Libertarians and conservatives are sometimes criticized for harping on the fact that what the federal government subsidizes, it must inevitably control. Yet not only is this proposition supported by logic and by bureaucratic modus operandi, it is demonstrated time and again for all to see. One of the latest cases involved HEW's plan to regulate health care delivery by means of Professional Standards Review Organizations (PSROs). Under the terms of the 1972 Social Security amendments, every medical society in the country is asked to set up a PSRO to pass judgment on individual doctor decisions involving Medicare and Medicaid patients; the system would also cover any future national health insurance plan (and thereby would apply to nearly everyone). If the medical society refuses to set up a PSRO, HEW itself will set one up for that area. The PSRO will decide whether medical care decisions were "medically necessary," whether the quality of care met "professionally recognized standards," and whether the means of administering the care were the most economical possible. In the case of "elective" hospital care or services, the PSRO could rule in advance on whether such care should be permitted.
Last June a group of doctors struck back. Led by the Association of American Physicians and Surgeons (AAPS) and three independent physicians, they have filed suit in federal court in Chicago, asking for an injunction to prevent HEW Secretary Caspar Weinberger from implementing the PSRO law, and seeking to have it declared unconstitutional. According to AAPS president Dr. Robert Jaggard, "If allowed to go into effect, the law would do irreparable damage to medical care in the United States." The AAPS suit claims that the law would destroy the confidential relationship between the doctor and patient, by authorizing government agents to examine patient records. It further contends that the law violates doctors' rights under the First, Fourth, Fifth, Seventh, and Ninth Amendments. Specifically, the law:
• Deprives doctors of their right to practice their profession, without due process of law
• Deprives them of their right to administer medical care in accordance with the highest standard of medical practice and their best professional judgment
• Deprives patients of their right to receive medical care from physicians of their choice
• Exposes doctors to irreconcilable conflicts between their professional responsibilities to their patients and their duties under law
• Imposes duties and obligations stated in vague and uncertain terms
• Establishes procedures to implement sanctions which violate due process of law
• Empowers private organizations that are inherently biased to exercise quasi-judicial authority over doctors
• Authorizes unreasonable search and seizure of records
• Violates the privacy of the physician-patient relationship
• Grants doctors legal immunity against tort law liability, thereby violating the rights of patients.
So far, the doctors have survived a federal attempt to prevent the case from being heard by a three-judge court. A decision in the federal district court was expected by press time. AAPS is prepared to carry their defense of private medical practice all the way to the Supreme Court.
• "PSRO Challenged in Federal Court," PRIVATE PRACTICE, Vol. 5, No. 8, August 1973, p. 14.
• "Automated Medicare Bill Review Will Check Quality of Medical Care," COMPUTER DECISIONS, June 1973, p. 4.
• "AAPS vs. Weinberger," JAG, Vol. 11, No. 8, July 4, 1973. (JAG is a newsletter published by Dr. Robert Jaggard, 10 E. Charles, Oelwein, Iowa 50662.)
• The AAPS may be reached at 2111 Enco Drive, Suite N-515, Oak Brook, IL 60521.
ENDING THE AVIATION RIP-OFF
For many years the users of the nation's airports and airways have been flying around the country at the expense of the American taxpayer (see "Hijacking the Taxpayer," REASON, January 1971). Claiming that aviation somehow provides a "unique public benefit," airlines and especially corporate and private aircraft owners and pilots argued for, and got, extensive federal subsidies. The beginning of the end of the subsidy era appears to be at hand, however, in the form of the Transportation Department's recently released cost allocation study. The study identifies the cost of providing airport and airways services, quantifies the extent of current subsidies, and sets forth a system of user charges that would approximate a market system in which everyone pays his own way.
The first finding of the study was that the cost of operating the federal airways system (including Transportation Department air traffic control R&D, FAA airport/airways material and services, aviation weather service, and FAA air traffic control) was $1.28 billion in 1972, and will be $1.43 billion in 1973, $1.58 billion in 1974, and $1.82 billion in 1975. Based on extent of use, airline users should be paying 50% of this total, "general aviation" (private and corporate flying) another 30%, and the federal government only 20% (to cover military and other government use of the system). In fact, however, the current system of taxes collects from non-government users only 55% of the total, leaving the federal (taxpayer) share at 45%, rather than 20%. The biggest subsidy by far goes to general aviation, which pays only 6% of the total bill, but accounts for 30% of the cost of the system. During 1971 general aviation's deficit was $246 million, while that of the airlines was only $18 million. Moreover, the general aviation deficit (subsidy) is growing at a faster rate than that of the airlines, and is projected at $400 million by 1975.
To correct this situation, the report urges the phase-in of a revised tax structure that would make users pay in proportion to their use of the system; not only would this eliminate the subsidy effect, it would also provide stronger incentives for overall efficiency. For airlines, such taxes would include a charge for IFR flight plans (based on mileage flown), landing fees to pay for terminal area control, and increased fuel and/or cargo taxes. For general aviation, where the main problem lies, the report suggests some combination of fuel taxes, ticket taxes for air-taxi operators, landing fees (especially important to promote efficient use of airport facilities), and flight plan fees.
Predictably, the general aviation lobby is gearing up for a massive assault on the report, in defense of their cozy subsidy arrangement. John H. Winant, president of the National Business Aircraft Association, calls the user charge philosophy "unrealistic" and argues that tradition is on the side of subsidies. General Aircraft Manufacturers Association president Edward Stimpson admits that "the strict approach of the economists makes us look pretty bad," and then pulls out of a hat the assertion that "there is at least a 50% public benefit in the national aviation system." In other words, there should arbitrarily be at least a 50% subsidy.
Perhaps more wisely than he realized, Stimpson noted that the same economic rationale as in the DoT report could be used against federal support of educational institutions, agricultural subsidies, health care, research programs, shipping, and "virtually every type of federal activity except possibly legislative and military functions." We couldn't agree more. Let's hope that the phase-out of aviation subsidies will be but the first step in phasing out all the rest.
• "Cost Allocation Studies Portend Tax Rises for General Aviation," AVIATION WEEK, 24 September 1973, p. 39.
• "Increased User Charges Sought," Charles E. Schneider, AVIATION WEEK, 1 October 1973, p. 12.
SAYING NO TO THE BUREAU OF MINES
One of the most common ploys of many large, established companies in an industry is to get the government to pass laws imposing costly restrictions on small, aggressive, bothersome competitors. Such laws are generally advocated in the name of high-sounding goals like consumer protection, professional standards, or worker safety. An example of the latter is the tough new mine safety laws passed by Congress in 1970. For large mines, many of the safety features required by the new laws were either already in effect, or could be added for a small cost, relative to the mine's production. For smaller mines, however, many of the regulations are proving both costly and unnecessary. As a result, many small mines across the country are going out of business, at a time of mounting energy shortages.
One small mine that is not closing down, despite the regulations, is the King Coal Mine in Hesperus, Colorado. Its owner, 69-year-old Violet ("Auntie Vi") Smith, is fighting the regulations tooth and claw, and has no intention of giving in. Signs posted on the Smith property proclaim:
No inspections allowed on this property. This is our property. We are capable of minding our own business. King Coal Mine.
Mrs. Smith claims to have punched ten inspectors and five U.S. marshals in chasing them off her property on various occasions. No inspectors have visited the mine since last March. She is currently under a federal injunction restraining her from preventing mine inspectors from entering the mine, but that doesn't phase "Auntie Vi": "When the next bunch comes in, I'm ready for them," she declares. Bureau of Mines officials privately acknowledge that the situation is a standoff.
Mrs. Smith and her husband have operated the King Coal Mine since 1934. They have six hired miners who have been with them for years, and take all the safety precautions they consider reasonable. At first, Mrs. Smith attempted to go along with the regulations, but found many of them ridiculous:
• She refused to put a dynamite warning sign on her powder shed because dynamite thefts had been frequent and she saw no point in advertising its location.
• She refused to install showers in the mine.
• She refused to post "No Smoking" signs, since none of the miners smoke in the mine.
Petty harassment over missing imposed deadlines, plus the high cost of some of the required equipment, finally proved to be too much. When an inspector gave her nine books of rules and regulations, she threw them back in his face. Despite large numbers of summonses and contempt of court filings, Auntie Vi reports "I've ignored them all. And I haven't paid one cent of the many fines against me." She and her miners just continue doing their jobs, mining coal as safely and as economically as they know how.
Her forthright stand for the right to use her property as she sees fit, and her uncompromising battle with the Bureau of Mines bureaucracy have made Violet Smith a hero to small miners across the country. She was recently treated to a tour of Iowa coal fields by miners in Knoxville, Iowa who held a banquet in her honor. Apparently the victor, after three years of resistance to the Bureau of Mines, Violet Smith has this advice for those faced with visits from federal inspectors. "Tell them," she says, "to go to hell."
• "Woman Defies U.S. in Running Coal Mine," Charles Hillinger, LOS ANGELES TIMES, 18 September 1973.
Despite the conventional wisdom that the liberals consistently favor big government and the conservatives a more limited state, a recent study indicates that this just isn't so. A group of college students called the Libertarian Task Force, headed by Harvard history student Lawrence J. Siskind, revealed that among the biggest 15 spenders in the Senate are conservatives Barry Goldwater, Peter Dominick, Robert Taft, and Roman Hruska. Conversely, among the lowest 15 spenders are such liberal Democrats as Mike Mansfield, J.W. Fulbright, William Proxmire, and Abraham Ribicoff. The biggest spenders of all, however, are liberal Democrats, specifically John Pastore (#1), Hubert Humphrey (#2), Philip A. Hart (#3), Edmund Muskie (#4), and Jennings Randolph (#5). Four of the five lowest spenders were conservative Republicans: William V. Roth (lowest), William Brock, Norris Cotton, Wallace Bennett, and Harry F. Byrd, Jr.
The ratings for each Senator are based on the cost of appropriations voted for in 1972, together with the additional spending he proposed for 1973. By using all the votes, the rating avoids the problem of bias in selecting "key" issues, as in the case of the ADA, ACA, and COPE ratings. The complete results, including a Senator-by-Senator analysis of spending votes, are available as a $10 bound volume from the Libertarian Task Force (15 Yale Street, Winchester, MA 01890).
• "Students Rate Senators on Spending Public $$," WASHINGTON POST wire, 3 Sept 1973.
SECOND THOUGHTS ON GUN CONTROL
Gun control has long been a left-wing cause in the United States, and opponents of gun control laws have been calumnied, whatever their arguments. Yet in the wake of the Chilean coup, the left may begin to have second thoughts about the wisdom of an unarmed populace. Chile had a very strong gun control law, passed under the pre-Allende Christian Democratic regime. According to Dr. Jorge Nef, a Chilean political scientist, the law had been lobbied for by the military. "This law provided them with a legitimate way to disarm everyone, even rifles, knives, BB guns, everything." Thus, when it came time for the military coup, those segments of the population which might have resisted were unarmed and defenseless. The lesson should be clear: an unarmed citizenry has no way to resist the State.
• "Chilean Calls Junta 'Nazis'," SANTA BARBARA NEWS AND REVIEW, 21 September 1973, p. 8.