Menthol Bans Will Spell Financial Hit to State Coffers

Back in March, the Food and Drug Administration (FDA) announced it was planning “to prohibit menthol as a characterizing flavor in cigarettes and prohibit all characterizing flavors (other than tobacco) in cigars.” The proposal is rooted in the agency’s desire to “significantly reduce disease and death from the use of combusted tobacco products, the leading cause of preventable death in the U.S., by reducing youth experimentation and addiction and increasing the number of smokers that quit.” While the desire to have fewer Americans smoke is a good public policy, a prohibition on menthol cigarettes and flavored cigars could have significant health and financial ramifications beyond Washington, denying all 50 states access to an essential source of revenue. While public finances should never trump public health, policymakers must consider the full ramifications of their decisions before proceeding with any new rules. Failing to do so could create more intractable problems further…

Stablecoin Legislation Seeks to Preserve the Growth of Blockchain-Based Currency

…Federal Trade Commission (FTC). In addition to these two agencies, cryptocurrencies can also be covered by the Commodity Futures Trading Commission, the Internal Revenue Service, or the Financial Crimes Enforcement Network. If  passed, the Stablecoin TRUST Act would clarify some of the regulatory confusion for stablecoins by establishing that stablecoins are not securities, and would therefore not fall under the purview of the SEC. According to Brummer, this would put the stablecoins under the FTC’s jurisdiction. The bill also creates a federal license for Stablecoin issuers with specific requirements such as capital requirements, liquidity requirements, risk management, and reserve asset requirements to protect the value of stablecoins for the owners of the currency. Clarifying regulatory confusion is essential as uncertainty inhibits the growth and widespread use. Telegram already announced in 2020 that it would discontinue operations in the U.S. due to regulatory uncertainty and disagreement over whether the company’s offerings were subject…

Congress Must Act Quickly to Ensure the FCC’s Spectrum Authority is Reauthorized

The Federal Communication Commission (FCC), which is tasked with hosting annual auctions for commercial wireless providers, may soon lose the ability to license radio frequency bands if its spectrum authority expires on September 30th. The FCC’s current authority only lasts for 10 years and must be renewed by Congress. Should Congress fail to act in a timely manner, the consequences could be devastating. The FCC collects billions of dollars each year from the sale of spectrum. This money is used to offset public debt and pay for a variety of important public projects such as FirstNet emergency communication networks. It also provides the federal government with a steady stream of revenue that cannot be easily replaced. To do so would require raising taxes on Americans who can ill afford higher costs during a time of high inflation. Yet, after the July 29th auction of the 2.5 Gigahertz band licenses, the…

ACI Files Comments with the U.S. Postal Commission Regarding Contributions to Institutional Costs

…and package segment has accelerated 22.9 percent in just a two-year period (7,578,000 units in FY2021 compared 6,165,000 in FY2019).[2] Despite growth of the product segment that the Postal Service considers an essential competitive market venture, and critical to the formation of a modern postal system, the institution’s financial difficulties have notably accelerated. While Congress has largely absolved the USPS’ net losses of $9.2 billion and $4.2 billion during the pandemic years, and for many years prior, significant concerns remain. Specifically, the Postal Service Reform Act omits business and operational overhauls that would counteract escalating losses stemming from its own decision-making and authority. The Postal Service has cumulatively posted $11.6 billion in controllable losses since FY2018 and it projects to lose $4.1 billion in FY2022.[3] It should concern the Commission that the origin of such operational losses largely remain unknown, especially as expenses are projected to grow beyond the institution’s…

American Consumer Institute Finds Current Efforts to Target Large Tech Firms May Harm Consumers

…Steve Pociask dispels the notion that the existence of large firms in certain markets will harm consumers. He writes, “is the diffusion of market power across a handful of large firms more concerning than concentrating all of that power in the hands of a single government agency?” His work shows that large companies can, in many cases, “increase productivity and lower consumer prices” for consumers. “The key to antitrust enforcement,” he writes, “is whether consumer welfare is lessened.” He concludes that retaining a consumer welfare test is essential to justifying any antitrust actions. ACI’s latest ConsumerGram should serve as a warning to lawmakers and federal regulators not to rush ahead and make antitrust laws overly strict without first considering the harm that blanket restrictions may have on consumers. In the end, these regulations should be about making consumers better off, not worse off.   You can read the ConsumerGram online….

ACI Comments on DOE’s Proposed Changes Regarding 90/10 Rule and Career College Impacts

…return on investment for low-income students found that when accounting for graduation rates and earnings of Pell Grant students, the bachelors-level colleges with the best return on investment for low-income students are two for-profit colleges, the Neumont College of Art and Design and SAE Expression College. The same study found that when ratings are designed to reflect graduation rates and long-term earnings, six of the top ten associate’s level colleges were private for-profit institutions. Career and proprietary colleges play an essential role in our education system, and we should think carefully before enacting measures that will punish students who freely choose to attend these schools. If the Department truly wants to help students, then the best course of action would be system-wide transparency and accountability measures to ensure that every student can get the quality education they need. We would be happy to work with you on developing these standards….

The Economic Standard: DOE’s War on Career Colleges Will Harm the Very Students It Seeks to Help

…comparing nonprofit and proprietary schools, Heritage Foundation found that “when apples to apples comparisons are made between program types, for-profit colleges even graduate students at higher rates than their traditional college counterparts.” A recent Georgetown University study focused on return on investment for low-income students found that when accounting for graduation rates and earnings of Pell Grant students, the bachelors-level colleges with the best return on investment for low-income students are two for-profit colleges, the Neumont College of Art and Design and SAE Expression College. The same study found that when ratings are designed to reflect graduation rates and long-term earnings, six of the top ten associate’s level colleges were private for-profit institutions. Career and proprietary colleges play an essential role in our education system and DoE’s scapegoating of these institutions are harming students. Instead, the Department should implement system-wide transparency and accountability measures to ensure that every American can…

Clear Regulations are Essential for Cryptocurrency

Cryptocurrency has moved from a fringe interest to a prominent player in global financial markets. Unfortunately, American lawmakers are struggling to keep up, resulting in contradictory regulations and creating a hostile regulatory environment. Lawmakers need to create clear and transparent rules to facilitate cryptocurrency’s growth and establish the U.S.’ leadership in global markets. Under minimal regulation, cryptocurrency has boomed in the U.S., with 16 percent of Americans reporting having used or invested in cryptocurrency, with usage rates being almost twice as high, at 31 percent, for populations 18 to 29. This suggests that cryptocurrencies will become even more prevalent in the future. Crypto is also a growing part of the global and U.S. economy. Over 35 percent of the world’s Bitcoin mining occurs in the U.S., and Bitcoin represents 66 percent of a roughly $2 trillion market. While the use of crypto is on the rise, regulators are struggling to…

Capping Interest Rates is Bad For New Mexico Consumers

…offers an essential source of credit to those who are excluded from traditional lenders. Payday loans also allow New Mexicans to pay for surprise bills. A 2016 study by the Global Strategy Group, the Terrance Group, and the Community Financial Services Association of America found that “96% say their payday loans…have been useful to them personally” in meeting unexpected financial commitments. Furthermore, borrowers have stated the principal reason they turned to payday loans (57%) was “to pay for an unexpected expense – such as car repair or medical emergency.” Removing the incentive for payday loan companies to undertake these significantly riskier loans would ultimately give New Mexicans fewer options when faced with surprise bills, forcing them into unnecessary economic insecurity. While legislative efforts to rein in payday loans may be well-intentioned and politically popular, these efforts pose substantial risks to low-income New Mexicans who depend on access to short-term credit that traditional lenders cannot…

The Teen Vaping Smokescreen

…regulations attempting to solve a problem that does not exist. After recognizing that these regulations are predicated on fictional evidence, it is essential to consider what consumers will lose because of overregulation. First, studies routinely show that switching to electronic cigarettes could save millions of lives each year and improve health outcomes for those looking to quit. For example, a study from September 2021 found that for every 100 people using nicotine e‐cigarettes to stop smoking, 9 to 14 might successfully stop, compared with only 6 of 100 people using nicotine‐replacement therapy, 7 of 100 using nicotine‐free e‐cigarettes, or four of 100 people having no support or behavioral support only.” Additionally, researchers from Georgetown University found there would be 6.6 million fewer deaths over a ten-year period by replacing cigarettes with electronic cigarettes. Fewer people would die simply because electronic cigarettes do not “contain cancer-causing tar,” unlike traditional combustible cigarettes….