Who's Right On Dynamic Scoring? Ask Canada - Bloomberg View

 

Republicans and Democrats are once again locked in battle over whether the government should use a method known as dynamic scoring to calculate the budgetary effects of legislation. In an attempt to bridge the seemingly intractable philosophical divide, I figured the debate could use some help from a neutral arbiter. So I called Canada.

For those just joining the debate, both the Congressional Budget Office and the Joint Committee on Taxation generally employ so-called static scoring to assess tax and spending measures. This technique, largely favored by Democrats, doesn't take into account estimates of the legislation's potential effect on the size of the economy and, critics contend, its broader impact on federal revenue.

Republicans and some of their allies have periodically pushed for the agencies to provide more estimates that rely on dynamic scoring, which assesses the potential macroeconomic effects of legislation, namely the changes it could produce in economic activity and employment.

Representative Paul Ryan of Wisconsin, who will take over as chairman of the House Ways and Means Committee in January, wants the CBO and JCT to make greater use of the practice, which he calls "reality-based scoring," for tax measures. Democrats have long objected to the change, which they say would understate the actual cost of tax cuts by overestimating their impact on the economy.

For what it's worth, the people who work for the Parliamentary Budget Officer, Canada's equivalent of the CBO and JCT, mostly agree with the Democrats. The PBO doesn't use dynamic scoring to estimate the cost of individual pieces of legislation.

Mostafa Askari, the assistant parliamentary budget officer, provided several reasons for the PBO's caution about the method.

The first is that predicting the effects of policy changes isn't as straightforward as dynamic scoring's proponents suggest, and in some cases comes down to assumptions that are a matter of belief.

"Dynamic scoring will depend on methods and methodology that are not really standard," Askari said. "You could have a wide range of views."

Another reason for Canada's decision to stick with the static method, according to Askari, is that in most cases it doesn't make that much of a difference, a conclusion many American experts share. "The assumption is there is an impact, but that impact is not significant enough to change the views of the policy," he said.

Finally, Askari said that dynamic scoring reflects an ideological agenda, derived from the belief that tax cuts always lead to growth.

"The source of this debate in the U.S. is supply-side economics," he said. "It's not an economics issue, it's a political issue."

The Parliamentary Budget Office was established in 2006  by a government run by Canada's right-of-center Conservative Party. It has authority to choose how it estimates the cost of bills, though Askari said an additional reason the PBO doesn't do dynamic scoring is that it has fewer resources than the CBO and JCT.

Nonetheless, the PBO has sometimes had to fend off political pressure. Kevin Page, who became the first parliamentary budget officer in 2008, said the Conservative government pushed him to use dynamic scoring for its tough-on-crime legislation, which included longer prison sentences. He refused.

"This upset the government, because they argued on largely ideological grounds that there were significant benefits to society," Page said in an e-mail. "We stayed out of that debate."

Page said dynamic scoring could be useful in some instances, if those conducting the studies have the independence (and the resources) to do it well -- what he called a "systematic and consistent approach."

It's debatable whether Ryan's proposal fits that description. For instance, it would mainly apply to tax measures and would prevent the CBO from considering the macroeconomic effect of major public spending bills, such as infrastructure projects or education -- an approach that Askari said made no sense. (Former Republican CBO directors have made the same argument.)

The more important test will be how the CBO and JCT would handle their new assignment. If the cost of tax bills decreases significantly, the onus will be on the scorers to show how they reached that conclusion.

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White Castle Introduces Veggie Sliders - Businessweek

 

Late-night burger chain White Castle announced this week that it will start offering a 99¢ veggie slider, essentially a vegetarian version of the mini beef burgers the chain is known for. Coming from a company that sells sacks (and even crates) of tiny cheeseburgers to the munchie afflicted, the move is something of a surprise. Especially because veggie burgers and other fare marketed as "healthier" than typical fast food have barely moved the needle at other chains so far.

Veggie burgers remain few and far between in fast food. Burger King offers one, but Wendy's never has. In 2011, McDonald’s then-chief operating officer (and now chief executive officer) Don Thompson told investors that the company had attempted several times to launch veggie burgers in the U.S., including in Southern California in the early 2000s. But "we ended up serving four a day,” he said. Salads typically sell poorly, too, with only 2.3 percent of orders at burger fast-food chains including a salad main dish and 1.3 percent including a side salad, according to data from NPD.

Despite these headwinds, White Castle Vice President Jamie Richardson says he expects the new veggie sliders, a limited-time menu offering, to attract new customers. In a survey the company conduced in 2013, veggie sliders were among the top three suggestions from White Castle customers, Richardson adds. And when White Castle tested the sliders in 12 East Coast stores this summer, the burgers sold better than other products launched in the past two years, including chicken and waffles and Siracha chicken sliders. Not bad when you consider that only 5 percent of adults report being vegetarian.

Until now, White Castle has had no vegetarian option besides fries, onion rings, and cheese sticks, and the only vegetables the chain stocks in the kitchen are onions and pickles (seriously, unless you count ketchup). So the company is likely banking on the idea that vegetarians, who probably avoided White Castle before, can now join their meat-eating friends for a meal. That prevents what's known in the industry as "the veto vote"—when an entire group decides not to eat at a restaurant because it doesn't offer a menu item that suits the dietary requirements of one person. “If options like a veggie burger exists, it reduces the veto vote and gives everyone in the party a chance to order what they want," says Darren Tristano, executive vice president at Technomic, a food industry researcher.

It also gives diners the option to diversify their meal, Richardson says. A sack of meat burgers with a veggie slider on the side, perhaps, or a mix-and-match crate.  Still, says Tristano, when it comes to healthy menu items, “our research indicates only half of the consumers who are looking for the healthier option will actually choose it when ordering.” Not that veggie burgers are necessarily healthier--their calorie and fat count (pdf) clocks in at around the same as plain beef sliders. The new burger does at least put White Castle on the map for those after a meat-free meal. And if it doesn't work, the chain can rest assured that 84 percent of vegetarians and vegans go back to eating meat anyway.

White Castle Introduces Veggie Sliders - Businessweek

Wisconsin's Walker facing opposition in own party - Yahoo News

 

Now Republican lawmakers are pressing to set the agenda.

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In addition to right-to-work legislation, conservatives are talking about social issues, such as banning abortions for pregnancies after 20 weeks, and making it more difficult for prosecutors to launch secret "John Doe" investigations, which are Wisconsin's version of a grand jury probe. Walker himself has been the target of two such probes. Both issues could provoke legislative battles.

The statewide Chamber of Commerce is among the powerful interests pushing for a right-to-work law. Backers argue that Wisconsin will be at a competitive disadvantage in attracting business until it can guarantee that workers won't have to pay union dues on union-contract jobs if they don't want to. Several neighboring states have such laws.

"It just feels like this is the right time for it," said Republican Rep. Chris Kapenga, who plans to sponsor the measure.

Walker dismissed the issue as "a distraction" and said tax cuts mean more for the economy. Walker wants to cut both property and income taxes and run through several other conservative priorities, such as required drug testing for food stamp recipients and expanded school vouchers. He also needs to address a looming $2.2 billion budget shortfall, and wants the budget wrapped up faster than usual.

"You can see why he would just as soon put off things like right to work," said Charles Franklin, director of the Marquette University Law School poll, who noted that, after withstanding protests over the anti-union action in his first term, Walker would rather demonstrate smooth efficiency in contrast to the political gridlock of Congress.

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Slavery, salt on South Korea's Sinui Islands - Chicago Tribune

 

The summer sun beat down on the shallow, sea-fed fields where Kim Seong-baek was forced to work without pay, day after 18-hour day mining the big salt crystals that blossomed in the mud around him. Half-blind and in rags, Kim grabbed another slave, and the two men — both disabled — headed for the coast.

Far from Seoul, the glittering steel-and-glass capital of one of Asia's richest countries, they were now hunted men on this tiny, remote island where the enslavement of disabled salt farm workers is an open secret.

"It was a living hell," Kim said. "I thought my life was over."

Lost, they wandered past asphalt-black salt fields sparkling with a patina of thin white crust. They could feel the islanders they passed watching them. Everyone knew who belonged and who didn't.

South Korea Slave Islands

AP image

In this image taken from video footage released by Guro Police, Kim Seong-baek stands on the deck of a boat leaving Sinui Island, South Korea. (AP image)

Near a grocery, the store owner's son came out and asked what they were doing. Kim broke down, begged for help, said he'd been held against his will. The man offered to take them to the police to file a report. Instead, he called their boss, who beat Kim with a rake — and it was back to the salt fields.

"I couldn't fight back," Kim said, in a recent series of interviews with The Associated Press whose details are corroborated by court records and by lawyers, police and government officials. "The islanders are too organized, too connected."

'Neglected and mistreated'

Slavery thrives on this chain of rural islands off South Korea's rugged southwest coast, nurtured by a long history of exploitation and the demands of trying to squeeze a living from the sea.

Five times during the last decade, revelations of slavery involving the disabled have emerged, each time generating national shame and outrage. Kim's case prompted a nationwide government probe over the course of several months last year. Officials searched more than 38,000 salt, fish and agricultural farms and disabled facilities and found more than 100 workers who had received no — or only scant — pay, and more than 100 who had been reported missing by their families.

Yet little has changed on the islands, according to a months-long investigation by the AP based on court and police documents and dozens of interviews with freed slaves, salt farmers, villagers and officials.

Although 50 island farm owners and regional job brokers were indicted, no local police or officials have faced punishment — and national police say none will, despite multiple interviews showing some knew about the slaves and even stopped escape attempts.

It was a living hell. I thought my life was over.- Kim Seong-baek

Slavery has been so pervasive that regional judges have shown leniency toward several perpetrators

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Enbridge restarts oil pipeline after Canadian release - UPI.com

 

CALGARY, Alberta, Dec. 19 (UPI) -- Canadian energy company Enbridge said it restarted an oil pipeline that feeds U.S. Midwest markets from Alberta after an earlier release of 1,350 barrels.

Enbridge closed its Line 4 pipeline after the release was discovered late Tuesday. The pipeline carries an average 796,000 barrels of oil sourced from Alberta to a terminal point in Wisconsin.

The company said the National Energy Board was site and cleared the company to restart the pipeline.

"All free product has been recovered and more detailed clean-up work on site will continue into next week," the company said in a Thursday statement.

When issuing its notification of the release, the company said there were no environmental or public health concerns as the spill was limited to an on-site pumping station.

The NEB confirmed in a separate statement the release was contained to the immediate site.

"There were no injuries, no fire, no nearby residences and no threat to public safety," the regulator said.

The company's safety record is under close scrutiny in the wake of a spill from its Line 6b in southern Michigan in 2010, the largest inland release of its kind in the history of the industry. The nature of the heavier grade of Canadian crude oil caused it to sink in regional waters, making clean-up operations lengthy and complex.

A "pinhole" leak was discovered earlier this week on an Enbridge pipeline in Michigan's Upper Peninsula, though no spill was associated with the incident.

Enbridge restarts oil pipeline after Canadian release - UPI.com

Enbridge shuts oil pipeline in Saskatchewan after release - UPI.com

 

CALGARY, Alberta, Dec. 18 (UPI) -- Canadian pipeline company Enbridge said it shut down a pipeline in Saskatchewan after more than 1,000 barrels of oil were spilled.

Enbridge closed its Line 4 pipeline after the release was discovered late Tuesday. The company said there were no environmental or public health concerns as the spill was limited to an on-site pumping station.

"Nearby residents and businesses may detect a faint odor," the company said in a statement Wednesday. "Air monitoring is being conducted and levels are well within safety limits."

Enbridge Line 4 carries an average 796,000 barrels of oil sourced from Alberta to a terminal point in Wisconsin. The company said it notified its clients of the pipeline's closure, but had no estimate for a return-to-service date.

Michigan Attorney General Bill Schuette said Tuesday a "pinhole" leak was discovered on the company's pipeline network in the state's Upper Peninsula. There was no resultant contamination, though the discovery sparked regional concerns about pipeline integrity.

Schuette is a member of a pipeline monitoring task force in the state, which he said continues its "exhaustive review of the safety of petroleum pipelines in Michigan, and to implement every possible safety precaution to protect the ecology and the economy of the Great Lakes."

An Enbridge spill from its Line 6b in southern Michigan in 2010 was the largest inland spill of its kind. A new Enbridge pipeline through Minnesota, Sandpiper, is slated to carry oil from the Bakken reserve area in North Dakota in 2017, a year later than expected.

Sandpiper would ship up to 225,000 bpd through Minnesota. It would then transfer oil to other pipelines for delivery to the U.S. and Canadian refinery markets.

Minnesota regulators in September called on Enbridge to study the environmental issues surrounding six alternative routes through the state proposed by outside groups.

Enbridge said it was undergoing a thorough investigation into the release from Line 4.

"We are committed to the goal of reaching zero spills and will thoroughly investigate the incident for lessons learned," the company

Enbridge shuts oil pipeline in Saskatchewan after release - UPI.com

Enbridge Leak Fixed With No Environmental Damage In Michigan's Upper Peninsula | WEMU

 

State officials are reporting what they say is a small natural gas leak in a pipeline in the Upper Peninsula that’s owned by Enbridge Energy.

Brad Wurfel of the Michigan Department of Environmental Quality says the leak near Manistique was discovered, reported, and fixed by Enbridge. He says there was a small amount of liquid natural gas
released, but it quickly evaporated.

“The good news is there’s no lingering environmental damage to discuss with this incident,” he said.

Enbridge Line 5 is 645 miles long and runs from Superior, Wisconsin, across Michigan’s Upper Peninsula and under the Straits of Mackinac to the Lower Peninsula, where it runs to Sarnia Ontario. Environmental
groups have targeted the 60-year-old pipeline for criticism, especially the portion that runs under the Straits of Mackinac.

“Enbridge Line 5 carries oil products over many sensitive areas of Michigan and it deserves an environmental review to protect the Great Lakes,” says David Holtz of the Sierra Club.

The DEQ’s Brad Wurfel says the leak near Manistique is not a signal there are potential problems with the underwater portions of the pipeline.

He says the above-ground and below-water portions of the line are built very differently. He says, unlike the above-ground pipes, the pipes under the straits don’t have welded seams.

“The reason this pipeline had a leak, as I understand it, is it there was a leak in a weld seam. There aren’t weld seams in the segment that runs under the lake. So it’s kind of apples to oranges from a regulatory perspective.”

Wurfel says the underwater pipes are welded where the sections are joined.

A state commission is looking into the safety of the Enbridge pipeline. Environmental groups say it should be subjected to a full review by state and federal authorities.

Enbridge Leak Fixed With No Environmental Damage In Michigan's Upper Peninsula | WEMU