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Recent Policy Studies
Budget & Taxation
The Budget Debate in Pictures: A Look at CBO Projections and the Role that Bush-Era Tax and Spending Policies Play in the DeficitBy William McBride, Tax FoundationFiscal Facts, 06/15/2011
Kathy Ruffing and James Horney of the Center on Budget and Policy Priorities (CBPP) made quite a stir with their May 10 report titled “Economic Downturn and Bush Policies Continue to Drive Large Projected Deficits.” The report states that “the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.” But the report paints an incomplete picture by placing only certain budget items in a graph of the deficit. Should we blame Bush (or rather, all that happened during his presidency) for this? In a sense, yes, but not for the reason the CBPP would have us believe; the role of Bush-era policies in the projected deficits is mainly on the spending side of the equation, not the tax side.
Budget & TaxationBy Jason Richwine, The Heritage FoundationReport, 06/15/2011
Numerous studies have concluded that federal workers do receive a substantial wage premium. Most studies have used the cross-sectional human capital method, which compares federal workers to private workers who have the same skills. The cross-sectional method is not perfect, however, and supplemental analyses can be useful in confirming its results. Rather than comparing workers at a single point in time, this report follows individual workers as they switch between the federal and private sectors. Workers who change jobs receive a substantially larger raise when they switch into federal employment rather than into another private job. This result corroborates the findings of the cross-sectional studies, providing further evidence that federal workers enjoy a wage premium.
Foreign Policy/International AffairsBy Ariel Cohen, The Heritage FoundationWebMemo, 06/15/2011
For the last two years, the Obama Administration has touted its Russia “reset policy” as one of its great diplomatic achievements. Yet the reality that Medvedev has a limited capacity to deliver and is unlikely to continue in office means that the U.S. should rethink its strategy for engaging with Russia’s leadership. The U.S. should pursue its national interests in relations with Moscow instead of chasing a mirage. Russia can benefit from access to U.S. science—especially health sciences, technology, and investment—if Moscow improves its foreign and domestic policies. However, Congress and the Administration should not tolerate Russian mischief, either domestic or geopolitical. The U.S. should not shy away from articulating its priorities and values to its Russian partners—and play hardball when necessary.
Foreign Policy/International AffairsBy James Phillips, James Jay Carafano, Morgan Roach, The Heritage FoundationWebMemo, 06/15/2011
The Obama Administration, which launched the war in Libya with no clear military plan or exit strategy, now must fashion an acceptable way forward. The Administration’s short-sighted effort to score a quick and easy military victory over Colonel Muammar Qadhafi’s regime failed to end the threat to civilians in “days not weeks,” as President Barack Obama promised. Unless Qadhafi can be persuaded to step down, civilians will continue to be killed in the stalemated civil war, undermining the stated humanitarian goals of the intervention. U.S. policy must honor commitments to NATO but also scope the effort consistent with U.S. interests. The President has failed to consult Congress adequately on this matter; therefore, it is appropriate for Congress to propose a reasonable path forward that respects the commitments made to U.S. allies and the constitutional authority of the commander in chief but sets clear limits on what Congress will support.
Natural Resources, Energy, Environment, & Science
North American Electricity: Escalating Prices Possible Unless Infrastructure Investment Barriers are EasedBy Gerry Angevine, Carlos A. Murillo, Fraser InstituteStudies, 06/15/2011
Market-driven development of the continent’s energy resources and endowments can bring economic benefits to North Americans in the form of expanded employment opportunities and income, improved living standards, energy price stability, and greater security of energy supply. This report addresses the magnitude of investment that will be required in electricity infrastructure in North America and also identifies some of the market, regulatory, and other challenges associated with the materialization of such investments. Reforms such as reducing energy and environmental uncertainties and risks, and streamlining the regulatory approval processes for nuclear plans will help alleviate and solve some of the challenges associated with electricity infrastructure in North America.
Medicare Auctions for Durable Medical Equipment: Price Suppression and Research and Development InvestmentBy Benjamin Zycher, Pacific Research InstituteResearch Papers, 06/15/2011
The auction design for medical devices and equipment as established by the Centers for Medicare and Medicaid Services is seriously flawed, in ways that can be predicted to yield prices substantially lower than those that would be observed in a competitive market. The CMS auction design is unambiguous: it yields prices too low. This outcome results from the flawed design features. Because incentives to invest in the research and development of new medical technologies are driven by perceived returns, there is a downward bias in auction prices that is virtually certain to reduce such investment. The sheer magnitude of this adverse economic effect suggests strongly that reform of the CMS auction process should be a very high priority for policy makers.
Natural Resources, Energy, Environment, & ScienceBy Todd Wynn, Cascade Policy InstituteFact Sheet, 06/15/2011
Bisphenol-A (BPA) is a chemical building block used primarily to make polycarbonate plastic and epoxy resins, both of which are used in a wide variety of applications that make our lives better and safer. In wide use for over fifty years, BPA has been extensively studied. The best science continues to tell us that consumer exposure to BPA is far below levels of concern even for infants and children. That being said, the Oregon legislature should be careful before regulating BPA. Despite considerable fears raised by activist groups and the press, the science does not warrant regulations on BPA. Instead, it shows that human exposure is too low to have any measurable impact. As a result, regulatory measures to ban or limit BPA use simply promise to raise prices for consumers and could have unintended, adverse health and safety consequences.
Foreign Policy/International AffairsBy Lazar Berman, American Enterprise InstituteThe American, 06/15/2011
The narrative that Israel is tactically proficient but strategically hapless continues to gain currency. Commentators often criticize the Jewish state for its over reliance on force and its inability to consider the strategic ramifications of its responses to Hezbollah, Hamas, and myriad attempts to delegitimize Israel. It is easy to disparage Israel’s actions without appreciating the complexity of the unceasing challenges with which it must cope. What’s more, there has been a dearth of sustained analysis of the ramifications of Israeli “blunders.” Tracking the outcome of recent controversial Israeli actions, surprisingly, portrays Israel in an entirely different strategic light. Though often caught off-guard, the Israeli government and military learn quickly, understand the calculations of its enemies, and are able to minimize continued bloodshed by firm deterrent responses.
Regulation & DeregulationBy Randall Lutter, American Enterprise InstituteRegulation Outlook, 06/15/2011
As the Food Safety Modernization Act, signed by President Barack Obama on January 4, 2011, is implemented, it is appropriate to take stock of food-borne illness (FI) in the United States. This outlook report conducts a careful review of federal FI statistics and finds that reporting and data disclosure are out of date and woefully incomplete. As important, it finds that the available evidence indicates no increase in either the number of outbreaks or their severity. Further, a key measure of the government response to such outbreaks has been deteriorating.
EducationBy Vance H. Fried, Cato InstitutePolicy Analysis, 06/15/2011
Undergraduate education is a highly profitable business for nonprofit colleges and universities. They do not show profits on their books, but instead take their profits in the form of spending on some combination of research, graduate education, low-demand majors, low faculty teaching loads, excess compensation, and featherbedding. The industry’s high profits come at the expense of students and taxpayer. To lower the cost of education, federal government policies should encourage competition. Regulations should not favor nonprofits over for-profits. Further, the accreditation process should be reformed so that any qualified institution can easily enter the industry. The financial-aid process should be redesigned to remove the bargaining advantage that colleges currently hold over prospective students. To the extent that the federal government continues to play any role in higher education, its goal should be to ensure that all deserving students have access to higher education, not to maintain high industry profits.
Economic GrowthBy John H. Makin, American Enterprise InstituteEconomic Outlook, 06/15/2011
Market conditions in the United States, Japan, China, and Europe portend a weakening global economy. While not dramatic in any one region save an earthquake-burdened Japan, these conditions could accumulate to create a problematic loss of momentum for global growth, especially compared to current upbeat consensus views for the second half of 2011.
Health CareBy Scott Gottlieb, American Enterprise InstituteHealth Policy Outlook, 06/15/2011
Requirements to test new drugs against older medicines would add a major hurdle to the development and approval of new medicines. And equally important, the proposed mandates are unnecessary.
Foreign Policy/International AffairsBy Bruce Klingner, The Heritage FoundationBackgrounder, 06/14/2011
Two factors have driven the debate over the planned U.S. military realignment in Japan: campaign pledges made by the Democratic Party of Japan and complaints from Okinawans about the presence of the U.S. military. These factors have had a particularly strong impact on efforts to preserve the Marine Corps Air Station on Okinawa. However, other critical factors—national interests, regional threats, and the U.S–Japan alliance’s military requirements—are absent from the discussion over the station’s scheduled relocation from Futenma to a more remote locale. The Obama Administration should continue to press Japan for implementation of the military realignment agreement. It is past time for Tokyo to jettison its passive consensus-building approach and take more assertive steps.
Health CareBy Hal C. Scherz, The Heritage FoundationHeritage Lecture, 06/14/2011
The recipient of this year’s Salvatori Prize for American Citizenship is the founder of Docs 4 Patient Care (D4PC), formed in 2009 as a voluntary association of medical practitioners that advocates sensible health care reform and affordable access to quality care for everyone. In the past two years, D4PC has enlisted doctors who love medicine and love their patients, and who believe in the sanctity of the doctor–patient relationship, to join it in providing the means for doctors to give their patients a clear understanding about what is happening to their health care and what they must do to preserve it.
EducationBy Nathan Levenson, American Enterprise InstituteWorking Paper, 06/14/2011
Nathan Levenson offers practical solutions to tame out-of-control special education spending while serving special-needs students better. Because of the excess of special education litigation done today, school districts are cautious in even considering costs when designing student special education plans. As a result, there has been a steady increase in special education spending along with remarkably little attention paid to effectiveness or efficiency. Levenson demonstrates that districts can improve in four key areas with: better integration of special education with general education classrooms; smarter deployment of support staff; more sophisticated metrics to gauge effectiveness; and more strategic management structures.
Natural Resources, Energy, Environment, & ScienceBy Dennis Ambler, Science and Public Policy InstitutePaper, 06/14/2011
In view of the rejection by the Environmental Protection Agency of challenges to their endangerment finding, it is not surprising to find that they have a long-term stake in the climate models by the Intergovernmental Panel on Climate Change. Endangerment finding claims are, in fact, overtly political and are the culmination of many years of maneuvering by the EPA.
EducationBy Commonwealth Foundation for Public Policy Alternatives, Commonwealth Foundation for Public Policy AlternativesPolicy Points, 06/14/2011
More than 106,000 children are enrolled in the 144 public schools comprising Pennsylvania’s lowest performing 5 percent on student proficiency. These schools reported more than 5,400 violent incidents on students and staff in the 2008-2009 school year.
Natural Resources, Energy, Environment, & ScienceBy Terry Anderson, Shawn Regan, Hoover InstitutionResearch, 06/14/2011
When GoDaddy CEO, Bob Parsons, posted a video online of himself shooting an elephant in Zimbabwe, he unleashed a stampede of criticism. People for the Ethical Treatment of Animals (PETA), and 20,000 others, discovered the video then dropped their account with GoDaddy. Hunting and wildlife-related tourism in Africa have spurred private sector investment in wildlife conservation. The area is home to more than 9,000 private game ranches, 1,100 privately managed nature reserves, and over 400 conservancies. For the landowners who bear the costs of wildlife, the decision of whether to protect wildlife is a simple one: if it pays, it stays. The ban on hunting gives wildlife little or no economic value, causing rural Africans to view wildlife as a liability to be avoided. As a result, landowners have increasingly turned to agriculture instead of habitat protection, which decreases available habitat and increases the potential for human-wildlife conflicts.
EducationBy Matthew Denhart, Christopher Matgouranis, Oklahoma Council of Public AffairsReport, 06/14/2011
Like most states, Oklahoma is facing tough times funding public services. This study presents two key findings. First, Oklahoma’s state colleges have not suffered financially over the past half-decade. Statewide, university revenues have actually increased over this period, even after controlling for inflation and growths in enrollment. Second, this study makes the case that increasing state appropriations for higher education does not positively affect a state’s economic growth. While human capital formation is an important variable in virtually all economic growth models, this study suggests that increased state funding for higher education may be failing to actually increase a state’s human capital stock.
Natural Resources, Energy, Environment, & Science
Observed Climate Change and the Negligible Global Effect of Greenhouse-gas Emission Limits in the State of MontanaBy Science and Public Policy Institute, Science and Public Policy InstituteReport, 06/14/2011
The historical observations of weather and climate in Montana show that climate variability from year-to-year and decade-to-decade plays a significant role in Montana’s climate. While temperatures have generally appeared to have risen across the state over the past century (although part of this rise may be a result of non-climatic influences on the thermometers), precipitation changes have been largely limited to the early portion of the 20th century, and other climate impacts are largely influenced by natural variations and cycles driven in part by decadal variations in the Atlantic and Pacific Oceans. Most significantly, they find that Montana’s greenhouse gas emissions have virtually no effect on global climate.
Regulation & DeregulationBy George S. Ford, Lawrence J. Spiwak, Phoenix Center for Advanced Legal and Economic Public Policy StudiesPolicy Bulletin, 06/14/2011
As part of the sweeping Telecommunications Act of 1996, Congress directed the Federal communications Commission to adopt regulations to promote the commercial availability of cable set-top boxes. To date, the agency’s efforts to implement section 629 of the act has wasted almost 1 billion dollars. Some still encourage the Commission to pursue implementation of this statute by imposing rigid technological standards on the multichannel video industry. Section 629 has outlived its usefulness. In this policy bulletin the Phoenix Center sets forth what they believe to be sound economic, legal and evidentiary arguments to support a sunset of Section 629 under that section’s unique statutory provisions. Sunset hinges on the definition of “fully competitive,” which we define as a condition where market forces are sufficiently strong to eliminate the need for government regulation. After this study the Phoenix center finds that there is a plausible legal and evidentiary case for sunset.
EducationBy Janie Scull, Amber M. Winkler, Thomas B. Fordham FoundationAnalysis, 06/14/2011
Public data indicate that the national proportion of students with disabilities peaked in 2004-05 and has been declining since. This overall trend masks interesting variations; for example, proportions of students with specific learning disabilities, mental retardation, and emotional disturbances have declined, while the proportions of students with autism, developmental delays, and other health impairments have increased notably. The ratio of special-education teachers and paraprofessionals to special-education students also varies widely from state to state—so much so that our analysts question the accuracy of the data reported by states to the federal government.
Health CareBy Brian Blasé, C.L. Gray, Platte Institute for Economic ResearchReport, 06/14/2011
In Nebraska alone, inflation-adjusted per capita Medicaid spending increased 224 percent over the past two decades. Nebraska’s state taxpayers pay about 40 percent of the state’s Medicaid spending with the federal government paying the remainder. This open-ended federal reimbursement of Medicaid spending is a primary reason for states having budget crises, and it partially explains the federal government debt crisis. The ability to pass costs to taxpayers in other states has fueled Medicaid’s growth to an unsustainable level. This is a system designed to fail, and given that Obamacare’s Medicaid expansion will add nearly 100,000 additional Nebraskans to Medicaid, the problem will only worsen. Unless the method by which Washington helps states cover Medicaid expenses is fundamentally changed, Medicaid will not only exacerbate the federal budget crisis, it will likely push some states into bankruptcy.
Health CareBy Jagadeesh Gokhale, et al., Nevada Policy Research InstituteAnalysis, 06/14/2011
With 22 percent of Nevada’s population projected to be on Medicaid by 2023 under the Affordable Care Act (ACA), the state’s Medicaid expenditures are projected to grow by an additional $5.4 billion beyond the increase projected without the ACA. To avoid making deep cuts in other necessary public services and to maintain the state’s economic competitiveness by avoiding tax increases, Nevada lawmakers have a strong incentive to control the huge potential growth of Medicaid expenditures under ACA. However, few avenues appear to be available to restrain Medicaid spending, given the bill’s prohibitions against reducing program eligibility and altering health care coverages.
Family, Culture & CommunityBy William C. Duncan, Institute for Marriage and Public PolicyResearch Brief, 06/14/2011
In court cases challenging the definition of marriage in the United States, a prominent claim is that same-sex marriage is a fundamental right. This brief provides excerpts from cases from non-U.S. jurisdictions that have weighed in on this claim and found that there is no right to same-sex marriage in the relevant legal charters the courts were assessing. It also notes court decisions that have relied on the organic law of the nation to mandate a redefinition of marriage.
Economic GrowthBy Paul J. Gessing, Rio Grande FoundationReport, 06/14/2011
Expensive studies are in the works and much discussion is taking place on the best ways to develop New Mexico’s economy. For too long, economic development in New Mexico meant waiting for the federal government or the Labs to bring more jobs and money to the area. In an effort to steer the debate towards proven, pro-free-market policies, the Rio Grande Foundation has released its own study, “A Roadmap for a More Economically-Competitive New Mexico” that bases its findings on “tried and true” principles of taxation, spending, and regulation as a path forward for New Mexico’s economy.
Transportation/InfrastructureBy Jake Haulk, Eric Montarti, Allegheny Institute for Public PolicyPolicy Brief, 06/14/2011
Monopoly transit agencies do not face cost pressures from competition, so riders and taxpayers are constantly being squeezed in order to keep service running as cost increases regularly outstrip available revenues. And for a public sector monopoly this problem is even more pronounced. In Pennsylvania, The Transportation Funding Advisory Commission (TFAC) must not ignore this side of the “funding” issue in its deliberations. Consideration must also be given to the difficulties created by the absence of cost containment pressures competitive private firms face.
National SecurityBy Ariel Cohen, Morgan Roach, The Heritage FoundationWebMemo, 06/13/2011
Last month, Kazakhstan’s Parliament approved the sending of troops to Afghanistan. The Taliban immediately issued a threat, warning Kazakhstan that its willingness to participate in the war on terrorism would make the country a target for violence. Days later, Kazakh security services’ headquarters in the northwestern city of Aktobe and the capital city of Astana were attacked by suicide bombers. As the United States and NATO battle al-Qaeda and the Taliban in Afghanistan and Pakistan, radical Islamic organizations are expanding north through the porous borders of Central Asia. Further attacks could jeopardize vital transit facilities and massive energy projects which is why the U.S. and NATO must pay closer attention to the spread of international terrorism and its negative implications.
Budget & TaxationBy Frank Gamrat, Jake Haulk, Allegheny Institute for Public PolicyPolicy Brief, 06/13/2011
Many, perhaps most, Pennsylvania school districts are facing a financial crunch. With taxpayers already stretched to the limit and Harrisburg contemplating large cuts to K-12 education spending, districts must watch every penny. One way the Legislature can help offset the budget cuts and assist school districts would be to repeal the prevailing wage requirement for school construction and renovation.
Transportation/InfrastructureBy Jennell Lewis, Grassroot Institute of HawaiiResearch Article, 06/13/2011
Debate over rail transportation in Hawaii has been ongoing for over half a decade. Advocates for the system insist that Honolulu’s traffic woes can only be remedied with the building of a steel rail system and that without it traffic congestion in Honolulu will significantly worsen. According to state research, the population of Oahu is expected to grow by 200,000 by 2030, creating 750,000 more daily car trips. This research gathered by the City and Council of Honolulu suggests that the rail will keep about 25,000 cars off the road daily and by 2030 reduce traffic congestion 11%. However, those opposed to the rail argue that it will do nothing to solve Hawaii’s traffic problems and will simply increase the state debt which is already the highest in the nation.
Economic GrowthBy Dalibor Rohac, Adam Smith InstituteBriefing Paper, 06/13/2011
Income inequality is not a useful measure. Measures of income inequality tell us nothing about the living conditions of the poor, their health and their access to economic opportunity. Income inequality can easily increase in societies in which everyone, including the very poorest individuals, is becoming better off. Conversely, a reduction in inequality can be associated with deterioration in the living conditions of the less well-off members of the society.
Budget & TaxationBy Nicholas A. Fett, Commonwealth Foundation for Public Policy AlternativesPolicy Brief, 06/13/2011
On June 30, 15 of Pennsylvania’s 19 government union contracts expire, with two more expiring in August. The average wage, including benefits, for state government employees has risen by 45% over the past 10 years, which is more than double the rate of inflation (22%). Private sector wages have risen only 34%.1. The following analysis and recommendations will provide a guideline for reforming government employment and aligning public sector compensation with that of the private sector.
PhilanthropyBy Joel Graves, Washington Policy CenterPolicy Note, 06/13/2011
Philanthropy is under attack. Recent movements in California and subsequently in Florida have leaders at many charitable organizations worried. In 2009, Americans voluntarily contributed more than $300 billion to charitable causes to feed the hungry, promote education and research, and enrich the culture of our nation. A few people, however, believe there is a lack of contribution to so-called minority-led causes. The argument is that because charitable giving is tax-exempt, it is lost government revenue and therefore should be considered a “public good.” This logic is being advanced by an organization called The Greenlining Institute in Berkley, California. In an attempt to redirect more charity dollars towards supposedly underrepresented causes, executive director Orson Aguilar has used the legislative process to convince large, private foundations to cooperate. The potential harm of increased government intervention in this arena has left many people backpedaling.
Monetary Policy/Financial RegulationBy Todd Zywicki, American Enterprise InstituteThe American, 06/13/2011
The United States has long been a leader in innovation in payment systems—MasterCard and Visa, for example, are the dominant payment processing networks in the world. New technologies such as PayPal and mobile payment technologies are poised to revolutionize the payment landscape still further, bringing with it new opportunities and security threats to consumers and the economy. The Durbin amendment, passed with no discussion of its likely impact on consumers and the economy, threatens this global leadership and innovation. Congress should reconsider this ill-advised venture into government price-setting before it is too late.
Budget & TaxationBy Curtis Dubay, The Heritage FoundationBackgrounder, 06/13/2011
The 2010 Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act—which extended the 2001 and 2003 tax cuts for two years—also extended the lifespan of other policies that will not benefit the economy. The country is in dire need of tax reform, yet confusion reigns about what exactly this reform should entail. Congress now has an opportunity to reverse some of those mistakes and simultaneously lay the groundwork for fundamental tax reform.
The Constitution/Civil LibertiesBy Thomas J. Main, Hoover InstitutionPolicy Review, 06/13/2011
In planning a freshman undergraduate curriculum with colleagues recently, the question arose as to what type of understanding we wanted to impart to our students about the Constitution. Is there some practical way to impart a critical understanding of the Constitution in just a very few classes? It turns out there is: Assign the students Sanford Levinson’s Our Undemocratic Constitution, or Robert Dahl’s How Democratic is the American Constitution?, Daniel Lazare’s The Frozen Republic: How the Constitution is Paralyzing Democracy could also serve this purpose. But at the heart of these works are two other types of supposed constitutional defects. Levinson and the other authors are all more or less critical of bicameralism, the presidential veto, and judicial review; the analysis of these institutions is what makes these books especially interesting though sometimes wrongheaded.
Transportation/InfrastructureBy Ronald Utt, The Heritage FoundationWebMemo, 06/13/2011
At May congressional hearings, Representative Jon Mica (R–FL), chairman of the House Committee on Transportation and Infrastructure, proposed (1) that 363 of the 456 miles that comprise the Northeast Corridor (NEC) owned by Amtrak be transferred to the U.S. Department of Transportation (DOT) or a newly created government entity and (2) that the U.S. DOT seek competitive bids from private-sector investors/operators to provide the funds and expertise to reconstruct the corridor and provide genuine high-speed rail (HSR) service over the newly renovated line. While the obstacles facing the project are substantial, Mica should be applauded for this bold step to end to the death grip that the Federal Railroad Administration, Congress, rail unions, and Amtrak management have on passenger rail in America.
Schooled in Obstruction: Maricopa Community College Staff Blocks Reforms Cost-Cutting Reforms while Pushing Tax and Tuition HikesBy Mark Flatten, Goldwater InstituteGoldwater Institute Watchdog Report, 06/13/2011
For years governing board members for Maricopa County community colleges in Arizona have struggled to get straight answers about how much money being spent on feeding layers of unneeded management. They have voiced concerns that too much money is going to administrative overhead and too little to benefit students. Several current and former board members say they are not confident they’ve gotten clear explanations from staff as to how much is being spent inunnecessary management. But when they dig too deeply, they are blocked by the district’s chief administrator, Chancellor Rufus Glasper, who warns that they are venturing into the operational aspects of the district, where in his view they are not allowed to be. The district spends more money every year than most cities in Arizona, but after recent budget cuts by the Arizona state legislature Glasper is asking the board for more money from students and tax payers.
Budget & TaxationBy David John, The Heritage FoundationWebMemo, 06/13/2011
As an antidote to months of Obama Administration rhetoric that Social Security “isn’t the problem,” three Senators have produced legislation that both recognizes the program’s financial realities and would fix it for the next 75 years. The Social Security Solvency and Sustainability Act, S. 804, introduced by Senators Lindsey Graham (R–SC), Rand Paul (R–KY), and Mike Lee (R–UT), would gradually increase the early and normal retirement ages and gradually reduce benefits for the highest-income retirees. If it became law, Social Security would still run deficits, but they would be much smaller in the near term and would end permanently after 2052. This is far more responsible than the results of what appears to be the Obama Administration’s preferred scenario: perpetual deficits for at least the next 75 years and 22 percent benefit cuts for all after 2036.
EducationBy Robert S. Eitel, Kent D. Talbert, Federalist SocietyArticle, 06/10/2011
Rulemaking is often difficult, requiring close attention to the language of statutes that are poorly drafted with little or no legislative history; however, this is not the case with the substantial misrepresentation, incentive compensation payment, and state authorization provisions of the Higher Education Act (HEA). The Final Regulations remain vulnerable due to an expansive reading of the HEA by the Executive Branch. Critics assert that the promising discussion in the spring of 2009 on ways to develop rules to guide institutions through the requirements of the HEA has changed into a debate in which both foes and allies of the Administration have found common cause to oppose many of the controversial elements of the Final Regulations. The Department’s recent attempt to use informal guidance to clarify language that contradicts the HEA only underscores their defective nature. The Department should rescind the regulations and that it should begin the rulemaking anew.
Regulation & DeregulationBy Susan Dudley, Federalist SocietyArticle, 06/10/2011
Over the course of our history, concerns about the cumulative impact of regulations have occasionally reached a level of public discourse that led to meaningful efforts at regulatory reform. There is evidence that we may be witnessing such a period today. This article begins with a brief review of previous efforts at regulatory reform, and then evaluates the regulatory landscape today. It then examines possible regulatory reform initiatives in the legislative branch and executive branch.
EducationBy Todd Myers, Washington Policy CenterPolicy Note, 06/10/2011
Six years ago, the Washington state legislature passed legislation requiring that all new schools in the state meet “green” buildings standards, known as the Washington State Sustainable Schools Protocol. During the past six years, research has consistently shown these schools do not meet the energy efficiency targets promised by “green” building advocates. Proponents also claimed the new “green” schools would improve student test scores by creating a better learning environment. The data show that students at Washington’s “green” schools have a lower average education achievement ranking than traditionally built schools, according to data from the State Board of Education’s 2010 Public School Achievement Index. With increasingly tight budgets, the state’s school districts should not be required to waste precious dollars on building standards that do not help meet the basic goal of education: helping children learn.
ImmigrationBy Mark Metcalf, Center for Immigration StudiesBackgrounder, 06/10/2011
American immigration courts are the heart of a system that nurtures scandal. Their work touches nearly every aspect of America’s immigration system. These courts are essential to recruit the bright and talented to American shores, to alleviate persecution, and to secure this nation’s borders and neighborhoods. But they cannot perform their critical work. Deception and disorder rule. These courts have become—in the words of frustrated judges—“play courts.” In reality, they are courts that are built to fail.
Budget & TaxationBy Nick Kasprak, Tax FoundationAnalysis, 06/10/2011
Now, for the first time, The Tax Foundation has presented data on property tax statistics that include nearly all counties in the United States. They rank counties three different ways: by median property taxes paid on homes, by median property taxes as a percentage of median home values, and by median property taxes as a percentage of median household income. Hunterdon County, New Jersey ranks first for median property taxes. For median property taxes as a percentage of median home value, Orleans County, New York takes the top spot, and all of the top ten counties for this statistic are in upstate New York. Finally, the No. 1 county for median property taxes as a percentage of median household income is Passaic County, New Jersey.
Regulation & DeregulationBy William P. Ruger, Jason Sorens, Mercatus CenterReport, 06/09/2011
This project develops an index of economic and personal freedom in the American states. Specifically, it examines state and local government intervention across a wide range of public policies, from income taxation to gun control, from homeschooling regulation to drug policy.
Budget & TaxationBy Joseph Henchman, Tax FoundationFiscal Facts, 06/09/2011
In short, while film incentive programs were once universally applauded as great economic development tools and tourism boosters, their merits are now being rigorously debated. At a minimum, film incentive programs should be required to report how many dollars in incentives were provided per each Full-Time Equivalent job created by qualified productions. Programs should be reviewed periodically for their effectiveness by legislative oversight or a third party.
Budget & TaxationBy Joseph Henchman, Tax FoundationFiscal Facts, 06/09/2011
“Amazon” tax laws such as the one Louisiana is currently considering are poor tax policy and likely unconstitutional. Some possible amendments to obviate these flaws include: Require that in-state affiliates be the source of a majority of the out-of-state seller’s sales in the state for the collection obligation to be effective; set a de minimis threshold of $1 million or more of in-state referred sales for the law to apply to a particular out-of-state company; replace the collection obligation with a requirement that the out-of-state vendor notify the customer by e-mail that a use tax obligation may exist; treat out-of-state and in-state online businesses alike by forcing in-state businesses to collect each jurisdiction’s respective sales tax on all their out-of-state sales; and exempt the in-state online sales by brick-and-mortar retailers from the state sales tax.
Health CareBy Ronald Bailey, Reason FoundationReason, 06/09/2011
We do in fact know what works when it comes to restraining prices, encouraging innovation, and increasing consumer satisfaction—competition in markets. Markets are superb at gathering widely dispersed information and resources from millions of people and firms and then distilling that information into prices. Here’s a partial list of what needs to be done: Allow physicians to sell their services in any form that they choose, as group members, health maintenance organizations, fee-for-service, etc. Nurses and other health care professionals should be encouraged to compete with physicians for primary care services. Insurers should be allowed to compete across state lines offering a wide variety of policies tailored to the perceived needs of various customers. Consumers looking out for their own health and insurance needs would be vigilant about the costs and benefits of treatments, ensuring that medical progress remains economically affordable.
Crime, Justice & the LawBy Veronique de Rugy, Reason FoundationReason, 06/09/2011
Economists are getting better at understanding how to keep people out of jail. In a 2007 paper for Economic Inquiry, for instance, the U.C.–Santa Barbara economist Jeff Grogger found there are large deterrent effects from increased certainty of punishment and much smaller, generally insignificant effects from increased severity. Such findings call into question the economic rationality of increasingly long prison terms. Who knows how many more millions will be locked up by the time public policy finally catches up with economics?
Natural Resources, Energy, Environment, & ScienceBy Jonathan H. Adler, PERC – The Property and Environment Research CenterPERC Reports, 06/09/2011
If the common law is to be taken seriously as a viable alternative to conventional regulation, much work needs to be done. Making the case for the common law requires additional research and analysis into how common law systems operate in practice to address environmental concerns, how they can be improved, and how they compare with regulatory options. In the alternative, it is time for free market environmentalists to reconsider what made the common law attractive in the first place and develop ideas for regulatory or other mechanisms to resolve pollution problems while respecting property rights and facilitating market exchange.
Foreign Policy/International AffairsBy Christopher Sands, Hudson InstituteBriefing Paper, 06/09/2011
John Sloan Dickey observed in 1971 that Canadians were forced to grapple with an “American presence” not just on their border but in their daily lives – one that complicated the challenge of forging a national identity that wasn’t mere reactionary anti-Americanism. For Americans in 2011, there is a real “Canadian presence” not just on our border, but permeating the intellectual, cultural, commercial, and political dimensions of our daily lives, too. Today’s technology creates new opportunities for consultation at a time when the Baby Boom generation is in a position to shape the “structures of process” as a legacy for the New Generation to inherit and inhabit.
EducationBy Joseph L. Bast, Heartland InstitutePolicy Brief, 06/09/2011
The Texas Legislative Budget Board, by using an extremely low enrollment estimate and by assuming the current funding system won’t be changed to place savings in the same year as expenses for savings grants occur, produces a fiscal note for HB 33 that forecasts losses to the state in the first two years and then only very small savings. Using more accurate and realistic estimates of enrollment and assuming the state’s payment system is modified, we conclude that the state would save $2.28 billion in the first two years of the program, and growing amounts in every successive biennium.
EducationBy Joseph L. Bast, Heartland InstitutePolicy Brief, 06/09/2011
In summary, the Indiana School Scholarship Act has at least eight provisions that can serve as models for legislators considering drafting legislation for school choice programs in their states. Those provisions are necessary and well-written in this law. The act also contains five provisions that are not so good, that reflect compromises with or concessions to persons or groups that oppose school choice and so wish to undermine an effective school choice program. On balance, the strengths of the new law outweigh its flaws. If the program is implemented, it will benefit millions of children and prompt many other states to follow Indiana’s lead. It is a genuine breakthrough for school reformers everywhere and ought to be celebrated as such. But, it will require constant vigilance to ensure that the law is properly implemented and that future revisions and reforms strengthen rather than weaken it.
Natural Resources, Energy, Environment, & ScienceBy Jack Spencer, The Heritage FoundationBackgrounder, 06/09/2011
H.R. 1280—a new bill currently before the House of Representatives—is intended to ensure that America’s commercial nuclear exports do not lead to the proliferation of nuclear weapons. Designed as an amendment to the Atomic Energy Act of 1954, the bill has a laudable goal. But, despite some positive aspects, the overall effects of H.R. 1280 would be counterproductive. Heritage Foundation nuclear policy expert Jack Spencer explains how the proposed amendment would prevent implementation of U.S. regulatory and safety standards, put U.S. businesses at a disadvantage in the global market, and could hinder, not support, U.S. and international nonproliferation efforts.
Budget & TaxationBy Joseph Henchman, Tax FoundationFiscal Facts, 06/09/2011
Fewer states have been hit harder by the present recession than Nevada. However, many experts believe that Nevada is well positioned for strong growth in the future, but the state legislature’s proposed tax policies-such as a corporate income tax and a gross receipts tax-would be major impediments to an economic revival. As Nevada policymakers consider fiscal options through 2011, they should keep this in mind.
Foreign Policy/International AffairsBy Nile Gardiner, The Heritage FoundationWebMemo, 06/09/2011
President Obama was effusive in his praise for the Special Relationship when he visited London in May, but his Administration continues to slap Britain in the face over the highly sensitive Falkland Islands sovereignty issue by aligning itself with Argentina’s call for U.N.-brokered talks on the future of the islands. This reckless approach toward the U.S.–U.K. alliance threatens to upset relations between Washington and London at a time when both countries are actively engaged in a major war in Afghanistan and American and British aircraft are enforcing the NATO no-fly zone over Libya.
Regulation & DeregulationBy William Ruger, Jason Sorens, Mercatus CenterMercatus on Policy, 06/09/2011
This report focuses on Oregon and how it compares to other states in its fiscal, regulatory, economic, and personal freedom. Thanks to recent reforms, Oregon is now the eighth most free state in the country and the most free state in terms of personal freedom. However, it is exactly in the middle of the table for economic freedom, where room for improvement remains. In addition, the report offers recommendations as to how Oregon can become freer.
Regulation & DeregulationBy William Ruger, Jason Sorens, Mercatus CenterMercatus on Policy, 06/09/2011
This report focuses on Florida and how it compares to other states in its fiscal, regulatory, economic, and personal freedom. Overall, Florida does relatively well, especially in personal freedom, although its economic policies leave room for improvement. In addition, the report offers recommendations as to how Florida can become freer.
The Constitution/Civil LibertiesBy Ken Blackwell, Ken Klukowski, Threshold EditionsBook, 06/09/2011
The United States is at a crossroads. Our national debt is rising, our social programs are unsustainable, and our government is expanding at an alarming rate. This book is a wake-up call. Written by acclaimed conservative leaders Ken Blackwell and Ken Klukowski, it is a back-to-basics action plan inspired by the original words and beliefs of our nation’s forefathers. Using the U.S. Constitution, the authors guide us through our current political minefield, showing how both Democrats and Republicans have led our country astray. They reveal startling connections between the crash of the economy, the collapse of the family, and the rise of big government. They lay out a policy agenda of constitutional fixes for our greatest national problems, from retirement, to education, to social issues, to taxes.
Foreign Policy/International AffairsBy Brett Schaefer, The Heritage FoundationReport, 06/09/2011
Despite NATO intervention and advances by opposition forces, the Libyan conflict appears far from resolution. The White House support for rushing referral of Muammar Qadhafi to the International Criminal Court (ICC) has significantly complicated efforts to get Qadhafi to leave the country. The lesson of the ICC referral of Libya is that the pursuit of international justice is not without consequences and must be balanced with the need to resolve threats to international peace and security. The Administration should be more cautious when considering future proposals to refer situations to the ICC.
Family, Culture & CommunityBy Chuck Donovan, The Heritage FoundationReport, 06/09/2011
Marriage and family are declining in America, following a trend well established in Europe. This breakdown of the American family has dire implications for American society and the U.S. economy. Halting and reversing the sustained trends of nearly four decades will not happen by accident. The federal, state, and local governments need to eliminate marriage penalties created by the tax code and welfare programs and instead use existing resources to better encourage and support family life.
Economic GrowthBy John Friar, Pioneer Institute for Public Policy ResearchAnalysis, 06/09/2011
Massachusetts is among a handful of states nationwide that have seen no new net job growth since 1990, and it is among the even fewer states that saw significant job loss between 2001 and 2007, even before the recession. This paper adds to our understanding by examining the shrinking size of Massachusetts’ firms and the causes of this economy-wide phenomenon in order to determine whether the trend has systemic impacts on our economy. Shrinking firm size raises a central policy question: What is precluding Massachusetts establishments from growing and, in the process, hiring more people? Given that firm shrinkage is pervasive across industries, the answer may lie in the general business environment, not any one specific policy. That is, it is likely due to factors that make the costs of growing and hiring outweigh the benefits. These costs include labor, commercial rents, housing, taxes, unemployment insurance, and the legal and regulatory environments, to name just a few factors other studies have highlighted.
Foreign Policy/International AffairsBy Dana Dillon, Hoover InstitutionPolicy Review, 06/09/2011
American interests in maintaining the freedom of navigation in the South China Sea and other contested waters should be defended with diplomacy backed by military strength. The U.S. must not flinch or compromise, because any temporary concession to China’s demonstrably unreasonable demands will not earn gratitude, but instead will become a precedent for China’s future demands. Diplomatically and militarily, Washington must continue to deploy sufficient force to deter China’s unjustifiable territorial ambitions.
EducationBy Jonathan Haughton, et al., Beacon Hill InstituteBHI Policy Study, 06/09/2011
Conventional wisdom holds that public education is an investment that produces a large, often double digit, percentage return to the students and society at large. The long term gains are large but they are not the result of recent spending increases. Other factors are clearly at work. The Beacon Hill Institute's results indicate that the relationship between spending and student performance is very weak and that changes in spending levels, up or down, contribute very little toward student performance. As Massachusetts state and local governments continue to face tight budgets, leaders should not refrain from considering cuts to education spending. Despite the longstanding myths, substantial cuts in education will not significantly impinge upon student performance in any meaningful way.
National SecurityBy James Carafano, The Heritage FoundationReport, 06/09/2011
The U.S. defense base is on the verge of a crisis—losing the design engineering and industrial capacity to affordably produce the cutting-edge military systems that once gave the American military an unassailable advantage. The reason for this is simple: The free market works. When there is no competitive market for goods and services, the industries that produce them dry up and blow away. The Pentagon has been under-funding procurement by about $50 billion a year. That, however, is only part of the problem. The U.S. government unnecessarily hamstrings the ability of American defense companies to compete overseas. Unleashing the capacity to compete will help save our defense industrial base, build the capacity of allies, and strengthen U.S. ability to leverage technological innovation. Both the President and the Congress ought to put competitiveness at the top of the agenda.
Budget & TaxationBy Kristina Rasmussen, Amanda Griffin-Johnson, Illinois Policy InstituteReport, 06/09/2011
Illinois lawmakers have been patting themselves on the back for supposedly holding the line on spending and getting rid of wasteful projects. Should taxpayers buy into this newfound “fiscal responsibility?” No. A review by the Illinois Policy Institute found that the budget passed by the House left overall spending levels largely unchanged from last year. Additionally, many low-priority projects are slated to receive millions of dollars – dollars that deficit-plagued state government doesn’t have to spare.
International Trade/FinanceBy U.S. Chamber of Commerce, American Chamber of Commerce of Mexico, U.S. Chamber of CommerceReport, 06/09/2011
The United States and Mexico share a border of nearly 2,000 miles, a cultural heritage, and a desire to grow both our economies through cooperation and hard work. The two nations also share an obligation to address a series of complex issues. This report, developed by the business communities of both the United States and Mexico, recommends ways to enhance growth and security simultaneously. Recognizing that both the public and private sectors must work together to meet these challenges, the U.S. Chamber of Commerce and the American Chamber of Commerce of Mexico are providing these recommendations to improve security, trade facilitation, infrastructure, immigration, and travel.
Budget & TaxationBy Andrew Biggs, Jason Richwine, American Enterprise InstituteWorking Paper, 06/09/2011
Public sector compensation has come under increased scrutiny from politicians and the media, but comprehensive technical comparisons of federal and private compensation have been largely absent from the discussion. Drawing from the academic literature and using the most recent government data, this report measures the generosity of federal salaries, benefits, and job security. Compared to similar private sector workers, we estimate that federal workers receive a salary premium of 14 percent, a benefits premium of 63 percent, and extra job security worth 17 percent of pay. Together, these generate an overall federal compensation premium of approximately 61 percent. Reducing federal employee compensation to market levels could save taxpayers roughly $77 billion per year.
Natural Resources, Energy, Environment, & ScienceBy Timothy J. Considine, Robert W. Watson, Nicholas B. Considine, Manhattan InstituteEnergy Policy & the Environment Report, 06/09/2011
Directional drilling and hydraulic fracturing have unlocked vast new reserves of natural gas in the United States. Development of these resources is now well under way in Pennsylvania and West Virginia. Unlike their neighbors to the south, however, New York residents are not directly benefiting from natural gas development as the result of a government-imposed moratorium, itself a response to environmental concerns surrounding hydraulic fracturing. This study analyzes the economic and environmental impacts of shale gas drilling in New York and finds the net economic benefits to be significantly positive. This study also reviews the public records of environmental violations reported by the Pennsylvania Department of Environmental Protection over the period 2008–10. The study finds that the cost of these environmental impacts is far smaller than the economic benefits that drilling can provide.