Recent Policy Studies

• Foreign Policy/International Affairs
  

  Hugo Chávez’s Cancer, Authoritarianism, and the U.S.

  By Ray Walser, The Heritage Foundation
  
  WebMemo, 07/01/2011
  

  Throughout June speculation and uncertainty regarding Hugo Chávez’s health increased with each passing day. Finally, on June 30, Chávez informed the Venezuelan people that he had undergone surgery to remove a tumor with “cancerous cells.” His return is still to be determined. This secret, Kremlinesque management of Chávez’s illness has demonstrated a major weakness in Venezuela’s current political arrangement: its total dependence upon an elected autocrat and the cult of personality that has increasingly become Chavismo. If Chávez is incapacitated or dies, a struggle for succession will likely occur, yet if he returns to governing it will only embolden the opposition and weaken his hold on Venezuela. The United States has an opportune moment to: dispel the notion that Venezuela is democratic, spotlight Chávez’s dangerous foreign policy, and increase pressure on the Organization of American States to perform its role as democratic watchdog.

  
  
  
• Economic Growth
  

  Maine: By the Numbers

  By The Maine Heritage Policy Center, Maine Heritage Policy Center
  
  Report, 06/30/2011
  

  The Maine Heritage Policy Center publishes this compendium to provide a fact-based look at how Maine compares to other states and the District of Columbia in six key areas: demographics, economics, health care, welfare, education, and tax and fiscal. Maine ranks in the top-ten states for cost of residential electricity, percent of households receiving food stamps, Medicaid spending per capita, and state and local taxes as a percent of personal income. And although Maine’s private sector job growth has out-performed the New England state average, Wyoming, a rural peer state, leads the nation in private sector job growth. Lastly, while neighboring New Hampshire ranks first in the nation for private sector share of personal income, Maine ranks a disappointing 41st.

  
  
  
• Foreign Policy/International Affairs
  

  Reset Regret: Moral Leadership Needed to Fix U.S.–Russian Relations

  By Ariel Cohen, Donald Jensen, The Heritage Foundation
  
  WebMemo, 06/30/2011
  

  The discussion about democracy, human rights, and the rule of law has careened through at least three phases in U.S. relations with Russia, each one resulting in sometimes jarring shifts in Washington’s approach to Moscow. In order to reaffirm America’s interests, when dealing with Russia, the U.S. should concentrate on the values of freedom and justice. The Administration needs to stop its policy of “pleasing Moscow” and instead add pressure on Russia to start a “reset” of its own policies that currently disregard human rights, democracy, and good governance. The U.S. should deny visas to corrupt Russian businessmen, examine their banking practices and acquisitions, and target Russian police and prosecutors who fabricate evidence, and judges who rubber stamp convictions, which is what the bipartisan S. 1039 “Justice for Sergey Magnitsky” bill aims to do.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Diversity of Debt Crises in Europe

  By Jerome L. Stein, Cato Institute
  
  Cato Journal, 06/30/2011
  

  The foreign debts of the European countries are at the core of the current economic crises. Generally, the crises are attributed to government budget deficits in excess of the values stated in the Stability and Growth Pact which is a framework for the coordination of national fiscal policies. Although the main causes of the debt crises in Europe varied by country, Europe has collectively puts forth efforts to counter the economic crises with proposals for reform that generally involve increasing the powers of the European Union. These powers include the ability to monitor fiscal policies of the national governments and increasing bank regulation. This article seeks to explain intercountry differences in the debt crises and how to enact policies that will prevent a reoccurrence.

  
  
  
• Crime, Justice & the Law
  

  The Supreme Court’s Willful Blindness Doctrine Opens the Door to More Wrongful Criminal Convictions

  By Brian Walsh, The Heritage Foundation
  
  WebMemo, 06/30/2011
  

  A recent decision of the Supreme Court of the United States in a patent lawsuit may, somewhat surprisingly, have a major and destructive impact on federal criminal law. In Global-Tech Appliances v. SEB, the high court held that the “willful blindness” doctrine, which relieves a plaintiff of proving that the defendant actually knew that its actions were infringing, applies to certain patent infringement claims. The Court also implied that the doctrine properly applies in federal criminal cases, which would undermine traditional criminal-intent, or mens rea, protections against unjust criminal punishment. The result may be that more innocent Americans will face criminal conviction.

  
  
  
• Budget & Taxation
  

  Wisconsin Reins in Government Worker Unions

  By Jake Haulk, Allegheny Institute for Public Policy
  
  Policy Brief, 06/30/2011
  

  This past February the nation’s attention was focused intensely on the Capitol in Madison, Wisconsin, as Governor Scott Walker and the Republican legislature attempted to pass legislation that would strip public sector workers of most of their bargaining power. The bill was held up from resistant Democratic legislators and the courts but ultimately passed. One of the bill’s most contentious components is Act 10. What makes Act 10 so beneficial to taxpayers and elected administrative officials while at the same time making it so despised by unions? Four items in particular are extremely important, and they have helped to greatly alter the landscape in terms of who has the power to determine factors which include compensation, work rules, and seniority rules.

  
  
  
• Economic and Political Thought
  

  The Virtues of Free Markets

  By Mark A. Zupan, Cato Institute
  
  Cato Journal, 06/30/2011
  

  Free markets have many virtues. The most recognized is, arguably, the expansion of individual choice through mutually beneficial exchange. This article argues that free markets promote other important virtues that have heretofore received scant attention. Specifically, through fostering an indefinitely-lived series of exchanges, free markets create a future promoting integrity and trust. This is because the more the future matters, the better behaved individuals are in the present. Therefore, rather than being castigated, as they so often are in the popular media and political arena, for encouraging immorality, free markets should be praised for fostering integrity.

  
  
  
• Budget & Taxation
  

  Minnesota Income Tax Increase Modification Could Encourage Tax Avoidance and Promote Poor Investment Decisions

  By Joseph Henchman, William McBride, David S. Logan, Tax Foundation
  
  Fiscal Facts, 06/30/2011
  

  Minnesota is one of 46 states that begin their fiscal year on July 1. However, it is the only state that may endure a government shutdown, due to a tax policy impasse between Governor Mark Dayton and the legislature. While the Minnesota legislature is resistant to increasing taxes, Governor Dayton is insistent. His proposed new high-earner individual income tax rates flow against recent trends in other states. These proposals involve the exclusion of small business income, encourage tax avoidance, and risk promoting poor investment decisions.

  
  
  
• Health Care
  

  Access Delayed, Access Denied: Waiting for New Medicines in Canada

  By Mark Rovere, Brett J. Skinner, Fraser Institute
  
  Report, 06/30/2011
  

  Canada’s federal and provincial government policies create unnecessary delays for patients wanting access to new drug treatments. The Canadian government’s latest data shows that in 2009 Health Canada took 472 days on average to approve new drugs, up from 388 days in 2008. Due to budget constraints, provincial public drug plans refuse to pay for most new drugs, even when Health Canada says they are safe and effective. This report provides patients with information they need to determine whether the time they wait for access to new medicines in Canada is unnecessarily long, and whether publicly funded and managed drug-insurance programs provide adequate benefits and choice for patients.

  
  
  
• Health Care
  

  Tampering with Part D Will Not Solve Our Debt Crisis

  By Joseph Antos, Guy King, American Enterprise Institute
  
  Working Paper, 06/30/2011
  

  The Democratic leadership in Congress recently introduced the "Medicare Drug Savings Act of 2011" as a means of saving $112 billion over the next decade by reducing spending on Medicare Part D-the prescription drug program for seniors. Based on the presumption that manufacturers are making extraordinary profits from the government, the proposed legislation would mandate that drug companies give the federal government rebates for low-income seniors enrolled in Medicare Part D. But under the proposed legislation, this report finds that many Medicare Part D plans could change significantly or face failure, disproportionally affecting the most vulnerable seniors. Furthermore, premiums for all seniors would be likely to increase, with the strongest impact actually borne by low-income seniors. Lastly, government spending on Medicare as a whole is likely to increase, thus offsetting any savings

  
  
  
• Transportation/Infrastructure
  

  Intercity Buses: The Forgotten Mode

  By Randal O’Toole, Cato Institute
  
  Policy Analysis, 06/30/2011
  

  The debate over President Obama’s fantastically expensive high-speed rail program has obscured the resurgence of a directly competing mode of transportation: intercity buses. Despite the hype about high-speed rail, inter-city buses are proving to be a far superior mode of transportation for travelers. The buses are safer, more energy efficient, and far less costly to ride than intercity trains. Rather than continue to subsidize a costly competitor, elected officials and regulators should get out of the way and let intercity buses flourish where they make economic sense. Instead of restricting bus operators to use central stations, cities should allow bus companies to find curbside locations that are optimal for them, charging the companies no more than the market rate for parking. Policies such as these will help bus operators provide better service with minimal subsidies.

  
  
  
• Budget & Taxation
  

  2011 Pork Report

  By Dick Rowland, et al., Grassroot Institute of Hawaii
  
  Report, 06/30/2011
  

  Official government estimates now identify Hawaii’s budget crisis as an astonishing $1.3 billion shortfall over the next two years. And the state’s employee retirement program faces an alarming $9 billion in unfunded liabilities. To make matters worse, in an attempt to tax its way out of the fiscal crisis, the state legislature approved a sizeable $600 million in new tax revenues. But does the state really need more revenue, or does it simply spend too lavishly? In an effort to promote government transparency and engage the taxpayers so that they can hold lawmakers accountable, the Grassroot Institute of Hawaii has released their annual report revealing the Aloha State’s profligate spending. Hawaii’s legislators must take immediate steps to handle the budget with responsible, long-term solutions that will not bankrupt future generations.

  
  
  
• Health Care
  

  An Unsustainable Path: The Past and Future of Kentucky Medicaid Spending

  By John Garen, Bluegrass Institute for Public Policy Solutions
  
  Report, 06/29/2011
  

  Kentucky’s Medicaid program is on an unsustainable path. Its expansive spending growth over the past 25 years has put increased pressure on state and federal budgets. There are a number of ways to effectively reform Medicaid so that it can simultaneously alleviate the burden to taxpayers and be a quality program that provides a helping hand to the truly needy. These reforms include: improving competition in the healthcare and health insurance markets, transitioning Medicaid to a health insurance voucher (premium support) program; and block granting Medicaid to the states so that they can determine how to best administer the program, given their unique circumstances.

  
  
  
• National Security
  

  The Next Wave: On the Hunt for Al Qaeda’s American Recruits

  By Catherine Herridge, Random House
  
  Book, 06/29/2011
  

  From Guantánamo to Afghanistan, Fox News national correspondent Catherine Herridge has looked the world’s worst terrorists in the face. In her recent book, The Next Wave: On the Hunt for Al Qaeda's American Recruits, Herridge reveals who the recruits are for the next wave of terrorism. Shockingly, they live next door. They are born here, raised here, and plotting here. Yet our government has gotten stunningly complacent in the war on terror, overlooking key players like the blood-crazed American Anwar al-Awlaki. Furthermore, these domestic terrorists turn our technology against us. Online terror recruiters are in fact one of the Web’s greatest success stories, yet our government refuses to stop them. Catherine Herridge sounds the alarm, warning that the next wave of deadly terror is here and now, and that the next massacre in the name of Islam will be “Made in the U.S.A.”

  
  
  
• Elections, Transparency, & Accountability
  

  Nyetizdat: How the Internet Is Building Civil Society in Russia

  By Leon Aron, American Enterprise Institute
  
  Russian Outlook, 06/29/2011
  

  In the past decade, Russia has experienced explosive growth in the spread of the Internet and its applications. As in other authoritarian regimes, where the national media are state controlled, censored, or self-censored, the Russian “net” has become a shelter that is insulated from the world of censorship. While most Russians continue to get their daily news from television, the minority who rely on the Internet are, fortunately, more politically engaged. The Internet is becoming the backbone of civil society in Russia—giving people both a voice and the tools to self-organize—and it is a growing force against authoritarianism. Its influence is growing almost daily.

  
  
  
• Economic and Political Thought
  

  Polls on Patriotism and Military Service

  By Karlyn Bowman, Andrew Rugg , American Enterprise Institute
  
  Papers and Studies, 06/29/2011
  

  In the lead up to the 4th of July, Karlyn Bowman and Andrew Rugg have released a comprehensive collection of data about patriotism gathered from surveys compiled by major U.S. pollsters. Thankfully, patriotic sentiment continues to remain strong. In a May 2011 CBS poll, 61 percent described themselves as extremely proud to be an American and 25 percent very proud. And fortunately, the men and women who defend this great country are given the reverence they so deserve: The military is viewed as the most positive institution in the country, according to a recent Gallup Poll. What is considered “patriotic”? Not surprisingly, according to one poll, accepting what government officials say without questioning ranked last!

  
  
  
• Economic Growth
  

  The United States and China: Macroeconomic Imbalances and Economic Diplomacy

  By Philip I. Levy, American Enterprise Institute
  
  Working Paper, 06/29/2011
  

  The United States and China are now the two largest economies in the world. Questions of macroeconomic imbalances remain at the heart of bilateral discussions between the two countries. Given their importance to the world economy, these imbalances have also become central to multilateral discussions about global economic governance. This study examines the two countries' macroeconomic imbalances of the last decade and the diplomacy surrounding them through the lens of political economy, positing that there are significant internal divisions within each country and that the policy outcomes that emerge may differ significantly from those that a powerful, unitary actor might impose.

  
  
  
• National Security
  

  Planned Military Recruiting Center Attack: 40th Terror Plot Against the United States Foiled

  By Jena Baker McNeill, Jessica Zuckerman, The Heritage Foundation
  
  WebMemo, 06/29/2011
  

  On June 22, the FBI arrested Abu Khalid Abdul-Latif and Walli Mujahidh in a Seattle warehouse. Authorities have learned that Abdul-Latif, a Seattle native, had initially planned to attack the Joint Base Lewis-McChord with his friend, Los Angeles resident Mujahidh. The target was later changed to the Seattle Military Entrance Processing Station for undisclosed reasons. This is the 40th terrorist plot that has been foiled in America since the 9/11 attacks. Fortunately, the Seattle Police Department and FBI worked well in coordinating their efforts. However, the Obama Administration and Congress should remain committed to real reforms to maximize efficacy, including: equipping law enforcement and intelligence officials with the necessary tools, fostering greater information sharing, and ensuring the participation of all forms of government. With these improvements and continued vigilance, this nation will be better prepared to avert the next wave of terrorist threats.

  
  
  
• Foreign Policy/International Affairs
  

  Consequential China: U.S.-China Relations in a Time of Transition

  By Franklin L. Lavin, The Heritage Foundation
  
  Lecture, 06/29/2011
  

  On April 20, 2011, long-time “China hand” Frank Lavin addressed an audience at The Heritage Foundation on the future of U.S.–China relations. How will the U.S. economic turmoil affect the Chinese economy? What is the impact of the “Jasmine spring”? Which effects will China’s leadership transition have on relations between the two countries? What is the future of economic nationalism in China? Ambassador Lavin lays out a measured—and optimistic—view.

  
  
  
• Health Care
  

  Saving Medicare from Itself

  By Avik Roy, National Affairs
  
  National Affairs, 06/28/2011
  

  At the heart of America’s fiscal crisis is the looming collapse of our entitlement system. The primary cause of that looming collapse is the explosion of costs in Medicare. Without comprehensive reform, there is simply no way for us to address the federal deficit, contain the national debt, or save Medicare itself from collapse. Until our whole system moves in the direction of an individual market for health insurance, we will have no voluntary mechanism to encourage Americans to shop for value in health care. Addressing this problem would require reforming and integrating Medicare, Medicaid, the employer-sponsored system, and the individual market. It would also involve addressing the runaway costs of defensive medicine and medical-malpractice litigation.

  
  
  
• Health Care
  

  Blue Pill or Red Pill: The Limits of Comparative Effectiveness Research

  By Tomas J. Philipson, Eric Sun, Manhattan Institute
  
  Report, 06/28/2011
  

  Comparative Effectiveness Research (CER) has been heralded as a way to reduce health-care costs by picking “winners” and “losers” among alternative treatments for a given condition. Studies that employ CER attempt to determine which treatments provide the most benefit for the largest number of patients. In their new report, Blue Pill or Red Pill: The Limits of Comparative Effectiveness Research, researchers Tomas Philipson and Eric Sun of the Manhattan Institute’s Project FDA find that CER may fail to provide successful strategies for lowering health care costs if politicians and providers restrict access to therapies that aren’t deemed “winners” in CER trials.

  
  
  
• Budget & Taxation
  

  Spending in Disguise

  By Donald B. Marron, National Affairs
  
  National Affairs, 06/28/2011
  

  The federal government spends much more than it collects in tax revenue each year. The argument over how to close that gap is often dominated by disagreements about how much should come from spending cuts and how much from tax increases. A great deal of government spending is hidden in the federal tax code in the form of deductions, credits, and other preferences—preferences that seem like they let taxpayers keep their own money, but are actually spending in disguise. The magnitude of these preferences raises the possibility of a dramatic reform of the tax code that would dramatically improve the government’s fiscal outlook. The best way to achieve this is to take a hatchet to the thicket of spending-like tax preferences. Lawmakers can then use the resulting revenue to cut tax rates across the board and reduce the deficit.

  
  
  
• Information Technology
  

  U.S. Must Improve Internet Freedom Outreach Effort

  By Helle C. Dale, Jessica Zuckerman, The Heritage Foundation
  
  WebMemo, 06/28/2011
  

  More than 2 billion people worldwide now have some degree of access to the Internet, a figure that has doubled over the past five years. Yet while the Internet is emerging as an increasingly powerful tool for political activism, governments around the world are also becoming more expert at controlling electronic communication. As part of the U.S. effort to defend freedom of speech and expression throughout the globe, Secretary of State Hillary Clinton has asserted the Administration’s dedication to Internet freedom time and time again. Actions, however, speak louder than words. The Administration should be sure to spend internet freedom funds wisely, speak out against Internet freedom’s worst offenders, and encourage other nations to join a coalition, which could provide the venue for “naming and shaming” offenders.

  
  
  
• Economic Growth
  

  The New Commanding Heights

  By Arnold Kling, Nick Schulz, National Affairs
  
  National Affairs, 06/28/2011
  

  Over the past few decades, our economy has undergone some fundamental changes—with the result that the fight for control over the commanding heights of American economic life is still very much with us. And it is a fight that, at least for now, the free-market camp appears to be losing. The commanding heights of our economy are clearly education and health care, and it is in precisely these two sectors that the case for extensive government intervention and planning, if not outright control, is dominant. Looking to the coming decades, it will simply not be possible to maintain a genuine free market if our education and health sectors are controlled by the government.

  
  
  
• Health Care
  

  Federal Health Reform and Stock Market Returns of Health Insurers

  By John R. Graham, Pacific Research Institute
  
  06/28/2011
  

  Health insurers appear to have benefited from the Patient Protection and Affordable Care Act (PPACA). The total return of the S&P 500 over the three-year period was minus 4 percent versus plus 40 percent for HMO. The most likely explanation for health plans’ stock performance is that investors saw PPACA itself as a boon for health plans. Also, investors likely do not believe that Republicans will eventually repeal it, but instead exercise even less oversight and give health plans more favors than a single-party Democratic federal government would. In other words, investors likely expect that PPACA will evolve into a bipartisan reality that will favor health plans, despite current political rhetoric.

  
  
  
• Education
  

  Houses of Learning: The Charter Public School Facilities Process

  By William Donovan, Pioneer Institute for Public Policy Research
  
  White Paper, 06/28/2011
  

  Founders of charter public schools are educators and visionaries. They imagine schools that offer varying learning environments, where novel approaches stimulate creativity and students reach their full educational potential. It’s at that point that dreams meet reality and charter founders realize creating an actual school is a magnificent goal, but an arduous process. This paper is intended to act as a guide for charter school founders and directors to accomplish what has been called the “devilishly difficult” task of financing a charter school, finding a location, assembling a development team and building the facility, among other requirements.

  
  
  
• Education
  

  Making Teacher Incentives Work: Lessons from North Carolina’s Teacher Bonus Program

  By Thomas Ahn, Jacob L. Vigdor, American Enterprise Institute
  
  Education Outlook, 06/28/2011
  

  North Carolina has operated one of the country’s largest pay–for–performance teacher–bonus programs since the late 1990s. New research shows that a North Carolina–style incentive–pay program has the potential to improve student learning by encouraging teachers to exert more effort on the job. The North Carolina model avoids three pitfalls associated with implementing individual–level pay–for–performance plans: the problem of grades and subjects without standardized tests, the problem of teachers fighting for the best students, and statistical noise in test scores. The program also enjoys broad political support, including from the state teachers union. Education reformers worldwide should understand how performance pay can improve student learning.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Think Local: When and for Which Environmental Problems?

  By Sarah Anderson, PERC – The Property and Environment Research Center
  
  Report, 06/28/2011
  

  Arguments for smaller government imply that local control will produce better environmental policy because representatives are closer to their constituents and, therefore, more responsive. It is also argued that competition between multiple smaller governments leads to better policy outcomes. When governments compete, constituents win, particularly if there is specialized local knowledge, the outcome from a local government is likely to be better. This brief analysis offers some insight into answering the question of when and for which kinds of environmental problems local control is preferable.

  
  
  
• Economic Growth
  

  Texas’ Economic Leadership Success Due to Our Leadership in Limited Government Policies

  By Bill Peacock, Texas Public Policy Foundation
  
  Policy Brief, 06/28/2011
  

  Texas has been the hands-down winner in the national jobs growth contest for quite some time. Since June 2009, when the recession ended, Texas has added 265,300 net jobs, accounting for 45 percent of net U.S. job creation. Over the last ten years, the numbers are even better: Texas created more than 1 million jobs during this period, more than all other states combined. Not surprisingly California, New York, Florida, and Illinois have combined to lose 930,000 jobs. Why is Texas lapping the rest of the field when it comes to jobs creation? A state that keeps its taxes low and overregulation at bay is one that fosters economic development. On the other hand, a state that plows its cash into government spending is one whose businesses and citizens will soon be leaving for greener pastures.

  
  
  
• Regulation & Deregulation
  

  Analysis of Seattle’s Paid Sick Leave Ordinance

  By Carl Gipson, Washington Policy Center
  
  Policy Brief, 06/28/2011
  

  A mandatory paid sick leave ordinance would affect every business in the city of Seattle. Mandating paid sick days removes the option of non-cash benefits that smaller firms are more likely to use. More importantly, mandating paid sick days prioritizes this benefit over that of health insurance, paid vacation, flexible schedules, etc., because none of these other benefits are mandated and may be reduced to counter the added cost of providing paid sick days. Especially in a time of sluggish economic growth a government mandate would increase costs to the small business community and potentially to consumers as well, while reducing job opportunities for low-wage workers.

  
  
  
• Family, Culture & Community
  

  Five Impacts of the New York Same-Sex Marriage Vote

  By Chuck Donovan, The Heritage Foundation
  
  WebMemo, 06/28/2011
  

  The New York legislature’s June 24 vote to redefine the family and recognize homosexual marriage will have a number of short-term and long-term impacts within and well beyond the Empire State. The vote does not signal an end to the now two-decade fight over the meaning of marriage. A new phase—not an endgame—has begun. No citizen should fail to see the risks the nation is running with the decline and redefinition of marriage. That being said, here are five key impacts whose full import will unfold in the coming months.

  
  
  
• Budget & Taxation
  

  Five More Myths About Collective Bargaining and Senate Bill 5

  By Matt A. Mayer, Buckeye Institute for Public Policy Solutions
  
  Policy Bulletin, 06/28/2011
  

  The State of Ohio’s Senate Bill 5 (SB 5) outlaws public employee strikes and puts other limits on collective bargaining by public employees. Supporters of the recently passed bill consider it a necessary reform to restore fairness to the taxpayers, while opponents continue to view it as an assault on public unions and saving little from the state’s budget. In fact, in an effort to repeal the bill, opponents are in the process of gathering enough signatures to put SB 5 on the statewide ballot for this coming November. In the midst of the continuing battle over SB 5, The Buckeye Institute has released a set of myths about collective bargaining reform and SB 5 that every Ohioan should know. These are in addition to the “Top Ten Myths About Collective Bargaining and Senate Bill 5” that they released several weeks ago.

  
  
  
• National Security
  

  Nuclear Weapons Modernization Priorities After New START

  By Baker Spring, The Heritage Foundation
  
  Backgrounder, 06/28/2011
  

  In a world of multiple nuclear powers, the U.S. government should exchange Cold War–style deterrence for a policy of “protecting and defending” the U.S. and its allies against nuclear attack. Pursuing such a policy will require both maintaining a credible nuclear posture, which is modernized to meet the strategic needs of the 21st century, and expanding and improving U.S. strategic defenses, including missile defenses. Regrettably, the President and Congress have been underfunding both. Two decades of neglect have left the U.S. with a nuclear triad of ICBMs, submarine-launched ballistic missiles, and bombers that are aging and not adapted to meeting the requirements of the “protect and defend strategy.” To maintain a credible deterrent, the U.S. must modernize its nuclear arsenal, which must include developing and testing new nuclear weapons.

  
  
  
• Budget & Taxation
  

  Maine’s Biennial Budget: Tax Cuts to Spur Job Growth

  By David Tuerck, Paul Bachman, Michael Head, Beacon Hill Institute
  
  Policy Study, 06/27/2011
  

  On February 11, 2011, Maine Governor Paul LePage released his budget proposal for the fiscal year 2012-2013 biennium. In his budget message, Governor LePage declared that the budget has one priority: “to reform and restructure state government to ensure that state government helps–not hinders–private sector job creation.” In addition, the Republicans and Democrats in the legislature have each introduced their own budget plans. All three tax reform plans, if enacted, would reduce state taxes on Maine’s households and businesses. This report illustrates that making moderate changes to, in particular, the state personal and corporate income taxes, would improve Maine’s economy. State policymakers should consider this type of tax reform or bolder moves to cut taxes and provide a larger boost to the economy.

  
  
  
• Elections, Transparency, & Accountability
  

  An Essential Turnaround Project: The Reform of State Government Operations

  By Robin Gates, Wisconsin Policy Research Institute
  
  Report, 06/27/2011
  

  Just like so many governments nationwide, Wisconsin’s state government faces serious challenges. The fiscal situation is abysmal, and the problems their state agencies must solve are large and complex. Yet it is a time of great opportunity. The tools available to state agencies to accomplish their public purposes have never been greater. The challenge for political leaders is how to change state government management so it can harness these forces to meet state needs. Former public employee Robin Gates—who also has the benefit of private sector experience—lays out a clear case for strengthening state agency management, importing innovative management processes and, perhaps most important, holding management accountable for results.

  
  
  
• Monetary Policy/Financial Regulation
  

  Will There Be Whistleblowers?

  By Jonathan L. Awner, Denise Dickins, Cato Institute
  
  Regulation, 06/27/2011
  

  The Dodd-Frank Wall Street Reform and Consumer Protection Act is one of the most onerous pieces of corporate governance regulation. The most contentious provision is Section 922, which directs the Securities and Exchange Commission to implement a “whistleblower” program by which individuals may report suspected securities violations to the agency. Dodd-Frank elevates whistle blowing by enabling employees, vendors, and customers, among others, to bypass companies’ internal control systems and report accusations directly to the U.S. Government. It further stipulates that whistleblowers could receive as much as 30 percent of any fines, penalties, or the repayment of losses resulting from their reports. This study finds that existing whistleblower programs have received limited use in spite of offered bounties and implementing internal bounties may have unintended consequences, including increases in unwarranted reports and additional administrative costs.

  
  
  
• Monetary Policy/Financial Regulation
  

  Everything Old Is New Again

  By Chinmay Jain, Pankaj K. Jain, Thomas H. McInish, Cato Institute
  
  Regulation, 06/27/2011
  

  Last February the Securities and Exchange Commission voted 3–2 to adopt SEC Rule 201 in response to the recession of 2008. Rule 201 places restrictions on short sellers, requiring that they place order at or above the National best Bid price when the National System stock declines below 10 percent. SEC Chair Mary Schapiro has said the rule “is designed to preserve investor confidence and promote market efficiency…” But Former SEC chief economist Larry Harris fundamentally disagrees, arguing that Rule 201 will cause a “massive loss of confidence…” This study shows that short sellers are more active before price declines than after and that short selling has increased for stocks that experience positive returns.

  
  
  
• Economic Growth
  

  2011 Legislative Report: Florida Solidifies Its Position as the Leader in Free-Market Reforms

  By Thomas Perrin, James Madison Institute
  
  Report, 06/27/2011
  

  Floridians had high expectations when the Legislature’s 2011 regular session began. With a Republican super-majority in both chambers for the first time since Reconstruction and a newly elected Governor who touted fiscal conservatism and reducing the scope of government, many thought the stars had aligned to address some big ticket items that had fallen by the wayside in years past. In most cases they were right as lawmakers took on the daunting task of addressing many of the major policy decisions facing Florida all at the same time while also addressing serious budget challenges. At the end of the day, the Legislature approved a $69.7 billion budget (trimmed to $69.1 billion by Governor Rick Scott), passed 295 bills, and placed seven constitutional amendments on the 2012 general election ballot. The report below focuses on some of the many issues the James Madison Institute tracked during this year’s legislative session.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The USDA’s Anti-Science Activism

  By Henry I. Miller, Gregory Conko, Cato Institute
  
  Regulation, 06/27/2011
  

  A comprehensive environmental review by the United States Department of Agriculture (USDA) scientists had concluded that a genetically engineered alfalfa variety was substantially equivalent to other conventional varieties and posed no genuine risks. U.S. Department of Agriculture Secretary, Tom Vilsack chose to ignore two things: the findings proposed by the USDA and President Obama’s pledge that “political officials should not suppress or alter scientific or technological findings and conclusions.” Instead, Vilsack pandered to the organic food lobby by announcing that the Agriculture Department might have certain restrictions on farmers including the ability to plant the alfalfa variety on huge swaths of American cropland, proposing geographic restrictions as well as minimum separation distances from other crops for the commercial cultivation of the genetically engineered alfalfa variety. This article shows the increasing prevalence of obstructionist litigation which now shows that the irrationality of this regulatory policy.

  
  
  
• Health Care
  

  Business Solutions to the Health Care Crunch: Innovations in Health Care Insurance Plan Design

  By Amy Lischko, Cristi Carman, Pioneer Institute for Public Policy Research
  
  White Paper, 06/27/2011
  

  The Massachusetts health reform law has not fulfilled its promise of containing health care costs for many small employers and their employees. As in the years before the 2006 reform, small employers on average continue to pay higher premiums than mid-sized and large companies, and their premiums continue rising more quickly (after adjusting for variations in geography, demographics, and benefits). Fortunately, Business Solutions to the Health Care Crunch describes trends in employer-based health insurance plans that have the potential to contain escalating health care costs. It includes case studies of Massachusetts firms that have implemented innovative insurance plans and have experienced resulting reductions in health care spending growth as well as positive health effects.

  
  
  
• Health Care
  

  Optimal Weight

  By Michael L. Marlow, Alden F. Shiers, Cato Institute
  
  Regulation, 06/27/2011
  

  Concern over rising health care costs has encouraged a growing number of government interventions aimed at reducing the prevalence of obesity. Examples of such interventions include special taxes on sodas, bans on toys offered in children’s meals with high levels of calories and salt, and restrictions on locations of new restaurants. The government has adopted a “one size fits all” policy goal for weight which exerts an “excess burden” on those subgroups that exhibit optimal weight gain in excess of government goals. Placing identical goals for obesity rate reduction across all individuals also exerts excess burdens on those individuals who differ from government’s mandated “ideal” weight. Researchers typically assume its reduction is desirable without addressing the issue of its optimal level. This paper suggests optimal levels of obesity have increased over time and that optimal levels are not identical for all individuals or groups.

  
  
  
• Budget & Taxation
  

  Estimated Savings From Michigan’s 1997 State Employees Pension Plan Reform

  By Richard C. Dreyfuss, Mackinac Center for Public Policy
  
  Policy Brief, 06/27/2011
  

  In 1997, as a result of state legislation, the pension plan for the Michigan State Employees’ Retirement System (MSERS) underwent a significant change. State employees who qualified for MSERS and who were hired on or after March 31, 1997, were placed in a “defined-contribution” retirement plan; those hired before March 31 were, and continue to be, enrolled in a “defined-benefit plan. Author Richard C. Dreyfuss analyzes state pension data to determine whether state taxpayers have saved money from this reform. Using data from the Michigan Office of Retirement Services, the Michigan Senate Fiscal Agency and the MSERS defined-benefit plan’s comprehensive annual financial reports, the author estimates that from fiscal 1997 through fiscal 2010, state government saved a sizeable $167 million in MSERS defined-benefit plan normal costs by switching new employees to the defined contribution plan.

  
  
  
• Health Care
  

  CON Job

  By Timothy Sandefur, Cato Institute
  
  Regulation, 06/27/2011
  

  Certificate of Necessity (CON) laws were originally devised to regulate railroads and other public utilities. First appearing in Massachusetts in the 1880s, Progressive Era proponents proposed these CON laws by arguing that: they would prevent “wasteful duplication” of services, prevent “ruinous competition,” and promote private investments in public service industries. Occupational licensing laws, such as aforementioned, are among the most common abridgements of economic liberty. These laws exist for the explicit purpose of preventing competition. There is no reasonable foundation for applying such rules to moving companies, taxi companies, or hospitals. CON restrictions, which still exist today, unfairly favor entrenched private interests, increase the cost of living for consumers, destroy economic opportunity for vulnerable entrepreneurs, and in the case of hospitals, threaten Americans’ lives.

  
  
  
• Regulation & Deregulation
  

  Would the REINS Act Rein In Federal Regulation?

  By Jonathan H. Adler, Cato Institute
  
  Regulation, 06/27/2011
  

  Over the past several decades, the scope, reach, and cost of federal regulations have increased dramatically. Regulations of the Executive in Need of Scrutiny (REINS) Act would prevent federal agencies from implementing major regulatory initiatives without congressional approval. REINS Act supporters hail the legislation as a needed check on federal regulatory agencies. Opponents criticize it as a potentially unconstitutional attack on federal regulations that could undermine health, safety, and environmental protections. The primary effect of the legislation would be to make Congress more responsible for federal regulatory activity by forcing legislators to voice their opinion on the desirability of significant regulatory changes.

  
  
  
• National Security
  

  Obama Cybersecurity Proposal Flawed, But Fixable

  By Paul Rosenzweig, The Heritage Foundation
  
  WebMemo, 06/27/2011
  

  In May, the Obama Administration unveiled a legislative proposal for cybersecurity that is now working its way through Congress. It is one of several major legislative packages offered that seek to enhance the security and resilience of the nation’s cyber infrastructure. Getting the federal government’s role right in cybersecurity is crucial. One of the key principles in addressing any proposed law is that Congress should take its time and get the solution right. What Washington does online should enhance the security, freedom, and prosperity of Americans in equal measure. The Administration’s proposal does not adequately address all these priorities.

  
  
  
• Education
  

  Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs

  By Vance H. Fried, American Enterprise Institute
  
  Working Paper, 06/27/2011
  

  Over the past two decades, the cost of a college education has risen dramatically. Tuition and fees have increased at twice the rate of inflation, rising more quickly than market goods or services and outstripping the growth in family incomes. Professor Vance Fried finds that this dramatic rise in college tuition costs is, in fact, not due to lavish university facilities and extra student services. Instead, tuition has skyrocketed because of the ways in which traditional colleges and universities organize and allocate resources. Undergraduate colleges wishing to offer a quality yet affordable education should consider optimizing class size, downsizing extracurricular student activity programs, and eliminating or consolidating low-enrollment programs.

  
  
  
• National Security
  

  The Use of Drones and Targeted Killing in Counterterrorism

  By Michael W. Lewis, Vincent J. Vitkowsky, Federalist Society
  
  Engage, 06/27/2011
  

  Since taking office, President Obama has expanded the Bush Administration’s use of drones to target al Qaeda and Taliban leaders. Many have urged the Obama Administration to articulate legal justification for the continued use of drones to target and kill terrorists. The Administration addressed concerns last March when Harold Koh, State Department Legal Adviser, made a speech to the American Society of International Law. The arguments raise very important questions about the Administration’s targeted killing policy, such as: Who may be targeted, where may the targeting take place, and are targeted killings illegal assignations under U.S. domestic law?

  
  
  
• National Security
  

  Pakistan Must Act Against Network That Shielded bin Laden

  By Lisa Curtis, The Heritage Foundation
  
  WebMemo, 06/27/2011
  

  New information has revealed contacts between members of Pakistani terrorist group Harakat-ul-Mujahideen and Osama bin Laden’s courier. These revelations show that Pakistan’s segmented approach to terrorism contributed to bin Laden’s ability to live undetected in a military town deep inside Pakistan. Pakistan has long sought to distinguish between Kashmir-focused terrorist groups—which it allows to operate freely in Pakistan as a buffer against India—and al-Qaeda. U.S. officials should reject this distinction and make clear that they view any individuals who facilitate al-Qaeda as threats to America. If Pakistan fails to take action against terrorist organizations affiliated with al-Qaeda, Washington should withhold security aid to Islamabad.