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Recent Policy Studies
Budget & TaxationBy Philip Dittmer, Tax FoundationSpecial Report, 08/16/2012
It is not by accident that 27 of 34 members of the Organisation for Economic Cooperation and Development have territorial systems, and that every independent government tax advisory group has encouraged Congress to discard the current worldwide system in favor of a sleeker territorial model. Even two of the most outspoken critics of territoriality have recently expressed that “there is a lot to like” about the House Republicans’ draft legislation for a territorial system, and that “it is worthwhile to adopt.”
Budget & TaxationBy Economics 21, e21: Economic Policies for the 21st CenturyAnalysis, 08/16/2012
The so-called radicalism of the Path to Prosperity merely reflects the radical imbalance of the U.S. budget situation. Critics who characterize Chairman Ryan’s budget reforms as “radical” leave the mistaken impression that small changes are all that’s necessary to close the current fiscal gap. In truth, the Ryan proposal represents the absolute least policymakers would have to do to close the long-run budget gap without raising taxes above the post-war average. Anyone who describes the Ryan budget as “radical” is either deluding themselves about the size of current entitlement commitments or thinks a sustained tax burden 50% larger than any previously recorded in U.S. history is a more natural state of affairs.
Health CareBy Roger Stark, Washington Policy CenterPolicy Brief, 08/16/2012
The experience of other states shows that a meaningful legal cap on non-economic damages is the most effective element of successful lawsuit reform legislation. This is confirmed both by California’s legislation in practice and by a number of independent academic studies. To a lesser extent, a statute of limitations on lawsuits and pre-trial screening are often effective in reducing the cost of specific medical malpractice lawsuits. The barriers to enacting non-economic caps are provisions in some state constitutions, the active political opposition of powerful state trial lawyer associations and the question of whether the states or the federal government should pass such legislation. To control the rise in medical lawsuit costs, Washington state would need to amend its constitution. This would require a supermajority of legislative votes as well as supermajority support of voters. This must be done to avoid the next medical malpractice crisis in our state.
Health CareBy Arlene Wohlgemuth, Spencer Harris, Texas Public Policy FoundationPolicy Brief, 08/16/2012
Texas has higher average insurance premiums than Alabama. One contributor to this difference is the number of mandates the state has on health insurance policies. The employer mandate is the most significant of these. Many businesses are required to offer their employees minimum essential benefits coverage as defined by ObamaCare. To stay compliant with federal law, businesses must monitor employee household income relative to plan costs, total employee out of pocket costs, and exchange information.
EducationBy Jeanette Moll, Henry Joel Simmons, Texas Public Policy FoundationPolicy Perspective, 08/16/2012
Many studies have been conducted on zero-tolerance policies that cast doubt on their effectiveness. Furthermore, current crime and victimization rates do not indicate that zero-tolerance policies have produced increases in school safety. On top of that, these programs have been found to cost millions in taxpayer dollars each year through costly alternative programs for suspended students, while other costs compound the taxpayer investment, including lost educational hours for students and lost wages for parents taking time off work to deal with a suspended child.
Crime, Justice & the LawBy Vikrant P. Reddy, Texas Public Policy FoundationPolicy Perspective, 08/16/2012
Indigent defense is broken in Texas—and throughout the United States—and it has been broken for decades. When a prisoner was asked in 1971 whether he had been provided with a lawyer at trial, he replied: “No. I had a public defender.” Excessive caseloads and conflicts of interest are two of the most significant problems behind the notoriously poor quality of indigent defense services. Texas can address these problems through at least five changes to the state criminal justice system: reclassifying several offenses so that they do not trigger the right to counsel, increasing diversion to problem-solving courts, expanding the use of victim-offender conferencing, encouraging “open file” discovery systems, and providing vouchers to indigents for the selection of counsel. These changes, if implemented, will better ensure that Texas is discharging its constitutional obligation to provide effective assistance of counsel to indigents.
Information TechnologyBy Bill Peacock, John Di Pietro, Texas Public Policy FoundationPolicy Brief, 08/16/2012
For years, Texas municipalities have imposed franchise fees upon telecom and utilities providers to provide revenue that supports general city expenditures. These fees are much higher than needed to support the use of the city rights-of-way by these companies. Ostensibly charged as a form of “rent” for use of public right-of-way to benefit taxpayers of a city, these fees are simply a tax charged to those citizens in their role as consumers.
EducationBy James Goslan, Bill Peacock, Texas Public Policy FoundationReport, 08/16/2012
Home-rule districts were authorized by the Texas Legislature as a way to empower parents, citizens, and local administrators to govern schools in a manner that best suits the needs of students in their district. However, none have been created since they were authorized in 1995 because there are too many roadblocks to their creation and too many of the same mandates on traditionally-run school districts are imposed on home-ruled districts.
Budget & TaxationBy Steve Poftak, ed., Pioneer Institute for Public Policy ResearchReport, 08/16/2012
This guide is intended to help engaged citizens, particularly the members of municipal finance committees, understand how best to perform an analysis of the effectiveness and efficiency of municipal spending. The Guide begins with a brief overview of the budget process, and reviews where funds are spent and what budget areas should be prioritized. It also includes a discussion of how to conduct the analysis process.
EducationBy Paul Manna, Keenan Kelley, Frederick M. Hess, American Enterprise InstituteReport, 08/16/2012
Indiana’s experience so far shows that state-level leadership is invaluable for articulating, supporting, and advancing an education reform agenda but that eventual results depend on several things: local leaders and teachers using reforms to carefully, creatively, and properly reshape critical tasks and school cultures to improve students’ experiences; state and local officials effectively leveraging resources from nongovernmental organizations to support that reshaping; and implementers inside and outside government having a clear understanding of the opportunities and consequences that will follow from their actions. Unless state and local implementers seize opportunities present in the law, efforts such as Putting Students First likely will prompt new rounds of compliance-oriented behavior, wasted money, bureaucratic busyness, frustrated teachers, and few or no substantive gains.
Monetary Policy/Financial RegulationBy John H. Makin, American Enterprise InstituteEconomic Outlook, 08/16/2012
This summer, the US Federal Reserve Bank (Fed) and the European Central Bank (ECB) claimed they would strive to address fundamental structural problems in the US and European economies. Yet neither central bank has rolled out concrete measures to achieve these goals. Even if the Fed were to undertake additional quantitative easing in September, there is no guarantee that this would effectively reduce US unemployment or increase economic growth. If enacted, ECB lending programs would provide only temporary relief to peripheral sovereign borrowers such as Spain and Italy. Furthermore, the Fed seems to lack confidence in its own ability to spur economic growth, and the progress of the ECB’s loan program greatly hinges on upcoming decisions by German courts. The most recent round of Fed and ECB meetings thus serve as reminders that in the aftermath of the 2008 and 2010 economic crises, central banks are being asked to promise more than they can deliver.
Foreign Policy/International AffairsBy Luke Coffey, James Phillips, The Heritage FoundationIssue Brief, 08/16/2012
In the aftermath of Secretary of State Hillary Clinton’s trip to Turkey last weekend, there has been speculation that the U.S. might support the idea of establishing a no-fly zone (NFZ) over Syria. Under the current conditions, an establishment of an NFZ would be a costly and risky action that would do little to stop the killing on the ground while entangling the U.S. in an intensifying civil war. While the U.S. and its partners have the military capability to establish and enforce an NFZ above Syria if they wanted to, an NFZ is the wrong policy at the wrong time. The U.S. should concentrate on determining which elements inside the opposition want a stable and secure Syria, marginalizing elements inside the opposition movement that promote an extremist agenda, and drumming up regional support against the Bashar al-Assad regime.
Orphan Drugs & Humanitarian Devices: It’ll Take More Than More Meetings and More Reports to Make More Discoveries and More AccessBy John R. Graham, Pacific Research InstituteHealth Policy Prescriptions, 08/16/2012
Orphan drugs can cost in the neighborhood of $400,000 annually—far more than the patients can pay directly. This means that successful access depends on a well-functioning health-insurance system that spreads the risk of these diseases over a large risk pool. Unfortunately, this does not occur in the United States, where health “insurance” has been outlawed in favor of a perversely regulated system of employer-based coverage and government programs. As a result, third-party payers have incentives to shape plans that focus on covering the “median patient,” instead of those who suffer the most catastrophically expensive illnesses. Insurers often put orphan drugs the fourth tier of their formularies, which means that patients who would enjoy the most protection from costs in a well-functioning health-insurance system end up paying more than patients suffering from more common afflictions. As well as reducing the power of the FDA, advocates for patients with rare diseases should also push reforms that will improve the market for individually owned health insurance that protects patients from the catastrophic costs of rare diseases.
Budget & TaxationBy J. Scott Moody, Wendy P. Warcholik, Oklahoma Council of Public AffairsReport, 08/16/2012
Overspending by Oklahoma’s state government, relative to the TABOR benchmark, is costing taxpayers dearly. First, overspending is costing taxpayers up to $4,867 in higher taxes (though much of this is paid for by Uncle Sam). Second, this overspending is resulting in the crowding out of Oklahoma’s private sector—which now costs up to $13,176 per household in lost personal income.
Budget & TaxationBy Jeff Hooke, Michael Tasselmyer, Maryland Public Policy InstituteMaryland Policy Report, 08/16/2012
In these tumultuous economic times, the administrators of Maryland’s pension systems would be wise to index the systems’ portfolios to ensure average investment returns. This would be a safer, more responsible use of system resources than paying Wall Street management firms millions of dollars each year to deliver sub-par results on public stocks and bonds and risky private alternative investments.
Health CareBy Joel Allumbaugh, Maine Heritage Policy CenterReport, 08/16/2012
As we look to the long-term future of health care in Maine we must also consider the incentives we are creating for future generations. Medicaid began as a program for particular categories of vulnerable individuals, and now it is being used to assist all citizens, including the able-bodied, below an arbitrary income level. As a young person entering the workforce, earning $14,856 means free health care. Increase those earnings by just one dollar, to $14,857, and that same young person not only loses the free coverage, but it becomes an obligation to purchase coverage or else face a penalty. The culture of dependency created by our current Medicaid system is straining the very fabric of our nation and our state. Our decisions today will impact the future for our children, not only in regards to financial obligations, but also in regards to the culture that will shape their generation.
Economic GrowthBy J. Scott Moody, Maine Heritage Policy CenterPath to Prosperity, 08/16/2012
An aging workforce, if left unchecked, will mean ever-declining tax receipts from Maine’s income tax. Rather than wait for the inevitable, policymakers should proactively phase out the income tax. This would not only help Maine’s small businesses that mostly file through the individual income tax code (sole-proprietorships, partnerships, LLCs, and S-corporations), but would also help young families by lowering their tax bills and put more money in their pockets for diapers, clothes, and education.
Budget & Taxation
Tax Reform Gears Kansas for Growth: A Dynamic Analysis of Additional Revenue and Jobs Generated by Tax ReformBy Todd Davidson, et al., Kansas Policy InstitutePolicy Brief, 08/16/2012
There will be significant economic benefits due to Kansas’ historic tax reform legislation that goes into effect on January 1, 2013. The Pass-Through Model predicts 33,430 new jobs created, $307 million more business investment and $1.6 billion in additional disposable income. The Standard Model predicts 41,690 new jobs created, $85 million more business investment and $1.8 billion in additional disposable income.
Elections, Transparency, & Accountability
Preliminary Analysis: The Cost and Benefits of Minnesota’s Proposed Photo ID Constitutional AmendmentBy Peter J. Nelson, John LaPlante, Kent Kaiser, Center of the American ExperimentReport, 08/16/2012
The proposed constitutional amendment on photo ID has been subject to claims that it is an unfunded mandate that will harm local government finances and delay election results. The core of the argument is that the amendment will require either provisional voting for the Minnesotans who use Election Day registration (roughly 500,000 people in each presidential election) or electronic poll books in each precinct, each equipped with an expensive broadband connection. Either option would indeed be a recipe for chaos and financial harm. This report finds no merit in this argument.
EducationBy Cornelius Chapman, Beacon Hill InstitutePolicy Study, 08/16/2012
We forbid the exercise of monopoly power and restraints of trade in the private sector except in the case of bargaining by employees, who may otherwise be at a disadvantage in dealing with a private employer. In the case of public services, however, the marketplace is different; customers are compelled to pay in advance for services which, if a monopoly of public employees colludes to withhold or provides in an adequate fashion, they may be unable to afford or even to obtain elsewhere. The customer who refuses to cross a picket line at a private business takes his money elsewhere and buys substitute goods or services; the parent of a school-age child can’t get a refund for taxes previously paid if teachers strike or a school fails to educate his or her child, and must pay twice to purchase the education that the state requires children to obtain under compulsory attendance laws.
Regulation & DeregulationBy Susan E. Dudley, Jerry Brito, Mercatus CenterBook, 08/16/2012
Federal regulations affect nearly every area of our lives and interest in them is increasing. However, many people have no idea how regulations are developed or how they have an impact on our lives. Regulation: A Primer by Susan Dudley and Jerry Brito provides an accessible overview of regulatory theory, analysis, and practice. The primer examines the constitutional underpinnings of federal regulation and discusses who writes and enforces regulation and how they do it. It also provides insights into the different varieties of regulation and how to analyze whether a regulatory proposal makes citizens better or worse off. Each chapter discusses key aspects of regulation and provides further readings for those interested in exploring these topics in more detail.
Budget & TaxationBy Nick Gillespie, Veronique de Rugy, Reason FoundationReason, 08/16/2012
Social Security and Medicare, which provide retirement and health insurance benefits for senior Americans, generally without regard to need, are funded by taxes on the relatively meager wages of younger Americans who will never enjoy anything close to the same benefits. From any serious fiscal or moral viewpoint, and particularly for the sake of helping those truly in need, Social Security and Medicare should be ended. The demographic math is irrefutable: Entitlements are killing the safety net. They should be replaced with social welfare programs that cover all citizens, regardless of age, but only those who are too poor or incapacitated to take care of themselves. Focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system.
Economic GrowthBy Tate Watkins, Reason FoundationReason, 08/16/2012
Joplin’s recovery contrasts with the fitful, fraught response to the destruction wrought by Hurricane Katrina in New Orleans, 700 miles to the south, in 2005. The two storms, like the two cities, were different in nature and scale. But there were also disparities in the official and unofficial responses after the initial damage. While the people of Joplin largely took matters into their own hands, pushing aside burdensome rules and refusing help when it came with too many strings attached, New Orleans and the surrounding area to this day remains hamstrung by federal, state, and local bureaucracy. Joplin’s experience offers a powerful lesson in self-sufficiency and knowing when to say “no thanks” to government.
Transportation/InfrastructureBy Wendell Cox, Reason FoundationPolicy Study, 08/16/2012
On the basis of this evaluation, the Taxpayer Risk Analysis concludes that the Victorville to Las Vegas train project, as proposed, entails enormous risks for taxpayers. There appears to be little or no prospect for the Victorville to Las Vegas train to generate sufficient fares and commercial revenues to pay a federal loan of between $5.5 billion and $6.5 billion. The likely default would represent a loss to taxpayers. Moreover, this could lead to further taxpayer losses, at any or all of the federal, state or local levels, as political pressure is placed upon governments to operate (and perhaps even complete construction of) the system.
Natural Resources, Energy, Environment, & ScienceBy Alexis Hunter, National Center for Policy AnalysisBrief Analysis, 08/15/2012
The Environmental Protection Agency is precluded from regulating or banning lead ammunition under an exemption to the definition of “chemical substance” in the Toxic Substances Control Act. To reinforce its intention to limit the EPA’s authority, in April 2012 the House of Representatives passed the Sportsman’s Heritage Act of 2012, which would expressly prohibit the EPA from regulating the amount of lead in ammunition. A pending amendment to the Senate’s Agriculture Reform, Food, and Jobs Act of 2012 would have the same effect.
Health CareBy Roberta Herzberg, Chris Fawson, National Center for Policy AnalysisBrief Analysis, 08/15/2012
The Obama administration has little trust for real markets and believes that consumers are incapable of directing their own health care in a competitive market. It believes that government experts must manage consumers to protect them from unscrupulous providers. The result is a top-heavy regulatory system in which administrators in government and the Accountable Care Organizations could soak up health care dollars without improving patient outcomes or reducing overall health care costs.
Budget & TaxationBy Peter Ferrara, National Center for Policy AnalysisBrief Analysis, 08/15/2012
The federal government should abolish the remaining minor share of federal income taxes paid by the middle class. That would enable a rational flat tax to be adopted for the top 40 percent of income earners, who earn 72 percent of all income anyway. In the last two decades, the two successful Democrat nominees for president campaigned on a tax cut for the middle class, then never delivered a permanent cut after they were elected. But with income taxes for the middle class eliminated, that game would be over.
Budget & TaxationBy Steven Malanga, Manhattan InstituteCity Journal, 08/15/2012
Notwithstanding the widespread failure of gambling as a fiscal and economic-development tool, states keep trying to use it. New York is exploring full-fledged casinos, while in response, New Jersey politicians are urging the governor to expand casino gambling statewide—though that would likely cannibalize revenue from Atlantic City. Massachusetts’s recent vote to approve casinos has prompted politicians in other New England states, such as Rhode Island, to push for their own. And as consumers’ interest in traditional lotteries continues to wane, states scramble to add more games, even eyeing sports betting—which today exists legally only in Las Vegas. So politicians, too, are addicted to gambling. Their addiction will damage many lives—and fail to help state finances.
Economic GrowthBy Diana Furchtgott-Roth, Manhattan InstituteReport, 08/15/2012
Numerous and expensive federal workforce training programs have failed to provide necessary skills and career guidance to legions of unemployed American workers. There is no doubt that those who enroll in federal worker training programs are a difficult-to-serve population. Many have poor job histories and lack the basic skills to benefit from on-the-job training. However, if we are to make progress, it is crucial that workforce initiatives be more than just employment sinecures for those who provide the training. Programs must be held accountable not just for spending money or recruiting trainees but for equipping those they are seeking to help with marketable skills and placing them in legitimate jobs. If the programs remain, state and local governments are in the best position to do this.
Health CareBy Eli Lehrer, Heartland InstitutePolicy Study, 08/15/2012
Public policy should not place any restrictions on the use of tobacco as a rating factor, and policymakers, regardless of their positions on tobacco use, may find it advantageous to allow for more rating flexibility in regard to tobacco than the Patient Protection and Affordable Care Act currently allows.
Health CareBy Dan Pilla, Heartland InstitutePolicy Brief, 08/15/2012
The Patient Protection and Affordable Care Act is the most sweeping social legislation ever enacted in the United States. Even the Social Security program, the federal government’s first major step into the area of social planning and the beginning of the federal “nanny state,” did not and still does not have the reach of the PPACA.
International Trade/FinanceBy Simon Lester, Cato InstituteFree Trade Bulletin, 08/15/2012
Economics provides us with clear evidence that protectionism is an inefficient policy that makes us worse off. The tobacco industry has some unique characteristics, but the logic of basic economics does not cease to apply in this sector, and thus protection of domestic tobacco producers is no more sensible here than in other sectors. Protection for domestic producers is not a good way to reduce smoking, and there are many effective alternatives. Thus, removing protectionist barriers in the tobacco industry should remain a component of trade and investment agreements. Using these agreements to fight protectionism should not undermine sovereignty or the ability to promote public health. An anti-protectionism rule does not interfere with domestic policymaking to any significant degree. Legitimate health regulation is still possible.
National SecurityBy Luke Coffey, The Heritage FoundationIssue Brief, 08/15/2012
The Arctic region is home to some of the roughest terrain and harshest weather found anywhere in the world. Arctic ice is increasingly melting during the summer months, causing new challenges for the U.S. in terms of Arctic security. For example, the decreasing presence of ice will mean new shipping lanes opening, increased tourism, and further natural resource exploration. This means that more actors than ever before will be operating in the region, and this will present both challenges and opportunities for the U.S. Consequently, the U.S. should organize its Arctic security capabilities appropriately. The decisions and investments made now will greatly impact how the U.S. handles future Arctic security challenges.
National SecurityBy Jessica Zuckerman, The Heritage FoundationBackgrounder, 08/15/2012
In 2007, the Chemical Facility Anti-Terrorism Standards (CFATS) program to regulate chemical facilities in the U.S. took effect. While a degree of government oversight of high-risk chemicals is warranted, the CFATS regulations are overly complicated, and overly burdensome on the private sector, with little added security. CFATS expires in October 2012, and the Department of Homeland Security is pushing for a seven-year reauthorization. Rather than continuing flawed and misguided regulations, DHS and Congress should collaborate with the private sector to develop commonsense, market-conscious—and safer—policy solutions for U.S. chemical security.
National SecurityBy Paul McHale, The Heritage FoundationSpecial Report, 08/15/2012
A domestic asymmetric attack employing chemical, biological, radiological, nuclear, and high explosive (CBRNE) weapons would likely produce a large number of U.S. casualties. U.S. Northern Command—the command responsible for responding to such an attack—is not operationally prepared to address this foreseeable threat. The flawed policies embodied in the 2010 Quadrennial Defense Review have left Northern Command with inadequate capacity: an insufficient number of personnel, without the necessary training, possessing very limited operational readiness. While the states have adequate forces to respond to a mid-range CBRNE event, the President lacks sufficient federal forces to respond to a complex catastrophe. Congress, the Administration, and the Department of Defense should act promptly to fill these critical gaps.
Natural Resources, Energy, Environment, & ScienceBy Hans von Spakovsky, Nicolas Loris, The Heritage FoundationBackgrounder, 08/15/2012
Given the challenges still facing the U.S. economy, the government needs to move aside and let private industry do what private industry does best: create jobs and increase our oil supply to help lower the price at the pump. And yet the Obama Administration remains committed to strangling America’s economic revival by doing everything in its power to prevent companies that obtain offshore leases from actually drilling and producing oil—a fact evidenced by a new lawsuit just filed in the U.S. Court of Federal Claims by an independent U.S. oil and gas company. Congress should act now to open access and reduce the onerous regulatory risk that characterizes U.S. offshore drilling policy. Such reform would provide companies the certainty they need to expand job creation and increase America’s energy supply.
National SecurityBy Michaela Bendikova, Jessica Zuckerman, The Heritage FoundationIssue Brief, 08/15/2012
An electromagnetic pulse (EMP) attack on the U.S. would have devastating effects. On August 15, 2003, a major blackout occurred throughout the northeastern U.S. and Canada, offering a glimpse of what life would be like after an EMP attack. More than 55 million people were affected, but most services were restored within a day. That would not be the case after an EMP. Damage to lives and property would be immense, and the ensuing devastation would continue for years, if not decades. Yet despite this substantial threat, the U.S. remains largely vulnerable to such an attack. In order to raise recognition of the threat and begin a national dialogue, Congress should establish August 15 as National EMP Awareness Day.
Foreign Policy/International AffairsBy Bruce Klingner, The Heritage FoundationIssue Brief, 08/15/2012
South Korean President Lee Myung-bak made an unprecedented trip on August 10 to an islet whose sovereignty is disputed by Japan. Lee’s visit—the first by a South Korean president—to Dokdo Island (called Takeshima by the Japanese) was intended to affirm Seoul’s sovereignty in response to perceptions of renewed Japanese territorial claims. Lee’s trip will, however, further inflame already strained bilateral relations with Tokyo. The deterioration of relations comes at a time when Washington has been urging the two allies to separate contentious historical issues and territorial disputes from strategic policymaking objectives, such as improving deterrence against common threats. The Obama Administration has made strengthening allied military capabilities in Asia an important pillar of American national strategy. Massive looming U.S. defense spending cuts add greater urgency to alliance burden sharing and promoting lateral military efficiencies among allies.