The Unintended Consequences of Regulation
An end to the Senate's "candy desk"?
6 Jan 2007 in Legislation, People & Institutions
In the Wall Street Journal's A-hed column, Sarah Lueck reports on the possible demise of the Senate's "candy desk." The story, interesting in its own right, has lessons for regulatory policy, the incentive effects of zero prices, and understanding...
Lueck recounts how the history of the "candy desk" -- a strategically located repository of free sweets for Senators ever since Republican Sen. George Murphy began dispensing them from his desk in 1968. The desk is located in a high traffic zone close to the elevators.
After Murphy left office in 1971, the candy desk proceeded through numerous temporary owners until captured by Sen. Rick Santorum, who kept it as he rose in seniority even though it's a backbencher's desk. With Santorum gone, the candy desk may be history.
The Senate has both stringent ethics rules and innumerable exemptions, and an exemption historically has been exploited for the benefit of Senate sweet tooths. Rule XXXV(a)(2) prohibits Members from accepting gifts worth more than $100 during a calendar year from any single source. Section (c) lists a bevy of exemptions, including "[d]onations of products from the State that the Member represents that are intended primarily for promotional purposes, such as display or free distribution, and are of minimal value to any individual recipient" (12).
When Santorum inherited the candy desk, he availed himself of this exemption and stocked the desk with products from Hershey's and other Pennsylvania-based candy makers. Lueck reports that Hershey's alone has been supplying 400 pounds of candy per year.
With Santorum gone in the 110th Congress, the candy-desk is assigned to Sen. Craig Thomas. The rules permitted Santorum to receive candy from Pennsylvania-based confectioners but they prohibit Thomas from doing the same unless the candy comes from Wyoming. Wyoming is not a candy-manufacturing powerhouse, and buffalo jerky just isn't the same.
Such arbitrary logic is widely observed in federal regulation, especially when agencies resort to design standards (which tell regulated parties exactly what they must do) rather than performance standards (which tell regulated parties what they have to achieve without regard for how they do it). Design standards are favored by lawyers because it is easy to monitor compliance even if it's impossible to evaluate performance. Performance standards are favored by economists (who like to encourage innovation) and engineers (who like to innovate). Congress is brimming with lawyers, but has few economists and engineers. Ergo, the $100 gift limit combined with exemptions, exceptions and variances that require a lawyer to interpret.
We were struck by other aspects of the story reported but left hanging by Lueck. For example, the 400 pounds of chocolate supplied annually by Hershey's alone works out to eight pounds per Member -- more if, as seems likely, some Senators abstain for dietary or health reasons (such as Type II diabetes) and others are chocoholics. Lueck equates 400 pounds of chocolate to 38,000 Hershey's Kisses, each of which contains 4.6 grams and 25.6 calories. Multiplying by 38,000 and dividing by 50 yields 3,462 grams and 19,456 calories per Senator per year. Assuming a 2,000 calorie per day healthy diet, Senators are on average getting 10 additional days' caloric intake per year from the candy desk. Assuming they are on the Senate floor 100 days per year, they are each consuming an additional eight Kiss-equivalents and 200 calories each day. It takes about an hour of walking at 3 mph or half an hour running upstairs to burn off these extra calories. (But remember that the candy desk is located close to the elevators)
Such are the perils of zero prices. Like everyone else, Senators will consume candy until the amount of pleasure they gain declines to equal the price they pay. But with a zero price, that means they eat chocolate until they get no more pleasure at all from it -- or get sick, whichever comes first. At any positive price, Senators would consume less candy.
One way Senators can be protected from this health threat is to get rid of the candy desk. Senate lawyers would appreciate the ease of enforcement, but bans are notoriously crude and inefficient regulatory instruments. They also invite unintended consequences, some of which can be easily predicted. A better approach, and one more in keeping with the Senate's duties, is to impose a sin tax on Senate sweets. Using a static analysis favored by the Congressional Budget Office, the federal deficit could be eliminated just by imposing a tax of approximately $4,500 per Kiss.
We're confident the Senate will find a way to solve this problem short of giving up the candy desk or paying a sin tax. After all, there never was a logical basis for permitting Senators from accepting as gifts products made within their own States but prohibiting them from accepting products made in other States. Both must be unethical if either one is. More plausibly, the exemption for home State products was added to avoid some of the rule's more obvious unintended consequences. Now that the rule has a new unintended consequence, a new carefully Gerrymandered exemption must be devised. In fact, Rule XXXV already provides a loophole if the Senate wants to claim it. Paragraph (6) conveniently exempts "[a]ny gift from another Member, officer, or employee of the Senate or the House of Representatives." Sen. Thomas can freely accept candy Pennsylvania confectioners give to to Sen. Arlen Specter. Alternatively, Sens. Frank Lautenberg or Bob Menendez can send Sen. Thomas custom printed valentines.
Otherwise, how will Senators retain the privilege of getting unlimited free Kisses?
Showing our work:
- 4.6 g and 25.6 calories per Hershey Kiss
- x 38,000 kisses = 173,111 g and 972,800 calories
- / 50 Senators = 3,462 g and Senator and 19,456 calories per Senator
- / 100 days per year on the Senate floor implies
- 38,000 / 100 days / 50 Senators = 7.6 Hershey's Kisses per day
- 19,456 calories / 100 / 50 Senators = 195 calories per day
