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Recent Policy Studies
Natural Resources, Energy, Environment, & ScienceBy Kathleen Hartnett White, Texas Public Policy FoundationTestimony, 03/29/2011
Texas stands in the cross-hairs of Environmental Protection Agency’s unprecedented and heavy-handed regulatory onslaught. EPA issuance of an automatically effective Federal Implementation Plan in December 2010 to revoke key state permitting authority was the first such action in EPA history. The rules on track to go into effect in the next three years could cost more than $1 trillion, result in hundreds of thousands of jobs lost and significantly impair electric reliability. The cost of regulatory compliance for EPA rules has risen from the several millions to the hundreds of billions. Economic impacts of this magnitude need to be approved by the U.S. Congress and not left to the unelected bureaucrats of EPA. This testimony recommends an increased role for Congress in approving regulations, and it also makes other policy recommendations.
Budget & TaxationBy Talmadge Heflin, Arlene Wohlgemuth, Texas Public Policy FoundationBudget Solutions, 03/29/2011
In 2003, the Texas Legislature did something unprecedented. Faced with a record $10 billion budget shortfall, lawmakers balanced the budget without raising taxes and cut general revenue spending for the first time since World War II. This achievement did much to lay the foundation for the period of extraordinary economic growth and prosperity we are currently experiencing in Texas. Now, with the state facing another large budget shortfall, this piece offers insights on the most important lessons learned from 2003 that should help inform the decisions of today’s policymakers.
Budget & TaxationBy Donna Arduin, Arthur B. Laffer, Wayne H. Winegarden, Texas Public Policy FoundationBudget Solutions, 03/29/2011
Federal funds are not “free” and, in fact, contribute a great deal to the unsustainable growth of state government and a resulting decline in economic growth. Additionally, based on current law, the federal support to the states should be winding down. Consequently, if the extra $5.5 billion to $7.5 billion in Texas spending that is being financed to a large extent by the federal government is not reduced, the total expenditure burden levied on Texans will end up being permanently increased. Based on this analysis, maintaining the current expenditure burden on the Texas economy will diminish its growth, as measured by state GDP, between $1.3 billion and $1.8 billion based on the 2008 level of Texas’ GDP (the latest data available). Accordingly, Texas should avoid reliance expansion or extension of federal fund relief in its 2011 budget but instead begin to address the excessive levels of government spending.
Family, Culture & CommunityBy Ryan Messmore, The Heritage FoundationBackgrounder, 03/29/2011
President Barack Obama’s FY 2012 budget proposal would harm charitable organizations by raising the tax rate on upper-income individuals and families and reducing their income tax deduction for charitable donations. These two changes in the tax code would discourage charitable donations and leave the most generous donors with less money to donate. Predictably, they would shift resources from private nonprofit charitable organizations to the federal government, which is consistently less effective and efficient in caring for the needy.
National SecurityBy Jena Baker McNeill, The Heritage FoundationBackgrounder, 03/29/2011
The President’s budget request would maintain homeland security funding at current levels, but the budget request would increase funding for several programs that add little additional security while cutting others that could significantly enhance U.S. homeland security. Congress should use the budget process to refocus the Department of Homeland Security on its primary objective of improving security. Counterproductive homeland security grants to state and local governments should be eliminated or curtailed and redesigned. Conversely, Congress could significantly enhance security by substantially increasing funding for the Coast Guard to enable it to perform its new missions. Congress and the country cannot afford to allow the homeland security budget to devolve into another vehicle for pork-barrel spending.
Budget & TaxationBy Alex Wood-Doughty, Sarah Hyon, Kail Padgitt, Tax FoundationFiscal Facts, 03/29/2011
Every state and the federal government impose an excise tax on the sale of gasoline as a fixed number of cents per gallon. Therefore, as gas prices rise, states will see no increase in gas excise tax revenue since the tax rate is fixed regardless of price. Some states, however, apply a sales tax (or a similar tax) to gasoline, in addition to their excise tax. When gas prices go up, these states will receive additional tax revenue. For example, Indiana levies a 7 percent sales tax on gasoline in addition to its gasoline excise tax. Due to higher gas prices relative to a year ago, Indiana is currently collecting an additional 5 cents for every gallon of gasoline purchased. This amounts to over $202 million in tax revenue for Indiana in just the past year.
ImmigrationBy Jena Baker McNeill, The Heritage FoundationWebMemo, 03/29/2011
On March 21, Secretary of Homeland Security Janet Napolitano introduced a new component of the E-Verify system called Self Check. This free, voluntary service would allow individuals to log in to a system to verify their immigration status and address any problems with their work status, including outdated information or typographical errors. Self Check is a positive step in improving E-Verify accuracy and helping employers to ensure that their workforce is legally able to work in the United States. Employment remains one of the biggest drivers of illegal immigration in the United States. Therefore, it is essential that Congress and the Administration support E-Verify and other work-site measures to enforce the law and decrease the incentive to come to the United States illegally.
Monetary Policy/Financial RegulationBy Arnold Kling, Mercatus CenterTestimony, 03/29/2011
The time has come to say no to the mortgage lobby. Send them home empty-handed. There is a way to guarantee reliability of mortgages that does not require a government agency. The solution is for most borrowers to make down payments of 20 percent, which was typical before the madness of the last two decades. If it is in the public interest for more people to own their homes, then policies must be crafted that expand home ownership, rather than mortgage indebtedness. Programs should be created that encourage people to save for down payments, rather than encouraging them to take on too much debt.
Health CareBy Joseph Coletti, Nicole Fisher, John Locke FoundationSpotlight, 03/29/2011
North Carolina funding for Medicaid will exceed $3 billion in FY 2012. Since 1990 the General Assembly has expanded eligibility for Medicaid and NC Health Choice by about 900,000 people. ObamaCare forbids reducing eligibility back to previous levels. ObamaCare will also expand enrollment from 1.3 million people to potentially over 2 million people in 2014. Medicaid already provides less access to care than private insurance. Without the ability to reduce enrollment among Medicaid recipients with higher incomes, access to care will decline for every Medicaid recipient. Without reform or tighter eligibility, the state will need to cut some services and payments to doctors. Both options will mean worse care for every person on Medicaid. Governor Bev Perdue and the General Assembly need to push Washington for exemptions from Medicaid restrictions and greater ability to innovate with premium support and encourage patient control of their own care.
Budget & TaxationBy Kelly McCutchen, Georgia Public Policy FoundationIssue Analysis, 03/29/2011
The big picture of moving to a flat tax, which Georgia is considering doing, is outstanding economic policy. There are taxpayers who will pay higher taxes, but most Georgians will see small changes. Taxpayers with large itemized deductions will no longer be able to shelter the majority of their income. For families facing a small increase in next year’s taxes, the next time they get a raise, work more overtime or take a better-paying job, they will get to keep more of the money they have earned. The opportunity to make significant changes to tax policy comes along rarely. Georgia has a narrow window of opportunity and this plan meets all the criteria to move Georgia forward.
Class Conflict: Gainful Employment Proposal Penalizes At-Risk Student Populations and Hurts the EconomyBy Kara Cheseby, Competitive Enterprise InstituteStudies, 03/29/2011
Career colleges—also known as for-profit, proprietary or private sector colleges—provide an important avenue to post-secondary education and upward mobility for at-risk nontraditional student populations. The career college sector is also the country’s best hope, through its efficiency and innovation, to substantially expanding Americans’ access to the higher education that enables individuals to pursue the fastest growing and emerging occupations. The career colleges sector is now under harsh scrutiny by Washington. The U.S. Department Education has decided that rapid growth in enrollment, rising student debt levels, and a relatively high level of default rates has created a need for new rules around “gainful employment” for graduates from career colleges. The Department’s proposed rules are not only unnecessary, they are certain to cause harm.
Budget & TaxationBy Michael D. Tanner, Cato InstitutePolicy Analysis, 03/29/2011
The U.S. government is about to exceed its statutory debt limit of $14.3 trillion; however, if one considers the unfunded liabilities of programs such as Medicare and Social Security, the true national debt could run as high as $119.5 trillion. Driving this massive increase in the size and cost of government are so-called “entitlement programs,” in particular Social Security, Medicare, and Medicaid. Indeed, by 2050, those three programs alone will consume 18.4 percent of GDP. If revenues return to and stay at their traditional 18 percent of GDP, then those three programs alone will consume all federal revenues. Therefore any serious attempt to balance the federal budget and reduce our growing national debt must include a plan to reform entitlements. It may well be politically convenient to continue ducking entitlement reform. But doing so will condemn our children and our grandchildren to a world of mounting debt and higher taxes.
Health CareBy Roger Vinson, Cato InstituteCato Policy Report, 03/29/2011
The individual mandate of The Patient Protection and Affordable Care Act seeks to regulate economic inactivity, which is the very opposite of economic activity. And because activity is required under the Commerce Clause, the individual mandate exceeds Congress’ commerce power, as it is understood, defined, and applied in the existing Supreme Court case law. Congress must operate within the bounds established by the Constitution. For these reasons, Congress exceeded the bounds of its authority in passing the Act with the individual mandate. Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.
Family, Culture & CommunityBy Thomas Atwood, The Heritage FoundationBackgrounder, 03/28/2011
For tens of thousands of endangered children, foster care has become a trap door rather than the safety net they need to help them succeed. In particular, federal financing policies have favored foster care over other child welfare approaches, leading states to overuse foster care to the detriment of children who could be adopted or whose families could be rehabilitated. Congress should give states more flexibility in how they can use federal funding and stop providing foster care funding on a per capita basis, which promotes this dependence. States should refocus on achieving the best outcomes for children. Among other approaches, state agencies should work with private-sector agencies and faith-based networks to find adoptive parents and guardians for children languishing in foster care.
Monetary Policy/Financial RegulationBy Robert A. McTamaney, Washington Legal FoundationLegal Backgrounder, 03/28/2011
This Legal Backgrounder discusses the Martin Act, a 1921 piece of federal legislation that deals with securities transactions and fraud. In a society nine decades more complex than the one in which it was conceived, the Martin Act, intended in good faith to cure unfairness, has instead become a prime example of it. The statute is and should be preempted. Any other result does no honor to the law.
The Constitution/Civil LibertiesBy Eric G. Lasker, Washington Legal FoundationLegal Backgrounder, 03/28/2011
In its 2010-2011 Term, the United States Supreme Court granted certiorari to three cases in which defendants asserted federal preemption defenses in response to state common law tort claims in products liability litigation. The Court's focus on federal preemption of product liability claims follows closely on the heels of its similar consideration in its 2008-2009 Term of three cases that likewise addressed the scope of the preemption defense in such litigation. The Court's first preemption trilogy in its 2009-2010 Term offered the promise of some much-needed guidance on the preemption doctrine. In contrast, with two of the three 2010-2011 preemption cases now decided, the Court appears resigned to a case-by-case approach to preemption in which rulings will be narrowly decided based on the specific facts of each federal statute and regulatory regime at issue.
Crime, Justice & the LawBy Michael Volkov, Adeel Muhammad Bashir, Washington Legal FoundationLegal Opinion Letter, 03/28/2011
To most it’s an obvious point: The purview of criminal law should be limited to criminal conduct. Yet that point maybe lost on some since, as Chief Judge Alex Kozinski points out, United States v. Goyal, is just the latest in a “string of recent cases in which courts have found that federal prosecutors overreached by trying to stretch criminal law beyond its proper bounds.” It is no surprise then that in Goyal the U.S. Court of Appeals for the Ninth Circuit reversed the defendant’s convictions, and Judge Kozinski took the opportunity to rebuke the government with a simple message: Prosecutors should not bring criminal charges unless they have clear evidence of criminal wrongdoing.
Transportation/InfrastructureBy Ronald Utt, The Heritage FoundationWebMemo, 03/28/2011
President Obama’s High-Speed Rail (HSR) program came to its unofficial end on March 11 when Transportation Secretary Ray LaHood announced that the $2.4 billion in federal money promised to Florida would instead be redirected to passenger rail projects in other states. Florida’s new governor Rick Scott followed the examples of Governors John Kasich (R–OH) and Scott Walker (R–WI) in February when he rejected a federal grant of $2.4 billion to fund an HSR line between the Orlando and Tampa. Scott argued that the project’s future subsidies and projected cost overruns would burden Florida’s taxpayers and could not justify a costly project that would serve only a small fraction of the state’s travelers. With Amtrak now the key to the President’s rail program, a review of Amtrak’s recent performance reveals that this “transformational” event will take place upon a foundation of epic failure, gross mismanagement, and union featherbedding.
EducationBy Jonathan Haughton, et al., Beacon Hill InstituteStudies, 03/28/2011
This study demonstrates that charter schools outperform non-charter public schools on the 8th and 10th grade Massachusetts Comprehensive Assessment System (MCAS) exams by statistically significant margins after controlling for socio-economic differences among the student populations. We offer several explanations to account for these findings, paramount among them being the freedom charter schools enjoy from bureaucratic restrictions. This freedom allows charter school teachers to innovate with methods denied to their non-charter counterparts. Charter schools appear to practice tough love as well. Although the data required to conduct more comprehensive analysis is currently lacking, our research indicates that charter schools are a viable alternative to traditional public schools. If policymakers desire improved student test scores without greater costs, they would be well served to lift the restrictions obstructing charter school growth and amend legislation governing traditional public schools to incorporate similar elements of freedom and accountability.
Foreign Policy/International AffairsBy Jaime Daremblum, Hudson InstitutePaper, 03/28/2011
Argentine officials are mad that President Obama will not be visiting their country during his swing through Brazil, Chile, and El Salvador. But given its record, the Kirchner government does not deserve such a presidential visit. Its attacks on press freedom, its autocratic style, its manipulation of economic figures, its rampant corruption, its hostility toward the United States, and its warm ties with the Venezuelan dictatorship all suggest that Argentina has joined Bolivia, Ecuador, and Nicaragua in the radical Chávez camp. Once a regional leader, Argentina now finds itself increasingly isolated in the hemisphere. Argentina is no longer the “jewel of South America.” Today, it is among the “sick men” of South America, both economically and politically. The country can still recover its lost influence—but only if it makes a decisive break with the past eight years of Kirchnerism.
Foreign Policy/International AffairsBy Marion Smith, The Heritage FoundationBackgrounder, 03/28/2011
Although a free and democratic state after the reforms of 1989, Hungary has never had a legitimate written constitution that unambiguously represents the consent of the governed. In September 2010, the Fidesz–KDNP government, led by Prime Minister Viktor Orbán, initiated a constitution drafting process, and on March 14, it formally submitted a draft constitution to the Hungarian Parliament, which is now debating that proposal and plans to adopt it formally by April 18. By reinforcing natural rights, protecting economic freedom, ensuring an independent judiciary, and adopting the new constitution by ratification convention, Hungary can both intellectually and symbolically complete the regime change of 1989. At this moment, Hungary has a rare opportunity to establish institutions founded on universal principles of good government, but that outcome is by no means guaranteed.
Foreign Policy/International AffairsBy Nile Gardiner, The Heritage FoundationWebMemo, 03/28/2011
U.S. Secretary of State Hillary Clinton has announced that an agreement has been reached by the 28-member NATO alliance to enforce the no-fly zone over Libya. This follows several days of tense negotiations within the alliance, with Turkey and Germany now dropping their opposition to a NATO-led mission. But serious disagreements remain among alliance members over the rules of engagement in Libya. It is also unclear whether NATO will be in command of air-based and sea-based missile strikes against Libya’s military and political infrastructure, which projects a great degree of uncertainty. At this critical juncture, President Barack Obama should seek congressional approval of the use of force that would clarify for the American people the scope and goals of U.S. participation in the Libya intervention.
Economic GrowthBy Kyle A. Jackson, Property Rights AllianceInternational Property Rights Index, 03/24/2011
The 2011 International Property Rights Index (IPRI) is an international comparative study that measures the significance of both physical and intellectual property rights and their protection for economic well-being. In order to incorporate and grasp the important aspects related to property rights protection, the Index focuses on three areas: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR). This study analyzes data for 129 countries around the globe, representing ninety-seven percent of world GDP. Of great importance, the 2011 gauge incorporates data of PR protection from various sources, often directly obtained from expert surveys within the evaluated countries.
Foreign Policy/International AffairsBy James Phillips, The Heritage FoundationWebMemo, 03/24/2011
As turmoil and transformation sweep across the Middle East and North Africa, President Obama cannot afford to dwell on one crisis at a time. In particular, the United States must not neglect the ongoing crisis in Yemen, a country that has served as a base of operations for terrorist attacks aimed at the U.S. and its allies. A double dose of diplomacy and engagement is now vital to ensure that the U.S. can continue to conduct effective counterterrorism operations in the region. To help stabilize Yemen and maintain pressure on al-Qaeda in the Arabian Peninsula (AQAP), the Obama Administration should encourage a peaceful transition of power, maintain close contacts with Yemen’s military leaders, engage the opposition, coordinate policy with Saudi Arabia, and prevent Iran from fishing in troubled waters.
Economic and Political ThoughtBy Steven B. Smith, National AffairsArticle, 03/24/2011
Politics instills certain loyalties and passions in people; ideally, it is an activity intended to curb and control conflict within the territorial confines of a distinctive regime. While this understanding of politics is under attack today, the tension between the best regime and any actual regime is the space that makes politics possible. In the best regime, political philosophy would be unnecessary or redundant. Questions surrounding the idea of the best regime are best answered by political prudence or judgment: the form of knowledge that governs political life, and distinguishes the study of politics from all other arts. A political education is necessary to cultivate political judgment. A political education, therefore, must be an education in judgment; thus, it must be a liberal education broadly understood. Today, the study of politics—let alone the defense of politics—is simply too important to be left to the political scientists.
Natural Resources, Energy, Environment, & Science
Upton-Inhofe Legislation Would Block the EPA’s Harmful Climate Rules: U.S. Economy, Jobs, and Energy Costs at StakeBy Dana Joel Gattuso, National Center for Public Policy ResearchNational Policy Analysis, 03/24/2011
Congress and the American people rejected a cap-and-trade scheme last year after much debate and deliberation. But that has not stopped the Environmental Protection Agency (EPA) from skirting the legislative process, disregarding the intent of the Clean Air Act, and greatly expanding its own authority to hand down harsh and debilitating carbon dioxide emissions limits. Many members of Congress, led by U.S. Representative Fred Upton and U.S. Senator James Inhofe, are supporting the Energy Tax Prevention Act stop the EPA from regulating carbon dioxide emissions and bypassing the legislative process. The Energy Tax Prevention Act would rein in the EPA, put Congress back in control, and steer our economy toward a permanent complete and healthy recovery.
Economic GrowthBy Todd Zywicki, National AffairsArticle, 03/24/2011
The Obama administration’s economic policy returns us to the thinking of the 1950s and ’60s—to an economy in which big business, big labor, and big government are tied together in a relationship of mutual succor and support. The auto bailouts exemplify this new reality. Sold as a means of revitalizing the economy, they are in fact a means of transforming the relationship between the state and the market in a way that empowers large players at the cost of economic growth. The overall effect of such state capitalism is a kind of controlled stasis, in which the preservation of old jobs takes priority over the creation of new ones. Managed decline, rather than dynamic growth, is the defining feature of the Obama economy.
Monetary Policy/Financial RegulationBy John B. Taylor, National AffairsArticle, 03/24/2011
Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. The same approach that best serves the interests of freedom and the rule of law also makes for good economics. In both cases, setting out a rule and sticking to it helps policymakers resist interest-group pressure and avoid overreacting to short-term blips. It allows citizens to exercise their freedom and their judgment, and enables both the people and their leaders to keep their eyes on long-term needs and goals. Today’s economics should be informed by the theories built up in that time. Those facts and those theories argue against the recent reversion to Keynesian discretionary interventionism, and for a revival of the kinds of rules-based fiscal and monetary policies that have yielded unmatched stability and economic growth.
Economic and Political ThoughtBy Yuval Levin, National AffairsArticle, 03/24/2011
Austerity and decline are what will come if we do not reform the welfare state. The choice we face is between that combination and a different approach to balancing our society’s deepest aspirations. America still has a little time to find such an alternative. Conservatives must produce not only arguments against the liberal welfare state but also a different vision, a different answer to the question of how we might balance our aspirations. It must be a vision that emphasizes the pursuit of economic growth, republican virtues, and social mobility over economic security, value-neutral welfare, and material equality; that redefines the safety net as a means of making the poor more independent rather than making the middle class less so; and that translates these ideals into institutional forms that suit our modern, dynamic society.
EducationBy Andy Smarick, National AffairsArticle, 03/24/2011
The plight of Catholic schools—many of which are in dire financial straits—should concern everyone who cares about reducing educational inequality, ending cycles of poverty, and turning around America’s inner cities. Potential salvation for Catholic schools may be found in the creation of religious charter schools. The Supreme Court’s holding in the 2002 case Zelman v. Simmons-Harris, unintentionally adumbrated how a state might craft constitutionally acceptable legislation that allows for religious charter schools. This faith-based charter compromise could lead to a renewed urban school system—one based on equitable funding, more diverse options, parental choice, and comprehensive transparency and accountability. It is also probably the most practical way to rescue an institution that has played an enormous role in America’s history, and that continues to help millions of children achieve the American Dream.
Budget & TaxationBy Josh Barro, National AffairsArticle, 03/24/2011
The pension-cost explosion is hitting nearly every state in the Union. Unfortunately, in most places, state legislators are overmatched by savvy public-employees’ unions and by pension-fund managers wedded to the status quo. Concern about this impending crisis should extend far beyond state capitals, because its consequences will affect much more than state balance sheets. The staggering burden of paying out retirement benefits is increasingly preventing state and local officials from financing all the other services that citizens expect their governments to perform. Any successful pension reform should address the dual problems of excessive cost and excessive risk. Pension reform must be enacted—and soon.
SB 5773: Offering Health Savings Accounts and Direct Patient-provider Primary Care Practices to State EmployeesBy Roger Stark, Washington Policy CenterLegislative Memo, 03/24/2011
Washington State’s SB 5773 deals with expanding health insurance options for state employees. The bill directs the Health Care Authority to include health savings accounts (HSAs) and direct patient-provider primary care practices, or medical homes, in the list of available health insurance plans for state workers. Currently state employees are barred from choosing HSAs as their family health care benefit. One of the solutions to out-of-control health care spending is to allow individuals more control over their health care dollars. HSAs—and, thus, SB 5773, which permits them—are an excellent tool to put more patient-directed spending into our health care system.
Natural Resources, Energy, Environment, & ScienceBy Romina Boccia, Independent Women's ForumPolicy Focus, 03/24/2011
Today, given current technology, solar and wind power are simply unable to meet the energy needs of the American public. They are unreliable, costly, and inconvenient, and depend on wasteful government subsidies to compete in the energy marketplace. Similarly, ethanol has failed to live up to its promise of reducing carbon emissions and ending American dependence on foreign oil. Instead, US ethanol production wastes energy, creates more carbon emissions than it saves, raises the cost of fuel, and drives up the prices of nearly all foods. Instead of wasting taxpayer dollars by lavishing subsidies on select renewable energy sources and driving up energy prices by mandating their usage, policymakers should reduce artificial barriers to domestic energy production and create a level playing field so that energy providers compete on their merits.
EducationBy Greg Forster, Friedman Foundation for Educational ChoiceReport, 03/23/2011
This report collects the results of all available empirical studies using the best available scientific methods to measure how school vouchers affect academic outcomes for participants, and all available studies on how vouchers affect outcomes in public schools. Contrary to the widespread claim that vouchers do not benefit participants and hurt public schools, the empirical evidence consistently shows that vouchers improve outcomes for both participants and public schools. In addition to helping the participants by giving them more options, there are a variety of explanations for why vouchers might improve public schools as well. The most important is that competition from vouchers introduces healthy incentives for public schools to improve.
EducationBy Andrew Gillen, Jonathan Robe, Center for College Affordability and ProductivityReport, 03/23/2011
This report examines two commonly used higher education price indices, the Higher Education Price Index (HEPI) and the Higher Education Cost Adjustment (HECA), finding that these indices are almost always misused and suffer from significant biases. Both the HEPI and HECA are often used to discount tuition levels; however, both indices are inappropriate for such a use. The whole point of using a price index in this instance is to put otherwise incomparable values into the same context, something that an industry-specific price index does not allow. These indices also suffer more than most price indices from several sources of bias, including productivity bias, quality bias, substitution bias, and (in the case of the HEPI) from a self-referential bias.
EducationBy Robert E. Martin, Andrew Gillen Center, Center for College Affordability and ProductivityReport, 03/23/2011
While financial aid is designed to increase access by lowing prices, this report shows that recent increases in financial aid have not improved affordability and have therefore not increased access. We argue that the reason for this is that colleges are able to capture the aid by increasing prices. This does not suggest that colleges and universities are engaged in either collusive or venal behavior. Rather, these institutions are simply responding to the perverse incentive system they confront. The incentive system is what must be changed.
Retirement/Social SecurityBy Andrew G. Biggs, American Enterprise InstituteRetirement Policy Outlook, 03/23/2011
With Social Security deficits increasing and the US population aging, policymakers today face a choice. If they raise Social Security’s maximum taxable wage—a common proposal—individuals will respond by working and saving less, which weakens the economy and does not fix the problem. Instead, we should reduce Social Security benefits for middle- and high-income earners to encourage more working and saving—and free up the government to focus on the daunting challenges of Medicare and Medicaid.
Foreign Policy/International AffairsBy José R. Cárdenas, American Enterprise InstituteLatin American Outlook, 03/23/2011
Given Venezuelan leader Hugo Chávez’s theatrical obsession with the limelight, it is easy to overlook the activities of other radical populist leaders in the Andean region. This is a dangerous oversight. In Ecuador, operating under the radar, Rafael Correa is imposing his own autocratic vision for his country’s path to salvation. In doing so, he has made common cause with rogue international actors and criminal groups who care not a whit about the interests of the Ecuadorean people, but only about maximizing their destructive agendas. The Obama administration should disabuse itself of the notion that Correa is someone “with whom we can do business” and instead increase scrutiny of his activities in this critical region of the Western Hemisphere.