Recent Policy Studies

• Foreign Policy/International Affairs
  

  Why America Has Trouble Reaching Iran: VOA’s Persian News Network in Dire Need of Reform

  By Helle Dale, The Heritage Foundation
  
  Backgrounder, 03/05/2012
  

  The regime that controls Iran is the world’s leading sponsor of terrorism, the world’s fourth-largest oil producer, and close to acquiring a nuclear weapon. Controlled by this regime are 74 million Iranians, 60 percent of which are under age 30, multitudes of whom reject the fanatic theocracy that tries to separate them from outside ideas. Millions of Iranians hunger not only for news, but for democracy—as evidenced by the Green Movement protests of 2009. For the United States government’s international broadcasting complex, Iran is a place where a good communication strategy is a necessity; it is also a place of great opportunity. Tragically, America’s principal instrument, Voice of America’s Persian News Network, has simply not been up to the task.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Obama Administration: No Confidence in Nuclear Energy

  By Cornelius Milmoe, Jack Spencer, The Heritage Foundation
  
  Backgrounder, 03/05/2012
  

  A major public concern about nuclear reactors has been that the spent nuclear fuel could remain stranded at the reactor site indefinitely. In the 1970s, courts prohibited the Nuclear Regulatory Commission from licensing new reactors unless it assured the public that the waste would be removed—a requirement called the “waste confidence” rule. President Obama’s decision to abandon plans for removing the waste to the Yucca Mountain repository in Nevada creates an uncertainty that could be a barrier to the expansion of nuclear power. Two nuclear policy experts argue that the 1982 Nuclear Waste Policy Act provides sufficient confidence that spent nuclear fuel will be removed and, thus, that the waste confidence rule is unnecessary and should be abandoned.

  
  
  
• Budget & Taxation
  

  We Need Fair and Sound Fiscal Health, Too

  By Deborah D. Thornton, Public Interest Institute
  
  Public Interest Institute Brief, 03/05/2012
  

  Health care benefits are a hot topic this spring. A major concern is not only benefits and costs for the private sector, but also the government workers. On the health-care retiree benefit side, many states – 19 in fiscal 2009 – have zero funds set aside to fund these benefits. Another seven have only funded 25 percent of their liability. In total, the states only have about $31 billion, or 5 percent of the expected liability, set aside. With the continuing growth in health-care expenses, this will be a significant problem for these states and their taxpayers in the future. Many states, including Kentucky, New Hampshire, New Jersey, and South Carolina, are making changes in the structure and payment plans of retiree healthcare benefits. They are attempting to better manage this long-term liability.

  
  
  
• Budget & Taxation
  

  The Squeeze: Government Unions’ Grip on Pennsylvanians

  By Priya Abraham, Cara Dochat, Commonwealth Foundation for Public Policy Alternatives
  
  Policy Report, 03/05/2012
  

  Pennsylvania’s government unions wield tremendous political influence and advance policies that harm the commonwealth’s taxpayers, children, and even their own members. Pennsylvania is a forced union state, meaning even workers who are not official union members must pay fees to the union as a condition of their employment. A single union usually has monopoly bargaining power with a government unit, such as a school district, preventing employees from choosing a different union or from bargaining individually. And most government units are “agency shop,” requiring non-union workers to pay a fair share fee to a union in order to keep their job.

  
  
  
• Transportation/Infrastructure
  

  Fixing America’s Freeways

  By Robert Poole, Reason Foundation
  
  Reason, 03/05/2012
  

  In light of ever-worsening congestion, America’s urban freeways constitute a massive case of government failure. They do not give their customers reliable mobility, and their method of financing (via flat-rate fuel taxes) vastly undercharges urban users (especially during rush hours) and generally overcharges rural highway users, whose roads cost far less to build. And without market pricing, we don’t know how much urban expressway capacity people would be willing to pay for. The private sector is capable of taking on the challenge of reinventing America’s freeways.

  
  
  
• Budget & Taxation
  

  Progressive Consumption Taxation: The X Tax Revisited

  By Alan D. Viard, Robert Carroll, American Enterprise Institute
  
  Book, 03/05/2012
  

  The United States is alone among industrialized countries in having no broad-based consumption tax at the national level. Yet, economic analysis suggests that consumption taxation is superior to income taxation because it does not penalize saving and investment. The X-Tax Revisited proposes to completely replace the income tax system with a progressive consumption tax, known as the “X-tax.” It sets forth solutions to commonly perceived problems concerning the taxation of pensions and fringe benefits, business firms, financial intermediaries, international transactions, owner-occupied housing, state and local governments, and nonprofit institutions. By adopting these approaches, the United States can move to a progressive tax system that no longer penalizes saving and investment.

  
  
  
• Monetary Policy/Financial Regulation
  

  Ending Government Price Fixing in Deposits at Long Last

  By Alex J. Pollock, American Enterprise Institute
  
  Testimony, 03/05/2012
  

  Last year’s repeal of the final remaining vestige of Regulation Q, the prohibition of payment of interest on business demand deposits, at long last completed a pro-competitive process which began with the Monetary Control Act of 1980. The repeal was and is a good idea.

  
  
  
• Economic Growth
  

  Is Japan Set to Boom?

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 03/05/2012
  

  Japan’s economic growth has been stagnant since 1990 in what have been called its two “lost decades.” The significant contractions in gross national product and gross domestic product during the fourth quarter of 2011 tell the same story: a Japan trapped in a cycle of weak growth and deflation. However, the Bank of Japan announced last month that it would finally begin to buy bonds, increasing the money supply in pursuit of an inflation target of 1 percent. This shift to expansionary monetary policy signals the first time in more than two decades when the Bank of Japan has been able to overcome its fear of inflation. Carefully managed, this policy could spur both Japan’s economy and the corresponding world output that would result from a robust Japan. The experiment’s success will be key to world economic growth in the coming decade.

  
  
  
• Foreign Policy/International Affairs
  

  What China’s Leadership Transition Means for the United States

  By Dean Cheng, The Heritage Foundation
  
  Issue Brief, 03/05/2012
  

  As China prepares to see Hu Jintao step down from the senior Party and governmental positions, American leaders will be confronted with a new Chinese leadership cohort. While some expect significant changes in foreign policy toward the United States, the Chinese system is designed to encourage consensus and discourage major initiatives. At the same time, there is little evidence to suggest that the Chinese military will be in charge or will even be more powerful. American foreign policy—especially the greater focus on Asia—can succeed only if it follows a consistent line of persistent actions, rather than hoping for fundamental changes in Chinese behavior. American foreign policy should adhere to American principles and pursue American interests, rather than seek to alter China’s opaque foreign policy-making process in this period of transition.

  
  
  
• Education
  

  Regulating Virtual Schools: A New Policy Challenge

  By William Donovan, Pioneer Institute for Public Policy Research
  
  White Paper, 03/02/2012
  

  Much like charter schools 20 years ago, the regulating of virtual schools is still very much in its early stage. That parallel is causing many education reform advocates to urge lawmakers to learn from whatever mistakes were made when laws were formed around charter schools and not repeat them with online learning. In fact many are saying laws could be designed and tested with virtual schools that could ultimately yield broader lessons for all schools. Twenty states, including New York and Connecticut, are still without virtual schools and others, including Massachusetts, are new to the model.

  
  
  
• Budget & Taxation
  

  Tax Simplification

  By Carrie Lukas, Independent Women's Forum
  
  Policy Focus, 03/02/2012
  

  Our tax code not only takes too much of our money—it also takes too much of our time. Americans spend more than 7.6 billion hours each year complying with our tax code. That’s the equivalent of more than 3.8 million full-time workers. There’s a tremendous cost associated with all of this wasted time and energy. The average non-business individual filer loses twelve hours and $160 in out-of-pocket each year for tax filing preparation or assistance. And even after all this investment, millions are still left wondering if they accidentally broke the law or gave Uncle Sam more of their earnings than they had to. Americans deserve a fair, transparent, simple tax code that’s sole goal is to raise the money necessary to fund the legitimate functions of government.

  
  
  
• Budget & Taxation
  

  Diagnosis: Disaster – The $44 Billion Price Tag of State Retiree Health Insurance

  By Jonathan Ingram, Illinois Policy Institute
  
  Health Care Brief, 03/02/2012
  

  Illinoisans are beginning to see the dangers of another unfunded liability: free or subsidized health care for retired state workers. The state has promised, in today’s dollars, nearly $44 billion in retiree health benefits to government employees over the next thirty years. Unfortunately, it has not set aside any funds for those future payments. These unfunded liabilities are growing two and a half times faster than state revenues and, if left unreformed, will work in tandem with rising pension costs to dramatically cut government services.

  
  
  
• Health Care
  

  The Truth about ObamaCare Exchanges

  By Jonathan Ingram, Illinois Policy Institute
  
  Health Care Brief, 03/02/2012
  

  The Affordable Care Act, commonly referred to as ObamaCare, permits states to establish health insurance exchanges. These exchanges will operate as new bureaucracies to oversee the purchase of government-approved health insurance. States electing to create these exchanges must comply with federal rules that will dictate virtually all aspects of the exchanges’ operations. If Illinois chooses to establish an exchange, the state will bear the full cost of running it. Illinois simply cannot afford to pay for this new, complex and burdensome bureaucracy. State officials estimate the exchange could cost Illinois upwards of $90 million per year. Worse yet, by moving forward with implementation Illinois could risk wasting valuable time and taxpayer money on a new bureaucracy that the Supreme Court ultimately strikes down or the federal government refuses to approve. While a number of people are urging the state to immediately create an ObamaCare exchange, the reasons are based on myths, not facts.

  
  
  
• Budget & Taxation
  

  What Public Employee Unions Are Doing to Our Country

  By William McGurn, Hillsdale College
  
  Imprimis, 03/02/2012
  

  The greater challenge today—to state and city finances, to democratic representation, to the middle class—is at the state and local level. This is partly because state and city unions have the power to negotiate wages and benefits that their counterparts at the federal level largely do not. More fundamentally, it is because we cannot reform at the federal level without correcting a problem that is bringing our cities and states to bankruptcy. We have to recognize that public sector unions have successfully redefined key relationships in our economic and civic life. The elected politicians who represent us at the negotiating table are not in fact management, our taxing and spending decisions at the city and state level are in practice decided by our public sector contracts, and when you put this all together, what emerges is a completely different picture of the modern civil servant. In short, we work for him, not the other way around.

  
  
  
• Foreign Policy/International Affairs
  

  The Obama–Netanyahu Summit: Time to Present a Common Front Against Iran

  By James Phillips, The Heritage Foundation
  
  Issue Brief, 03/02/2012
  

  When President Obama meets Israeli Prime Minister Benjamin Netanyahu at the White House on March 5, the Iranian nuclear issue will dominate their agenda. The two leaders have starkly different perceptions of Iran’s evolving nuclear threat and how best to confront it. Both governments have publicly aired their differences in the run-up to the meeting, with the Obama Administration warning that an Israeli preventive strike would be premature and destabilizing while Netanyahu’s government has signaled that it cannot wait much longer. The increasingly public spats reveal a glaring lack of trust. The two leaders need to forge a common understanding of how best to defuse Iran’s ticking nuclear time bomb and present Tehran with a credible military threat to dissuade it from continuing on its current nuclear path.

  
  
  
• Elections, Transparency, & Accountability
  

  The Akaka Bill (Part 2)

  By Malia Hill, Grassroot Institute of Hawaii
  
  inPursuit, 03/02/2012
  

  The name “Akaka Bill” is a catch-all term for the various proposals for creation of a separate Native Hawaiian government, most generally along the lines of Native American tribal governments. It is interesting, given that the primary motivation for passing the Akaka Bill seems to be rooted in the desire to “help” Native Hawaiians that the mechanism settled upon to do so shows so little historical evidence that this is the best route for success. In fact, given that the experience of American Indian tribes under the Bureau of Indian Affairs has led to a worse state of affairs (according to most socio-economic indicators) than currently experienced by Native Hawaiians, one wonders whether anyone has given full consideration to the impact that tribal status could have on the wealth, land, trusts, and status of the Native Hawaiians.

  
  
  
• Education
  

  Obama’s Education Record: Does the Reality Match the Rhetoric?

  By Michael Petrilli, Tyson Eberhardt, Education Next
  
  Education Next, 03/02/2012
  

  President Barak Obama and Secretary of Education Arne Duncan have been better on education reform than any of their Democratic predecessors. But to ignore the shortcomings of the president’s K–12 education-reform record entirely would be a mistake. And it would also be bad for the country. The administration deserves to be pressed on the cost-effectiveness of its education system bailouts, on the results of its Race to the Top initiative, and on the wisdom of its approach to federalism and separation of powers. Education may not play a major role in the 2012 election, but that doesn’t mean that Obama’s education policies should be given a pass.

  
  
  
• Education
  

  Cheating the Charters: Political and Financial Lessons from South Carolina

  By Jonathan Butcher, Joel Medley, Education Next
  
  Education Next, 03/02/2012
  

  Charters, publicly funded schools formed by parents and community leaders, are expected to provide alternatives to traditional public schools. Yet despite the proliferation of charter laws and new schools around the country, charters and their authorizers still spend their first several years in a fight for survival. Nowhere is this more true than in South Carolina, which was among the first states to adopt a charter statute.

  
  
  
• Health Care
  

  Feed the Beast: Renewing the Prescription Drug User Fee Act

  By John R. Graham, Pacific Research Institute
  
  Health Policy Prescriptions, 03/02/2012
  

  There is a crisis in biopharmaceutical research and development in all segments of the industry. Much of the responsibility for this can be laid at the door of the Food and Drug Administration, which is slow to approve new drugs. Furthermore, the law that funds the Food and Drug Administration must be renewed by September or new drug approvals will come to a stop. Although the Prescription Drug User Fee Act is far from ideal, there is no real opportunity to enact laws that significantly reduce the Food and Drug Administration’s power this year. A “clean” re-authorization of Prescription Drug User Fee Act for the next five years is the best choice available to patients and biopharmaceutical investors in 2012.

  
  
  
• Education
  

  The Fiscal Effects of School Choice Programs on Public School Districts

  By Benjamin Scafidi, Friedman Foundation for Educational Choice
  
  Policy Study, 03/02/2012
  

  The public education establishment routinely argues that school choice programs, where “the money follows the child,” harm students who remain in public schools. They suggest that students who remain in public schools are worse off because there will be fewer resources available for their education once some children depart public school districts via school choice. That is, there will be fewer students and, consequently, fewer taxpayer dollars to cover the substantial fixed costs of running a school. Instead, research shows that all forms of school choice tried in the United States have led to improvement in academic outcomes for students who remain in public schools or have led to no effect on academic outcomes for students who remain in public schools. Thus, the evidence on academic outcomes is one-sided. Greater school choice does not harm academic outcomes for students who remain in public schools.

  
  
  
• National Security
  

  U.S. Strategy in Afghanistan: Costs of Accelerating Troop Withdrawal Too High

  By Lisa Curtis, The Heritage Foundation
  
  Issue Brief, 03/01/2012
  

  The situation in Afghanistan has spiraled downward over the last 10 days, but before making hasty decisions on next steps in Afghanistan, United States policymakers need to consider what has contributed to this ominous turn of events and what options there are for adjusting the United States strategy to avoid further such incidents. United States policymakers should also be aware that leaving Afghanistan prematurely would likely lead to the revival of al-Qaeda and increase the threat of further attacks on the homeland.

  
  
  
• Budget & Taxation
  

  Meals Taxes in Major U.S. Cities

  By Joseph Henchman, Alex Raut, Kevin Duncan, Tax Foundation
  
  Fiscal Facts, 03/01/2012
  

  Tourists and business travelers quickly learn that taxes on meals are sometimes higher than taxes on other goods. Meals taxes generally apply to purchases of prepared food that are consumed in a restaurant or similar establishment, or taken “to go” for later consumption. In contrast, sales of groceries (or “non-prepared food”) are completely exempt from state sales tax in 30 states and the District of Columbia and partly exempt in a further eight states. Meals taxes are usually locally imposed but are sometimes imposed at the state level. Regardless of the justification, meals taxes can add significant costs and lead to administrative complexity.

  
  
  
• Budget & Taxation
  

  Location Matters: A Comparative Analysis of State Tax Costs on Business

  By Tax Foundation, Tax Foundation
  
  Policy Analysis, 03/01/2012
  

  State and local taxes represent a significant business cost for corporations operating in the United States; in fact, they often have a material impact on net operating margins. Consequently, business location decisions for new manufacturing facilities, corporate headquarter relocations, and the like often are influenced by assessments of relative tax burdens across multiple states. To fill the void left by other studies, the Tax Foundation, in collaboration with KPMG LLP, the United States audit, tax and advisory firm, set out to develop and publish a landmark, apples-to-apples comparison of corporate tax costs in the 50 states.

  
  
  
• National Security
  

  Obama’s Defense Budget Makes Protecting America Its Lowest Priority

  By Baker Spring, The Heritage Foundation
  
  Backgrounder, 03/01/2012
  

  Despite Administration claims to the contrary, President Barack Obama’s budget proposal for fiscal 2013 would reduce national defense to the lowest of the major budget priorities of the federal government. The combination of the budget request and the Budget Control Act of 2011 would reduce the military’s personnel levels and force structure to the point that they could no longer protect United States vital interests and keep United States security commitments around the world. Under the Constitution, Congress has the obligation to pass a budget that maintains United States military capabilities.

  
  
  
• Regulation & Deregulation
  

  Fat Chance: An Analysis of Anti-Obesity Efforts

  By Michael Marlow, Sherzod Abdukadirov, Mercatus Center
  
  Working Paper, 03/01/2012
  

  There’s no question that America is packing on the pounds. But the public continues to debate what should be done about this problem that costs more than $168 billion in health spending. If the market fails to provide the right circumstances for change, some argue that it’s the government’s job to step in and enforce what is in the best interest of the individual, even if they are fully able to make good health choices on their own. This paper observes the use of behavioral economics to justify government intervention with regard to obesity. This research finds that on obesity, government intervention is ineffective in remedying the shortcomings of individuals. To fight obesity, paternalistic policymakers have borrowed the regulatory approaches traditionally used to deal with market failures. However, the evidence shows that government policies designed to remedy market failures are ineffective at mitigating the consequences of individual failures.

  
  
  
• Monetary Policy/Financial Regulation
  

  House of Cards: Reforming America’s Housing Finance System

  By Dwight M. Jaffee, et al., Mercatus Center
  
  Policy Papers, 03/01/2012
  

  In 2006, at the height of the housing bubble, prescient voices warned of the dangers inherent in allowing privately managed, profit-seeking government-sponsored enterprises to operate with implicit government guarantees. In those heady years, both the government-sponsored enterprises and homeowners racked up big profits. In the wake of a great housing crash and the financial collapse of Fannie Mae and Freddie Mac, however, America’s housing policies, particularly those related to government-sponsored enterprises, must be rethought. As we approach the future, we need to move intelligently away from the mistakes of the past and toward a safer system that does less to distort housing markets and more to protect taxpayers.

  
  
  
• National Security
  

  Majid Khan: Anatomy of a Terrorist’s Plea Bargain

  By Cully Stimson, The Heritage Foundation
  
  Issue Brief, 03/01/2012
  

  The first Guantanamo detainee to have been in CIA custody pleaded guilty yesterday before a military commission judge in a courtroom on the United States Naval Base in Guantanamo Bay. In exchange for a cap on his confinement related to his military commissions case, Majid Khan agreed to testify truthfully in future military commissions cases, including against the 9/11 co-conspirators. The historic plea, which the military judge accepted, is a significant milestone in the war against terrorism and likely foreshadows cases to come.

  
  
  
• Immigration
  

  Numbers Show Obama’s Lack of Commitment on Immigration Enforcement

  By Matt A. Mayer, The Heritage Foundation
  
  Issue Brief, 03/01/2012
  

  President Barack Obama commented on Univision radio that, with a second term, he would get immigration reform “done.” The last attempt at immigration reform occurred in 2007 when President George W. Bush failed due to the perception that his Administration did not take border security and interior enforcement as seriously as it should have. The Obama Administration runs the risk of a similar failure if it cannot show the American people that it truly understands the issue and that the proposed solution will really solve the illegal immigration problem in America.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The High Cost of Renewable-Electricity Mandates

  By Robert Bryce, Manhattan Institute
  
  Energy Policy & the Environment Report, 03/01/2012
  

  Motivated by a desire to reduce carbon emissions, 29 states have required utility companies to deliver specified minimum amounts of electricity from “renewable” sources. Proponents of the renewable portfolio standards say that the mandated restrictions will reduce harmful emissions and spur job growth, by stimulating investment in green technologies. But this patchwork of state rules—which now affects the electricity bills of about two-thirds of the United States population as well as countless businesses and industrial users—has sprung up in recent years without the benefit of the states fully calculating their costs. There is growing evidence that the costs may be too high—that the price tag for purchasing renewable energy, and for building new transmission lines to deliver it, may not only outweigh any environmental benefits but may also be detrimental to the economy, costing jobs rather than adding them.

  
  
  
• Health Care
  

  The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It

  By Roger Stark, Washington Policy Center
  
  Book, 03/01/2012
  

  Virtually everyone in this country has the opportunity to purchase food, shelter and clothing. Why should the purchase of health care be more complex than obtaining these necessities? Most Americans would agree that our health care delivery system is in crisis. In this easily readable book, Dr. Roger Stark provides a brief history of how we arrived at this point, the underlying cause of the crisis, the recent sweeping federal health care reform law, and the options that are now before us. In a logical fashion, he outlines the solutions to maintain the high standard of care we enjoy in the United States.

  
  
  
• Transportation/Infrastructure
  

  Recommendations on the State’s 2012 Transportation Tax Package, Part V

  By Michael Ennis, Washington Policy Center
  
  Legislative Memo, 03/01/2012
  

  Instead of a system based on politics and process, Washington state lawmakers need a system focused on project delivery, results and performance, one that leverages public funds by using all financial tools available and limits unnecessary cost drivers. If lawmakers want to rebuild trust with taxpayers and pass a comprehensive transportation funding package, they should tackle the cost side of public works projects before raising fees and taxes.

  
  
  
• Foreign Policy/International Affairs
  

  Achtung! It’s Syria!

  By Russell A. Berman, Hoover Institution
  
  Defining Ideas, 03/01/2012
  

  In one sense, the Syrian crisis is absolutely clear: a dictatorship waging war against its people. At the same time, however, it is complex, involving a Russian return to Cold War habits, a competition between Turkey and Iran, and the dysfunctionality of the United Nations, all in the context of the United States’ general retreat from the world stage. In this fluid situation, Germany’s response provides an important indicator not only of its specific national interests but also of the likely future shape of European Union foreign policy: that is, nominally in support of democratic values but unlikely to go very far to defend them.

  
  
  
• Foreign Policy/International Affairs
  

  Five Conservative Principles That Should Guide U.S. Policy on Europe

  By Nile Gardiner, Ted Bromund, The Heritage Foundation
  
  Issue Brief, 03/01/2012
  

  The Obama Administration has attached little importance to the transatlantic alliance, and Europe has barely figured in its foreign policy. The Administration’s highly touted “pivot to Asia” is simply a belated admission that it has less interest in Europe than any post–1945 Administration. While Europe is the home of some of America’s most important allies, the Administration has weakened the American alliance with Great Britain while undercutting allies in eastern and central Europe in an attempt to appease Russia. A strong transatlantic alliance should be at the heart of United States foreign policy. Washington should reinvigorate partnerships with America’s key friends and allies in Europe. It should adopt policies that advance national sovereignty and economic freedom across the Atlantic, rather than subvert them.

  
  
  
• The Constitution/Civil Liberties
  

  Retribution and Overcriminalization

  By Gerard V. Bradley, The Heritage Foundation
  
  Legal Memorandum, 03/01/2012
  

  From the ever-expanding number of federal criminal laws to prison sentences that are too numerous or too long, there are many promising bases for criticizing overcriminalization. One such basis, however, has yet to be fully considered: the fact that too many criminal offenses today are malum prohibitum offenses—that is, they criminalize conduct that is morally innocuous—and do not contain an adequate mens rea (criminal-intent) element. In order to limit the growth of laws criminalizing morally innocuous conduct—a development that, in turn, would curb overcriminalization—the United States legal community would be well-served to explore the concept of retribution and the manner in which it provides an account of how punishing those convicted of criminal offenses is morally justified. Punishment without a firm basis in retribution is unjust and therefore should be avoided.

  
  
  
• National Security
  

  All Congressional Hands on Deck: Cutting Coast Guard Cutters Big Mistake

  By James Jay Carafano, The Heritage Foundation
  
  Issue Brief, 02/29/2012
  

  The National Security Cutter is the Coast Guard’s flagship for the future. Commandant Admiral Robert Papp recently declared, “The National Security Cutter is proving to be a vital instrument for protecting American maritime security and prosperity.” Yet in his fiscal year 2013 budget request, the President cuts the two vessels that were supposed to complete the fleet. Congress should restore funding for these cutters to ensure that the Coast Guard can sail a fleet capable of protecting United States security.

  
  
  
• Budget & Taxation
  

  Obama’s Budget Badly Undercounts Tax Hikes

  By Curtis Dubay, The Heritage Foundation
  
  Issue Brief, 02/29/2012
  

  President Obama’s fiscal year 2013 budget proposal explicitly claims a $1.561 trillion tax hike over 10 years, as reported by the White House Office of Management and Budget. This is a vast understatement, because that figure fails to account for all of the President’s tax increases and improperly claims credit for reducing tax receipts from tax cuts that are not new policies.

  
  
  
• Foreign Policy/International Affairs
  

  North Korean Nuclear Freeze: A Positive but Limited Development

  By Bruce Klingner, The Heritage Foundation
  
  Issue Brief, 02/29/2012
  

  North Korea’s agreement to freeze its nuclear activities under international observation marks a major reversal by the regime after nearly four years of refusal. However, the development, though positive, represents a tactical rather than strategic breakthrough. The agreement is extremely limited in scope and, when negotiating with North Korea, the devil is always in the details. Previous United States Administrations have frequently accepted vaguely worded text in order to maintain an illusion of progress only to later find Pyongyang exploiting loopholes or covertly cheating on the agreement. It is critical that Washington insist on detailed text in this and any subsequent agreements, as well as an extensive verification measures.

  
  
  
• Monetary Policy/Financial Regulation
  

  Obama and the Crash of 2013

  By Peter Ferrara, Encounter Books
  
  Book, 02/29/2012
  

  Most people do not know that already enacted in current law for 2013 are increases in the top tax rates of virtually every major federal tax. That is because the tax increases of Obamacare become effective that year, and the Bush tax cuts expire, which Obama has refused to renew for the nation’s small businesses, job creators and investors. Also by 2013 Obama’s regulatory tsunami will be building to a crescendo of increased costs on the economy. And the Federal Reserve, now committed to maintaining loose monetary policy through the election, will be reversing course right after to head off inflation, which will add to the contractionary effects on the economy. The result will be one whopping, horrendous, record shattering recession, unless America changes course. In this explosive Broadside, former Reagan White House policy advisor Peter Ferrara exposes the final calamitous consequences of Obama’s assault on prosperity.

  
  
  
• Information Technology
  

  The Fallacy of Net Neutrality

  By Thomas W. Hazlett, Encounter Books
  
  Book, 02/29/2012
  

  “There is little dispute that the Internet should continue as an open platform,” notes the United States Federal Communications Commission. Yet, in a curious twist of logic, the agency has moved to discontinue the legal regime successfully yielding that magnificent platform. In late 2010, it imposed “network neutrality” regulations on broadband access providers, both wired and wireless. Networks cannot (a) block subscribers’ use of certain devices, applications, or services; (b) unreasonably discriminate, offering superior access for some services over others. The Commission argues that such rules are necessary, as the Internet was designed to bar “gatekeepers.” The view is faulty, both in it engineering claims and its economic conclusions. Networks routinely manage traffic and often bundle content with data transport precisely because such coordination produces superior service. The “open Internet” allows consumers, investors, and innovators to choose, discovering efficiencies. The Federal Communications Commission has mistaken that spontaneous market process for a planned market structure, imposing new rules to “protect” what evolved without them.

  
  
  
• Economic and Political Thought
  

  Why Progressive Institutions are Unsustainable

  By Richard A. Epstein, Encounter Books
  
  Book, 02/29/2012
  

  The painful performance of the American economy in the past decade is not a function of bad luck. It is the product of flawed institutional design. Right now we are reaping the harvest of efforts to reinvigorate the progressive programs of the New Deal that stress high progressive taxes, large transfer payments, strong labor laws, and major barriers to free trade. The government has committed itself to substituting state mandates for voluntary arrangements in labor and real estate markets, disabling both by retarding job formation and roiling real estate markets. To these multiple ailments, Epstein argues that the best recipe is a return to the flat tax of the classical liberal tradition and a reinvigoration of free markets. Just change these two levers, and we can find an effective classical liberal antidote to excesses of the modern progressive age.

  
  
  
• Budget & Taxation
  

  By the Numbers: What Government Costs in North Carolina Cities and Counties, FY 2010

  By Michael Lowrey, John Locke Foundation
  
  By the Numbers, 02/29/2012
  

  Counties and towns are critical levels of government in North Carolina, providing or administering many services while taking in billions of dollars of revenue. This is especially true as the state government has increasingly shifted more taxing authority to localities to make up for money kept by the state. While the importance of county and municipal government is great, obtaining comparative data is difficult. To help address this problem, “By The Numbers” provides information on how much local government costs in every city and county in North Carolina.

  
  
  
• Monetary Policy/Financial Regulation
  

  Empty Promise: The Holes in the Administration’s Housing Finance Reform Plan

  By Peter J. Wallison, American Enterprise Institute
  
  Financial Services Outlook, 02/29/2012
  

  In the year since Treasury Secretary Timothy Geithner announced the Obama administration’s options for reforming the housing market, the administration has said and done nothing to indicate which option it prefers or how its plan will be implemented. In early February, however, Geithner reported to the Financial Stability Oversight Council that the administration wants to make progress on housing finance reform this year, winding down government-sponsored enterprises Fannie Mae and Freddie Mac and bringing private capital back into the market. For any such plan to be credible, it must do much more than wind down the government-sponsored enterprises. The Federal Housing Administration creates competitive obstacles to the revival of the private securitization market that are at least as serious as the government-sponsored enterprises, and because of the Dodd-Frank Act a number of formidable legal obstacles now exist that must be cleared away before a private securitization market will come back. If the administration is serious, its plan must address all these issues.

  
  
  
• Budget & Taxation
  

  Unlocking Entrepreneurial Forces: States Can Spark Business Creation, Attract Venture

  By Stephen Slivinski, Goldwater Institute
  
  Issue Brief, 02/29/2012
  

  This year, Arizona policymakers have a chance to do something that no other state with an income tax has done: eliminate the tax on capital gains. Arizona, like most states with an income tax, treats capital gains as “ordinary” income and taxes it at the same rate as all other income. Taxation of capital gains is, among other things, a tax on entrepreneurship. Businesses – new businesses especially – need investment to flourish. States that have lowered their taxes on capital gains have seen an increase in investment which precipitated an increase in entrepreneurial activity and the job creation that accompanies it. State policymakers can set the stage to make Arizona a national hub for new investment. The best way to do this is to immediately eliminate taxation of capital gains or phase it out as quickly as possible.

  
  
  
• Crime, Justice & the Law
  

  Five Essential Principles for Georgia’s Juvenile Justice System

  By Jeanette Moll, Kelly McCutchen, Georgia Public Policy Foundation
  
  Issue Analysis, 02/29/2012
  

  There are five essential principles specific to the Georgia juvenile justice system that provide basic guidelines for policy-makers to increase the effectiveness and efficiency of the system. These five essential principles are: 1) least restrictive placements for low-level offenders provide cost-savings and better results; 2) effective juvenile justice must include comprehensive analyses of each youth; 3) systematic responses to status offenders should focus on the family; 4) avoiding formal processing for first-time and low-level offenders ensures cost-savings and may deter future crime; and 5) limit pre-adjudication detention to only those youths who pose a risk to public safety.

  
  
  
• Budget & Taxation
  

  Spain Becomes One of Europe’s Highest Taxed Countries

  By Juan Ramón Rallo, Ángel Martín Oro, Adrià Pérez Martí, Cato Institute
  
  Economic Development Bulletin, 02/29/2012
  

  Last year’s election of Spain’s conservative People’s Party opened up an opportunity to implement much needed fiscal and structural reforms. However, merely a week following the inauguration of Prime Minister Mariano Rajoy, the government announced a significant tax hike that will have pernicious effects on the Spanish economy. Raising taxes will only put an additional drag on private sector recovery by reducing workers’ disposable income—and consequently, their ability to consume, save, or repay their large amounts of outstanding debt—and by decreasing foreign investment. Moreover, high taxes and high public spending are negatively correlated with economic growth and entrepreneurship. To reduce the deficit, cutting government spending substantially would be a better alternative than raising taxes.

  
  
  
• National Security
  

  Why More States Should Establish State Defense Forces

  By Jessica Zuckerman, et al., The Heritage Foundation
  
  Backgrounder, 02/29/2012
  

  Twenty-two states currently have volunteer state guard units. These units, formally known as state defense forces, are today’s state militias. Authorized by the Constitution and built on a strong United States militia tradition, today’s state defense forces offer a vital, low-cost force multiplier and homeland security resource. In July 2011, Arizona’s Senate Bill 1495 went into effect, authorizing Arizona’s governor to establish a state defense force. Historically, state defense forces were often organized as light infantry and military police forces. This model is largely a relic of past security and defense needs. While state defense forces are not necessarily required in states with low risk of natural disasters or terror attacks, several states that are at high risk for catastrophes have yet to create a modern state defense force. Such states can no longer afford to place establishment of a state defense force on the sidelines.

  
  
  
• Budget & Taxation
  

  President Obama’s 2013 Budget Delivers Tax Hikes, More Spending, More Debt

  By Patrick Louis Knudsen, et al., The Heritage Foundation
  
  Backgrounder, 02/29/2012
  

  The President’s 2013 budget, released on February 13, repeats the stale and unsuccessful policies of the past three years. The Administration’s apparent vision is one of bigger government, more spending, higher taxes, and deeper deficits. At a time when runaway spending and swelling deficits must be reversed, President Obama increases both. Moreover, he neglects to deal with the biggest drivers of spending and debt: the entitlement programs. In his first post-debt-ceiling budget, President Obama appears to have offered an election-year campaign document, not a credible blueprint for addressing the nation’s fiscal and economic problems. Heritage Foundation experts analyzed the President’s fiscal 2013 budget, offering their insights on a wide range of policy issues in an “immediate-reaction roundup” blog.

  
  
  
• Foreign Policy/International Affairs
  

  Why Vladimir Putin Is Immune to the American Reset

  By Garry Kasparov, The Heritage Foundation
  
  Heritage Lecture, 02/29/2012
  

  Vladimir Putin’s regime is best understood not in political terms, but in criminology terms. The minions and oligarchs are loyal to Putin because he offers them protection. They can commit any crimes they like, but as long as they stay loyal, they can get rich and take their money to the West. Pushing back hard and setting a firm, even confrontational line is the only message the Putin regime will respond to. They respect only strength. Talk of engagement slowly transforming Russia has been disproven. Twenty years ago, it was expected that Russia would eventually embrace the manners of the West, but now it is clear that the opposite has happened. Countries dealing with Russia have conformed again and again to the corrupt practices institutionalized by Putin: The system is not corrupt; corruption is the system. To remove a dangerous virus, a reset or a reboot is not enough. The entire system must be replaced.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Academic Peer Review Process: An Inside Perspective

  By Amy Kaleita, Pacific Research Institute
  
  Issue Brief, 02/28/2012
  

  There are numerous flaws in the peer-review process. At the same time, there are opportunities for improvement, without abandoning altogether the idea of critical review by qualified specialists. A stronger peer review process will have numerous beneficiaries: paper authors, who will be treated more fairly through a system that minimizes bias and allows for a more open evaluation; journals, which will be able to generate higher quality publications; and perhaps most important, non-scientists – including policy makers and the general public – who will be able to have a little more confidence in the research that informs decision-making.

  
  
  
• Budget & Taxation
  

  Higher Taxes? Not with Maine’s High Tax Burden

  By J. Scott Moody, Maine Heritage Policy Center
  
  Path to Prosperity, 02/28/2012
  

  As Maine’s state government grapples with budget shortfalls in the Department of Health and Human Services budget and a recent lawsuit aimed at rolling-back necessary pension reforms, the calls for higher taxes on Maine’s beleaguered private sector will grow louder. However, policymakers must resist the siren call for higher taxes as Maine’s tax burden is significantly higher than commonly believed. The standard tax burden calculation (as a percent of personal income) makes Maine’s tax burden appear smaller than it really is when adjusting for the fact that Maine’s private sector is one of the smallest in the country.

  
  
  
• Health Care
  

  The “Doc Fix” Dilemma Calls for Immediate Medicare Reforms

  By Nina Owcharenko, The Heritage Foundation
  
  Issue Brief, 02/28/2012
  

  Once again, Congress stopped a scheduled 27 percent payment cut to physicians who serve Medicare patients. This frequent exercise serves as a perfect example for the need to move Medicare away from its current price-control model toward a market-based, premium support model. Ten months from now, when faced with this predicament again, Congress should not focus just on yet another “fix” but attach structural Medicare policy reforms that end this dilemma for good.

  
  
  
• Economic Growth
  

  Economics 101

  By Arthur Laffer, Jonathan Small, Wayne Winegarden, Oklahoma Council of Public Affairs
  
  Monograph, 02/28/2012
  

  One of the great things about the United States of America is its diverse terrain and the unique sectors that are found across the states. Each state relies on a unique conglomeration of industries, but this still does not change the response of people to incentives. For any state competing for people, what better way for a state to position itself against a state with perceived industry advantages than to create the economic environment where people can receive the greatest after-tax return on their income?

  
  
  
• Budget & Taxation
  

  It Is Time to Make the R&D Tax Credit Permanent

  By Pamela Villarreal, Brian Bodine, National Center for Policy Analysis
  
  Brief Analysis, 02/28/2012
  

  In December 2010, Congress extended the research and development tax credit through tax year 2011, but it has since lapsed and has not yet been renewed for 2012. The tax credit was first enacted in 1981 in an effort to improve the international competitiveness of American businesses by encouraging innovation and new technology. Concerned about the budgetary impact of lost tax revenue, Congress never made the credit permanent—though it has renewed it 14 times. This creates year-to-year uncertainty for firms that wish to plan for the long term.

  
  
  
• Information Technology
  

  Technopanics, Threat Inflation, and the Danger of an Information Technology Precautionary Principle

  By Adam Thierer, Mercatus Center
  
  Working Paper, 02/28/2012
  

  Fear is an extremely powerful motivational force. In public policy debates, appeals to fear are often used in an attempt to sway opinion or bolster the case for action. Such “fear appeal arguments” are frequently on display in the Internet policy arena and often take the form of a full-blown “moral panic” or “technopanic.” These panics are intense public, political, and academic responses to the emergence or use of media or technologies. In the extreme, they result in regulation or censorship. While cyberspace has its fair share of troubles and troublemakers, there is no evidence that the Internet is leading to greater problems for society than previous technologies did. That has not stopped some from suggesting there are reasons to be particularly fearful of the Internet and new digital technologies. There are various individual and institutional factors at work that perpetuate fear-based reasoning and tactics.

  
  
  
• Economic Growth
  

  The State of the Anglosphere

  By Joel Kotkin, Shashi Parulekar, Manhattan Institute
  
  City Journal, 02/28/2012
  

  Post-financial-crisis reports of the Anglosphere’s imminent irrelevance have been exaggerated—wildly. English-speaking countries are not graying as rapidly as their historical European rivals are—notably, Germany and Italy—or as Russia and many East Asian countries are. Between 1980 and 2010, the United States, Canada, and Australia saw big population surges: the United States’ expanded by 75 million, to more than 300 million; Canada’s nearly doubled, from 18 million to 34 million; and Australia’s increased from 13 million to 22 million. By contrast, in some European countries, such as Germany, population has remained stagnant, while Russia and Japan have watched their populations begin to shrink. Immigration presents the most important long-term advantage for the Anglosphere, which has excelled at incorporating citizens from other cultures.

  
  
  
• Economic Growth
  

  California’s Demographic Revolution

  By Heather Mac Donald, Manhattan Institute
  
  City Journal, 02/28/2012
  

  California is in the middle of a far-reaching demographic shift: Hispanics, who already constitute a majority of the state’s schoolchildren, will be a majority of its workforce and of its population in a few decades. This is an even more momentous development than it seems. Unless Hispanics’ upward mobility improves, the state risks becoming more polarized economically and more reliant on a large government safety net. And as California goes, so goes the nation, whose own Hispanic population shift is just a generation or two behind.

  
  
  
• Economic Growth
  

  Farewell to the Free Market?

  By Nicole Gelinas, Manhattan Institute
  
  City Journal, 02/28/2012
  

  In the years leading up to 2007, the rules necessary to govern a flourishing market economy broke down, producing a financial and economic crisis. Rather than responding to the crisis by fixing those rules, the West aggressively repudiated market economics, and the repudiation continues to this day. Through their actions, government officials around the world have revealed a disturbing assumption: that they can decide how to allocate resources better than markets can.

  
  
  
• Elections, Transparency, & Accountability
  

  The Court That Broke Jersey

  By Steven Malanga, Manhattan Institute
  
  City Journal, 02/28/2012
  

  For half a century now, New Jersey has been home to the most activist state appellate court in America. Lauded by proponents of “living” constitutions who urge courts to make policy instead of interpret the law as written, the New Jersey Supreme Court has profoundly transformed the Garden State by seizing control of school funding, hijacking zoning powers from towns and cities to increase subsidized housing, and nullifying taxpayer protections in the state constitution. Its undemocratic actions have blown apart the state’s finances and led to ill-conceived and ineffective policies. If you want to understand what rule by liberal judges looks like on the state level, you need only look at New Jersey, which is teetering on bankruptcy though it remains one of America’s wealthiest states.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Get Dense

  By Robert Bryce, Manhattan Institute
  
  City Journal, 02/28/2012
  

  Over the course of the last century, human beings have found ways to concentrate crops and energy production within smaller and smaller areas, conserving land while meeting the ever-growing global demand for calories and watts. This approach runs counter to the beliefs of many environmental activists and politicians, whose “organic” and “renewable” policies, as nature-friendly as they sound, squander land. The real organizing principle for a green future is density, which not only provides the goods that we need to survive and prosper but also achieves the land-preservation goals of genuine environmentalists.

  
  
  
• Budget & Taxation
  

  It’s Working in Walker’s Wisconsin

  By Christian Schneider, Manhattan Institute
  
  City Journal, 02/28/2012
  

  The unions’ battle against Wisconsin Governor Scott Walker’s labor reforms has rested on the argument that the changes would damage public services beyond repair. The truth, however, is that the reforms not only are saving money already; they’re doing so with little disruption to services.

  
  
  
• Labor
  

  Loar v. Michigan Department of Human Services Brief

  By Patrick J. Wright, Mackinac Center for Public Policy
  
  Legal Brief, 02/28/2012
  

  The Mackinac Center Legal Foundation sued to end the Department of Human Services’ illegal diversion of so-called “union dues” from state subsidy checks received by home-based day care providers who watch children from low-income families. The “dues” were funneled to a government-employee union that purports to represent more than 40,000 of Michigan’s home-based day care providers, who are actually private business owners and independent contractors. The case was ruled moot by the Michigan Supreme Court after the Department of Human Services ceased to collect the dues and the director stated that these home-based day care providers are not public employees.

  
  
  
• National Security
  

  Fail-Safe Failure? Metrics on the Nuclear Arsenal Are Inadequate

  By Baker Spring, Michaela Bendikova, The Heritage Foundation
  
  Issue Brief, 02/28/2012
  

  President Obama’s fiscal year budget request uses inadequate metrics to evaluate the strategic objective to “maintain a safe, secure, and effective nuclear arsenal to deter attack on the United States and on our allies and partners.” Two categories being evaluated are: “Number of formal Department of Defense-led meetings with international partners to reaffirm United States commitments to extended deterrence,” and “Passing percentage rate for Defense Nuclear Surety Inspections.” This is an overly simplified way to assess the safety, security, and effectiveness of the United States nuclear weapons arsenal. The Pentagon should realize the importance of the United States nuclear umbrella and adjust its metrics accordingly.