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Recent Policy Studies
EducationBy Thomas Lindsay, Texas Public Policy FoundationPolicy Perspective, 01/12/2012
While Texas’ debate over public higher education’s cost and value garnered a great deal of press coverage in 2011, this is far from a Texas issue alone. As the statistics compiled below demonstrate, rising tuitions and student debt, as well as declining student performance, have become subjects of truly national concern. At the same time, this sourcebook also reports on a number of developments that promise solutions to our higher education crisis.
Crime, Justice & the LawBy Jeanette Moll, Texas Public Policy FoundationPolicy Perspective, 01/12/2012
Two distinct but interrelated phenomena are spreading across the United States. One, which is by no means novel, is the efforts of state lawmakers to control and reduce budgets in response to tough economic times. The other is somewhat new in some states, and that is the acknowledgment that juvenile justice systems too often fail taxpayers, victims, and juvenile offenders alike. While these phenomena have different root causes, the latter may assist with the accomplishment of the former. Comprehensive juvenile justice reform can help reduce budgetary pressures on state lawmakers. And at the same time, outcomes for juveniles can actually improve, resulting in productive, law-abiding citizens independent of the justice system.
Budget & TaxationBy John Hendrickson, Public Interest InstituteInstitute Brief, 01/12/2012
It is clear that spending is the major domestic policy problem facing the nation today and it is vital that policymakers follow policies that will resolve fiscal and economic problems confronting the nation. The solution to reducing government spending and formulating pro-growth policies rests in returning to constitutional limited government. These are the policies that President Warren G. Harding, President Calvin Coolidge, and President Ronald Reagan utilized in creating periods of economic growth and prosperity. The future of the Republic depends on returning back to constitutional principles.
Health CareBy Deborah D. Thornton, Public Interest InstituteInstitute Brief, 01/12/2012
In response to the Patient Protection and Affordable Care Act (ObamaCare), a group of concerned business people created the Health Care Compact Alliance, a 501(c)(4) organization working to keep health-care responsibility and financial control at the state level, instead of federal, by the establishment of health-care compacts between the states. This initiative is working in parallel with the state legal challenges to ObamaCare moving through the court system.
EducationBy William Donovan, Pioneer Institute for Public Policy ResearchWhite Paper, 01/12/2012
Massachusetts is well behind the leaders in offering a full-time virtual school, though students at nearly 200 public and private schools have access to courses offered through Virtual High School (VHS), an online education collaborative based in Maynard, Massachusetts.
Health CareBy John R. Graham, Pacific Research InstituteHealth Policy Prescriptions, 01/12/2012
Earlier this year, the Pacific Research Institute published a study demonstrating one way that Obamacare will dramatically reduce Americans’ choice of health insurance. By encouraging states to pass laws giving politicians control of health plans’ premiums, Obamacare creates incentives for politicians to impose populist limits that threaten health plans’ solvency. Furthermore, common measurements and tools used to determine whether health insurance is “competitive” are deeply flawed, leading even well-intentioned regulators astray as they seek to control the cost of health insurance. This article incorporates new data to test whether the conclusions of the earlier study persist. It finds that they do.
Health CareBy Sally Pipes, Pacific Research InstituteBook, 01/12/2012
The devastation and economic destruction caused by Obamacare has begun. When President Obama laid out his grand plan for health care reform, he promised expansive coverage and cheaper costs for all. These two promises have already been broken as studies reveal that Obamacare is actually increasing the cost of medical care, and will not even begin to solve the problem of uninsured Americans. But how do we go about undoing the harm? Even the presidential candidates disagree on how complicated repeal might actually be. The steps are simple and we cannot afford to wait, says Sally Pipes, author of The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare and president of the Pacific Research Institute.
Passing the Health Care Compact in Florida: A Historic Opportunity to Restore Self-Government and Affordable Health CareBy Mario Loyola, James Madison InstitutePolicy Brief, 01/12/2012
One promising tool that has enormous potential to retrace the vanishing boundary between state and federal authority is the interstate compact. With the consent of Congress, interstate compacts can shield whole areas of regulation from federal intrusion, allowing states and local communities to reassert their proper role as the primary instruments of self-government. Already adopted in four states, with many more on the way, the Health Care Compact (HCC) will give each state the opportunity to chart its own path in the health care arena, without having to worry about giving up “federal matching funds” that the states have already paid for. The HCC will give states a formal mechanism for working together to roll back federal overreach in health care, and reassert state and local control at the right time and in their own way.
Budget & TaxationBy Stuart Buck, James Madison InstitutePolicy Brief, 01/12/2012
Several supplemental changes would improve the overall financial stability of the Florida retirement system. These changes include: 1. Make a 401(k)-style “defined contribution plan” the default choice for new hires who express no preference concerning their retirement options. 2. Limit the time horizon over which new employees may switch between the traditional defined benefit plan and the defined contribution plans. 3. Lengthen the vesting period on the defined benefit plan to 10 years. 4. The employee contribution rate should be increased to 4 percent from the current 3 percent – assuming that Florida Supreme Court does not toss out the employee contribution.
Budget & TaxationBy Ted Dabrowski, Illinois Policy InstituteTax & Budget Brief, 01/12/2012
One year after Illinois’ Democratic leaders pushed through a record tax hike, the grades are in. The tax hike flunked. It failed to put Illinois on sound fiscal footing. It failed at restoring confidence in government’s ability to meet serious challenges head on. It failed to strengthen the state’s economy. It failed to create opportunity and prosperity. It failed families and the businesses that want to be a part of making Illinois great again.
Budget & TaxationBy Lowell Reese, Bluegrass Institute for Public Policy SolutionsReport, 01/12/2012
The state’s six retirement funds have long-term obligations (benefits owed to retirees) that are double the funds’ assets (the ability to pay the future obligations) – $61.7 billion in future obligations but only $30.7 billion in assets, which means that 50.3 percent of the obligations are not funded. That’s a collective figure; the state employees’ fund (KERS) is in the worst shape of all — in Kentucky and in the nation — with 67 percent of its future obligations not funded. Lawmakers need to come up with $23 billion for Kentucky’s retirement systems, on top of the systems’ current revenue stream, to get the systems in good health again. That amount would not entirely erase the $31 billion unfunded liability, but an influx of $23 billion would bring the funding up to an 80 percent level, where the actuaries and experts want it to be: 80 percent or above.
Economic GrowthBy Veronique de Rugy, Reason FoundationReason, 01/12/2012
Rising income inequality, while alarming at first glance, isn’t what it seems to be. The dynamism of the U.S. economy has been sadly underappreciated. Contrary to what most people believe, American households still experience considerable income mobility over time. That means more reasons to celebrate, and fewer reasons to pitch a tent at Occupy Wall Street.
Regulation & DeregulationBy Christopher J. Conover, Jerry Ellig, Mercatus CenterMercatus on Policy, 01/12/2012
What do the Obama administration’s first few major health care regulations and the Bush administration’s first few major homeland security regulations have in common? Both reflected a president’s signature high-priority issue. Both took the form of “interim final rules” issued under tight legislative deadlines. Both exemplify “fire, ready, aim” rulemaking at its worst. And both were accompanied by low-quality regulatory analysis that reads more like an attempt to justify decisions than an attempt to inform decisions.
Health CareBy Edmund Haislmaier, The Heritage FoundationBackgrounder, 01/12/2012
In March 2012, two years after the enactment of the Patient Protection and Affordable Care Act (PPACA), the Supreme Court will hear challenges to the federal health care legislation. One issue the court will take up is whether the PPACA’s Medicaid expansion constitutes a coercive infringement on state sovereignty by the federal government. Relevant to that dispute is the economic burden to a state that—in the face of the impending PPACA-mandated Medicaid expansion—decides to end its participation in Medicaid, thus forfeiting its entire federal Medicaid funding. This Heritage Foundation analysis attempts to calculate that burden.
National SecurityBy Scott Erickson, Matt Mayer, The Heritage FoundationBackgrounder, 01/12/2012
A robust, comprehensive, and integrated suspicious activity reporting (SAR) system, linking the unique observations of law enforcement personnel from around the nation, is a necessary component of a 21st-century policing strategy predicated on the increasing role of state and local law enforcement in the battle against domestic radicalization and homegrown terror. While many state and local agencies have embraced their roles in the development of SAR, far too many have yet to do so. The Department of Justice, under which the initiative to expand the nationwide adoption of SAR operates, should vigorously promote the use of SAR within federal, state, local, and public agencies.
Budget & TaxationBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
Federal employees spent 3.1 million hours on official time in 2010. This subsidy to federal unions cost taxpayers $137 million. Requiring unions to reimburse taxpayers for these costs would help close the deficit. Alternatively, the savings could be used to lower taxes.
LaborBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
Abuse of the leave granted by HFA reduces productivity, thus increasing the cost of business while decreasing incentive for capital investment. This costs jobs. Companies respond to higher benefit costs by reducing workers’ pay by approximately the cost of providing the benefit. Companies would spend more on leave benefits and less on wages. Mandated benefits have many of the same labor market effects as raising taxes on workers. Therefore, Congress should not raise taxes on workers during the middle of a steep economic downturn. Less take-home pay means less savings and less consumption in the economy, which costs jobs.
LaborBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
The National Labor Relations Board is making it more difficult for workers to stay non-union. Allowing unions to cherry-pick bargaining units and giving workers little time to hear the other side will greatly facilitate union organizing—whether or not unionizing is in workers’ best interests. Unionized businesses invest approximately 15 percent less than comparable non-union firms. Employment expands three to four percentage points more slowly at unionized companies.
Budget & TaxationBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
The Davis-Bacon Act increases the cost of federally funded construction projects by 9.9 percent. Repealing the DBA restrictions would allow the government to build more infrastructure and create 155,000 more construction-related jobs at the same cost to taxpayers.
Budget & TaxationBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
Reducing federal pay to market rates would save taxpayers approximately $47 billion per year. This reduces the deficit without reducing public services. This also frees up more resources for private businesses to save and invest, expanding the economy and creating more jobs.
LaborBy James Sherk, The Heritage FoundationWebMemo, 01/12/2012
The RAISE Act would allow unionized employers to give performance-based pay to deserving workers. Economic research shows that the average worker’s earnings rise 6–10 percent when the pay is performance-based. This is an average figure—industrious and enterprising workers earn larger raises while lazy employees earn less. Performance pay allows workers to earn more by becoming more productive. At companies that offer performance pay, the typical union member earns between $2,600 and $4,300 more per year in performance-pay bonuses and merit raises. With millions of American families struggling to get ahead financially in the recession, Congress should lift the ceiling on workers’ pay immediately. This is the right kind of stimulus that would add billions of dollars to the economy.
Health CareBy Kathryn Nix, The Heritage FoundationCenter for Policy Innovation Research Summary, 01/12/2012
In 2003, the Medicare Modernization Act created the Medicare Advantage program, which allowed seniors to choose coverage from private health plans. Both recent research published in The American Journal of Managed Care by Niall Brennan and Mark Shepard and another analysis by America’s Health Insurance Plans use HEDIS measures and state-based data on hospital utilization, respectively, to compare the quality of care received by enrollees in Medicare Advantage and traditional Medicare fee-for-service. The studies found the new program performed better than traditional Medicare on a number of measures, including delivery of care and hospital utilization.
Economic GrowthBy Terry Miller, Kim R. Holmes, Edwin J. Feulner, The Heritage FoundationBook, 01/12/2012
Global economic freedom has declined over the past year according to the 2012 Index of Economic Freedom. The tension between government control and the free market has heightened around the world, particularly in developed countries. Eroding hard-earned gains in economic freedom in years past, the mounting burden of reckless government spending in many cases has overwhelmed gains in economic freedom achieved in other policy areas. The 2012 Index, the 18th edition, analyzes economic policy developments in 184 countries since the second half of 2010. Somalia, though not formally graded, returns to the Index for the first time since the 2001 Index. Countries are graded and ranked on 10 measures of economic freedom that evaluate the rule of law, the intrusiveness of government, regulatory efficiency, and the openness of markets.
Health CareBy Christopher J. Conover, Jerry Ellig, Mercatus CenterMercatus on Policy, 01/11/2012
In general, the health regulations were less transparent than the major proposed rules issued by the Bush and Obama administrations in 2008 and 2009. This means it was difficult for the lay public or even experts to understand how the analysis calculated at least some of its estimates of benefits or costs. In some cases, the rules inadequately assessed the expected benefits or failed to demonstrate how the rule would achieve them. In other cases, the analysis failed to demonstrate that there was some market failure or other systematic problem that could be addressed only through federal government action. Some rules also failed to identify alternative, less expensive approaches to regulation or failed to adequately assess costs and compare these to benefits. In fact, not one of these rules sought to monetize expected benefits, making it unclear why the agency concluded that the rule had benefits that exceeded its costs.
Beware the Rush to Presumption, Part C: A Public Choice Analysis of the Affordable Care Act’s Interim Final RulesBy Christopher J. Conover, Jerry Ellig, Mercatus CenterWorking Paper, 01/11/2012
From a process perspective, it appears that the analysis and review associated with these regulations was less thorough than economically significant regulations typically receive. The result was certainly subpar. The abbreviated regulatory process and low-quality analysis are predictable results of the incentives the regulatory agencies faced. A combination of top-down direction and tight deadlines eliminated the agencies’ ability and incentives to produce high-quality regulatory impact analyses or use the results to make choices. Presidential and congressional decisions, in turn, flowed predictably from the political incentives President Obama and Congress faced in 2010.
Beware the Rush to Presumption, Part B: Substandard Regulatory Analyses for the Affordable Care Act’s Interim Final RulesBy Christopher J. Conover, Jerry Ellig, Mercatus CenterWorking Paper, 01/11/2012
The quality and use of analysis for the Affordable Care Act interim final regulations falls well below the standards set by other agencies and by the Department of Health and Human Services itself in conventional notice-and-comment rulemaking in previous years.
Beware the Rush to Presumption, Part A: Material Omissions in Regulatory Analyses for the Affordable Care Act’s Interim Final RulesBy Christopher J. Conover, Jerry Ellig, Mercatus CenterWorking Paper, 01/11/2012
Regulatory impact analyses for eight major Affordable Care Act rules issued so far were seriously incomplete, often omitting significant benefits, costs, or regulatory alternatives. Analysis of equity was cursory at best. In short, the regulatory analyses for these regulations were insufficient to guide decisions or inform the public. Based on these RIAs, we cannot tell whether the regulations will produce the promised benefits for the projected costs, whether alternative approaches could have produced greater benefits at lower costs, or even whether the regulations satisfy any well-defined concept of fairness.
Budget & TaxationBy E.J. McMahon, Terry O’Neil, Empire Center for New York State PolicyReport, 01/11/2012
New York’s 30-year-old “Triborough Amendment” requires public employers to maintain all contractual perks for unionized public employees, including automatic “step” increases in pay, after the expiration of a collective bargaining agreement. This law gives unions an incentive to resist negotiating structural changes to their contracts, since the status quo will be preserved even if there is no contract. Pay hikes required by the Triborough Amendment cost the state government $140 million a year, despite a “freeze” on base salaries. The Triborough Amendment guarantees pay increases for teachers that add almost $300 million a year to school budgets across the state.
National SecurityBy Bruce Thornton, Hoover InstitutionDefining Ideas, 01/11/2012
As the costs of our misreading the Iranian revolution have become obvious, the same failure of imagination conditions our response to events in the rest of today’s Middle East—namely, Tunisia, Libya, and Egypt. Despite the Muslim Brothers’ long record of jihadist theory and violence aimed at creating Islamist regimes founded on illiberal Sharia law, for months we have heard of the “liberal” or “moderate” Muslim Brotherhood. That judgment is based not on what Egyptians say and do, but on what we uncritically assume are the normal aspirations and good intentions of all people regardless of their culture and faith. This is the same error made thirty years ago, when the conventional wisdom thought that the secular nationalists and liberals in Iran would prevail over the clerics and the religious parties.
National SecurityBy Victor Davis Hanson, Hoover InstitutionDefining Ideas, 01/11/2012
What are we to make of Iran’s serial, but seemingly empty threats of war, so reminiscent of North Korean bluster? Of course, there are plenty of examples in history to remind us that the constant saber rattling of failed states leads nowhere except to temporary tension and convenient rises in commodity and oil prices. But there also are enough other instances of unexpected attacks to suggest that the lunacy of lunatic regimes sometimes should be taken seriously.
Elections, Transparency, & AccountabilityBy Arnold Kling, American Enterprise InstituteThe American, 01/11/2012
The executive branch is a sprawling apparatus that is likely to proceed on autopilot unless there is a drastic shakeup. A re-organization could make it more responsive to democratic priorities and more effective at achieving the taxpayers’ objectives.
Foreign Policy/International AffairsBy Ali Alfoneh, American Enterprise InstituteMiddle Eastern Outlook, 01/11/2012
Esmail Qaani’s battlefield experience, network within the IRGC, and long acquaintance with Supreme Leader Ali Khamenei may aid him as Suleimani’s replacement, but there is no doubt that the uncharismatic and less distinguished Qaani would have great difficulties filling Suleimani’s boots. That Qaani directs the IRGC QF’s activities in Afghanistan, Pakistan, and central Asia may also provide an indication that he would focus primarily on Afghanistan as IRGC QF commander. Decision makers planning US military withdrawal from Afghanistan can safely assume that an IRGC QF led by Qaani would engage much more aggressively in Afghanistan and central Asia.
EducationBy Robin Lake, Cheryl Miller, American Enterprise InstituteReport, 01/11/2012
While many charter leaders see civic education as a priority, many admit that, in practice, they cannot give it as much attention as they would like. In addition, charters appear to diverge widely in their basic philosophies and priorities when it comes to defining civic education.
Foreign Policy/International AffairsBy James Jay Carafano, The Heritage FoundationWebMemo, 01/11/2012
After three years of the Obama Doctrine, the place of the United States in the world is less secure than when the President came into office. That trend must change. Nor can foreign policy be left on the backburner any longer with Washington only focusing on domestic issues. The White House and Congress ought to make foreign policy a priority, and they ought to return to a policy where politics stops at the water’s edge. Rather than shaping foreign policies through the lens of election politics, Washington ought to protect the nation’s interest first—even though that means admitting that right now the government is doing things more wrong than right and that fixing foreign policy in 2012 requires some bold moves.
Economic GrowthBy Rea Hederman Jr., James Sherk, The Heritage FoundationWebMemo, 01/11/2012
While the jobs report was encouraging, it will still take years for unemployment to recover at this pace. Economists estimate that the “natural rate of unemployment” in the U.S. economy is 5.2 percent. If employers continue to create 200,000 net jobs per month, then one year from now, the unemployment rate will still stand at 7.9 percent. At that pace, the unemployment rate will not return to normal levels (or 5.2 percent) for four and a half years—not until September 2016.
National SecurityBy Bruce Klingner, The Heritage FoundationWebMemo, 01/11/2012
President Obama has correctly emphasized that “we have to remember the lessons of history. We can’t afford to repeat the mistakes that have been made in the past—after World War II, after Vietnam—when our military was left ill prepared for the future.” American pundit Will Rogers said in 1933 that “if you want to know when a war is coming, you just watch the U.S. and see when it starts cutting down its defenses. It’s the surest barometer in the world.” Unfortunately, Rogers may again prove prescient.
Foreign Policy/International AffairsBy Ray Walser, James Phillips, The Heritage FoundationWebMemo, 01/11/2012
On January 8, Iranian President Mahmoud Ahmadinejad lands in Venezuela to start a brief but highly symbolic Latin American visit. The Iranian leader aims to bolster ties with Venezuela’s Hugo Chavez and some of the region’s most strident anti-American leaders. For the Obama Administration, the Iranian visit reflects a continuing erosion of U.S. influence in the region and highlights the urgent need for an active policy to safeguard and advance U.S. security and interests in our neighborhood.
Economic GrowthBy Derek Scissors, The Heritage FoundationWebMemo, 01/11/2012
Chinese investment has become a notable factor in the world economy and will continue to be for the indefinite future. As a whole, Chinese investment is now maturing in both positive and negative senses. As investment has matured, annual growth has slowed, with growth in some markets stagnating entirely. On the other hand, investment is becoming more regularized, and more non-state firms are now participating. Chinese investment in the U.S. continues to underperform relative to the size of the American economy and growth in other major markets, including Canada. This is hardly a threat to the American economy, but it does follow in large part from America’s failure to clarify its policy. Because Chinese investment will be a notable force for years to come, the U.S. needs to improve its response, both at home and around the globe.
National SecurityBy Jessica Zuckerman, The Heritage FoundationWebMemo, 01/11/2012
On Saturday night, 25-year-old Sami Osmakac was arrested in connection to an alleged Islamist-inspired terrorist plot in Tampa, Florida. Osmakac, a naturalized U.S. citizen born in the former Yugoslavia, is believed to have planned to use vehicle bombs, assault rifles, grenades, and other explosives in an attack on possible targets including night clubs, businesses, and a local sheriff’s office. His arrest was the result of an undercover operation in which the FBI had been monitoring Osmakac for months. Osmakac’s arrest marks the 44th terrorist plot foiled against the U.S. since 9/11 and serves as a strong reminder that the global war against terrorists is not yet won.
Crime, Justice & the LawBy Paul Larkin, The Heritage FoundationLegal Memorandum, 01/11/2012
Are maple syrup felons sufficiently heinous that they should be imprisoned for perhaps as long as 45 years? Some members of the U.S. Senate seem to believe the answer is yes: How else to explain the provisions of the Maple Agriculture Protection and Law Enforcement Act of 2011? This bill, known as the MAPLE Act, would make it a “federal crime…for anyone knowingly and willfully to distribute into interstate commerce a product that is falsely labeled as maple syrup.” While falsely labeling a product should not go unpunished, there are ample criminal laws on the books to deal with the false labeling of maple syrup. The real threat raised by the MAPLE Act is not that of a shadowy syrup syndicate, but a U.S. Congress determined to expand the federal criminal law well beyond its intended limitations—the phenomenon known as overcriminalization.
EducationBy Jason Richwine, Andrew Biggs, The Heritage FoundationBackgrounder, 01/11/2012
A November 2011 Heritage Foundation report—“Assessing the Compensation of Public-School Teachers”—presented data on teacher salaries and benefits in order to inform debates about teacher compensation reform. The report concluded that public-school teacher compensation is far ahead of what comparable private-sector workers enjoy, and that recruiting more effective teachers will be more difficult than simply raising salaries. The debate over the report’s findings has generated substantive inquiries as well as some misconceptions. Here, the report’s authors respond to questions and concerns, in the process showing that certain critical accusations—such as undercounting teachers’ work hours or overestimating retirement benefits—are simply false. The broader implication of the authors’ research is that the current teacher compensation system is not working. The United States needs a more rational system that pays teachers according to their performance.
Family, Culture & CommunityBy Ryan Messmore, The Heritage FoundationWebMemo, 01/11/2012
As Americans exercise their right to vote in presidential primaries, caucuses, and conventions, candidates face questions from voters on a wide range of issues, including religious faith. When it comes to this issue, what should they be looking for? Which questions about religion are most helpful in selecting a President?
Administrative Reforms Insufficient to Address Flawed White House Immigration and Border Security PoliciesBy Matt Mayer, The Heritage FoundationWebMemo, 01/11/2012
The latest Administration policy announcement would streamline the wait for those unlawfully present in the United States—with family members here who are U.S. citizens—who have identified themselves to authorities and plan to leave the United States and reenter on a proper visa. The new proposal would let qualifying individuals apply for a provisional waiver in the U.S. before going to their countries for the visa. This change is a reasonable and compassionate administrative reform to speed up a process that was always intended as a means to keep families together. The problem with this policy is that the White House has sold it as another down payment for amnesty and has failed to address immigration and border security in an effective manner in concert with Congress.
Budget & TaxationBy David John, Curtis Dubay, The Heritage FoundationWebMemo, 01/11/2012
While supporters of the financial transactions tax claim that it would rein in Wall Street speculators, the reality is very different. The tax would not hurt these high-volume traders, who would move their activities offshore to escape the tax. It is average investors who would instead bear the burden of the tax when their portfolios fall in value and suffer from damage to the overall economy.