERNMENT POWERS The New London City Council solicited the New London Development Corporation—a private organization—to create the

current development plan for the Fort Trumbull neighborhood, a plan that was approved by the City Council in January 2000. But the City Council did not stop there. It then delegated its authority over the project, including its eminent domain power, to the NLDC. When the property owners in Fort Trumbull were served eminent domain papers, they read that the “City of New London, acting by the New London Development Corporation” seeks their home. The NLDC decided which properties were taken and demolished. It also made the ultimate determination on which developer would build the proposed projects. Under pressure from the NLDC—which included posting eviction notices on the day before Thanksgiving in 2000 on the doors of residents who refused to move—the Fort Trumbull neighborhood has been transformed. After obtaining properties from those who wanted to sell and others who felt like they had no choice but to surrender their homes or businesses, the NLDC moved swiftly and demolished the structures. Today, vast empty dirt fields give the neighborhood the feel of a moonscape with the remaining homes and businesses left standing on less than two acres along the edge of the 90-acre parcel of land slated for private development. The vast majority of the NLDC’s development could move forward without taking the few remaining homes, but the NLDC wants it all.
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Bill Von Winkle is pictured in front of his business, one of 15 properties condemned.

THE PROPERTY OWNERS In a neighborhood that once teemed with dozens of families, only seven property owners who own 15 total parcels remain. Despite the NLDC’s threat demanding they move out no later than March 2001, these seven families continue to fight for their property rights. Here are the stories of a few of them. MATT & SUE DERY The Fort Trumbull neighborhood was once largely made up of Italian immigrants. In fact, right up the street from Kelo is the Dery family, who has lived in Fort Trumbull since 1895. Matt Dery, his wife Suzanne and their son live right next door to Matt’s mother and father. Matt’s great-grandmother, Maria Ballestrini, purchased that house in 1901. Matt’s mother, Wilhelmina, was born in the house in 1918. She and her husband, Charles, have lived there together since he finished his service in the Merchant Marines in World War II. The Derys liked the neighborhood so much that they bought two more houses and now rent them out. Matt said, “My grandmother opened a grocery store on our threatened property. She extended credit to everyone in the neighborhood when they needed it, and when the property went into receivership during the Depression, she worked until 1958 to earn it back. Through good times and bad over the course of the past century, we’ve been good neighbors and good citizens. We were good enough to pay taxes for more than 100 years. Any town should want
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residents like us, but now New London has decided that they want better people here, and they’re trying to move us out.” BILL VON WINKLE Around the corner from the Derys is Bill Von Winkle’s Fort Trumbull Deli. Von Winkle also owns six apartments above the deli, two homes with another five apartments, and one commercial building with three storefronts once leased out by Bill and his wife, Jennifer. The deli served oversized hoagies to eager customers from 1986 until 2001, when the NLDC’s actions forced the Von Winkles to shut it down and forgo its income. Bill said, “The government decided that despite the fact that my apartments were full, that someone else could make a more profitable use of my land. The New London Development Corporation working with the City has done everything in its power to take what’s mine and give it to a private developer

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“Nothing like this is supposed to happen in this country. America is supposed to be different. It is supposed to be a place where our rights are protected by the government, not a place where they are sold to the highest bidder, but that’s exactly what is happening.”
—Bill Von Winkle

so they can get richer. It’s just not fair. Nothing like this is supposed to happen in this country. America is supposed to be different. It is supposed to be a place where our rights are protected by the government, not a place where they are sold to the highest bidder, but that’s exactly what is happening.” “The same rules that applied to me should apply to anyone who wants to purchase private property in New London,” Bill said. “No home or business owner should be forced to sell simply because someone with more political influence wants that property.” CONCLUSION If private property may be condemned and given to another private organization or company for private profit, and if the determination of which properties are to be condemned may be delegated to a private group unaccountable to the electorate, then are there any limits on the exercise of this government power? Without accountability or constitutional constraints, all the incentives promote aggressive, unbridled use of the eminent domain power, regardless of the impact on innocent property owners. It is time to shift the balance away from government power and back to its citizens. The Institute’s case on behalf of Fort Trumbull property owners seeks to end another sad chapter in the government’s modern-day abuse of its awesome eminent domain power. As Susette Kelo said, “We begged and

pleaded for three years and no one heard us, not until the Institute for Justice took our case. Now, we are protected, we are no longer the ones backed in a corner, fighting for the simple right to live in our homes.” Americans should not be forced to beg for their rights. The case of Kelo v. The City of New London reminds the public that property rights are the foundation of all our rights. They are constitutionally enshrined and they must be preserved; when property rights are lost, the loss of other rights will inevitably follow. LITIGATION TEAM The litigation team is headed by Institute for Justice Senior Attorneys Scott G. Bullock and Dana Berliner. Joining them on the team is Institute President and General Counsel William H. Mellor. The Institute is joined by local counsel Scott W. Sawyer of New London. The Institute for Justice’s mission is to advance a rule of law under which individuals can control their own destinies as free and responsible members of society, using strategic litigation, training, communication and outreach. It litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. This article is reprinted with permission from the Institute for Justice. For more information on Kelo and eminent domain abuse, visit www.ij.org.
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Pounding the

How You Can Turn Abstract Ideas Into Concrete Policy

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nother Election Day has come and gone and the statistics show that it was the highest voter turnout since 1968 — 60.7 percent of registered voters (122 million people) voted in the November election. The flip side: more than 78 million Americans who were eligible to vote stayed home on Election Day. Think about that for a minute. A whole lot of individuals didn’t participate, far more than the margin of victory nationwide in the presidential race. In fact, in some of the tightest races at the state level, like the governor’s race in my home state of Washington, the contested margin of victory was fewer than 150 votes and is still being battled out in court. At all levels—local, state and national—we’re talking about votes that will have an impact on your life and the lives of your families and friends not only now, but for years to come. If you’re ever tempted to think your vote doesn’t matter, think again. As an informed and involved citizen, you have far more power than you realize. You’re the minority who will determine the fate of our nation. That said, it’s not enough to just leave some full-term chads in the voting booth or to fill out your absenTHE INSIDER Winter 05

A

Pavement
by Marsha Richards

tee ballot. Being informed and involved means more than that. I believe there are four critical elements to responsible citizenship. You must 1) know what you believe, 2) know why you believe it, 3) act on your knowledge, and 4) act effectively. Having one, two or even three of these elements is not enough. A responsible citizen embodies all four. Consider: A lot of people know what they believe and they’re willing to take action. A typical student at Olympia’s renowned Evergreen College might look you in the eye and say, “Logging companies will never stop until they reduce the earth to one giant parking lot.” And an activist such as California’s Dona Nieto will act on that belief by accosting loggers in the woods with “nudist guerilla poetry” (true story). If you ask such folks why they believe loggers are evil monsters whose sole motivation in life is to cut down enough trees to annihilate the human race, you probably won’t get a fact-based response. Assuming a person still held those beliefs after honestly considering their source, she could probably combat the

What We Do

problem with something more effective than “flowers in her hair and tears in her eyes,” as the bare-breasted guerilla poet did. I’m picking on silly leftists with my example, but the fact is many conservative, freemarket types are guilty of the same omissions. Too often we know what we believe and even why, but we don’t get out and do something about it. Or we’re ready to do something about it, but we spin our wheels and waste our time on strategies that don’t work. If someone asks why we believe lower taxes are better for the economy, or why parents should have school choice, or why Social Security has to be reformed, are we prepared with a convincing and factual response that not only debunks the myths of the other side but advances the debate into territory they’re not ready to defend? Are we the kind of people who go off half-cocked or do we carefully evaluate an issue and come up with a solid plan to advance our goals? Perhaps the most pressing question: Once we know what we believe and we’re ready to act, are we prepared to act decisively, even if it makes us uncomfortable? The men who made it possible for us to openly write and read articles like this would be considered radicals today. They were “the vigilant, the active, the brave” who meant it when they cried, “Give me liberty, or give me death!” They were the ones willing to give up fortunes, security, and even their lives to give us a chance to govern ourselves. They intelligently evaluated their times, and they did what it took to build a nation. Are we willing to do what it takes? We’re not asked to sacrifice much by comparison, but it’s not going to be painless either. We’ll have to sacrifice time to become informed, and we’ll probably have to sacrifice comfort to be involved. We may find ourselves knocking on our neighbors’ doors or waving signs on street corners; we may be ridiculed by those who have no appreciation for the sacrifices that bought

their right to ridicule; and we may (God forbid) even face more serious persecutions. The alternative is to let liberty continue to slip away until brave men and women are required to buy it back again with their lives. And those brave men and women will be our children, or grandchildren, or great-grandchildren. I hope you’ll be in that small but dedicated group of citizens who determine the fate of our nation. SOME GREAT BOOKS TO READ • Dedication and Leadership by Douglas Hyde. Long-time Communist Party activist turned Christian, Hyde describes the legitimate and effective tactics that allowed an evil philosophy to convert so many. • Rules for Radicals by Saul Alinsky. Despite his lack of morals and ethics, union radical Saul Alinsky has some legitimate information for those who want to be effective world-changers. No sense letting his protégés, Hillary Clinton and the National Education Association, have all the fun. • Confrontational Politics by H.L. Richardson. Retired California Senator H.L. Richardson provides a game plan for conservatives who want to effectively combat their liberal counterparts. • The Art of Political War and Other Radical Pursuits by David Horowitz. Horowitz shows how Bill Clinton’s generation, having mastered the art of political war, has spent the last ten years clobbering conservatives in and out of government. Marsha Richards is Director of the Evergreen Freedom Foundation’s Education Reform Center. This article first appeared in the Evergreen Freedom Foundation’s newsletter, Living Liberty. It is reprinted with permission from Evergreen Freedom Foundation. For more information, visit www.effwa.org.
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