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Recent Policy Studies
ImmigrationBy James Jay Carafano, The Heritage FoundationWebMemo, 07/27/2011
Recently, Senator Robert Menendez (D–NJ) introduced the Comprehensive Immigration Reform Act of 2011, which would grant legal permanent residence status to the nearly 11 million illegal immigrants present in the U.S. Additionally, the bill’s language also fully incorporates the DREAM Act and the AgJobs Act, providing two further avenues to amnesty for illegal immigrants within the U.S. The strategy for addressing the issue of unlawful presence in the U.S. embodied in this legislation has been rejected repeatedly by both the Congress and the American people. It would do little to solve the problem. In fact, it would do the opposite. The legislation’s triple amnesty offer would encourage further illegal border crossing, unlawful presence, and undermine efforts to establish respect for the rule of law, institute meaningful reforms, and help get employers the employees they need when they need them to help the U.S. economy grow and prosper.
Regulation & DeregulationBy David R. Henderson, Hoover InstitutionDefining Ideas, 07/27/2011
When it comes to the key pharmaceutical issue of off-label drug use, it’s clear the federal government is confused. One arm of the government actively denounces off-label drug use, going so far as to turn the promotion of off-label use by drug companies into a crime, while other arms of the government actively promote it. The implications of the suppression of off-label promotion are scary, not just for drug company shareholders and executives, but also for patients. Americans are suffering real, and sometimes catastrophic, harms as a result of the FDA’s single-minded policy on off-label promotion.
Economic GrowthBy Arnold Kling, Nick Schulz, American Enterprise InstituteThe American, 07/27/2011
It is increasingly clear that Keynesian stimulus has failed to get the economy where it needs to be. So what exactly needs to be done in a post-stimulus world? Interestingly, the fields of education and healthcare hold the greatest potential for job creation. Imagine what might happen, for example, if government involvement in education were restricted to giving school vouchers to households below the median income. Entrepreneurs would be free to actually redesign education completely. However, entrepreneurs today are stifled by the top-down model through which government approaches these sectors. To revitalize these sectors and revive the American job market, policymakers must open up these industries to competition and entrepreneurial reform.
Foreign Policy/International AffairsBy Sebastian Gorka, Foundation for Defense of DemocraciesTestimony, 07/27/2011
This past June, Dr. Sebastian Gorka of the Foundation for Defense of Democracies testified before the House Armed Services Committee on the evolution of the terrorist threat since 9/11. In his testimony, Dr. Gorka states that America still does not fully understand the nature of the enemy. He insists that even after the last ten years fighting the War on Terror, the US continues to fail to understand the enemy’s Threat Doctrine. By encouraging an atmosphere within government that is devoid of politically motivated sensitivities, the US will be able produce a comprehensive understanding of the enemy Threat Doctrine that is Global Jihadism.
Budget & TaxationBy Richard A. Epstein, Hoover InstitutionDefining Ideas, 07/27/2011
The negotiations over raising the U.S. debt limit have centered on tax policy. If Congress could settle on a flat tax policy it will benefit everyone. A flat tax is more rigorous since it taxes everything from the first to the last dollar at the same rate. That rate is chosen politically, and it should be set to bring revenues and expenditures into balance. A progressive tax, like the one we have now, is far harder to administer than any flat tax. It depends on the person who earns the income and the year in which that income is received. Given the taxing difference between high and low brackets, high net-worth taxpayers have strong incentives to shift their taxable income to their low income relatives, artificial tax entities, into low income periods, or all three.
Natural Resources, Energy, Environment, & ScienceBy Nicolas Loris, The Heritage FoundationBackgrounder, 07/27/2011
Are Americans energy dependent? Yes—dependent on government energy subsidies. In 2007, American taxpayers subsidized government-preferred energy sources to the tune of nearly $17 billion. Increasingly, it is politicians in Washington who decide how Americans produce and consume energy. But subsidies for special interests stifle competition, raise energy prices, and decrease economic opportunities. It is time for Washington to eliminate all government subsidies and special policy treatments that benefit certain industries at the expense of others. Energy companies should rely on innovation and efficiency, not American taxpayers, to thrive in a system of free enterprise.
Health CareBy Stuart Butler, The Heritage FoundationCenter for Policy Innovation Lecture, 07/27/2011
Imagine that the 2010 health reform legislation goes into effect as planned. If the skeptics are correct and it fails to control long-term federal health spending, what could a future Congress do to modify it? There are three approaches. Congress could (1) clamp down harder on prices and payments in a probably fruitless effort, (2) sharply expand the powers of the Independent Payment Advisory Board to ratchet back payments to providers of limited care, or (3) set a real and capped budget for federal health spending. If it took the third course, Congress would be faced with another choice: how to distribute the budget. Should it allocate funds to health care providers, as in Canada or the United Kingdom, which is the essence of rationing, or provide funds to households for them to decide how the funds will be spent?
Budget & TaxationBy Amanda Olberg, Michael Podgursky, Thomas B. Fordham FoundationReport, 07/26/2011
In the wake of the economic downturn that began in 2008, public schools face serious and seemingly long-term fiscal challenges. Rising pension costs are a particular concern for school districts, whose dollars help prop up state retirement plans that often have substantial unfunded liabilities. On the other hand, public charter schools are often allowed to develop their own policies and offer pension or retirement plans for their staffs. This study finds that charter participation rates are low in jurisdictions where teachers in the state plan also participate in Social Security. However, in states where teachers in the state retirement plan are not also included in Social Security, charter participation rates are high. When charter schools do not participate in state retirement plans, they most often provide their teachers with defined-contribution plans—401(k) or 403(b)—with employer matches that resemble those for private-sector professionals.
Regulation & DeregulationBy Diane Katz, The Heritage FoundationWebMemo, 07/26/2011
In an important victory for free enterprise, a unanimous panel of the U.S. Court of Appeals for the D.C. Circuit has struck down the regulatory hijacking of corporate board elections. Authorized by the Dodd–Frank statute, the so-called proxy access rule crafted by the Securities and Exchange Commission (SEC) was deemed to be “arbitrary and capricious” in a rebuke by the court. The opinion also chastised the commission’s rulemaking process as “opportunistic” and underscored the government’s duty to conduct credible analyses of regulatory costs rather than simply hyping unsubstantiated benefits. The proxy access case is particularly consequential, as the SEC and at least 10 other agencies prepare to unleash hundreds of new and costly regulations under Dodd–Frank. At least three other SEC rules have been invalidated for similar reasons in recent years, and several new commission regulations issued under Dodd–Frank could also face scrutiny for substandard economic analyses.
Monetary Policy/Financial RegulationBy Edward Pinto, American Enterprise InstituteThe American, 07/26/2011
David Min of the Center for American Progress continues to challenge Edward Pinto of the American Enterprise Institute on the origins of the housing and financial crisis. Pinto’s research finds that the financial crisis resulted from an unprecedented accumulation of weak and risky Non-Traditional Mortgages (NTMs). NTMs are those with low or no downpayments, increased debt ratios, impaired credit, reduced loan amortization, and other changes in underwriting standards as compared to traditional loan standards that were commonplace in the early 1990s. Minn’s central criticism is that Pinto has characterized as high risk some loans, most of which were acquired by Fannie Mae and Freddie Mac, which are not actually high risk when compared to mortgages originated for private securitization. But just because some types of loans were less risky than others does not mean they weren’t also risky.
Budget & TaxationBy David G. Tuerck, Laurence J. Kotlikoff, Beacon Hill InstituteTestimony, 07/26/2011
David G. Tuerck of the Beacon Hill Institute and Laurence J. Kotlikoff of Boston University recently testified before the House Ways and Means Committee on H.R. 25, the so-called FairTax, a proposal to reform the tax system by establishing a national sales tax. Their testimony focused on the need for consumption taxation and the manner in which the FairTax, as proposed in H.R. 25, can implement consumption taxation. Tuerck and Kotlikoff believe that, in comparison with the existing federal tax system, the FairTax is a sure winner. It’s more efficient, equitable, transparent, sustainable, and growth-and-jobs oriented. It will help revitalize investment, and with it, expand America’s economy, create jobs and bring in new revenues.
Budget & TaxationBy Charles Blahous, e21: Economic Policies for the 21st CenturyCommentary, 07/26/2011
During his Monday evening address to the nation on the budget negotiations, President Obama repeated his call for an extension of the current one-year Social Security payroll tax cut. Whether or not this extension is agreed to as part of a larger budget deal, it is vital that Congress not permit a repeat of a costly accounting gimmick implemented when the temporary tax cut was enacted last year. There are several reasons why this accounting gimmick is damaging and costly, which include: It’s unnecessary and irrelevant to any stimulus purpose; it contradicts the ostensible purpose of ongoing budget/debt negotiations; and it shifts Social Security’s financing basis from payroll taxes paid by today’s workers to higher income tax burdens on our children.
Natural Resources, Energy, Environment, & ScienceBy Frank Gamrat, Jake Haulk, Allegheny Institute for Public PolicyAllegheny Institute Report, 07/26/2011
It has been called the Commonwealth of Pennsylvania’s most vibrant industry—drilling for and extracting Marcellus Shale gas. While geologists have known about the natural gas reserves trapped deep in the Marcellus Shale formation for about a decade, drilling did not actually begin until about 2007. Thus, the industry is still in its infancy and debate has begun as to how valuable it will be to the state and regional economies. This report focuses on the jobs, income and tax impacts of the drilling activity. It finds that, fortunately, there is a very strong case to be made that Marcellus Shale is having significant, positive impacts on the economies of counties where drilling is occurring.
Budget & TaxationBy Joseph Henchman, Micah Cohen, Mark Robyn, Tax FoundationSpecial Report, 07/26/2011
Sales tax holidays are periods of time when certain goods are exempted from state sales taxes. Such holidays have become an annual event in many states, with exemptions for products such as back-to-school supplies, clothing, computers, and even guns. At first glance, sales tax holidays seem like great policy. Proponents argue that tax holidays are a highly visible form of tax relief and provide benefits to low-income consumers. And politicians routinely claim that sales tax holidays improve sales for retailers, create jobs, and promote economic growth. However, tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform. Taxes should raise revenue, not micromanage a complex economy by picking winners and losers in the market.
Monetary Policy/Financial RegulationBy Judy Shelton, Atlas Economic Research FoundationPamphlet, 07/26/2011
It is the responsibility of self-governing American citizens to demand sound money that will remain useful for future generations and ensure that the sanctity of the American idea prevails. But what exactly is sound money? It need not be complicated. Sound money is honest money in that it accurately conveys price signals and reliably serves as a store of value. And sound money is trustworthy and reliable in that it functions as a meaningful unit of account so that market participants—consumers and producers, investors and entrepreneurs—can make informed decisions and rational plans. Furthermore, the definition of sound money must rise above the purely economic functions; it is also necessary to ensure that money cannot be used to expand government powers over a free society.
Regulation & DeregulationBy James Gattuso, Diane Katz, The Heritage FoundationBackgrounder, 07/26/2011
Following a record year of rulemaking, the Obama Administration is continuing to unleash more costly red tape. In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion. No major rulemaking actions were taken to reduce regulatory burdens during this period. Overall, the Obama Administration imposed 75 new major regulations from January 2009 to mid-FY 2011, with annual costs of $38 billion. This flood of red tape will undoubtedly persist, as hundreds of new regulations stemming from the vast Dodd–Frank financial regulation law, Obamacare, and the EPA’s global warming crusade advance through the regulatory pipeline—all of which further weakens an anemic economy and job creation, while undermining Americans’ fundamental freedoms. Action by Congress as well as the President to stem this regulatory surge is essential.
Foreign Policy/International AffairsBy Bruce Klingner, The Heritage FoundationWebMemo, 07/25/2011
Surprise meetings between North and South Korean nuclear negotiators this weekend and Washington’s subsequent invitation to Pyongyang for bilateral talks in New York are significant for their occurrence. However, it is premature to see them as a breakthrough toward achieving North Korean denuclearization. In fact, they are not even negotiations but rather meetings to explore a return to negotiations. The meetings are consistent with the existing South Korea and U.S. two-track policy of pressure and conditional dialogue with North Korea. Accordingly, in keeping with multiple Obama Administration statements, the U.S. should offer no new inducements to North Korea’s denuclearization, let alone sweeteners to simply return to the negotiating table.
Budget & TaxationBy Scott A. Beaulier, Peter J. Boettke, Cato InstituteCato Policy Report, 07/25/2011
In recent years policymakers have pushed the economy ever closer to the brink of fiscal catastrophe. Federal spending rose substantially under President George W. Bush, with the deficit reaching $460 billion in his last full year. In President Barack Obama’s first two years in office, it soared to $1.4 trillion in 2009 and $1.29 trillion in 2010. While bailouts and stimulus programs compounded the problem, its source is the big three transfer programs—Social Security, Medicare, and Medicaid. By 2052 these programs will reach 18.2 percent of GDP and, assuming tax collections remain at their long-term levels will absorb all federal tax revenue collected by the government. What is really needed is reform that fully shifts medical coverage for the elderly and the poor from the public sector to the market as well as stripping the government of its control of the money supply.
Budget & TaxationBy Michael McConnell, Hoover InstitutionDefining Ideas, 07/25/2011
It is often forgotten that the main reason the Constitutional Convention met in 1787 was to resolve a financial crisis—one more serious even than ours of today. More than any other single objective, the United States Constitution was designed to provide long-term institutional solutions to the young nation’s fiscal woes. In this article, author Michael McConnell examines how Alexander Hamilton dealt with the financial problems of his time including how he used a properly funded national debt to be a national blessing.
Economic GrowthBy e-21, e21: Economic Policies for the 21st CenturyCommentary, 07/25/2011
Economics Professor and New York Times Columnist Paul Krugman has consistently argued that the government has done too little to stimulate the economy in the wake of the financial crisis. This general line of reasoning suggests that our economic problems stem from too small a dosage of the stimulus medicine. It’s certainly tempting to believe that government purchases can and should supplement for household and business spending whenever the two are inadequate to maintain full employment. The problem is that believing that the government can fill this void is also partly what causes the employment and output gap to persist in the first place. The very medicine supposed to cure the illness actually worsens it by creating uncertainty that diminishes businesses’ willingness to take risks.
LaborBy Clint Bolick, Hoover InstitutionDefining Ideas, 07/25/2011
Frustrated by the failure to enact its pro-union agenda in Congress, the Obama Administration has unleashed the National Labor Relations Board (NLRB) to achieve it through regulatory fiat. The NLRB’s latest salvo is a lawsuit against Arizona, one of four states that resoundingly added to its constitution the right to secret-ballot elections. The Obama administration and the NLRB have chosen to fight this battle by taking the issue to the courts in hopes to remove it from public discourse. The right to secret ballot is a cornerstone of American democracy; it ensures that union representation is truly consensual and will reign in an out-of-control federal agency that is inflicting grave harm upon American enterprise and competitiveness.
Health CareBy Gary Lawson, The Heritage FoundationBackgrounder, 07/25/2011
The Patient Protection and Affordable Care Act (PPACA) is not so much a set of norms to regulate conduct as an authorization to administrators to produce norms to regulate conduct. Implementation of the Act will require many years and literally thousands of administrative regulations that will determine its substantive content and coverage. Under current law, those regulations will be promulgated through so-called informal rulemaking procedures, which offer very limited opportunities for public input. A recently introduced bill, H.R. 1432, proposes that rulemakings under the PPACA be conducted using formal rulemaking procedures that enhance the transparency and accountability of the rulemaking process. The idea deserves serious consideration. While formal rulemaking has largely disappeared from the modern administrative scene, it offers some significant advantages in the right setting, and the PPACA may very well be the right setting.
Crime, Justice & the LawBy Kirby T. Griffis, Washington Legal FoundationLegal Backgrounder, 07/25/2011
The biggest recent stir relating to third-party legal funding is a June 2011 ethics opinion issued by the New York City Bar Association. The opinion exemplifies how passively the litigation industry is being accepted by the profession, and it is remarkable for its lack of rigorous ethical analysis. Most importantly, the opinion seems to scarcely notice the substantial difference between the type of funding that amounts to a cash advance paid to an individual plaintiff and that which directly underwrites a litigation by providing, for example, a line of credit to a plaintiff’s law firm. But perhaps the most remarkable aspect of this legal ethics discussion is that third-party litigation funding is, in fact, illegal in New York.
The Constitution/Civil LibertiesBy Frank Miniter, Regnery PublishingBook, 07/25/2011
For most Americans, the Bill of Rights is sacred. It enshrines, defines, and protects the fundamental liberties our Founding Fathers fought to preserve. But for the left, the Bill of Rights is a “living” document that can be twisted, corrupted, and ignored according to the left’s own whims and “PC” policies. In this shocking yet inspiring book, Frank Miniter breaks down the Bill of Rights amendment by amendment, reminding people what they can do and—more importantly—what the federal government can’t do. He further reveals not only how Obama and his leftist cohorts are stripping away our God-given freedoms, but also how we can rescue those rights which are so fundamental to America.
Crime, Justice & the LawBy Kyle Baum, Washington Legal FoundationLegal Opinion Letter, 07/25/2011
Over the past twenty years, tort reform has gained significant traction in Texas. The state has steadily strengthened its court system by enacting a series of reforms to increase witness credibility, limit damages, and protect its business climate. With the help of these reforms, business development in Texas has thrived while the larger U.S. economy continues to sputter. During the 82nd legislative session in 2011, Texas took tort reform to another level by enacting H.B. 274, which included a stripped-down version of “loser pays.” This term is the moniker used in America for the English legal rule stating that the losing side in a court case pays the winner’s attorneys’ fees. While H.B. 274 does not wholeheartedly adopt the English rule, it moves the state further in this direction.
Natural Resources, Energy, Environment, & ScienceBy Paul C. Knappenberger, Science and Public Policy InstituteSPPI Originals , 07/25/2011
The installation of an outdoor sculpture at the University of Wyoming called “Carbon Sink” has caused distress in the coal mining state. The sculpture consists of a large horizontal swirl of pine logs from trees that were killed from pine beetle. The artist links these attacks to the supposed detriments of coal and global warming. This paper sheds light on the several weak links in the artist’s claims that global warming is leading to more droughts in the western U.S, and that pine beetle infestations result from anthropogenic climate change and its impact on the environment of the western U.S. While the art at the University of Wyoming may be interesting to look at, it is lacking any meaning other than that we each individually would attach through our own investigation of the work and its elements.
Budget & TaxationBy Alex J. Pollock, American Enterprise InstituteThe American, 07/25/2011
The huge debt of Fannie Mae, Freddie Mac, other government-sponsored enterprises, and other off-budget government agencies fully relies on the credit of the United States. This means it by definition exposes the taxpayers to losses. However, it is not accounted for as government debt. As the Federal Reserve carefully notes in its “Flow of Funds” report, non-budget agency and government-sponsored enterprise debt is not “considered officially to be part of the total debt of the federal government.” But if it is not considered government debt, then what really is it? It does put the federal budget at risk, subjecting it to uncertainty of defaults, and over time it has proven its ability to generate huge losses for the taxpayers. In reality, it is really, if not “officially,” government debt.
EducationBy James A. Peyser, Education NextEducation Next, 07/25/2011
Charter management organizations (CMOs) are integrated networks of charter schools. NewSchools Venture Fund has been one of the leading private funders of CMOs serving low-income urban neighborhoods. Analysis suggests that most of the CMOs in their “portfolio” are outperforming the local districts, especially for low-income students. It should not come as a suprise that the highest-performing CMOs in the NewSchools portfolio tend to be those that have embraced a “no excuses” approach to teaching and learning. These CMOs have created organizational and school cultures based on explicit expectations for both academic achievement and behavior, with meaningful consequences when those high expectations are not met.
Regulation & DeregulationBy Angela Logomasini, Competitive Enterprise InstituteIssue Analysis, 07/25/2011
As Constitution framer James Madison warned, special-interest politics never cease. Recent efforts by beer, wine, and spirit wholesalers in the courts show that Madison’s concerns remain relevant today. Wholesalers have a long history of leveraging their position within the industry, employing state laws to secure a guaranteed slice of the market. However, recent court cases have challenged some of these anticompetitive state laws. Accordingly, the wholesalers’ Washington, D.C., lobbyists are turning to Congress to pass federal legislation that undermines the free market and constitutional principles in order to serve their narrow special interest. It is nothing more than an attempt to game the system to advantage one segment of the alcohol industry at the expense of everyone else.
EducationBy Brian A. Jacob, Education NextEducation Next, 07/25/2011
If principals have the authority to dismiss teachers, will they dismiss the less effective ones, or will they instead make perverse decisions by letting the good teachers go? This article details that, in the City of Chicago, principals do exercise their authority in sensible ways. Principals are more likely to dismiss teachers who are frequently absent and who have previously received poor evaluations; they also dismiss elementary school teachers who are less effective in raising student achievement. Furthermore, principals are less likely to dismiss teachers who attended competitive undergraduate colleges. School districts could possibly improve student achievement if they adopted policies similar to those applied in Chicago.
Budget & TaxationBy Theodore Dalrymple, Manhattan InstituteCity Journal, 07/25/2011
In Britain, government spending is now so high, accounting for more than half of the economy, that it is increasingly difficult to distinguish the private sector from the public. Many supposedly private companies are as dependent on government largesse as welfare recipients are, and much of the money with which the government pays them is borrowed. In fact, the nation’s budget deficit is 10.4 percent of GDP. Cutting a deficit of this magnitude is like smoking: it is awfully difficult to give up. It can be cut only at the cost of genuine hardship, for many people have become dependent upon them for their livelihood. Hence withdrawal symptoms are likely to be severe. Britain is quickly discovering that shrinking government is a lot harder than expanding it.
Foreign Policy/International Affairs
Congress Should Renew the Report Requirement on U.S. Contributions to the U.N. and Reverse Record-Setting Contributions to the U.N.By Brett Schaefer, The Heritage FoundationWebMemo, 07/25/2011
The U.S. has fought a difficult battle for U.N. budgetary restraint and management reform for decades. Making sure U.S. contributions are used appropriately and how to best allocate them to advance U.S. interests starts with knowing how much the U.S. is providing to the U.N. and where that funding originates. Congress is right to demand accurate information. The legislative reporting requirement expires in 2011. Congress should take action to make this reporting requirement permanent. America’s current budgetary crisis adds fiscal necessity to underscore that oversight responsibility. The record-setting level of U.S. contributions to the U.N. in recent years and the notoriously weak and inadequate oversight, transparency, and accountability standards in the U.N. system should lead Congress to reverse the trend of increasing U.S. contributions to the U.N. and demand budgetary restraint in the U.N. system.
Health CareBy Brett J. Skinner, Mark Rovere, Fraser InstituteFraser Alert, 07/22/2011
The Canadian government’s greater intervention in prescription drug markets offers no affordability advantages for consumers compared to competitive markets in the US. By observing per capita drug spending as a percentage of per capita income this study compares the average personal affordability of drug costs for Canadians and Americans. While brand-name drugs in Canada are significantly cheaper on average than in the United States, generic drugs in Canada are about 90 percent more expensive on average. Americans also tend to substitute lower-cost versions of drugs for relatively more expensive brands more often than Canadians; and per capita after-tax incomes are higher in the United States than in Canada. Government involvement in prescription drug markets in Canada produces no personal affordability advantages for consumers on aver age compared to relatively more free market based policy approaches in the United States.
Information TechnologyBy Seth L. Cooper, Free State FoundationPerspectives from FSF Scholars, 07/22/2011
The Federal Communications Commission recently issued its annual Wireless Competition Report for 2011. The report contains plenty of positive data when it comes to wireless innovation, competition, and choice of service and price options. However, the report suggests that the agency has little interest in intermodal competition and the competitive impact of wireless as a substitute for wireline services. Unfortunately, this means another lost opportunity for the Commission to lay the groundwork for removing outdated, monopoly-era legacy wireline regulations. Furthermore, the agency’s agnosticism when it comes to effective competition gives it cover for a slate of proposals for imposing new wireless regulations that have been circulated in Congress and by the Commission itself.
Budget & TaxationBy Edwin Meese III, The Heritage FoundationWebMemo, 07/22/2011
As Congress considers what to do about federal overspending and overborrowing, conservatives must maintain focus. They must pursue the path that drives down federal spending and borrowing and gets to a balanced budget, while preserving our ability to protect America and without raising taxes. An important part of that conservative agenda is adoption of a sound—repeat, a sound—Balanced Budget Amendment. A Balanced Budget Amendment is not sound if it leads to balancing the federal budget by tax hikes instead of spending cuts. Thus, a sound Balanced Budget Amendment must prohibit raising taxes unless a two-thirds majority of the membership of both Houses of Congress votes to raise them. Without the two-thirds majority requirement, the Balanced Budget Amendment becomes the means for big spenders to raise taxes.
Foreign Policy/International AffairsBy Theodore Bromund, The Heritage FoundationWebMemo, 07/22/2011
On July 11–15, the United Nations held a third meeting of the Preparatory Committee for the Arms Trade Treaty. The committee discussed the content of the treaty in advance of a meeting of the conference in 2012 to finalize the treaty and open it for ratification. This treaty is purportedly intended to address the absence of commonly agreed international standards for the transfer of conventional arms, which, it is argued, contribute to war, crime, and terrorism. Previous meetings of the committee have made it clear that the treaty as contemplated poses serious threats to American liberties and interests and to effective and serious diplomacy. The latest committee meeting has not alleviated most of those concerns. But statements by both the permanent members of the Security Council and the European Union have at least reduced the supranational danger to U.S. sovereignty.
National SecurityBy Mackenzie Eaglen, et al., The Heritage FoundationReport, 07/22/2011
So far, the debate over long-term defense spending cuts has been a war among accountants—an abstract numbers game played with little regard for its concrete effect on the future of America’s armed forces and national security. This backgrounder describes the likely results of the significant defense spending reductions now being considered: a “hollow force” characterized by fewer personnel and weapon systems, slowed military modernization, reduced readiness for operations, and continued stress on the all-volunteer force. If realized, this modern day “hollow force” will be less capable of securing America’s interests and preserving the international leadership role that rests upon military preeminence.
Foreign Policy/International AffairsBy Ariel Cohen, Stephen Blank, The Heritage FoundationWebMemo, 07/21/2011
It is clear that Washington needs a new approach to Eurasian foreign policy to prevent an emergence of a Russian sphere of influence or another regional hegemony. The United States should boost its diplomatic support of sovereign states, such as Ukraine and Georgia, and expand a real commitment to the region. Specifically, Washington should provide political support to East–West energy pipelines and uphold sovereignty and territorial integrity under international law—even if this upsets Russia—while at the same time becoming an active mediator in the Transnistria and South Caucasus disputes.
Budget & TaxationBy Jason Mercier, Washington Policy CenterPolicy Note, 07/21/2011
Though it took a special session to finish its work on the 2011-13 budget, the legislature took positive steps this year to put the state on a more sustainable budget path. Despite progress, however, an inadequate reserve fund coupled with ongoing economic uncertainty and projected future spending pressure leaves the state’s budget outlook on tenuous ground highlighting the need for additional structural reforms and spending restraint. The failure to leave an adequate reserve coupled with the ongoing economic uncertainty means additional structural reforms and spending restraint will continue to be necessary as the state recovers from the impact of past overspending combined with the “great recession,” and embraces the path of sustainable budgeting.
PhilanthropyBy Scott Walter, Capital Research CenterFoundation Watch, 07/21/2011
The Tides Foundation is a public charity designed to allow anonymous pass-through funding by donors, and the Tides Center acts as an incubator for radical advocacy nonprofits. The innovative structure of the Tides network is designed to secure funding for and nurture the growth of radical nonprofits along a wide range of issues. But the most important—and dangerous—Tides initiative is its effort to promote the concept of “structural racism.” For now, Tides cannot compel foundations to organize their philanthropy by race or send money to ideologues chosen by structural racism experts. However, people should still remain vigilant; Tides may raise enough money from anonymous donors and its own coffers to someday achieve its goal of reshaping America.
Monetary Policy/Financial RegulationBy Diane Katz, The Heritage FoundationWebMemo, 07/21/2011
July 21st marks the one-year anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act. It comes in at some 2,300 pages, so it is no surprise that dozens of regulatory deadlines have been missed, and a multitude of agencies are months behind in their rulemaking schedule. It is fair to question, then, how the bureaucrats and technocrats who cannot get the rules written can possibly manage the vast and roiling markets over which they now rule. They cannot—at least not successfully. A principal reason is that their colossal regulatory edifice teeters on the faulty premise that the economic crisis was a consequence of too little regulation—as opposed to misguided housing policies and twisted tax and regulatory incentives. The law’s unparalleled powers, unless checked, will curtail the availability of credit and capital for consumers and businesses alike, both of which are needed to nurture economic growth.
Natural Resources, Energy, Environment, & ScienceBy Kevin Mooney, Capital Research CenterGreen Watch, 07/21/2011
With a Republican House of Representatives and Senate rejection of cap-and-trade legislation last year, little known grassroots green groups are stepping up their efforts to advance their agenda. In the early 2000s environmental activists tried to circumvent federal policymakers by promoting regional global warming linking adjoining states to in projects to curtail carbon emissions. Now they are running up against energized Tea Party activists and Republican state lawmakers. The Tea Party should give these smaller green organizations a closer look as it may be the key to unraveling how local and state level green campaigns get started.
LaborBy F. Vincent Vernuccio, Matthew Vadum, Capital Research CenterOrganization Trends, 07/21/2011
Led by the radical Service Employees International Union (SEIU), left-wing unions and activist groups have been planning to launch a national campaign of economic strong-arming and sabotage. SEIU said it is demonstrating against the impact of international finance, but its immediate goal is to buttress union economics. Their plan envisions mortgage and student loan strikes and bank boycotts. They have also contemplated acts of harassment and intimidation directed against bank officials, corporate heads and public officials deemed to be enemies of the people. SEIU’s goal is not to change policy, but to organize people and shame business leaders for not paying taxes—even though some, like the bank of America, have paid over $40 billion in taxes between 2000 and 2009.
EducationBy Cannon Brooke, Grassroot Institute of HawaiiWorking Paper, 07/21/2011
The time has come for parents to think about their children’s future plans and decide if the university system is a viable option. It has long been a part of the American dream to walk into the Ivory Towers and continue onto post-secondary education. However, this American dream can turn into an American nightmare for parents that are unprepared. Particularly, this paper focuses on how to think strategically about the college option and calls for a proper cost-benefit analysis from parents and their children. There are many viable options to the university system that need to be exhumed so both parents and their child know they made the correct choice. While much attention and consideration is given to the college experience, other options such as: vocational schools, internships, volunteering, apprenticeships, community college and working after high school are sensible alternatives.
Slashing Defense Makes America Less Safe While Allowing Politicians to Kick the Can down the Road on Entitlement ReformBy Mackenzie Eaglen, The Heritage FoundationWebMemo, 07/21/2011
As long as politicians continue asking the military to shoulder ever-increasing burdens in pursuit of America’s national interests, Washington cannot expect those in uniform to simply get by or “make do” with lower budgets. Washington must remember that those who demand scaling back military size, structure, and capabilities in the name of fiscal prudence ignore the fact that the nation will have to spend more later to rebuild. Unfortunately, it does not take a “hollow force” to harm national security. Even comparatively small cuts in defense—if applied to the wrong areas—can harm America’s capacity to project power abroad, guarantee the defense of its allies, and meet international commitments.
National SecurityBy David Kreutzer, The Heritage FoundationWebMemo, 07/21/2011
Will shifting the United States military to alternative fuels reduce casualties and geopolitical threats? That is what some are contending. Their answers focus on two main factors: the material and human costs of transporting fuel in a battle zone and oil revenues received by unfriendly regimes. Digging just a little below the surface shows these arguments to be camouflage for a bright green agenda that has high costs for the military, both in dollars and lives. The biofuels available today are simply not a smart option for military use. They require more money to transport and do not provide a national security benefit. Grafting a broader social agenda like “green energy” onto the military’s mission detracts from its ability to provide national security effectively and efficiently. The Pentagon should make the energy choices that best advance its capabilities for that critical mission.
LaborBy James Sherk, The Heritage FoundationBackgrounder, 07/21/2011
New regulations from the National Labor Relations Board (NLRB) and the Department of Labor are designed to swell the ranks of unionized labor at the expense of workers, employers, and the U.S. economy. The new NLRB rules that would shorten union-organizing elections to between 10 and 21 days are an attempt to rush to elections before employers can present counterarguments. The proposal to allow micro unions would enable unions to gerrymander bargaining units to disenfranchise workers who oppose union representation and would dramatically complicate labor negotiations. The Department of Labor’s expansion of reporting requirements on the activities of labor relations consultants is a transparent attempt to discourage companies from educating their employees on the disadvantages of unions. Congress should specifically bar the NLRB and the Department of Labor from using any funding to implement these regulations.