How many clicks does it take to get to the center of consumer harm? Well a lawsuit filed this week by the currently-partisan Federal Trade Commissi...

How many clicks does it take to get to the center of consumer harm? Well, a lawsuit filed this week by the currently-partisan Federal Trade Commission (FTC) has once again targeted America’s world-leading tech sector, this time with a surprise lawsuit against Amazon for, in part, making it purportedly too difficult to unsubscribe from their immensely popular Prime service. FTC counted, and according to them, it takes six clicks (not a typo, 6 clicks) to complete the process and that is sufficient justification to file a multi-million dollar suit using taxpayer resources against Amazon. However, the team here at TPA discovered ([link removed]) a problem with this case in almost as short amount of time as it takes to quit Prime. To file a comment with the FTC in the legally-mandated public comment process, starting on the FTC homepage, it takes a minimum of seven clicks. It’s hard to see how a federal judge will find that the burden on the
average consumer to quit Amazon Prime is too high at six clicks when the process for the public to redress a critical agency of the federal government starts at seven. TPA is hopeful this case is quickly thrown out before too many more billable hours are racked up at taxpayer expense harassing Amazon over one of the mildest cancelation processes in the market today.

Infrastructure Weak – A Lesson from Philadelphia

One of the most lasting images from June is of the utter devastation caused by a tanker truck fire on interstate highway 95 (I-95) in Philadelphia. The fire collapsed the northbound side of a bridge on I-95 near Philadelphia and compromised the integrity of the southbound side such that it was no longer suitable to handle traffic. Public officials scrambled to estimate the costs and timeline of repair while travelers were left to find alternatives to this key stretch of the nation’s longest north-to-south highway. Thankfully, temporary repairs now have the highway reopened. While this fire exposed weaknesses in I-95’s foundations, it also brought to light some shameful and longstanding public policy failures in the United States. Despite infrastructure being a frequent topic of conversation on Capitol Hill, it is often used as a trojan horse to advance other priorities. This neglect has led to highways, bridges, and tunnels across the United States severely lacking in structural integrity.

Late in 2021, lawmakers in Washington passed the much-vaunted “infrastructure bill” into law. The bill totaled over $1 trillion in investment. However, traditional infrastructure only received $127 billion – a little over ten percent – of the bill’s total funding. This is despite President Biden claiming that the passage of the bill meant “America is moving again,” and was in response to “countless speeches and promises, white papers from the experts” about the need to improve the nation’s roads, bridges, and other forms of infrastructure. The bill included $15 billion for electric vehicle subsidies. This came on top of the billions in tax credits and subsidies the electric vehicle (EV) industry already gets from the government. EVs have not sufficiently caught on in the market and are not being purchased at expected rates. Further, more uptake in the future threatens the sustainability of the electrical grid. Despite these factors, billions went to EVs instead of highways. The bill also
included $85 billion to get the government more involved in areas better left to the private sector. In fact, $20 billion of that total was dedicated for the Department of Energy to invest in energy startups largely at its own discretion. The agency had already failed at a similar venture in the past. Another $65 billion went toward building high-speed internet and let the government get involved in a traditionally private enterprise. Last week, the Federal Communications Commission (FCC) demonstrated the folly of this by publishing three maps, showing how comprehensively Verizon, AT&T, and T-Mobile cover the nation with high-speed internet.

Federal policy has also exacerbated traffic congestion on I-95’s northeast corridor and deprived motorists of alternate routes. The Jones Act – one of America’s most nefarious laws – restricts domestic water commerce to ships that are built, owned, and flagged in the United States and utilizing American crews. This creates very few options for travel between American ports. In February, the Cato Institute conducted a study, analyzing the Jones Act’s impact on Northeastern traffic. They found the region to be home of six of the ten most congested roads in America and two of the five most congested cities in the world. A large part of this is because of the sheer volume of truckers moving freight on these northeastern highways, and – as any motorist knows – driving more slowly than the average highway traveler. Shipping between American ports would be more efficient because ships can carry more in single trips. It would also be more environmentally friendly, given the emissions savings that
would emerge from the resulting efficiency. However, protectionists and maritime shipping unions have prevented this law from being taken off the books for over a hundred years. We are now seeing the costs more clearly. It has strained the highways and left many without alternatives when disaster occurs.

The tanker truck fire was certainly a freak accident. However, there were several ways policymakers could have mitigated the fallout from such an incident. They could have dedicated infrastructure bills to traditional infrastructure and empowered American industry to develop viable contingencies. However, special interests have prevented both from occurring. In the months it will surely take to permanently repair this section of I-95, policymakers should reflect on these mistakes and move to assuage them quickly.


An Easy Way to Save $1 Billion

The 118th Congress has been defined by tense negotiations over the debt ceiling and haggling over federal spending. With a deal now signed into law, lawmakers should refocus their energy on a smart bipartisan reform bill that offers a clear path to more than $1 billion in annual cost savings across the government. The Strengthening Agency Management and Oversight of Software Assets (SAMOSA) Act reforms the way the federal government buys technology. The bill’s sponsor, Sen. Bill Cassidy (R-La.), notes that SAMOSA “requires agencies to spend their money as if a taxpayer was spending their own money — wisely.” The bill presents a rare bipartisan win for fiscal responsibility at a time when 60 percent of taxpayers are increasingly concerned about government spending. The U.S. government is the single largest consumer of information technology products in the world. The government’s IT contracts for services like email, messaging, word processing, and cloud services make up billions of dollars
of government spending each year. With such scale, these contracts should represent an opportunity for technology companies large and small to compete to provide innovative products that equip our most critical government agencies with the best and most secure tools possible — while driving significant value for taxpayers. Unfortunately, that’s not the case. Instead, a single vendor dominates federal contracts with an 85 percent market share, driving up significant costs through licensing terms for which taxpayers are left holding the bag. Microsoft and Oracle (two of the world’s largest technology providers) receive 25 percent to 30 percent of their lucrative government contracts without meaningful competition, according to a January report. Because of this apparent lack of competition, legacy vendors have no incentives to innovate on behalf of the government and instead can leverage business practices to lock their government customers into long-term contracts and partnerships that can
hamper inter-agency collaboration and integration with those using competitors’ products.


The way our government buys its technology is broken. SAMOSA seeks to restore competition, and the legislation is gaining traction among lawmakers. Ultimately, the bill would increase innovation and reduce costs through transparency, giving both government officials and taxpayers more visibility into how and what federal agencies are buying. Decades of these practices have created a culture of inertia among federal IT professionals responsible for billions of taxpayer dollars in technology procurement. Current practices can hinder a shift to newer, cheaper, and more secure IT vendors because it seems prohibitively difficult, costly, and time-consuming. These barriers to change are significant, and without intervention from Congress, agencies will remain handcuffed by the restrictive licensing terms and aggressive contracts that created this environment in the first place. In today’s technology landscape, American taxpayers change their phone plans or media subscriptions to avoid hidden
fees, latent charges, or contract terms that hike costs. Similarly, companies can pick and choose from a range of best-in-class vendors to optimize their business needs. Yet the government does not have the same flexibility and freedom. The SAMOSA Act would fix that. The bill’s main function is transparency, requiring federal agencies to conduct independent, comprehensive assessments of their software purchasing practices and report their findings to Congress, the Office of Management and Budget (OMB), and the General Services Administration (GSA). With this information, the bill further requires the Federal Chief Information Officer to create a government-wide strategy for IT procurement that promotes choice and interoperability, removing barriers to competition. The Government Accountability Office (GAO) would then monitor progress toward those goals and ultimately hold the companies accountable if they lock agencies into bad deals with their licensing practices.

As we have experienced from debt-ceiling negotiations, there isn’t much common ground between Democrats and Republicans when it comes to budgeting. It often comes down to bartering and bargaining, with few winners and many losers. Following the debt-ceiling debacle, it is important to not halt the momentum toward fiscal responsibility in government that the talks have created. Both sides agree: IT spending and licensing costs are a rare opportunity to deliver a real win for the American people — that’s why the Senate Committee on Homeland Security and Governmental Affairs advanced the SAMOSA Act unanimously earlier in May. Taxpayers should not shoulder the burden of an inefficient procurement process that has allowed legacy technology vendors to tighten their grip on government contracts and charge for what are often outdated and under-sophisticated products. The SAMOSA Act makes sure they won’t.

BLOGS:

Tuesday: How Congress Could Save an Easy Billion Dollars ASAP ([link removed])

Wednesday: We Spent $1 Trillion On ‘Infrastructure.’ All We Have To Show For It Is A Highway Collapse ([link removed])

Thursday: Bill of the Month: Red Tape Reduction Act ([link removed])

Friday: Op-Ed: FDA barring life-saving chemotherapies from market ([link removed])



MEDIA:

June 16, 2023: The American Institute for Economic Research ([link removed]) ran TPA’s op-ed, “How Trump and Biden Are Blowing Up the Free-Trade System America Worked So Hard to Build.”

June 18, 2023: Inside Sources ran TPA’s op-ed, “Postal Service Fails to Protect Workers from Rising Crime. ([link removed]) ”

June 19, 2023: WBFF Fox45 ([link removed]) (Baltimore, Md.) interviewed me about the Baltimore red line.

June 19, 2023: The Center Square ([link removed]) ran TPA’s op-ed, “FDA barring life-saving chemotherapies from market.”

June 19, 2023: Issues & Insights ran TPA’s op-ed, “To Fight Next Pandemic, Revamp FDA Rules ([link removed]) .”

June 19, 2023: The Messenger ([link removed]) ran TPA’s op-ed, “How Congress Could Save an Easy Billion Dollars ASAP.”

June 19, 2023: The Manila Bulletin (Manila, Philippines) mentioned TPA in their story, “Health, policy experts express concern over WHO 'going rogue’.”

June 21, 2023: The Daily Caller ([link removed]) ran TPA’s op-ed, “We Spent $1 Trillion On ‘Infrastructure.’ All We Have To Show For It Is A Highway Collapse.”

June 22, 2023: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about tax reform and the Federal Trade Commission’s case against Amazon.

June 22, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about infrastructure spending.

June 22, 2023: The Boston Herald ( ([link removed]) Boston, Mass.) ran TPA’s op-ed, “Postal Service fails to protect workers from rising crime.”

Have a great weekend!

Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

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