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Recent Policy Studies
Regulation & DeregulationBy Henry I. Miller, Hoover InstitutionDefining Ideas, 08/12/2011
Members of the House and Senate, hoping to protect special interests back home, are trying to order the Food and Drug Administration (FDA) to stop doing some of the very work it is empowered to do on behalf of American consumers: regulate food safety. Some members of Congress are proposing an amendment that bars regulators from allocating funds to approve a genetically engineered salmon. This is intolerable meddling in regulation because it is within the legitimate province of the Executive Branch of government to regulate food safety. Unfortunately this all comes in spite of an exhaustive ten-year FDA review that found no hint of any health or environmental problems with the salmon.
Information TechnologyBy Seth L. Cooper, Free State FoundationPerspectives from FSF Scholars, 08/12/2011
Nearly a year after the FCC adopted changes to its CableCARD regulations, the agency announced on August 8th that its rule changes are now in effect. Or at least most of them. The FCC’s new requirement that cable operators include a home networking output on HD set-top boxes won’t be going into effect until December 1, 2012. The length of time it’s taken to put CableCARD rule changes into effect serves as an important lesson about the inability of any regulatory agency to impose technical device design regulations on a dynamic market. This lesson is especially relevant when it comes to the FCC’s ambitious but misguided “AllVid” proposal for adopting an ever more expansive regime for video navigation device regulation. Rather than continue tinkering with its CableCARD rules or mistakenly going through with its AllVid proposal to expand video device navigation regulation, the FCC should consider a deregulatory course correction.
Budget & TaxationBy Jacob Feldman, Americans for Tax ReformReport, 08/12/2011
Every year, the Americans for Tax Reform Foundation and the Center for Fiscal Accountability calculate Cost of Government Day. This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels. In 2011, Cost of Government Day falls on August 12. Working people must toil 224 days out of the year just to meet all costs imposed by government, a full 27 days longer than 2008. In other words, in 2011 the cost of government consumes 61.42 percent of national income.
Crime, Justice & the LawBy Kenneth L. Marcus, Federalist SocietyEngage, 08/12/2011
The Obama Administration recently mounted a campaign against bullying in public schools. The administrative core of the campaign has been a new federal bullying policy issued by the Department of Education’s Office for Civil Rights (OCR). Supporters have welcomed new protections for minority victims of this social problem, while critics have argued that the Obama Administration has effectively created a new right unauthorized by Congress. This policy is neither new nor a bullying policy. Rather, it is a repackaging of longstanding OCR interpretations of harassment law. In this sense, as this article will show, it is not what supporters and critics alike have assumed it to be. It is also neither a straightforward application of federal anti-discrimination statutes, nor a faithful application of judicial case law.
Natural Resources, Energy, Environment, & ScienceBy Chris Cargill, Washington Policy CenterPolicy Brief, 08/12/2011
This year, government officials in the City of Spokane imposed new prices on water. Under the assumption the region’s water supply is drastically dwindling, city officials say the new policy is “conservation based.” The new rates increase prices for families even if they are not being wasteful. Officials say about half of Spokane residents will pay more under the new prices, and about half will pay less. Unfortunately these new prices will punish larger families even though they have reduced their rate of consumption. Citizens of Spokane would be better served by a flat rate for water use.
Budget & TaxationBy Veronique de Rugy, Tad DeHaven, Cato InstituteReport, 08/11/2011
The primary purpose of the Small Business Administration (SBA) is to encourage lending to small businesses through government loan guarantees. The SBA retains political support because it is a tool for policymakers to signal their support of small businesses. At the same time, SBA supporters have cultivated a myth that being against the agency is equivalent to being against small businesses. In reality, the great majority of American small businesses have thrived without government subsidies. Even though there are no substantial economic benefits of the SBA, the agency has remained politically entrenched. It gains particularly powerful support from the banking industry. However, with today’s huge federal deficits, policymakers should begin eliminating unneeded business subsidies in the budget, including SBA spending.
Budget & TaxationBy Eli Lehrer, Heartland InstitutePolicy Brief, 08/11/2011
Imposing high taxes on tobacco products is widely used to discourage smoking. However, taxes on tobacco products already are so high in most places that legislators in the U.S. should be skeptical of proposals to increase them any further. Legislators considering a proposal to increase tobacco taxes should recognize the following five realities with significant support in the academic research on tobacco control: First, current costs imposed on smokers typically exceed the social costs of smoking; second tobacco taxes place a much larger burden on lower-income people than on the well-off; third, tobacco tax increases are not necessarily the best way to discourage smoking; next, black markets for cigarettes develop as taxes rise; finally, tobacco taxes often produce less revenue than expected and sometimes reduce revenue overall.
Health CareBy Kathryn Nix, The Heritage FoundationWebMemo, 08/10/2011
Medicare is in crisis, but moving to a premium-support model would reverse the program’s deterioration by using the dynamics of the free market to contain costs and improve consumer satisfaction. Critics claim that this approach is radical and would allow insurers to discriminate against people with pre-existing conditions. They also argue that seniors would not be effective consumers. None of these claims is supported by the evidence. The Federal Employees Health Benefits Program, which provides health care benefits for approximately 8 million federal employees, retirees, and their families, has long been the gold standard for a premium-support financing system. But examples also exist within Medicare itself and are proving successful. Applying their successes to the rest of Medicare can restore permanent solvency to the program, preserve robust access to high-quality care, encourage continued physician participation, and strengthen Medicare as real insurance for tomorrow’s seniors.
National SecurityBy Scott Nason, Janice Smith, The Heritage FoundationBackgrounder, 08/10/2011
Washington policymakers, facing unprecedented deficits and drastic measures to deal with a $14.3 trillion debt, are considering cutting the budget for national defense. Yet as former Secretary of Defense Robert Gates, his successor Leon Panetta, and other U.S. officials like Admiral Mike Mullen have said, defense spending is not the cause of our fiscal problems. Even eliminating the entire defense budget would not solve our budget woes. Neither the Administration nor Members of Congress should lose sight of their constitutional obligation to provide for the full defense of America. They would do well to consider the following sage statements from a number of current and former policymakers and experts from the U.S. and overseas.
Health CareBy John S. Hoff, The Heritage FoundationBackgrounder, 08/10/2011
An accountable care organization (ACO), as stipulated by the Patient Protection and Affordable Care Act (PPACA) is a group of doctors and hospitals who join in a separate legal entity that is accountable for the quality and cost of care of all the group’s Medicare beneficiaries. Although this suggests that ACOs are a form of organized care, like health maintenance organizations, they are not. They are more like a vessel for Centers for Medicare and Medicaid Services (CMS) statisticians and health policy gurus to work their craft than a mechanism that actually delivers better care. Expansive rhetoric that ACOs will improve care and reduce costs is based on the assumed incentivizing power of Shared Savings Payments. The actual organizational structure that qualifies as an ACO is muddled.
Transportation/InfrastructureBy John A. Charles Jr., Cascade Policy InstituteAnalysis, 08/10/2011
On June 30th TriMet began construction on a transit-only light rail line and bridge connecting Portland and Milwaukie. The project is budgeted at $1.5 Billion, and TriMet is hoping to get the federal government to pay for half. Unfortunately for TriMet almost none of the federal funds are secure after the Budget control Act of 2011was signed. Luckily the Cascade Policy Institute has provided a “Plan B” that will bring down the cost to less than $300 million. This plan includes: finishing the new bridge, canceling the light rail project, connecting a street car loop and improving transit to Milwaukie with more express bus services.
National SecurityBy Helle Dale, The Heritage FoundationWebMemo, 08/10/2011
The Security Assistance Act of 2011, which authorizes appropriations for the State Department for fiscal year 2012, represents a strong, back-to-basics answer to the Obama Administration’s overly ambitious attempts at redefining U.S. foreign relations. The bill’s aim is to tie American foreign affairs budgets to the country’s national security demands. Especially at a time of budgetary constraints, it only makes sense to refocus U.S. foreign policy and foreign aid on what is identifiably in the U.S. national interest. When Congress returns from recess, “back to basics” should be the mantra.
Natural Resources, Energy, Environment, & ScienceBy Douglas Nelson, Alexander Rinkus, American Enterprise InstituteThe American, 08/10/2011
Crop protection products have long played a significant role in agriculture. Stunningly, crop protection products help enable just 2 percent of our population to provide for the other 98 percent today. And partly because of these products, food security has moved from a constant struggle to a right and expectation in the developed world. It should be noted, however, that many people in the developing world do not know where their next meal will come from. Food security becomes only more challenging given that, according to United Nations estimates, the world population will be as high as 9 billion people by 2050. If we can adequately feed everyone and give them the opportunity to fulfill their intellectual promise, there is no predicting where humanity can go in the next century. Plant science and technology is the vehicle that can take us there.
EducationBy Deborah D. Thornton, Public Interest InstituteInstitute Brief, 08/10/2011
Year after year the United States spends more out of its national treasury on education. However, the results have not changed for the better. Parents and taxpayers need to realize that public education is in fact a coercive monopoly. This is because government keeps the prices high and restricts the output showing little or no responsiveness to the needs of their customers. It is time to start searching for better alternatives that promote competition so that our children are getting both an education that is both quality and affordable.
Retirement/Social SecurityBy Carrie Lukas, Independent Women's ForumPolicy Focus, 08/10/2011
Republicans and Democrats increasingly acknowledge that reforming Social Security needs to be a part of our long-term debt solution. The fundamental problem in keeping Social Security solvent is that, at the moment, the program operates under what’s called a “pay-as-you-go” system, which means it relies on revenue from today’s payroll taxes to pay current beneficiaries. As the number of retirees grows, there won’t be enough people paying in to pay all promised benefits. The good news is that changes to Social Security’s benefits can be structured so reductions in future benefits affect only those well above the poverty line. It is now up to Washington to implement reforms so our posterity inherits a system that is solvent and doesn’t require sky high taxes to finance it.
Health CareBy Paul Winfree, The Heritage FoundationBackgrounder, 08/10/2011
Heritage Foundation health care economist Paul Winfree lays out a four-step plan that Congress can follow to move Medicare toward solvency. The first step involves a modest phase-out of the Medicare subsidy for high-income seniors. The second involves introducing a premium for Medicare’s hospital insurance (Part A) either immediately or once the health insurance trust fund reaches insolvency, which the Medicare Trustees warn will occur by 2024. The third involves exempting seniors from the Social Security and Medicare payroll tax if they continue to work after becoming Medicare eligible. The fourth involves providing seniors who want to keep their existing private plans, including employment-based plans, with a risk-adjusted defined contribution
The Harding-Coolidge Path to Prosperity: What Policymakers Can Learn From the 1920s to Solve the Budget Crisis and Create a Sound EconomyBy John Hendrickson, Public Interest InstitutePolicy Study, 08/09/2011
When President Warren G. Harding was sworn in as President in 1921, he faced a similar economic situation to the one we have today. At that time the nation was suffering from the depression of 1920, which included 11.7 percent unemployment as well as a massive level of debt and high tax rates. President Harding confronted the depression with a conservative agenda of reducing government spending, cutting tax rates, paying down the national debt, and repealing excessive regulations. Harding’s program, continued under President Coolidge, resulted with a period of economic expansion, low unemployment, and budget surpluses. This economic program influenced conservative leaders including Ronald Reagan who also used limited-government means to solve an economic crisis and led the nation into a period of economic prosperity. Today’s policymakers can learn a lot from the policies and political philosophies of Harding and Coolidge, who both showed principled leadership in solving policy problems.
Economic GrowthBy Philip I. Levy, American Enterprise InstituteThe American, 08/09/2011
Americans are intensely interested in the state of the job market. However, trying to get a good sense of it recalls the story of the blind men describing an elephant by feeling it. The description depends on which part is felt. This article is a general guide to the much-discussed numbers, covering matters such as: why some people argue that the unemployment rate paints too optimistic of a picture; and resources other than government that provide an accurate measure of the labor market.
Economic GrowthBy Richard A. Epstein , Hoover InstitutionDefining Ideas, 08/09/2011
The major headlines on Saturday, August 6, 2011, contained no surprises in announcing that Standard & Poor’s had downgraded the United States credit rating from AAA to AA+. That decision, of course, had this rich irony: the same credit agency that was lambasted for giving rosy ratings to toxic mortgage-backed securities is now being skewered by liberals for selling the United States short. The markets, however, did not react with the same skepticism toward the S&P as the committed liberals did. For the economy to rebound it is imperative that the US address high marginal tax rates, fealty to unions, the Obama distractions idea of International free trade, and entitlement programs like Medicare and Medicaid.
Regulation & DeregulationBy Roger Koppl, et al., National Center for Policy AnalysisReport, 08/09/2011
A task force from across the United States assembled by the National Center for Policy Analysis found that cost increasing regulations have priced low-income families out of the market for many services that are essential to their quality of life and prospects for economic progress. The task force members identified regulations that keep low-income families from enjoying the benefits of competition and entrepreneurship and force them to rely on less consumer-friendly public services instead. The alternative approach they propose is straight-forward: Lift regulatory barriers for individual entrepreneurs, businesses and charities who propose to serve primarily low-income populations. As explained in this report, Enterprise Programs would benefit the consumers of the newly available services as well as create job opportunities for the workers who provide the services.
Foreign Policy/International AffairsBy Brett Schaefer, Anthony Kim, The Heritage FoundationBackgrounder, 08/09/2011
Countries that receive U.S. foreign aid routinely oppose U.S. diplomatic initiatives and vote against the U.S. in the United Nations. While linking humanitarian and security aid to support of U.S. policy priorities would undermine the purposes and effect of that aid, the effectiveness of development aid in improving economic growth and development among recipients remains dubious. Therefore, the U.S. has no compelling reason preventing it from explicitly linking disbursement of development assistance to support for U.S. policy priorities in the United Nations. The U.S. should also work to strengthen and build coalitions of economically or politically free nations in the U.N. because economically free countries and politically free governments tend to vote with the U.S. more consistently.
Foreign Policy/International AffairsBy Renato De Castro, Walter Lohman, The Heritage FoundationBackgrounder, 08/08/2011
Recent developments in the South China Sea illustrate the urgent need for the Philippines to shift its focus from internal security to maritime defense. Internal security will continue to be important to the Philippines, as active insurgencies are not yet securely behind it. But the Philippines can and must find a way to perform both missions adequately. It is in the United States’ interest that it be able to do so. The U.S.–Philippines Mutual Defense Treaty, the Visiting Forces Agreement, deeply embedded consultation mechanisms, and a century of friendship, cooperation, and mutual sacrifice give the U.S. the framework to assist its longtime ally. It need only be fully employed.
Foreign Policy/International AffairsBy Anna Simons, Foreign Policy Research InstituteArticle, 08/08/2011
For ten years and counting, U.S. policy has rested on the misguided notion that it is somehow possible to separate “moderates” from “radicals,’’ or reconcilables from irreconcilables. Washington’s policy has been that if those espousing and participating in unjustifiable violence can be isolated, moderates should be wooable, and once they’ve been won over the irreconcilables can be eliminated. To accomplish this, the US only needs to persuade moderates to stop lending extremists support. The US should no more tolerate those who protect or surreptitiously support perpetrators of anti-American violence than citizens should tolerate leaders who govern so ineffectively they permit safe havens to exist.
Foreign Policy/International AffairsBy Samuel Helfont, Tally Helfont, Foreign Policy Research InstituteE-Notes, 08/08/2011
No Arab state has been able to ignore the sweeping changes of the Arab Spring. It has dominated the Arab language news and changed the perceptions of millions about what is politically possible. Yet in each society the demands for change have manifested differently. The prospect of Jordan’s protests turning into a real force for change remains real as long as the activists continue to be committed and the population’s demands for reform go unanswered. If the protests gain traction, another staunch American ally in the Middle East could come under severe pressure to change its stance toward the West, and toward Israel.
The Constitution/Civil LibertiesBy John P. Feldman, et al., Washington Legal FoundationLegal Backgrounder, 08/08/2011
In late April of this year, the Federal Trade Commission, in collaboration with a host of other government agencies, released “Food for Thought: Interagency Working Group Proposal on Food Marketing to Children.” The report’s proposal call for voluntary principles that restrict the types of food, times of day, kinds of media, and specific information advertisers may or may not utilize when engaging in commercial speech. But are the proposals really voluntary? Professor Martin H. Redish of Northwestern University School of Law argues that the proposed regulations, despite being labeled voluntary, “unambiguously contravene the First Amendment’s protection of commercial speech as currently established by clear Supreme Court doctrine.” The advertising community must hold fast to its First Amendment rights as the Interagency Working Group’s Proposal, and other initiatives like it, seek to address social issues by suppressing or compelling speech.
EducationBy Dan Lips, Oklahoma Council of Public AffairsPolicy Papers, 08/08/2011
Across the nation, a growing number of students are benefiting from innovative online learning options. These options range from full-time online schools to part-time virtual course offerings and classroom-based blended-learning programs. According to the International Association for K-12 Online Learning, at least 1.5 million K-12 students participated in online and blended-learning programs during the 2009-10 school year. But many more Oklahoma children stand to benefit from the option to learn online. This report offers Oklahoma policymakers a blueprint for policy reforms that will make the state a national leader in offering families the option to use online learning. Specifically, it recommends that policymakers enact a state-funded education savings account program to give families the power to choose the best learning options for their children, including online or virtual education programs.
Budget & TaxationBy Antony Davies, John Pulito, Mercatus CenterWorking Paper, 08/08/2011
This paper explores the relationship between high-income tax rates and the interstate migration of high-income households. Controlling for property-tax rates, sales-tax rates, high income tax brackets, unemployment, and state/county-specific and time-specific effects, the authors find that higher state income-tax rates do cause a net out-migration. Not only does this migration apply to just higher-income residents, but to residents of lower wage levels as well. Drawing from the data, the authors conclude that states lose households to more tax-friendly states through three specific measures: lowering the “high-income” threshold so as to capture more households, increasing high-income tax rates, and increasing property-tax rates.
National SecurityBy James Jay Carafano, The Heritage FoundationWebMemo, 08/08/2011
An electromagnetic pulse (EMP) produced by the detonation of a nuclear weapon at high altitude or as the result of unusually powerful solar activity (often called severe space weather) could produce catastrophic destruction in the United States. Congress has long deliberated this threat, but it has not produced substantive legislative guidance or demonstrated effective oversight. The Administration and federal agencies remain mostly ambivalent. It is time to make August 15 National EMP Awareness Day to wake up America’s nation’s leaders. This should be recognized as a clear and present danger—one that could be devastating if it finds the nation ill-prepared.
International Trade/FinanceBy Derek Scissors, The Heritage FoundationBackgrounder, 08/08/2011
The scheduled autumn visit of China’s next Communist Party General Secretary, Xi Jinping, to Washington is a good opportunity for the U.S. to re-examine its often mismanaged economic diplomacy with China. Policymakers from both parties frequently point to the seemingly exceptional importance of China to the American economy, yet have created an inadequate, almost random, set of institutions to guide bilateral economic relations. Heritage Foundation China and international economics expert Derek Scissors identifies the problems and offers ways to improve the institutional toolkit.
Economic GrowthBy e-21, e21: Economic Policies for the 21st CenturyCommentary, 08/08/2011
Across the U.S., foreclosure filings in the first half of 2011 were down nearly 30% from filings in the first six months of 2010. Unfortunately, the drop in foreclosures is not a sign of improvement in the mortgage market, but rather a reflection of the delays in filings. The pace of foreclosures is likely to remain slow until large banks reach an agreement with government officials that establishes new loan servicing and foreclosure standards. The delay in foreclosures increases the “shadow inventory” of properties likely to be auctioned by banks. This not only increases supply and depresses future prices, but also contributes to the current price reduction trend as potential buyers rationally delay purchases until new supply comes on line. More ominously, the proposed resolution to the foreclosure mess may make it less likely the private sector will ever return to the home mortgage market.
Economic GrowthBy Joel Kotkin, Manhattan InstituteCity Journal, 08/08/2011
Los Angeles began the twentieth century with barely 100,000 residents. By century’s end, 4 million people were living there, making it the nation’s second-largest city, while another 6 million were occupying the rest of Los Angeles County. But in the new century, Los Angeles has begun to fade, and it can’t blame its condition on the recent recession. The unemployment rate is one of the highest among the nation’s largest urban areas. Businesses and residents are fleeing. In virtually every category of urban success, from migration of educated workers to growth of airport travel, Los Angeles lags behind not only such fast-growth regions as Dallas and Raleigh-Durham, but also historical rivals like New York. The only way for Los Angeles to get out of this downward spiral and fully recover is for sweeping change in its political culture.
EducationBy Himanshu Kothari, American Enterprise InstituteWorking Paper, 08/08/2011
In this paper, finance specialist and education real estate expert Himanshu Kothari explores the causes of the nation’s $300 billion funding shortfall in K-12 facilities and offers concrete recommendations to address this troubling trend. Kothari posits that public-private partnerships are a promising avenue for tapping the resources needed to address capital needs, but that current financial conditions in K-12 scare off potential investors. By overhauling facilities financing and exploring innovative approaches, policymakers can create the space for private investors to support school facilities. To better meet their facilities needs, Kothari specifically advocates: Holding educators and schools accountable for academic and financial performance; loosening regulations that limit the reach of charter schools and other nontraditional programs; and creating more opportunities for schools to take advantage of nontraditional financing options.
Economic GrowthBy J.D. Foster, The Heritage FoundationWebMemo, 08/08/2011
Late on Friday, August 5, Standard & Poor’s (S&P) downgraded the United States credit rating from AAA, and really best in class, to AA+. In one fell swoop, S&P sent two separate and powerful messages. First, as The Heritage Foundation and many others warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were entirely and woefully inadequate. Second, the global economy, the national economy, and state finances have all in their own ways been delivered a mighty and frightening body blow. The objective for the nation, the President, and the joint select committee is clear: drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation’s credit rating.