The idiocy of the Jones Act

In Puerto Rico, hundreds of thousands of Americans are without power thanks to the damage done by Hurricane Fiona. The island’s governor, Pedro Pierluisi, has warned of a shortage of diesel fuel needed to keep generators running that threatens lives and security.

To this serious problem there is a straightforward solution: a ship with 300,000 barrels of diesel is floating offshore. The only issue is that for the ship to dock in Puerto Rico and deliver that diesel would be illegal. Puerto Ricans are getting a painful lesson in the idiocy of the Jones Act, the century-old legislation that requires goods shipped between points in the United States be carried on ships that are US-flagged, US-built and mostly US-owned.

Pierluisi is urging the Biden administration to waive the restrictions. But there are a number of reasons why this hasn’t happened. First, Congress narrowed the legal basis for such waivers in 2020. (Three years earlier the Trump administration had used such a waiver in the aftermath of Hurricane Maria.)

For the Jones Act to be waived, the administration must demonstrate a higher level of national security urgency than before that change. The White House claims it does not have the power to do so under the current circumstances. But it’s not just a legal matter. A Washington Post story hints at the political tension: “The debate highlights the challenge Biden faces as he balances competing appeals from two constituencies he has pledged to champion as president: labor unions and the residents of Puerto Rico.”

Puerto Ricans aren’t the only Americans paying a high price for the Jones Act. In New England, lack of pipeline connections to refining centers in the rest of the continental United States means the region must transport the liquefied natural gas it uses as its primary energy source during cold winters via boat. The US has plenty of LNG. What it lacks, however, are US-made boats to transport that LNG. And so, thanks to the Jones Act, it is effectively illegal for New England to use US LNG. Instead, the region has imported its LNG, including from Russia.

One long-term solution would be to build some more pipelines, but that will do little in the short term. Which is why New England’s governors last month wrote to Biden asking for a suspension of the Jones Act. For a president committed to both the fight against Putin and easing the cost of living for American households, the move should be a no-brainer. In fact, if Biden is committed to both of those things he should go further and scrap the legislation altogether. But don’t hold your breath. to do so would enrage the unions. And Biden has vowed to be the “most pro-union president” in history.

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The challenge to debt forgiveness finally arrives

When Joe Biden announced his student debt cancellation plan a month ago, the White House was understandably sheepish when it came to discussions of the plan’s price tag. An administration midway through an Inflation Reduction Act victory lap was determined to talk about anything but cost. Four weeks on, the nonpartisan Congressional Budget Office’s estimate of the cost is finally in. They put the figure at $400 billion. That is even higher than the $360 billion estimation by the Committee for a Responsible Federal Budget. The White House is quibbling with the methodology, but those complaints would carry more meaning if the administration would release full costings of their own.

Meanwhile, the first legal challenge to the move has arrived. On Tuesday the Pacific Legal Foundation filed a lawsuit in Indiana that accuses the Department of Education of “an end-run around Congress” which “threatens to enact profound and transformational policy that will have untold economic impacts. The administration’s lawless action should be stopped immediately.” The plaintiffs have asked for an injunction that would halt the program and requested that a judge make that decision by October 1.

Manchin punts

Joe Manchin yesterday abandoned efforts to affix his permitting reform proposal to government funding legislation that needs to be passed by the end of the week to avoid a government shutdown. The measure was doomed when it became clear that enough Republicans would be voting against. Explaining the move, Manchin lamented that senators were “allowing politics to put the energy security of our nation at risk.”

But is the West Virginia’s senator’s withdrawal a tactical retreat or a defeat? Passage of permitting reform was Manchin’s price for supporting the Inflation Reduction Act this summer. Chuck Schumer is, at least publicly, committed to ensuring “responsible permitting reform before the end of the year.” And there is an appetite for bipartisan deal-making on energy, which will presumably become easier after the midterms. But however optimistic Manchin may be about his top priority eventually passing, he has missed his moment of maximum leverage.

What you should be reading today

Jacob Heilbrunn: Did Russia sabotage its own pipelines?
Roger Kimball: Donald Trump is looking forward
Mark Krikorian: What would securing the border actually look like?
Michael Scherer et al, Washington Post: How Kevin McCarthy’s political machine worked to sway the GOP field
Samuel Goldman, Modern Age: Conservatism remodeled
Ilya Shapiro, City Journal: What to look for in the new Supreme Court term

Poll watch

President Biden job approval
Approve: 42.9 percent
Disapprove: 53.2 percent
Net approval: -10.3 (RCP average)

Arizona governor’s race
Katie Hobbs (D): 46 percent
Kari Lake: 49 percent (Marist)

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