Recent Policy Studies

• Economic Growth
  

  What Our Grandkids Actually Want

  By Steve Conover, American Enterprise Institute
  
  The American, 06/15/2012
  

  The correct debate is not about paying down the debt; instead, it’s about how to return the economy to a strong growth rate. The question is not “How will our grandkids pay back all the debt?” Rather, it is “How can we grow the economy such that paying the interest will be at least as easy for our grandkids as it has been for us?” Current low interest rates are making interest payments on our debt easier than in previous decades. However, it all comes back to innovation and growth. Success in that arena makes all the difference.

  
  
  
• Economic and Political Thought
  

  Are Americans Too Dumb for Democracy?

  By Lee Harris, American Enterprise Institute
  
  The American, 06/15/2012
  

  The difficulty we human beings face in making the right decision is not owing to our lack of smarts. The challenge we face stems from the maddening complexity and relentless perversity of the world we live in. It is cognitive hubris to think that any degree of intelligence or expertise can do away with this most stubborn of all stubborn facts. The best hope for democracy still lies in the unregulated marketplace of ideas—though, as in any market, the cautionary maxim “Let the buyer beware” remains the surest safeguard against frauds, cheats, and charlatans, including those waving their PhDs in your face.

  
  
  
• Education
  

  Romney’s Education Plan: Recognizing the Success of Special Education Vouchers

  By Marcus Winters, Manhattan Institute
  
  Issue Analysis, 06/15/2012
  

  Special education voucher programs can improve educational outcomes while saving taxpayer dollars. Governor Romney’s plan to tie Individuals with Disabilities Education Act dollars to students as they move across schools would likely have a limited direct effect on student outcomes because of the relatively small share of special education expenditures borne by the federal government. However, by improving the parent’s ability to send their child to their chosen school, the policy would make better use of federal funds. Further, the policy could set a precedent to be followed by the states that could lead to substantial changes in special education financing and outcomes.

  
  
  
• Economic Growth
  

  Crisis in Europe: Time for a Tough U.S. Response

  By J.D. Foster, Derek Scissors, The Heritage Foundation
  
  Issue Brief, 06/15/2012
  

  As the European crisis deepens, the U.S. should acknowledge the threat and respond accordingly by strengthening the U.S. economy and financial system in anticipation of whatever shockwaves may come from across the Atlantic. This includes immediately ceasing the politicking and posturing, and ultimately disarm Taxmageddon. The simple threat of higher taxes in 2013 is already depressing economic activity and job growth. This greater uncertainty is a substantial incentive for firms to hold back on investments and other actions needed to propel economic growth.

  
  
  
• Transportation/Infrastructure
  

  The Great Streetcar Conspiracy

  By Randal O’Toole, Cato Institute
  
  Policy Analysis, 06/15/2012
  

  Streetcars have been a pet project of the Obama Administration. In doing so it eliminates cost-effective requirements for federal transportation grants, and instead allowing non-cost-effective grants for projects promoting so-called “livability”. These streetcars cost roughly twice as much to operate, per vehicle mile, as buses. They also cost far more to build and maintain. Streetcars are no more energy efficient than buses and, at least in regions that get most electricity from burning fossil fuels, the electricity powering streetcars produces as much or more greenhouse gases and other air emissions as buses. Based on 19th-century technology, the streetcar has no place in American cities today except when it functions as part of a completely self-supporting tourist line. Instead of subsidizing streetcars, cities should concentrate on basic—and modern—services such as fixing streets, coordinating traffic signals, and improving roadway safety.

  
  
  
• Health Care
  

  The Independent Payment Advisory Board: PPACA’s Anti-Constitutional and Authoritarian Super-Legislature

  By Diane Cohen, Michael F. Cannon, Cato Institute
  
  Policy Analysis, 06/15/2012
  

  The Patient Protection and Affordable Care Act (PPACA) created the Independent Payment Advisory Board, or IPAB. When the unelected government officials on this board submit a legislative proposal to Congress, it automatically becomes law: PPACA requires the Secretary of Health and Human Services to implement it. The Board’s edicts can become law without congressional action, congressional approval, meaningful congressional oversight, or being subject to a presidential veto. Citizens will have no power to challenge IPAB’s edicts in court. The creation of IPAB is an admission that the federal government’s efforts to plan America’s health care sector have failed. It is proof of the axiom that government control of the economy threatens democracy. IPAB may be the most anti-constitutional measure ever to pass Congress; and will potentially empower just one unelected government official to impose any tax or regulation, to appropriate funds, and to wield other lawmaking powers.

  
  
  
• Health Care
  

  Medicaid and the Dual Eligible Population

  By Arlene Wohlgemuth, Spencer Harris, Texas Public Policy Foundation
  
  Policy Brief, 06/15/2012
  

  “Dual Eligibles” pose significant costs to the state’s Medicaid program due to poor program coordination. Texas has been successful in reducing these costs, and further reforms could continue that success. These include Health and Human Services’ new cost savings initiatives. Further action can be done by Congressional funding for acute care in block grants for Medicaid. Opponents contend that block grants for dual eligibles would inevitably result in the shifting of costs to low-income seniors through reduced payments. However, the state is already reducing payments made to providers for the dual eligible population. Block grants would allow the state to utilize presently unavailable savings through care coordination and integration.

  
  
  
• Budget & Taxation
  

  The Cost of Taxmageddon: Impact by State and Congressional District

  By William W. Beach, The Heritage Foundation
  
  Special Report, 06/15/2012
  

  A tsunami of tax hikes is set to hit the American people in 2013 if Congress fails to act. Here are some snapshots of how Taxmageddon affects the country, drawn from the research of The Heritage Foundation’s Center for Data Analysis. The nation as a whole will face a total $494 billion tax increase on all Americans. Families will face an average $4,138 tax increase, Millennials will face an average $1,099 increase, and an $857 average increase for retirees. Congress needs to take immediate action to “remove the uncertainty clouding jobs and family finances by removing the threat of Taxmageddon now.”

  
  
  
• Foreign Policy/International Affairs
  

  The Law of the Sea: Costs of U.S. Accession to UNCLOS

  By Steven Groves, The Heritage Foundation
  
  Testimony, 06/14/2012
  

  The facts presented in this Congressional testimony collectively represent compelling evidence that the United States need not accede to the United Nations Convention on the Law of the Sea in order to advance its maritime and national security interests. The evidence suggests that the costs outweigh the benefits. These costs include a dangerous abdication of American sovereignty, the transfer of billions of dollars to an unaccountable Jamaican-based international organization, and language requirements that may lead to troublesome lawsuits and rulings in the happenstance that the United States “violates” the convention when acting in its own national interests. Also, the U.S. Navy’s support for its navigational right in UNCLOS is insignificant compared to the total costs of joining and is demonstrably disproved by facts and history.

  
  
  
• Welfare
  

  Getting Rich Off the Poor: Examining Welfare Abuse

  By Commonwealth Foundation, Commonwealth Foundation for Public Policy Alternatives
  
  Policy Points, 06/14/2012
  

  Welfare spending has grown by 55 percent in 10 years. Pennsylvania now spends $27 billion in state and federal dollars on public welfare programs. Yet 15,429 individuals are still on the waiting list for intellectual disability services. Over the past few years, the Pennsylvania Department of Public Welfare conducted a series of audits and uncovered many questionable practices among state contractors. Some providers of welfare services have taken advantage of unclear rules and regulations to nickel and dime Pennsylvania families. By misusing funds meant for the truly needy, these providers contribute to today’s bloated welfare budget, the single largest state General Fund expenditure. Shifting to a fee-for-service payment instead of reimbursing all provider expenses would prevent waste and abuse, freeing up tax dollars and reducing the number of truly needy Pennsylvanians waiting for help.

  
  
  
• Immigration
  

  Secure Committees by the Numbers, Revisited (Part 3 of 3)

  By W.D. Reasoner, Jessica Vaughan, Center for Immigration Studies
  
  Memorandum, 06/14/2012
  

  This is the third and final installment of a three-part series examining the outcomes of Immigration and Customs Enforcement’s (ICE) Secure Communities program and how those outcomes have been misleadingly described by one widely circulated paper, “Secure Communities by the Numbers: An Analysis of Demographics and Due Process”, from the Chief Justice Earl Warren Institute on Law and Social Policy at the University of California, Berkeley, Law School, and then uncritically re-told by major news media outlets. In sum, the statistics cited in the report have been used misleadingly. The manner and level of due process to which aliens are entitled varies as a function of the operation of immigration law. No proof has been found of systematic disregard of aliens’ due process rights, but rather an application of the existing statutory framework.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Economy Derailed: State-by-State Impacts of the EPA Regulatory Train Wreck

  By American Legislative Exchange Council, American Legislative Exchange Council
  
  Report, 06/14/2012
  

  The U.S. Environmental Protection Agency (EPA) has begun a war on the American standard of living. During the past couple of years, the Agency has undertaken the most expansive regulatory assault in history on the production and distribution of affordable and reliable energy. Given all of this EPA regulatory activity, it is essential for concerned state legislators to get involved and stop the economic derailment. This report outlines some of the available comprehensive and issue-specific legislative tools, which include expressing strong opposition to the EPA’s regulatory onslaught, enhancing regulatory review, introducing bills to assert state sovereignty, and providing guidelines for getting states on the right side of the ongoing legal and public relations battles.

  
  
  
• Budget & Taxation
  

  Public Employee “Other Post Employment Benefit” Plans: A Case for Shifting to a Defined-Contribution Approach

  By Barry W. Poulson, Arthur P. Hall, American Legislative Exchange Council
  
  Report, 06/14/2012
  

  States with defined-contribution retiree health plans have been more successful in limiting and reducing unfunded liabilities in their plans. Most of these states have not attempted to accumulate significant assets in their plans, choosing instead to rely on a pay-as-you-go basis. However, these states have been more successful in constraining the cost of health insurance and in requiring retirees to assume most of the cost of that insurance. As a result, these states are better able to meet their obligations with actual contributions to the retiree health plan equal to or exceeding the required contribution. The solution to the funding crises in Other Post Employment Benefit (OPEB) plans is a defined-contribution retiree health plan.

  
  
  
• Budget & Taxation
  

  The Estate Tax: Charitable Giving and Private Profits, Who Wins, Who Loses?

  By Matthew Vadum, Capital Research Center
  
  Organization Trends, 06/14/2012
  

  The 2001 tax relief legislation provided for the phase out and termination of the federal estate tax in 2010, but Democrats in Congress revived it for 2011 and 2012. If Congress fails to act before January 1, 2013, the Federal Estate Tax exemption will drop to $1 million and the rate will increase to 55%. Former Director of the Congressional Budget Office, Douglas Holtz-Eakin estimates that returning to a 55% death tax would cost an already jobs-thirsty America an additional 500,000 lost jobs. The most likely scenario this year is a one-year extension of the current tax (35% estate tax with a $5 million exemption), but Congress would be wise to repeal the tax completely. Repealing the tax will provide jobs, keep family businesses and farms intact, and increase charitable giving.

  
  
  
• National Security
  

  The Iranian Nuclear Program: Timelines, Data, and Estimates

  By Maseh Zarif, American Enterprise Institute
  
  AEI Critical Threats Project, 06/14/2012
  

  AEI’s Critical Threats Project has produced a capabilities assessment of the time required for Iran to acquire enough weapons-grade uranium to fuel one nuclear weapon if it proceeds to break out in 2012. It does not assess Iran’s intentions to weaponize or to purse break-out scenarios, but rather focuses entirely on technical feasibility. The assessment also provides scenarios for the growth of Iran’s 19.75% LEU stockpile, background data on processes involved in a nuclear weapons program and Iran’s reported progress, and imagery of the primary enrichment facilities at Natanz and Fordow. Iran is developing a rapid nuclear weapons breakout capability. Its expanding uranium enrichment activities at Natanz and Fordow are reducing the time it would need to break out and produce fuel for an atomic weapon. It is also increasing its stockpile of uranium enriched around the 3.5% level; that material is the feedstock for producing uranium enriched to 20%.

  
  
  
• National Security
  

  Iran’s Nuclear Weapons Fuel Production Capability

  By Maseh Zarif, American Enterprise Institute
  
  AEI Critical Threats Project, 06/14/2012
  

  Iran could offer to halt production of 20% enriched uranium in upcoming negotiations. This “concession” would have limited impact on Iran’s ability to quickly produce weapons-grade uranium for one nuclear warhead, however. Iran would still retain the ability to resume 20% enrichment and to produce weapons-grade uranium at a time of its choosing. In a worst-case dash scenario Iran could produce 25 kg weapons-grade uranium by resuming 20% enrichment at its two declared enrichment sites, then proceed to enrich to 90% weapons-grade uranium at Fordow in about 42 days total; a best-case dash scenario using limited capacity would extend the timeline to only about 8 months. Any outcome that does not include the verifiable dismantling of Iran’s nuclear program and the removal of all nuclear material—at any level—will allow Iran to retain the ability to acquire nuclear weapons fuel in short order.

  
  
  
• Health Care
  

  The “Right” to Health Care: A Question of American Values

  By Deane Waldman, Rio Grande Foundation
  
  Paper, 06/14/2012
  

  Many are intentionally ignoring an underlying problem as the US eagerly awaits the Supreme Court’s ruling on Obamacare. That is the question of whether Americans (or anyone) has a right to health care. Even in nations where health care is presumed to be a right; it really isn’t – not in the world that we all live in. There cannot be a true right to health care in the traditional sense of rights, like that of free speech, free press, and all our other rights in the Bill of Rights that constrain the government. A right to health care enslaves one person – a provider – in the service of another individual – a patient. That is simply un-American. The focus of health care reform must be on economic policy decisions such as who can allocate resources more efficiently and effectively: central, government planning or individuals operating in a free market.

  
  
  
• Monetary Policy/Financial Regulation
  

  Does Shadow Banking Require Regulation?

  By Peter J. Wallison, American Enterprise Institute
  
  Financial Services Outlook, 06/14/2012
  

  Since the financial crisis of 2008, there have been persistent calls from regulators, academics and others for new regulations on something they call the “shadow banking system.” Although the contours of this system have not been rigorously defined, it certainly includes many firms that are active in the securities markets. Over the last thirty-five years, the securities market has supplanted commercial banking as the principal source of funds for the real economy. The calls for additional regulation are a rush to judgment in light of the fact that both regulated deposit banking and the unregulated or lightly regulated securities market were overwhelmed by the financial crisis. In reality, the crisis was an event that says nothing about the inherent stability of the shadow banking system. To impose additional regulation on the shadow banking or securities system would add costs that will impair economic growth.

  
  
  
• Budget & Taxation
  

  Retirement Systems of Alabama (RSA) Pension Reform

  By Alabama Policy Institute, Alabama Policy Institute
  
  Guide to the Issues, 06/14/2012
  

  The promise of a fully funded retirement for the nation’s state employees is becoming harder to keep. Of the 149 state plans reporting their funding ratios for 2010, 93 were less than 80% funded. (Funding ratios are the difference between asset values and future liabilities, which are the promises made to current and future retirees.) The fiscal crises facing Alabama’s Retirement Systems of Alabama (RSA) are just as serious as those facing the rest of the nation. Unless these problems are addressed soon, state employees face an eventual reduction in benefits, an increase in their contributions, and a later retirement than they originally planned. Alabama must implement long-term reforms that protect taxpayers from the RSA’s unfunded liabilities.

  
  
  
• Economic and Political Thought
  

  Milton Friedman and the Power of Ideas

  By John Hendrickson, Public Interest Institute
  
  Institute Brief, 06/14/2012
  

  In our present economic crisis of an escalating national debt, high unemployment, high taxation, and an Administration that believes in the power of the federal government through regulation and social experimentation, it is essential that we remember the ideas of Milton Friedman. Friedman’s principles of freedom and liberty over centralized government authority are desperately needed in our current political and economic climate. They also provide the policy solutions needed to revive our national economy. As the nation remembers the 100th birthday of Milton Friedman, his ideas are still on the march, being pushed by not only academics and policymakers, but also the numerous citizens who make up the Tea Party Movement, who are fighting to restore the principles of constitutional limited government.

  
  
  
• The Constitution/Civil Liberties
  

  Alabama’s Handgun Laws and Constitutional Rights

  By Alabama Policy Institute, Alabama Policy Institute
  
  Guide to the Issues, 06/14/2012
  

  Alabama’s current concealed carry law may be unconstitutional. The phrase “may issue” allows county sheriffs discretion in deciding whether each applicant has “good reason” to carry a concealed pistol. In order to ensure that Alabama’s law complies with the requirements of the Second Amendment, Section 13A-11-75 of the Code of Alabama should be changed from a “may issue” law to a “shall issue” law where applicants not otherwise prohibited from carrying a pistol are granted a permit. In order to offer complete transparency, the Legislature should clarify that there is no licensing requirement to carry a pistol unconcealed when not in a vehicle, provided that the individual is not otherwise prohibited by law from carrying a pistol.

  
  
  
• Information Technology
  

  A Most Egregious Act? The Impact on Consumers of Usage-Based Pricing

  By George S. Ford, Phoenix Center for Advanced Legal and Economic Public Policy Studies
  
  Policy Perspective, 06/14/2012
  

  George ford uses usage-based pricing of broadband video services to illustrate that regulatory oversight may not improve well-being even in a case that the proponents of regulation would describe as an egregious example of anticompetitive conduct by broadband providers. Given this, and the fact that there are many economic and business reasons for usage-based pricing that most accept as valid, Ford concludes that regulatory oversight of usage-based pricing is unlikely to improve social well-being.

  
  
  
• Information Technology
  

  Digital Downloads Should Be Protected from Discriminatory and Duplicate Taxes

  By Seth L. Cooper, Free State Foundation
  
  Perspectives from FSF Scholars, 06/13/2012
  

  Explosive growth in the purchase and delivery of digital goods and services through the Internet cloud is a sure source of economic vitality and optimism for our nation. With the deployment of next-generation broadband and wireless broadband networks, businesses and consumers increasingly are taking to digitally-downloadable products. As the economy grows progressively more digital it becomes all the more important that federal and state tax policies align with the new realities of Internet e-commerce. The market for digital goods and services must be allowed to advance without being stifled by uncertain tax laws or subjected to multiplying tax burdens. Legislation now pending in Congress would create a sensible framework for state taxation of interstate sales of digital goods and services. And it would do so without itself imposing any new taxes or mandating tax or no-tax decisions by individual states.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Save the Whales

  By Gary D. Libecap, Hoover Institution
  
  Defining Ideas, 06/13/2012
  

  A well-designed whale market would take whaling out of politics and headline-grabbing, and reduce the dangerous encounters on the high seas between antagonists. It can ensure cooperation in the conservation of whales, a goal that all parties desire, but that the current International Whaling Commission arrangement cannot provide.

  
  
  
• Elections, Transparency, & Accountability
  

  Obamacare vs. Federalism

  By James Huffman, Hoover Institution
  
  Defining Ideas, 06/13/2012
  

  Solicitor General Donald Verilli probably did not mean to suggest that the Supreme Court declare a constitutional right to health care in the Obamacare case—that would be truly unprecedented. But there is no escaping the fact that he did seek to persuade the Court that it should affirm yet another expansion of government power in service to the asserted liberties of 40 million Americans. In his argument, Verilli has turned the relationship between federalism and liberty on its head. Liberty is rarely the fruit of expanded government power, particularly where it involves the redistribution of wealth. Rather, liberty survives only through constant vigilance in the restraint of power, whether vested in the federal or state governments.

  
  
  
• Economic Growth
  

  Jump Start the Economy

  By John B. Taylor, Hoover Institution
  
  Defining Ideas, 06/13/2012
  

  The best way to understand the problems confronting the American economy is to go back to the first principles of economic freedom upon which the country was founded. As these principles developed over the years, we can see periods when careful attention was paid to them and alternating periods when they were neglected. And we can draw clear conclusions from this history: When policymakers stuck to the principles, economic performance was good. When they ignored or compromised on the principles, economic performance deteriorated. Our problem now is that we are paying too little attention to these principles, and even worse, we are moving in the wrong direction. The good news is that if we begin to apply these principles to our current circumstances, we can restore America’s prosperity and our confidence in the future.

  
  
  
• Budget & Taxation
  

  How Much Does the Federal Government Owe?

  By Liqun Liu, Andrew J. Rettenmaier, Thomas R. Saving, National Center for Policy Analysis
  
  Policy Report, 06/13/2012
  

  The U.S. government faces severe fiscal challenges due to trillion dollar annual budget deficits and mounting public debt. But the liabilities are much larger than the public debt, due to commitments the government has made to federal employees, to veterans and to seniors. In addition, it has made explicit and implicit commitments to current workers and retirees through the Social Security and Medicare programs.

  
  
  
• Economic Growth
  

  The Second-Rate City?

  By Aaron M. Renn, Manhattan Institute
  
  City Journal, 06/13/2012
  

  Chicago also needs something even harder to achieve: wholesale cultural change. It needs to end its obsession with being solely a global city, look for ways to reinvigorate its role as capital of the Midwest, and provide opportunities for its neglected middle and working classes, not just the elites. This means more focus on the basics of good governance and less focus on glamour. Chicago must also forge a culture of greater civic participation and debate. You can’t address your problems if everyone is terrified of stepping out of line and admitting that they exist.

  
  
  
• Family, Culture & Community
  

  American Caste

  By Kay S. Hymowitz, Manhattan Institute
  
  City Journal, 06/13/2012
  

  So the single-mother revolution has left us with the following reality. At the top of the social order is a positive feedback loop, with kids raised in stable, high-investment, and relatively affluent homes going to college, finding similar mates, and raising their own children in stable, high-investment, and relatively affluent homes. At the bottom is a negative feedback loop, with kids raised by single mothers in unstable, low-investment homes finding themselves unable to adapt to today’s economy and going on to create more unstable, single-mother homes. Not only do we have more poverty, inequality, and immobility; we have the makings of a caste society, with an inherited elite and an entrenched proletariat. That’s not an America that anyone finds very attractive.

  
  
  
• Budget & Taxation
  

  Demystifying “Transition Costs” When Reforming Public Pensions

  By The Buckeye Institute, Buckeye Institute for Public Policy Solutions
  
  Policy Brief, 06/13/2012
  

  Meaningful public pension reform requires a transition from existing defined-benefit pension systems to defined-contribution or hybrid plans. Transition costs can be mitigated through smart reforms that correctly interpret several standards set by the Government Accounting Standards Board.

  
  
  
• Budget & Taxation
  

  Postal Pension “Refund” Is a Disguised Taxpayer Bailout

  By David John, The Heritage Foundation
  
  Backgrounder, 06/13/2012
  

  Calls to refund “overpayments” by the U.S. Postal Service (USPS) to the retirement of postal workers are misguided. The estimates of overpayments are inflated by overly optimistic assumptions, as recent years have demonstrated. A refund would leave taxpayers on the hook for future shortfalls in USPS retirement funding. The better choice is to follow the private-sector practice of using the current surplus—whatever it is—to defray future retirement payments. Instead of giving the USPS a questionable refund, Congress should require it to make comprehensive reforms that recognize new realities and enable it to restructure its operations accordingly.

  
  
  
• Budget & Taxation
  

  Auto Bailout or UAW Bailout? Taxpayer Losses Came from Subsidizing Union Compensation

  By James Sherk, Todd Zywicki, The Heritage Foundation
  
  Backgrounder, 06/13/2012
  

  The U.S. government will lose about $23 billion on the 2008-2009 bailout of General Motors and Chrysler. President Obama emphatically defends his decision to subsidize the automakers, arguing it was necessary to prevent massive job losses. But, even accepting this premise, the government could have executed the bailout with no net cost to taxpayers. It could have—had the Administration required the United Auto Workers (UAW) to accept standard bankruptcy concessions instead of granting the union preferential treatment. The extra UAW subsidies cost $26.5 billion—more than the entire foreign aid budget in 2011. The Administration did not need to lose money to keep GM and Chrysler operating. The Detroit auto bailout was, in fact, a UAW bailout.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  How to Think Seriously About the Planet: The Case for an Environmental Conservatism

  By Roger Scruton, Oxford University Press
  
  Book, 06/13/2012
  

  In How to Think Seriously About the Planet, Roger Scruton offers a fresh approach to tackling the most important political problem of our time. Scruton argues that no large-scale environmental project, however well-intentioned, will succeed if it is not rooted in small-scale practical reasoning. Seeing things on a large scale promotes top-down solutions, managed by unaccountable bureaucracies that fail to assess local conditions and are rife with unintended consequences. Scruton argues for the greater efficacy of local initiatives over global schemes, civil association over political activism, and small-scale institutions of friendship over regulatory hyper-vigilance.

  
  
  
• Health Care
  

  Concentration in Health Care Markets: Chronic Problems and Better Solutions

  By Barak D. Richman, American Enterprise Institute
  
  Report, 06/13/2012
  

  Health care providers with market power enjoy substantially more pricing freedom than monopolists in other markets for a reason not generally recognized: US-style health insurance. Consequently, monopolies in health care cause undesirable redistribution of wealth and inefficient allocation of resources, both of which burden consumers at levels beyond those of other monopolists.

  
  
  
• National Security
  

  Asia in the Balance: Transforming U.S. Military Strategy in Asia

  By Thomas G. Mahnken, et al., American Enterprise Institute
  
  Report, 06/13/2012
  

  In peace and in war, the US position in Asia has rested on a set of alliances, ground and air forces deployed on allied and US territory, nuclear-strike forces, and carrier-strike groups operating in the Western Pacific. But China has been working systematically to undermine the American approach to assurance, deterrence, and warfighting. Complacency in the face of growing threats to US interests in the Asia-Pacific region will increase rather than decrease the possibility of conflict. The region’s evolving security environment requires that America’s military strategy evolve as well. America’s future peace and prosperity will depend on it.

  
  
  
• Education
  

  Federal Student Aid and the Law of Unintended Consequences

  By Richard Vedder, Hillsdale College
  
  Imprimis, 06/13/2012
  

  Federal student financial assistance programs are costly, inefficient, byzantine, and fail to serve their desired objectives. In a word, they are dysfunctional, among the worst of many bad federal programs. Programs created with the noblest of intentions have failed to serve either their customers or the nation well. In the 1950s and 1960s, before these programs were large, American higher education enjoyed a Golden Age. Enrollments were rising, lower-income student access was growing, and American leadership in higher education was becoming well established. In other words, the system flourished without these programs. With the ratio of debt to GDP rising nationally, and the federal government continuing to spend more and more taxpayer money on higher education at an unsustainable long-term pace, a re-thinking of federal student financial aid policies is a good place to start in meeting America’s economic crisis.

  
  
  
• Budget & Taxation
  

  The ‘Government Sector of the Economy’ Canard

  By Economics 21, e21: Economic Policies for the 21st Century
  
  Commentary, 06/13/2012
  

  A recurring theme of commentary appearing in the New York Times and elsewhere is that the government is shrinking as a share of the economy. According to Floyd Norris, “the government sector of the American economy has shrunk during the first three years of a presidential administration” for the first time since the 1960s. This dangerous decline in government spending is thought by Norris and others to be responsible for the slow growth since the recovery officially began in July 2009. President Obama’s economic policy can be criticized on many fronts but insufficient government spending is not one of them. The most straightforward way to assess the burden of government is by comparing total government outlays to gross domestic product. By this standard, the federal government is currently larger than at any point in post-War history.

  
  
  
• Elections, Transparency, & Accountability
  

  Sock Puppets: How the Government Lobbies Itself and Why

  By Christopher Snowdon, Institute of Economic Affairs
  
  Policy Analysis, 06/12/2012
  

  New research from the United Kingdom’s Institute of Economic Affairs reveals the true extent of government funded lobbying by charities and pressure groups. The report argues that the government is undermining democracy and debasing the concept of charity when government directly funds lobbying of itself. As a wasteful use of taxpayers’ money and a distortion of the public debate and political process, the study found that state funding of charities increased significantly in the past 15 years. The distinction between public and private action has now become distorted. State-funded charities and non-governmental organizations (NGO’s) lobby for general policies that are not usually supported by the general public. These causes are typically bigger government, higher taxes, and increased regulation. The report calls for swift action, including banning the use of taxpayers’ money to engage in advertising campaigns, abolition of unrestricted grants to charities and the creation of a new non-profit organization for lobbying purposes.

  
  
  
• Labor
  

  Paycheck Fairness Act

  By Carrie Lukas, Independent Women's Forum
  
  Policy Focus, 06/12/2012
  

  The President and Democratic Senators are championing The Paycheck Fairness Act, legislation that would amend the Fair Labor Standard Act of 1938, supposedly to address and discourage workplace discrimination against women. They claim that women are regularly subject to discrimination based on sex, as proven by the “wage gap” between men and women’s earnings. Yet statistics showing a “wage gap” tell us nothing about the role discrimination plays in American workplaces since other factors that affect earnings (such as industry, hours worked, and background) are not taken into account. Employers would have an incentive to adopt more rigid compensation practices, as well as employ fewer workers, since each worker (particularly a female worker) would represent another potential lawsuit. Ultimately, the Paycheck Fairness Act would fail to create greater justice, and lead to a les flexible workplace and fewer opportunities for both men and women.

  
  
  
• Immigration
  

  Evaluating the Role of Immigration in U.S. Population Projections

  By Tom Godfrey, et al., Center for Immigration Studies
  
  Research Study, 06/12/2012
  

  Immigration accounts for the overwhelming majority of future U.S. population growth. Future immigration by itself will add about 100 million new residents to the U.S. population by 2050, accounting for about three-fourths of population growth. Moreover, if immigration continues at the level the Census Bureau expects, it would not be possible to stabilize the U.S. population even if native fertility were dramatically lower. Immigration has a positive, but small impact on the share of the population that is of working age. The arrival of nearly 70 million immigrants (the Census Bureau level of immigration) over the next four decades can only offset about 14 percent of the decline in the share of the population that is of working age (16 to 65). Immigration, therefore, is no fix for an aging society, a finding that is consistent with prior research.

  
  
  
• Health Care
  

  Tax Policy Meets the Affordable Care Act: The Case of the Premium Tax

  By Douglas Holtz-Eakin, American Action Forum
  
  Report, 06/12/2012
  

  The Patient Protection and Affordable Care Act (ACA) “annual fee premium tax” will raise $78.2 billion over the next 5 years. The premium tax fails to obey basic principles with regard to the tax treatment of costs, thereby tilting the playing field in favor of tax-exempt insurers. In addition, the ACA exempts from the premium tax a particular class of non-profit insurers. These design flaws suggest dramatic impacts on competition in health insurance markets, with potentially large tax-based shifting of purchase patterns and business organizational forms. These shifts would represent a pure, tax-based distortion or economic cost. Finally, the vast majority of the burden will fall on the middle class.

  
  
  
• Health Care
  

  ICD-10 Implementation Date: Better Never Than Later?

  By Jason Fodeman, Tom Coburn, Pacific Research Institute
  
  White Paper, 06/12/2012
  

  The Department of Health and Human Services recently announced hospitals and physicians have to adopt a new generation of diagnosis codes by October 1, 2014. Providers have to adopt what is effectively the tenth generation of the codes of International Classification of Diseases, known as “ICD-10.” The main difference between the current ICD-9 codes and the new set is there are many more codes, and they are filled with redundancies and unnecessary intricacies. The costs of this changeover for hospitals already operating under narrow financial margins will be substantial. The adoption of the codes will, by default, force physicians to devote more time and energy toward coding, which may detract from patient care. ICD-10 could indirectly accelerate the vertical integration of medicine and exacerbate the physician shortage. While the compliance costs of ICD-10 are tangible, the benefits are much more esoteric. As health care providers struggle to navigate the murky waters of health care reform, until more meaningful changes are made to lower costs and reduce administrative costs, HHS should halt ICD-10 implementation.

  
  
  
• Education
  

  Best Laid Plans: The Unfulfilled Promise of Public Higher Education in California

  By American Council of Trustees and Alumni, American Council of Trustees and Alumni
  
  Report, 06/12/2012
  

  This report shows that the real threat to the preeminence of California’s higher education is not a lack of funds. Rather, the real danger is a fundamental failure by today’s trustees and system leaders to apply the same creativity and thoughtfulness that informed the California Master Plan to a new world of reduced resources and a shrinking tax base. There are major problems that require urgent attention: Dramatic hikes in cost to students and obstacles to university access, inadequate attention to educational quality and outcomes, and poor use of campus resources.

  
  
  
• The Constitution/Civil Liberties
  

  Intellectual Laziness on the Supreme Court

  By Richard A. Epstein, Hoover Institution
  
  Defining Ideas, 06/12/2012
  

  In the run up to the Supreme Court’s decision on health care, few people will pay any attention to the Court’s most recent constitutional failure of intellectual nerve in Amour v. Indianapolis. The Supreme Court should never accept the open invitation to intellectual laziness and antisocial results that comes from adopting the rational basis test in any case that involves government regulation or taxation. There are all sorts of powerful and instructive private analogies that give clear guidance on how constitutional law cases should be decided, and these rules never give pride of place to some exaggerated concern with administrative costs. Just because the Court rightly exercises close scrutiny in cases that involve both fundamental rights and suspect classifications does not mean that it should throw in the towel whenever it is confronted by the blatant misuse of taxation powers by local governments.

  
  
  
• Budget & Taxation
  

  A Housing Market Without Fannie Mae and Freddie Mac: Effect on the Homeownership Rate

  By Nahid Anaraki, The Heritage Foundation
  
  Special Report, 06/12/2012
  

  For decades, Fannie Mae and Freddie Mac followed securitization policies that enabled Americans to make a low down payment when they purchased a house. The results of this study suggest that despite government-sponsored entities’ (GSE) interventions in the housing market, the homeownership gap among races and ethnic groups persists because economic fundamentals and sociodemographic features, not interest rates, drive homeownership rates. Contrary to the expectations of policymakers, subsidizing mortgage interest rates and lowering down payments have not been able to raise the homeownership among race and ethnic groups. To return stability to the housing market, the GSEs should abandon their interventions and allow the housing market to perform under a natural pricing mechanism.

  
  
  
• Budget & Taxation
  

  CBO’s Long-Term Budget Outlook: Congress Must Act

  By Patrick Louis Knudsen, The Heritage Foundation
  
  Issue Brief, 06/12/2012
  

  Not surprisingly, the latest Congressional Budget Office (CBO) long-term budget outlook projects a disturbing and unsustainable rate of growth in federal spending, deficits, and debt. Equally troubling, however, is the growing urgency of the problem: The “long term” is drawing nearer. The longer Congress delays, the more wrenching will be the policy changes needed to correct the government’s fiscal course—and the deeper will be the economic damage of undisciplined spending and growing deficits and debt. Correcting this disastrous fiscal course will require significant policy reforms—especially in the major entitlement programs—and delay only makes the problem worse.

  
  
  
• Elections, Transparency, & Accountability
  

  Tyranny in the United States Senate

  By Brian Darling, The Heritage Foundation
  
  Backgrounder, 06/12/2012
  

  Senate Majority Leader Harry Reid has regularly used a procedural tactic called “filling the amendment tree” to restrict Senators’ right to debate and offer amendments. While previous Majority Leaders have occasionally used this tactic, Senator Reid has used this tactic often—more than all of his predecessors combined. This tactic combined with another parliamentary maneuver and demonization of the filibuster threatens to squelch dissent in the Senate and further constrict the national debate on important political issues. The Senate could better serve the American people by ending the use of this tactic.

  
  
  
• Labor
  

  Paycheck Fairness Act Unfairly Burdens Employees and Employers

  By James Sherk, The Heritage Foundation
  
  Issue Brief, 06/12/2012
  

  Employers who pay similarly qualified male and female workers different wages for the same job face stiff legal sanctions. The law does not set wages, however. Employers may pay different wages to workers with different qualifications or who work different jobs. The government has a legitimate role in protecting women from discrimination but should allow employers to decide how they value the work performed for them. The Paycheck Fairness Act (PFA) undermines this policy. In the name of protecting women from discrimination, the PFA allows employees to sue businesses that pay different workers different wages—even if those differences have nothing to do with the employees’ sex. These lawsuits can be brought for unlimited damages, giving a windfall to trial lawyers. Any financial benefits they reap, however, would come at the expense of workers. The PFA would hurt the very workers it is meant to help.

  
  
  
• Health Care
  

  What’s Wrong With Health Insurance Exchanges …

  By Rita E. Numerof, Galen Institute
  
  Studies, 06/11/2012
  

  The Patient Protection and Affordable Care Act’s solution is fundamentally flawed and unsustainable. It will limit choice, create new bureaucracies, cost consumers and taxpayers more, and put additional burdens on the states. State insurance exchanges as defined in PPACA will not accomplish the goals they were designed to address. Rather than focus on compliance with PPACA and assume its burdens, legislators should take inventory of the problems plaguing the health insurance markets in their states. Then they can confront the most critical issues of insurance coverage, care delivery, and payment reform to ensure that residents have access to affordable care and enjoy better health outcomes at lower cost.

  
  
  
• Economic and Political Thought
  

  The Transformation of American Democracy: Teddy Roosevelt, the 1912 Election, and the Progressive Party

  By Sidney M. Milkis, The Heritage Foundation
  
  First Principles, 06/11/2012
  

  Progressivism came to the forefront of our national politics for the first time in the election of 1912. The two leading candidates after the votes were tallied were both Progressives: the Democratic Party’s Woodrow Wilson, who won the presidency, and the Progressive Party’s Theodore Roosevelt. The election was truly transformative. It challenged voters to think seriously about their rights and the Constitution and marked a fundamental departure from the decentralized republic that had prevailed since the early 19th century. The 1912 election did not completely remake American democracy, but it marked a critical way station on the long road to doing so. In a very real sense, Theodore Roosevelt won the 1912 election: The causes he championed with extraordinary panache still live on today.

  
  
  
• Health Care
  

  Protecting the Benefits of De-Identified Health Care Information

  By Kirk J. Nahra, Washington Legal Foundation
  
  Legal Backgrounder, 06/11/2012
  

  A Pennsylvania Federal District Court’s recent decision in Steinberg v. CVS Caremark Corp., 2:11-cv-02428 (E.D. PA Feb. 16, 2012), recognizes both the benefits of the uses and disclosures of de-identified health care information and the primacy of the HIPAA regulatory structure for defining the appropriate rules for this information. The court’s decision therefore is an important step in the ongoing battle to reinforce the beneficial uses of this information, and the decision takes the courts out of disputes about this data that already are defined by the appropriate regulatory process.

  
  
  
• Regulation & Deregulation
  

  Volks v. Secretary of Labor: Agencies’ Statutes of Limitations and a New Step in Chevron Deference?

  By Arthur G. Sapper, Washington Legal Foundation
  
  Legal Backgrounder, 06/11/2012
  

  A recent concurring opinion by Judge Janice Rogers Brown of the U.S. Court of Appeals for the District of Columbia Circuit discusses in detail a question that has split some federal appellate courts: Must a federal court afford deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984), to an agency’s construction of a statute of limitations embedded in its organic statute? In Volks, the D.C. Circuit again found it unnecessary to decide the broader question because it found the statutory language to be clear. Judge Brown wrote in her concurrence, however, that, where no “intricacies” of the kind presented in Intermountain were present, “I would find any ambiguities to be ours to resolve and not the agency’s.” The reasons for this conclusion are the main subject of this LEGAL BACKGROUNDER.

  
  
  
• International Trade/Finance
  

  MCOOL and the Politics of Country-of-Origin Labeling

  By Alexander Moens, Amos Vivancos Leon, Fred L. Smith Jr., Competitive Enterprise Institute
  
  Studies, 06/11/2012
  

  As multilateral, regional, and bilateral trade agreements have dramatically reduced tariffs among most trading countries, protectionist interests have become extremely creative at finding less direct ways to protect their domestic industries. Since overt protectionist measures would violate these agreements, and in many cases, violate World Trade Organization rules, opponents of trade liberalization have turned to non-tariff barriers to achieve their anti-competitive objectives. Usually, these are disguised as needed rules to advance the public good, ensure consumer safety and welfare, protect the environment, or any combination of these goals. Too often, these new fangled protectionist measures succeed, rolling back the gains of free trade. The solution for this regulatory problem in meat trade is to harmonize the sector and manage it bi-nationally. This paper calls for Canadian-American negotiations to remove the outstanding regulatory differences between our two countries.

  
  
  
• Budget & Taxation
  

  Trend #6: Tax Abolition

  By Joseph Henchman, Tax Foundation
  
  Fiscal Facts, 06/11/2012
  

  Seven states have no income tax and five states have no sales tax. Abolishing an entire tax means ridding your taxpayers of the associated compliance costs and loss to economic growth, but one must figure out whether to make up the revenue with spending cuts or higher taxes elsewhere. No state has abolished a major tax since Alaska ended its income tax in 1980, but some are now trying. Income tax reductions or repeals in particular are under consideration in a number of Midwestern states, characterized by a Wall Street Journal article entitled “The Heartland Tax Rebellion.” If all proposals come to pass, an income tax-free zone could stretch from Texas north through Oklahoma and Kansas and east to Missouri.

  
  
  
• Budget & Taxation
  

  Corporate Welfare Spending vs. the Entrepreneurial Economy

  By Chris Edwards, Tad DeHaven, Cato Institute
  
  Testimony, 06/11/2012
  

  Rising spending and huge deficits are pushing the nation toward an economic crisis. There is general agreement that policymakers need to find wasteful and damaging programs in the federal budget to terminate. One good place to find savings is spending on corporate welfare. Some people claim that business subsidies are needed to help fix market failures in the economy. But corporate welfare is just as likely to create failures by misallocating resources and inducing businesses to spend time on lobbying rather than on making better products. Corporate welfare transfers wealth from average families to favored businesses, and it creates corrupting ties between government officials, politicians, and business leaders. Policymakers are rightly concerned about the competitiveness of American businesses in the global economy. But the way to address that concern is not through subsidies, but through broad-based reforms such as permanent reductions to capital gains and corporate income tax rates.

  
  
  
• Elections, Transparency, & Accountability
  

  Addressing Concerns about the Integrity of the U.S. Department of Labor’s Job Reporting

  By Keith Hall, Mercatus Center
  
  Testimony, 06/11/2012
  

  For the Bureau of Labor Statistics to effectively disseminate data directly to the public and maintain credibility as an independent, objective provider of data, the U.S. Department of Labor (DOL) should not interfere with BLS’ dissemination of economic data through any means. This includes all products printed or electronic. DOL should comply fully with Office of Management and Budget Statistical Policy Directive #4 and revoke its centralized social media policy.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  All Pain and No Gain: The Illusory Benefits of the Utility MACT

  By Marlo Lewis Jr., et al., Competitive Enterprise Institute
  
  Policy Analysis, 06/11/2012
  

  The U.S. Environmental Protection Agency’s (EPA) Utility MACT Rule establishes the first-ever maximum achievable control technology (MACT) standards for emissions of hazardous air pollutants (HAPs) from coal- and oil-fired power plants. Mercury is the principal HAP targeted by the Rule. The Environmental Protection Agency contends that pregnant women in subsistence fishing households consume enough methylmercury in self-caught fish to impair fetal cognitive and neurological development. The MACT Rule supposedly reduces the risk to unborn children by lowering methylmercury concentrations in non-commercial fish. But the agency provides no empirical evidence that any American children are harmed by mercury emissions. With an EPA-estimated annual compliance cost of $9.6 billion, the Utility MACT Rule is one of the most costly environmental regulations in the nation’s history. The EPA claims that the Rule will deliver up to $80 billion in annual net benefits, with no risk of significant adverse impacts on fuel choice, electric supply reliability, or employment. These claims are false.

  
  
  
• Transportation/Infrastructure
  

  Fixing Surface Transportation in Massachusetts

  By Marc Scribner, Competitive Enterprise Institute
  
  On Point, 06/11/2012
  

  Over the past few years, every state and the District of Columbia receive more in federal highway funding than the various federal excise taxes on highway activities within the state generated, according to the Government Accountability Office. While the vast majority of Massachusetts highway funding comes from non-federal sources, if all highway funding responsibility were to be devolved to the states—as a growing number of fiscal conservatives in Congress advocate—additional revenue must be found. This issue brief examines the current funding realities and offers several potential mechanisms that could be used in Massachusetts to close the funding gap under a devolution scenario. However, there is a way forward. Maintaining the “user-pays/user-benefits” funding principle should be of the utmost importance to transportation policy makers seeking to address the nation’s growing transportation challenges. New technologies can help create novel approaches to transportation funding. To get there, we also need to turn away from existing failed policies.

  
  
  
• Budget & Taxation
  

  Progressive Consumption Taxation

  By Alan D. Viard, Robert Carroll, American Enterprise Institute
  
  Book, 06/11/2012
  

  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 likely to be superior to income taxation because it does not penalize saving and investment. This book proposes to completely replace the income tax system with a progressive consumption tax. This approach avoids the problems arising from the adoption of a consumption tax alongside the income tax and also avoids the distributional problems posed by regressive consumption taxes, such as the VAT.