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Recent Policy Studies
International Trade/FinanceBy Derek Scissors, The Heritage FoundationWebMemo, 02/09/2011
The entire global economy would benefit if the dollar-yuan exchange rate were driven by market demand. It would contribute to a U.S.-China economic relationship that is more balanced, more sustainable, and more beneficial to people in both countries in a way that a government-ordered revaluation would not. The U.S. can help alleviate Chinese concerns and spur financial reform in China. It would require American assistance—and insistence—on a schedule for capital account liberalization.
National SecurityBy James Sherk, The Heritage FoundationWebMemo, 02/09/2011
The Obama Administration has decided that the government will engage in limited collective bargaining with airline security screeners. This decision will reduce the Transportation Security Administration’s (TSA) effectiveness. In most parts of government, labor disputes and union inefficiencies raise costs for taxpayers. In national security agencies, they also put lives at risk. Federal law prohibits most national security agencies from unionizing for exactly this reason. The Secret Service, the FBI, and the CIA do not collectively bargain. America cannot afford conflict between unions and management that could allow a terrorist attack to succeed.
EducationBy Matthew Ladner, Friedman Foundation for Educational ChoiceReport, 02/09/2011
Ten years after Governor Jeb Bush’s election in Florida and subsequent work to improve K-12 education, this study lays out the cumulative impact of his reforms, using data from the National Assessment of Educational Progress (NAEP). Ultimately, Florida’s reforms largely yielded positive results. This report suggests how Tennessee policymakers could emulate the Sunshine State. Florida’s work was not easy, but the academic success that has occurred should make it easier for other states to follow, including Tennessee.
Elections, Transparency, & AccountabilityBy J. Ammon Smartt, Keith W. Randall, Federalist SocietyReport, 02/09/2011
Under the Tennessee Constitution, attorneys general are selected by the justices of the Supreme Court of Tennessee for eight-year terms with no limit on term renewals. Justices of the Tennessee Supreme Court, in turn, are selected by a version of the Missouri Plan known as the “Tennessee Plan,” which calls for the governor to fill vacancies on the court from a list of three judges submitted by a nominating commission composed primarily of lawyers; these justices are eventually subject to retention referenda where voters are asked whether to retain the justices. This paper explores the effects of both judicial selection generally, and the Tennessee Plan specifically, on the attorney general of Tennessee. It first examines the methods used by states to select attorneys general. Then, it examines Tennessee’s selection method. Finally, this paper examines Tennessee’s method of selecting attorneys general in relation to issues of governmental accountability.
EducationBy Commonwealth Foundation, Commonwealth Foundation for Public Policy AlternativesPolicy Points, 02/09/2011
Pennsylvania’s Senate Bill 1, The Opportunity Scholarship Act, would expand scholarships available to children in lower- and middle-income families through the Educational Improvement Tax Credit program and provide low-income students in chronically underperforming public schools with a state-funded voucher. While Senate Bill 1 will dramatically expand opportunities to families who lack the financial ability to access educational alternatives for their children, the Commonwealth Foundation suggests that all families be afforded such opportunities-regardless of income or zip code.
EducationBy Commonwealth Foundation, Commonwealth Foundation for Public Policy AlternativesPolicy Points, 02/09/2011
This series of policy points discusses the need for school choice, created by both fiscal problems and lack of public school performance. It discusses why school choice is important, and it lays out the state of school choice options in Pennsylvania. Additionally, it examines the myriad of benefits accrued when school choice is permitted.
Natural Resources, Energy, Environment, & ScienceBy American Legislative Exchange Council, American Legislative Exchange CouncilReport, 02/09/2011
The Environmental Protection Agency has begun developing and finalizing a slew of overreaching and inefficient air and water rules that, over the next several years, will dramatically increase energy costs, cause enormous negative impacts to jobs and the economy, irreparably damage the competitiveness of American business, and trample on state sovereignty in the process. This report outlines the costs of these major EPA rules, tells the true story of America’s modern clean air and water successes, and outlines best practices for state legislators (including following the many states that are considering resolutions in 2011 to call for Congress to slow and stop this regulatory onslaught). The report also explores more than 15 pieces of ALEC model legislation related to this topic.
Foreign Policy/International AffairsBy Roger Bate, American Enterprise InstituteCongressional Staff Foreign Policy Brief , 02/09/2011
More than thirty-four million dollars worth of grants for the procurement of lifesaving drugs and other commodities for the world’s poor have been stolen from the UN-backed, Geneva-based Global Fund to Fight AIDS TB. Committees of the new US Congress may want to hold hearings concerning halting aid dispersion to the Fund in the coming weeks. If US were to withhold funding, the Global Fund would have to immediately halt many grant payments, and potentially cancel huge upcoming aid disbursements. While this corruption must be halted, the Global Fund should not be disbanded because it has been more transparent than other agencies. Indeed, if any good can come out of these problems, it will be that other agencies are encouraged to become as transparent as the Global Fund.
EducationBy Andrew P. Kelly, Mark Schneider, American Enterprise InstituteEducation Outlook, 02/09/2011
Over the next several months, high school seniors across the country will decide where to go to college. Many students and their parents will base the decision on program offerings, cost, and distance from home, but they may be overlooking a vital piece of information. A recent study of parents choosing between two public colleges found that, when provided with graduation-rate data, 15 percent switched their preference to the school with the higher graduation rate. Providing this key information could have real economic implications for students’ lifetime earning potential. This piece presents the findings of the study and proposes policies to improve consumer information and increase college completion.
Budget & TaxationBy Kevin A. Hassett, Aparna Mathur, American Enterprise InstituteTax Policy Outlook, 02/09/2011
At 35 percent, the US statutory corporate tax rate is the highest among all the countries in the Organization for Economic Cooperation and Development (OECD). Since the 1980s, other OECD economies have been steadily lowering their tax rates, but the United States has not cut its top statutory rate since 1993. In the OECD, the United States also has higher-than-average effective average and effective marginal tax rates, which are the best indicators for capital investors of their true tax liability. Policymakers seeking to understand why some companies are moving plants abroad should consider the impact of tax rates on competitiveness. The Obama administration and the 112th Congress should lower effective tax rates so the United States can compete in the global economy.
Transportation/InfrastructureBy Ronald Utt, The Heritage FoundationWebMemo, 02/09/2011
The House Budget Committee has announced its discretionary federal spending target for the remaining eight months of fiscal year (FY) 2011, and the House Appropriations Committee subsequently provided details on how the 12 major program areas would have to be cut to meet that target. The transportation/housing account will receive the stiffest cuts of all: Both programs will be reduced by 17 percent compared to FY 2010 levels to an average of 9 percent for all discretionary programs. The Appropriations Committee and its subcommittee on housing and transportation should use this budget-cutting requirement as an opportunity to separate the wheat from the chaff and impose the severest cuts on those programs that provide the least benefits to mobility, congestion mitigation, and safety. Some programs that should be cut are discussed in this WebMemo.
Budget & TaxationBy Kail Padgitt, Tax FoundationFiscal Facts, 02/09/2011
In two-thirds of the United States, local-option sales taxes make it somewhat more difficult for citizens to know what the sales tax rates are, and transparency suffers. Thirty-three states allow localities to charge a local sales tax. The rates vary from jurisdiction to jurisdiction; this piece averages those rates in a way that gives an accurate impression of the sales tax in each state.
Monetary Policy/Financial Regulation
Housing Finance Reform: Protecting Taxpayers, Ending Bailouts, Reducing the Government’s Role, and Promoting Private CapitalBy Anthony Randazzo, Reason FoundationTestimony, 02/09/2011
This testimony includes ten ideas for reforming short-term mortgage finance. They are a starting point or a first step towards a robust overhaul, and should open the door to further mortgage finance reform discussion, as well as affordable housing discussion. Ultimately, the goal of housing finance reform should be to allow private investors to replace the government-i.e. taxpayers-as financers in the housing market while ensuring that any subsidies remaining in the system are explicit, direct, narrow, and on-budget. Congress should then continue in earnest to implement such reforms, ensuring that in the future, America’s housing market is far closer to a free market.
Budget & TaxationBy Oklahoma Council of Public Affairs, Oklahoma Council of Public AffairsReport, 02/09/2011
This proposed budget for Oklahoma, created by the Oklahoma Council of Public Affairs, returns government spending to reasonable, pre-spending-spree levels while providing much-needed tax relief for Oklahoma’s overtaxed families. Driven by the ideas that state government has expanded beyond its core functions and that voters want government to be smaller, this budget lays a blueprint for a smaller Oklahoma state government.
LaborBy J. Scott Moody, Wendy P. Warcholik, Oklahoma Council of Public AffairsResearch, 02/09/2011
This piece utilizes the National Establishment Time-Series (NETS) database of Oklahoma’s businesses to examine the births and deaths of Oklahoma establishments; these births and deaths are avenues of job creation. Every year in Oklahoma, new establishments and jobs are born (births), while existing establishments cease to exist, taking their jobs with them (deaths). Understanding this dynamic process relating to the creation of jobs from the births and deaths of establishments is the final step to ensuring that public policy helps rather than hinders job creation.
National SecurityBy Jena Baker McNeill, Charles Stimson, The Heritage FoundationWebMemo, 02/09/2011
Last night, the House of Representatives voted not to suspend the rules and pass three key counterterrorism amendments to the Foreign Intelligence Surveillance Act (FISA), which are set to expire at the end of February. These three amendments involved roving surveillance authority, business record orders under FISA, and the lone wolf provision. However, the motion to suspend the rules and pass the bill, which requires a two-thirds vote to proceed, failed by a vote margin of 277–148. This vote was troublesome, mostly because it is unclear why the act, which has enjoyed bipartisan support, was not reauthorized. Little evidence has ever been proffered to demonstrate any PATRIOT Act misuse; thus, these provisions should be renewed.
Foreign Policy/International AffairsBy James Phillips, The Heritage FoundationWebMemo, 02/09/2011
Although Egypt’s widely supported protest movement was reportedly instigated by secular opposition activists, the largest and most well-organized group within Egypt’s diverse coalition of opposition groups remains the Muslim Brotherhood, an Islamist movement determined to transform Egypt into an Islamic state that is hostile to freedom. The Muslim Brotherhood has joined other opposition groups in negotiating with Vice President Omar Suleiman over the ground rules for establishing a transitional government. In facilitating a transition to a more representative government, the Obama Administration should be careful that it does not also inadvertently help the Muslim Brotherhood advance its anti-freedom agenda.
Budget & TaxationBy Josh Barro, Manhattan InstituteCivic Report, 02/09/2011
In 2010, the pension plans of state and local governments came under increased scrutiny in response to their generally weak financial positions and mounting costs to taxpayers. By some measures, these funds are as much as $3 trillion short of the assets they would need to cover the promises they have made to government workers and retirees. However, several shortcomings in these funds’ financial disclosures have made it difficult for even lawmakers and policy experts to accurately evaluate pensions’ actual financial condition. To remedy these problems, funds should disclose their finances more fully in the following areas: discounting, smoothing, accrual method, projections, and normal cost.
Health CareBy Scott W. Atlas, Hoover InstitutionDefining Ideas, 02/08/2011
Despite a variety of problems with American healthcare, the health legislation passed by Congress and the Obama administration creates massive new government authority that controls access to medical care and dictates costly insurance bene?ts. Rather than increasing private sector competition, the legislation will reduce choice, shift more regulatory power to bureaucrats, hinder innovation, and ultimately be likely to serve as a rationale for shifting Americans to public plans that restrict access to care. The United States needs creative and bold leadership to stop the inexorable slide to nationalization of health care that has been proven world-wide to reduce choice, restrict access, and harm patient outcomes.
Foreign Policy/International AffairsBy Fouad Ajami, Hoover InstitutionBook, 02/08/2011
Beginning in 1937, when a young Minnesota-born mining engineer by the name of Thomas Barger first arrived in Arabia, that country has been somewhat of a mystery to America. In this book, Fouad Ajami presents a firsthand look at the political culture in Saudi Arabia and its conduct and influence in foreign lands, from the early 1990s to the present day. From the influence of Islam in public life to Saudi rulers’ attitudes toward the Bush and Obama administrations, the author fills a significant gap in our understanding of that country.
Natural Resources, Energy, Environment, & ScienceBy Ken G. Glozer, Hoover InstitutionBook, 02/08/2011
In this in-depth, fact-based evaluation, Ken G. Glozer provides a detailed political history of how the United States ended up with current federal corn ethanol policy. Part I relates the significant external events that have driven the politics that in turn have driven the policy since 1977. Part II of the book contains an in-depth objective evaluation of the major claims made by those who have advocated the ethanol policies during the past thirty years. Glozer’s surprising finding—that federal ethanol policy has little to do with energy and everything to do with wealth transfer—is particularly compelling because, after three decades of federal subsidies, trade protection and most recently mandated ethanol blending, ethanol remains uneconomical. Glozer’s sobering conclusion is that the taxpayers and consumers are the victims of the current policy in that they have no choice but to pay and pay.
Budget & TaxationBy Byron Schlomach, Goldwater InstitutePolicy Memo, 02/08/2011
This article consists of a series of suggestions for $2 billion in budget reductions for the state of Arizona based on Fiscal Year 2011 spending levels. The Governor’s office estimates the Fiscal Year 2012 budget is $1.1 billion in deficit. There is no question that these budget reductions will be challenging; however, significant changes must be made in our spending priorities in order to meet Arizona’s needs and put our fiscal house on solid footing.
Natural Resources, Energy, Environment, & ScienceBy William Yeatman, Competitive Enterprise InstituteWebMemo, 02/08/2011
On January 13, 2011, the Environmental Protection Agency (EPA) vetoed the issuance of a Clean Water Act permit by the U.S. Army Corps of Engineers to the Mingo Logan Coal Company for the Spruce No. 1 Mine in Logan County, West Virginia. This is the first time the EPA has used this authority since the Congress passed the Clean Water Act in 1972. EPA’s unprecedented action will result in the loss of 250 jobs, so one would think that the EPA has compelling case against the Spruce No. 1 Mine. Unfortunately, that is not the case. An audit of the EPA’s veto, “Final Determination of the U.S. Environmental Protection Agency Pursuant to 404(c) of the Clean Water Act Concerning the Spruce No. 1 Mine, Logan County, West Virginia (‘Final Determination’),” reveals that the document is pure environmental hyperbole; it is riddled with mistakes, incorrect citations, and false certainty.
Beyond Symbolism? The U.S. Nuclear Disarmament Agenda and Its Implications for Chinese and Indian Nuclear PolicyBy Lavina Lee, Cato InstituteForeign Policy Briefing, 02/08/2011
The Obama administration has elevated nuclear disarmament to the center of its nuclear agenda through the New Strategic Arms Reduction Treaty (New START) with Russia and the release of the U.S. Nuclear Posture Review (NPR). The administration expects that its professed goal of “getting to zero” has symbolic value and will encourage reciprocity in terms of disarmament and nuclear arms control by other nuclear weapons states, as well as cooperation on measures to limit nuclear proliferation and the threat of nuclear terrorism. In the case of the two rising powers of Asia—China and India—it is highly questionable whether either of these expectations will be met. Washington’s emphasis on disarmament could provide both states with a pretext for limiting their cooperation on U.S. nonproliferation goals. Because of that risk, the United States should be cautious about dissipating its advantages in the nuclear arena without getting significant concessions in return.
Health CareBy John S. Hoff, The Heritage FoundationBackgrounder, 02/07/2011
In response to public opposition to enactment of the Patient Protection and Affordable Care Act (PPACA), President Obama assured Americans that if they were happy with their current health insurance, nothing in the PPACA would force them to change their coverage. This promise has been broken. Not only does the PPACA itself require changes in existing coverage, but regulations issued by the Administration further undercut the ability of Americans to continue with their current insurance plans. The rules are arbitrary and confusing. Health care expert John S. Hoff lays out the bare truth.
Transportation/InfrastructureBy Wendell Cox, The Heritage FoundationBackgrounder, 02/07/2011
The 2010 Heritage Foundation report “Washington’s War on Cars and the Suburbs” disputed Transportation Secretary Ray LaHood’s claims that public transit produces substantial economic benefits, consumes only one-fifth the energy of cars, and saves billions in other costs. The author of the 2004 American Public Transportation Association report, Todd Litman, has taken issue with “Washington’s War.” The following paper is a response to Litman’s recent claims—and finds that new rail transit systems have not attracted drivers from their cars for commutes; transit funding increases are far out of proportion to any increase in ridership; transit attracts few drivers because of its limited competitiveness with the car; and the purported cost benefits have been exaggerated. Wendell Cox explains how outdated numbers and ambiguous definitions form the basis of today’s urban transportation policy.
Economic GrowthBy Edward Glaeser, Penguin PressBook, 02/07/2011
As Edward Glaeser proves in this myth-shattering book, cities are actually the healthiest, greenest, and richest (in cultural and economic terms) places to live. New Yorkers, for instance, live longer than other Americans; heart disease and cancer rates are lower in Gotham than in the nation as a whole. More than half of America’s income is earned in twenty-two metropolitan areas. And city dwellers use, on average, 40 percent less energy than suburbanites. Using intrepid reportage, keen analysis, and eloquent argument, Glaeser makes an impassioned case for the city’s import and splendor. He reminds us forcefully why we should nurture our cities or suffer consequences that will hurt us all, no matter where we live.
Transportation/InfrastructureBy R. Richard Geddes, American Enterprise InstituteBook, 02/07/2011
In The Road to Renewal: Private Investment in U.S. Transportation Infrastructure, R. Richard Geddes surveys the current state of the American transportation system and finds that, like the roads themselves, the existing policy approach is in desperate need of repair. Drawing on the basic economic principles behind supply, demand, competition, and incentives, Geddes argues that a shift toward increased use of public–private partnerships—contractual agreements between public agencies and private parties that allow private participation in the design, construction, operation, and delivery of transportation facilities—could significantly improve the quality of America’s transportation infrastructure. By learning to see themselves as customers and investors—rather than mere users—of roads and highways, Americans should expect to receive a reasonable return on their investment: thorough, effective maintenance of America’s transportation infrastructure.
EducationBy Liv Finne, Washington Policy CenterPolicy Note, 02/07/2011
In 2009, Washington’s Legislature directed the State Board of Education to create an Accountability Index of the state’s public schools. The State Board of Education has worked since that time to develop the Public School Accountability Index, ranking schools among four indicators of achievement and categorizing schools as Exemplary, Very Good, Good, Fair or Struggling. Results from the Index show that ten percent of the state’s public schools rank in the top two tiers, Exemplary or Very Good. Nearly 60 percent of Washington children attend schools ranked as Fair or Struggling.
Budget & TaxationBy Jason Mercier, Washington Policy CenterPolicy Brief, 02/07/2011
A combination of past spending increases and a historic economic downturn have left lawmakers in Olympia facing difficult choices to reset state government. If all that the legislature does this session is balance the budget through tough cuts without making necessary structural reforms, the state will be doomed to repeat the budget crisis again in the near future. Lawmakers should not only balance the budget, but should also do the following: enact a constitutional tax and spending limit, create an enhanced rainy-day account, restore state employee compensation decisions to the legislature, authorize proactive competitive contracting, and utilize performance-based budgeting. Implementing these reforms will help get the state off the boom-and-bust spending roller coaster, protect taxpayers, and create a structural framework that puts state spending on a sustainable path.
Budget & TaxationBy J. Scott Moody, Maine Heritage Policy CenterPath to Prosperity, 02/07/2011
Maine’s annual public pension payment is on the threshold of explosive growth. Unlike other states, Maine has a Constitutional requirement to fully fund the pensions system by 2028—just 16 years from now. As a consequence of the growing pension payments, all other state government spending will be crowded-out. Over the next biennium, the annual required pension contribution will consume 52 percent of all of the growth in General Fund revenue under the forecast from the Revenue Forecasting Committee (92 percent under a slow recovery growth rate of 2 percent). In the end, the pension burden is simply too great for taxpayers to bear. Only serious and significant reforms of the pension system, such as moving from a defined-benefit system to a defined-contribution system, will prevent this crowding-out of other General Fund Spending.
Budget & TaxationBy Eli Lehrer, James Madison InstituteBackgrounder, 02/07/2011
The Florida State Legislature needs to undertake a comprehensive reform of the state’s dysfunctional property insurance system. This study describes the steps the Legislature, the Governor, and the people of Florida could take to reform their property insurance system. The paper consists of four major sections. The first offers a brief overview of the problems Florida faces. The next three sections describe how the state can best change its policies with regard to the Florida Citizens Property Insurance Corporation, the Florida Hurricane Catastrophe Fund, the state’s built environment, and the evolving problems with sinkholes. This study presents data demonstrating that Florida’s property insurance system is seriously broken and needs significant changes, some of which may be somewhat painful to—or unwelcomed by—those who benefit from the status quo.
Budget & TaxationBy Collin Hitt, Amanda Griffin-Johnson, Illinois Policy InstituteTax & Budget Brief, 02/07/2011
The tax hikes of 2011 should be rolled back as soon as possible. In order to do so, lawmakers must make deep and sustained cuts to state spending. Every dollar spent by state government is a dollar taken from working families. The longer that tax hikes remain in place is the longer those families must go without many of the things they were already struggling to afford.
Budget & TaxationBy Danny de Gracia, Grassroot Institute of HawaiiResearch, 02/07/2011
This study examines the current state of the government of Hawaii. Upon examination, numerous departments and agencies display a rampant culture of inefficiency, confusion, conflicts of interest and, in some instances, glaring violations of the law. Hawaii’s taxpayers deserve a government which obeys its own laws and makes every effort to ensure that tax dollars are not wasted or abused. Hawaiian policymakers must realize that the fastest way to close budget gaps and leave buffers for falling revenues is to reduce the size and scope of government. Ultimately, Hawaii is in a crisis. Whether that crisis leads to opportunity for good or danger to taxpayers is a decision that must be made now.
PhilanthropyBy John J. Tierney, Capital Research CenterFoundation Watch, 02/04/2011
For nearly 50 years the Institute for Policy Studies (IPS) has conducted a systematic campaign to undermine American foreign policies and the social and economic system that supports them. Webster’s defines “undermine” as “to excavate beneath, to weaken or wear away secretly or gradually.” Such a description is particularly appropriate for IPS, the oldest and most ideological organization founded to impose leftist political change on America.
PhilanthropyBy Sean Higgins, Capital Research CenterOrganization Trends, 02/04/2011
They call it a think tank, but the Center for American Progress is something altogether different. It is an adjunct of the Democratic Party dedicated to repeating the message of the Obama administration over and over again until it becomes the unchallenged conventional wisdom in Washington.
Natural Resources, Energy, Environment, & ScienceBy Amanda Carey, Capital Research CenterGreen Watch, 02/04/2011
Today, a dangerous industrial complex looms on the horizon, and President Obama encourages its growth. It is the “Green-Industrial Complex,” or what climate warrior Bjorn Lomborg has called the “Climate-Industrial Complex.” A web of players that includes corporations and environmental non-profits, business executives, lobbyists, and government officials, is promoting a renewable energy agenda and targeting coal producers and the oil industry as public enemy number one. We should ask, “Who benefits and who loses?” as green groups, companies and the government work together to create new energy and environmental policies. The Green-Industrial Complex is likely to reap huge profits, but consumers, workers and taxpayers will pay the price in the end.
LaborBy Barbara Comstock, Capital Research CenterLabor Watch, 02/04/2011
In November 2010, Delta Air Lines Flight Attendants voted against unionization. This was the third time that the employees have defeated the Association of Flight Attendants (AFA) in the past decade. Yet the union continues to challenge the votes and the will of the Delta employees and insists on holding up the integration of the merged company (Delta Air Lines and Northwest merged in 2008). If they can’t get a union by the voting process, the unions are demonstrating that they will use their political muscle to push for unionization by regulation and bureaucratic fiat. Ultimately, The new Congress should exercise its oversight duties; looking at how the threat of forced unionization by regulation imposed by obscure government agencies would be a good place to start.
Economic GrowthBy Rea Hederman Jr., James Sherk, The Heritage FoundationWebMemo, 02/04/2011
The Bureau of Labor Statistics reported that, according to the household survey in January, the unemployment rate fell from 9.4 percent to 9 percent, the lowest level since April 2009. The payroll survey—which measures job growth, hours worked, and wages—reported that only 36,000 new jobs were created. The January report continues to show a divergence in the two surveys, with the household survey reporting fabulous news and the payroll survey painting a more worrying picture. Ultimately, the labor market is growing but slower than it should. While the unemployment rate has dropped sharply in the past two months, it is likely that it is a result of the household survey’s volatility. However, job growth is no doubt much better than the payroll survey is indicating. Revisions to the payroll survey have been consistently upward for the past few months, indicating an expanding job market.
Economic GrowthBy David Muhlhausen, The Heritage FoundationWebMemo, 02/04/2011
Under the Trade Adjustment Assistance (TAA) program, workers who lost their jobs due to foreign trade are eligible for job training, relocation allowances, and income maintenance while they attempt to shift into new occupations. TAA provides overly generous benefits for only a small fraction of laid-off workers. However, three quasi-experimental impact evaluations indicate that TAA is ineffective in raising the wages of participants. Thus, Congress should let this costly and ineffective program expire by not reauthorizing the program.
Economic GrowthBy James Sherk, The Heritage FoundationWebMemo, 02/04/2011
Trade Adjustment Assistance (TAA) provides substantial government benefits to American workers who lose their jobs because of foreign trade. The 2009 stimulus bill expanded TAA coverage and increased TAA benefits. However, very few workers lose their jobs because of foreign trade, and the Department of Labor’s Dislocated Workers Program already provides basic services to laid-off workers. Congress should allow TAA to expire. If Congress does reauthorize TAA, it should return the program to its pre-stimulus scope and couple reauthorization with the pending free trade agreements.
Budget & TaxationBy Jon Sanders, John Locke FoundationSpotlight, 02/04/2011
The North Carolina Education Lottery was sold as a way to boost education spending in this state, but research shows that has historically been a false promise of lotteries. The clearest and best solution is to eliminate it now; that is, to end the state lottery and return to a more honest, direct form of education funding. The state lottery has not become an irreplaceable funding source in the few short years of its existence. Another route would be to deregulate gambling in North Carolina, which would allow gambling industries to develop and compete in the state. Short of repealing the lottery, state leaders could at least address the issue of lottery funds not being used effectively by choosing to reform the lottery so as to use education proceeds more effectively.
EducationBy Eric Hanushek, Hoover InstitutionDefining Ideas, 02/04/2011
A good teacher is one who consistently evokes large gains in student learning, while a poor teacher is one who consistently gets small gains in student learning. Despite recent reforms, bad teachers remain in classrooms; thus, a major focus of K-12 education reform should be placing a highly effective teacher in every classroom. While teachers respond to incentives, the current incentive systems used in public education do not make student achievement the chief objective. The ultimate goal of the new incentive systems we design must be to attract, encourage, and reward high-performing teachers while pushing low-performing teachers toward either improving their efforts (if they are capable of doing so) or leaving the profession altogether. Over time, the effect of such systems will be to greatly increase the number of good teachers while drastically reducing the number of ineffective teachers.
Crime, Justice & the LawBy F. Scott Kieff, Hoover InstitutionDefining Ideas, 02/04/2011
The Supreme Court’s Microsoft v. i4i case will likely stifle innovation; this case centers on a debate about burdens of proof. Microsoft has been charged with violating a patent; it wants to defend itself by attacking the validity of the patent rather than relying on a non-infringement defense. Microsoft urges the Supreme Court to utilize a lighter burden of proof than previously used in such cases. However, the worst way to move forward would be to dial down the presumption of validity alone. The best approach may be to dial down the presumption of validity and restore a system of fee shifting for bad losers on either side.
Natural Resources, Energy, Environment, & ScienceBy Richard A. Epstein, Hoover InstitutionDefining Ideas, 02/04/2011
One conspicuous difference between the last Congress and the present one is the disappearance of a comprehensive cap-and-trade system for carbon dioxide emissions from the overall political agenda. However, in place of cap-and-trade, the President has reiterated his earlier support for “green” energy from renewable sources, in part to reduce overall levels of carbon dioxide emissions. However, the blunt truth is that no one in government knows the relative prices of all inputs in advance. The state, therefore, should do only what it can do, which is contain pollution externalities in ways that prevent cross subsidies between rival technologies. After that, decentralized markets should displace the nascent nationwide industrial policy. It is not enough to believe in the grand ends of a clean environment. On environmental matters, regulatory technique and institutional design matter as much good intentions.
Natural Resources, Energy, Environment, & ScienceBy Gregory Conko, Henry I. Miller, Hoover InstitutionPolicy Review, 02/04/2011
In spite of more than twenty years of scientific, humanitarian, and financial successes and an admirable record of health and environmental safety, genetic engineering applied to agriculture continues to be beleaguered by activists. Obstructionist lawsuits have prevented the marketing of products that offer palpable, demonstrated benefits to the environment and to the welfare of farmers and consumers. Nuisance lawsuits intended to slow the advance of socially responsible technologies are abusive, irresponsible, and antisocial. And so are those who file them. It is long past time for the national Environmental Policy Act’s burdensome paperwork requirements to be lifted from such an important and beneficial technology.
Economic and Political ThoughtBy Michael Gonzalez, Hoover InstitutionPolicy Review, 02/04/2011
Our knowledge of the past amounts to more than just the point of pride that people take in their family histories in stable countries. History gave us a sense of permanence that assured us of our daily survival, just as oaks can withstand gale force winds because of deep tap roots. The people of Cuba today need that permanence, that stability and sense of belonging. National identity and character must be felt at the personal level. Without the romanticism of culture, life becomes purely transactional and not worth living. And only by transmitting to present-day Cubans the importance of the contract between the generations that are dead (especially pre-Castro generations) and those not yet born can Cuba hope to survive.
Health CareBy Sally Satel, Hoover InstitutionPolicy Review, 02/04/2011
Soldiers often have invisible psychological wounds, which are broadly categorized post-traumatic stress disorder (ptsd). While psychological injuries can be as debilitating as any physical battlefield trauma, the lowering of the threshold for receipt of disability benefits is not always in the best interest of the veteran and his family. In some instances, disability entitlements actually work to the detriment of other patients by keeping them from meaningful work and by creating an incentive for them to embrace institutional dependence. Ultimately, anyone who fights in a war is changed by it, but few are irreparably damaged. For those who never regain their civilian footing despite the best treatment, full and generous disability compensation is their due. Otherwise, it is reckless to allow a young veteran to surrender to his psychological wounds without first urging him to pursue recovery.
Foreign Policy/International AffairsBy David Rieff, Hoover InstitutionPolicy Review, 02/04/2011
In the aftermath of the Holocaust, the idea “never again” has been touted in support of the idea of genocide prevention. However, since 1945, “never again” has meant, essentially, “Never again will Germans kill Jews in Europe in the 1940s.” Ultimately, the world has learned very little about genocide; however, this has not stopped it from pontificating about its evils. The Obama Administration’s National Security Strategy Paper, issued in May 2010, exemplifies this tendency.
Natural Resources, Energy, Environment, & ScienceBy Paul J. Saunders, Vaughan Turekian, Hoover InstitutionPolicy Review, 02/04/2011
Government officials worldwide are trying to put the best face on the 2010 United Nations climate change negotiations in Cancun, especially after 2009’s debacle in Copenhagen. But the talks produced little real progress, leading many to wonder whether the two global climate meetings represent a necessary, albeit somewhat sideways step in the long process towards an eventual global treaty reducing greenhouse gases or, alternatively, the gradual and unsurprising end to a nearly twenty-year effort to achieve binding international mandates. In truth, it is very unlikely that humanity will be able to considerably slow climate change by relying on binding emissions limits. Additionally, in America, there is not a sufficiently broad political base to make the policy changes necessary to address climate change successfully. What America really needs is a more effective and focused economic policy, including energy policy, driven by America’s economic needs but sensitive to climate concerns.
Foreign Policy/International AffairsBy Brett Schaefer, The Heritage FoundationLecture, 02/04/2011
The United Nations has largely failed to maintain international peace and security, promote self-determination and basic human rights, and protect fundamental freedoms. While the conflicting interests of member states have led to many of these failures, the U.N. system itself is partly to blame. The U.N. and its affiliated organizations are plagued by outdated and redundant missions and mandates, poor management, ineffectual oversight, and a general lack of accountability. In recent years, the U.S. Congress itself has neglected its responsibility to exercise proper oversight. Congress should press for U.N. reform and withhold funding when necessary to encourage reform.
Foreign Policy/International AffairsBy James Phillips, James Carafano, The Heritage FoundationWebMemo, 02/04/2011
When dealing with the current crisis in the Middle East, the Obama Administration should embrace the following principles: don’t lose focus on Iran, remain firmly committed to preserving a stable and free Iraq, reassert the need for close strategic, cooperation with Israel, stay engaged in Lebanon, and support and encourage Egypt’s army to safeguard a transition to freedom. This agenda would make a substantial difference in the Middle East; it would demonstrate that the U.S. is a faithful ally, a champion of supporting the cause of liberty and economic freedom, and a strong, resilient, and confident nation prepared to defend itself, its allies, and its interests.
Budget & TaxationBy Randall G. Holcombe, Christopher J. Boudreaux, Mercatus CenterMercatus on Policy, 02/03/2011
As the United States faces a record federal budget deficit forecast, policy makers are considering imposing a federal Value Added Tax (VAT). Lawmakers, however, have overlooked the negative impact of the VAT on state governments. A VAT would lower overall economic growth, decreasing both federal and state tax revenue, and would compete for a tax base already tapped by existing state sales taxes. This would particularly harm states like Florida that rely disproportionately on state sales tax revenues.
Crime, Justice & the LawBy Lester Brickman, Cambridge University PressBook, 02/03/2011
Lawyer Barons: What Their Contingency Fees Really Cost America, is a broad and deep inquiry into how contingency fees distort our civil justice system, influence our political system and endanger democratic governance. Contingency fees are the way personal injury lawyers finance access to the courts for those wrongfully injured. While the public senses that lawyers manipulate the justice system to serve their own ends, few are aware of the high costs that come with contingency fees. This book sets out to change that, providing a window into the seamy underworld of contingency fees that the bar and the courts not only tolerate but even protect and nurture. Contrary to a broad academic consensus, the book argues that the financial incentives for lawyers to litigate are so inordinately high that they perversely impact our civil justice system and impose other unconscionable costs. It thus presents the intellectual architecture that underpins all tort reform efforts.
International Trade/FinanceBy Derek Sciss, The Heritage FoundationWebMemo, 02/03/2011
Chinese outward investment is steadily and unavoidably expanding. American policy should improve in response. On the foreign policy side, the US can encourage a more attractive investment environment. The obvious means to do this is bilateral agreements. At home, the U.S. can draw desirable Chinese spending by increasing transparency. The ideal way to increase transparency is to sharpen the mandate of the Committee on Foreign Investment in the United States, which has the institutional experience to respond properly to evolving Chinese economic activity in the U.S. It, not Congress or other executive agencies, should be at the heart of the review process.
The Constitution/Civil LibertiesBy David N. Mayer, Cato InstituteBook, 02/03/2011
Alarmed by the explosive growth of government, Americans today are more interested than ever in the U.S. Constitution and the limits it places on government power. Liberty of Contract powerfully illuminates a key limit: the right of individuals to enter into contracts with one other. In this first comprehensive treatment of one of the most misunderstood and underestimated chapters in U.S. constitutional law, legal scholar David Mayer explores this lost right, identifying the foundations and nature of the Court’s Lochner v. New York-era jurisprudence. In doing so, he shatters myths created by scholars. Mayer demonstrates that the old Court thus was less guilty of judicial activism than the modern Court, with its inconsistent protection of individual rights. Modern constitutional law owes much to the Lochner era, including protection of the “right to privacy,” the last remaining vestige of liberty of contract.
Monetary Policy/Financial RegulationBy Kevin Dowd, Martin Hutchinson, Cato InstituteCato Policy Report, 02/03/2011
The actions of the Federal Reserve keep distorting returns in the economy and creating bubble after bubble; each bubble (or each group of contemporaneous bubbles) is bigger in aggregate and more damaging than the one that preceded it. Each bubble destroys part of the capital stock by diverting capital into economically unjustified uses—artificially low interest rates make investments appear more profitable than they really are, and this is especially so for investments with long-term horizons. This problem occurs in the context of various other government policies that are decapitalizing the U.S. economy. Radical reforms are necessary to stem this tide of decapitaliztion; such reforms must be based on a diagnosis of the underlying problems and must be accompanied by reform in the federal government’s capital-destroying policies.
Budget & TaxationBy Chris Edwards, Cato InstituteTestimony, 02/03/2011
The growth in federal spending over the past decade has been extraordinary. As a share of gross domestic product, spending soared from 18.2 percent in President Clinton’s last fiscal year of 2001 to 24.7 percent by fiscal year 2011. The causes of this government expansion include the costs of overseas wars, expanded entitlement programs, growing spending on domestic programs such as education, and recent stimulus spending. On the federal level, major spending cuts are needed in the areas of entitlements, domestic spending, and defense. Additionally, states are facing the long-term problem of soaring debt and unfunded obligations in state and local retirement programs. Among other initiatives, states should cut low-value programs, privatize government assets, encourage private financing for new infrastructure, and change the formulas on current pension plans to make them less lucrative.
National SecurityBy Mackenzie Eaglen, The Heritage FoundationWebMemo, 02/03/2011
As part of an effort to reexamine defense spending priorities, Congress should carefully review last year’s defense spending bills to identify areas worthy of further scrutiny. This would ensure that taxpayer dollars are being spent wisely and that necessary funds are dedicated to the appropriate federal agency while unnecessary projects are cut from the overall federal budget to reduce spending. Conducting due diligence in the defense budget is a critical step toward helping the military reach its goals of reprioritizing funds to bolster modernization plans after a decade of war and wear and tear on equipment.
Economic GrowthBy Jialin Zhang, Hoover InstitutionHoover Digest, 02/03/2011
Those who speak for China’s government officially deny that state-owned enterprises have expanded at the expense of private enterprise, pointing out that the private sector’s share of production value, profit, employment, and growth rate exceeds that of the state. Hybrid and interlocking asset ownership by state, non-state, and foreign capital is still encouraged, they assert. But most academics and journalists contend that such economic figures are unreliable and selective. Thus we are witnessing a heated debate in China on whether the state sector is making a comeback after decades of official encouragement of private enterprise, and if so, what the implications are for China’s economy. The contested advance and retreat show themselves in many ways.
Health CareBy John F. Cogan, R. Glenn Hubbard, Daniel P. Kessler, Hoover InstitutionBook, 02/03/2011
Our health care system has several well-known problems: high costs, significant numbers of people without insurance, and glaring gaps in quality and efficiency—and the Patient Protection and Affordable Care Act of 2010 is not the answer. This second edition of Healthy, Wealthy, and Wise details a better approach. It proposes five specific reforms to improve the ability of markets to create a lower-cost, higher-quality health care system that is responsive to the needs of individuals, including increasing individual involvement, deregulating insurance markets and redesigning Medicare and Medicaid, improving availability and quality of information, enhancing competition, and reforming the malpractice system. By promoting cost-conscious behavior and competition in both private markets and government programs such as Medicare and Medicaid, we can slow the rate of growth of health care costs, expand access to high-quality health care, and slow down runaway spending.
The Constitution/Civil LibertiesBy Clint Bolick, Hoover InstitutionBook, 02/03/2011
In the 1873 Supreme Court decision called The Slaughter-House Cases, one of the most important and beneficial products of the Civil War—a revolutionary constitutional provision intended to protect civil rights against oppression by state governments—was nullified. The repercussions of that unfortunate decision are still being felt today. In Death Grip: Loosening the Law’s Stranglehold Over Economic Liberty, Clint Bolick looks at the state of economic liberty in our country today and explains how the consequences of Slaughter-House continue to manifest themselves. Bolick examines the history and intent of the 14th Amendment and the judicial nullification of the privileges or immunities clause in the Slaughter-House Cases and their aftermath through the years. Looking at more recent decisions, he sees hope in the current campaign to restore economic liberty as a fundamental civil right. Ultimately, he concludes that we can win the battle to restore economic liberty.
Foreign Policy/International AffairsBy Morgan Roach, Sally McNamara, The Heritage FoundationWebMemo, 02/03/2011
In 2005, Turkey formally fulfilled the European Union’s “Copenhagen Criteria” to achieve official candidate status. However, the EU has not negotiated with Ankara in good faith, and Turkey’s membership prospects are badly stalled. Turkey and the EU should negotiate in good faith, pursue tangible opportunities for partnership, and explore membership in the European Defense Agency. President Obama should also remind Turkish leaders that there are responsibilities as well as benefits to its NATO membership. The level of trust that the world invests in Turkey as a NATO member and EU candidate depends on Turkey’s willingness to be an honest partner.
Natural Resources, Energy, Environment, & ScienceBy Jack Spence, Nicolas Loris, The Heritage FoundationBackgrounder, 02/03/2011
More and more companies—in the U.S. and abroad—are investing in new commercial nuclear enterprises, chief among them, small modular reactors (SMRs). The SMR industry is growing, with many promising developments in the works—which is precisely why the government should not interfere, as subsidies and government programs have already resulted in an inefficient system for large reactors. Heritage Foundation nuclear policy experts explain how the future for small reactors can remain bright.
National SecurityBy Jena Baker McNeill, The Heritage FoundationWebMemo, 02/03/2011
On January 28, Transportation Security Administration (TSA) head John Pistole announced with little warning or explanation that the Screening Partnership Program (SPP), which allows airports to privatize their security forces, would no longer expand to additional airports. This action makes no sense. Private security screeners, under the oversight of TSA, are a perfectly legitimate and secure method for handling the screening of airline passengers. This move—as well as recent changes in the primary screening process, including the extensive deployment of full-body scanners (and/or physical pat-downs), at U.S. airports—raises serious concerns about the Administration’s aviation security strategy. TSA needs to reassess its aviation security policy and invest in what actually works in terms of preventing terrorism. Getting caught up in the politics of privatization is another step backwards.