Recent Policy Studies

• Economic Growth
  

  The Collapse of Startups in Job Creation

  By Tim Kane, Hudson Institute
  
  Report, 09/13/2012
  

  The rate of job creation at startup companies was steady in the 1980s and 1990s at 11 startup jobs per 1000 people (i.e. among every 1000 Americans, 11 were newly hired at a company started that year). But the startup jobs rate has collapsed in recent years. In fact, the rate of startup jobs during 2010 and 2011, years that were technically in full recovery, are the lowest on record. The second figure shows how the rate declined during the recession years 2008-2009, but also shows that it continued to decline afterwards. The average rate for entrepreneurial job creation under the previous three presidents was 11.3, 11.2, and 10.8 respectively, but under President Obama it has been cut by one-third to 7.8.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The China Model and U.S. Energy Policy

  By Lee Lane, Hudson Institute
  
  Report, 09/13/2012
  

  With a stress on green energy or without one, China presents, not a better economic model, but a cautionary tale. This paper covers five points. First, for the PRC the task of maintaining high GDP growth rates will become increasingly difficult. Second, China’s institutions display deep flaws that, if not corrected, will make sustaining high growth harder still. Third, far from being a world leader in energy policy, the PRC has a very mixed record in the field, and its successes have come in spite of its institutions, rather than because of them. Fourth, while the PRC needs economic reform, the Party-state is likely to resist it. Fifth, for the United States, imitating Beijing’s dirigiste energy policies produces the same kind of wasteful patronage politics that plagues the PRC.

  
  
  
• Budget & Taxation
  

  Field of Schemes Mark II: The Taxpayer and Economic Welfare Costs of Price Loss Coverage and Supplementary Insurance Coverage Programs

  By Vincent H. Smith, Bruce A. Babcock, Barry K. Goodwin, American Enterprise Institute
  
  Report, 09/13/2012
  

  The Price Loss Coverage and Supplementary Coverage Option programs have the potential to be hugely expensive for the US taxpayer and, to an even greater degree than the Senate’s Average Revenue Coverage shallow loss program, budget busters that will increase (not reduce) the federal deficit. They will create incentives for economic inefficiencies by distorting crop production choices and, in some areas of the country, will encourage expanded production on environmentally sensitive lands. The programs will channel most of the subsidies they provide to large wealthy farms and large land owners in an agricultural sector that is financially perhaps the most stable and successful sector of the US economy and least in need of government welfare checks. And they will almost certainly have a substantial adverse effect on US trade relations with other countries, both with respect to agricultural and non-agricultural export markets.

  
  
  
• Economic Growth
  

  A Report on Corporate Governance and Shareholder Activism

  By James R. Copland, Manhattan Institute
  
  Proxy Monitor, 09/13/2012
  

  Overall, empirical analysis of Proxy Monitor data, in 2012 and across the 2006-12 time span, challenges the efficacy of the shareholder-proposal process, at least from the perspective of the ordinary investor. The prominent role being played by a small number of investors, most prominently labor-union pension funds whose actions in this area appear to deviate from concern over share value, suggests that this process may be oriented toward influencing corporate behavior in a manner that generates private returns to a subset of investors while harming the average diversified investor. The significant influence of the proxy advisory firm ISS, along with its substantial deviation from shareholders’ observed preferences, amplifies concerns about whether shareholder voting on proxy ballot items is effectively working to improve share value.

  
  
  
• Economic and Political Thought
  

  Liberty Is No War on Women

  By Carrie Lukas, Sabrina Schaeffer, CreateSpace
  
  Book, 09/13/2012
  

  The Left has accused supporters of limited government of waging a “War on Women.” In Liberty Is No War on Women, Lukas and Schaeffer take this charge apart. They demonstrate that liberals’ recipe for ever-bigger government backfires on women by eroding opportunity and true financial security, and explain how returning power to the people is the real key to women’s freedom. As Lukas and Schaeffer conclude, the “War on Women” rhetoric is fundamentally insulting to independent women and should be soundly rejected by all Americans.

  
  
  
• Monetary Policy/Financial Regulation
  

  Bernanke’s Quantitative Easing: Wrong Medicine for an Ailing Economy

  By J.D. Foster, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  The Federal Reserve’s Open Market Committee announced today that it would pursue $40 billion in additional monthly stimulus in the form of quantitative easing. Meanwhile, it will maintain its previous program of exchanging about $45 billion monthly in short-for-long-term securities. Quantitative easing, or QE, is purchasing long-dated government bonds and similar debt instruments. The policy is certainly well motivated: The U.S. economy is barely growing, as the latest jobs report underscored, predominantly because of severe regulatory and fiscal uncertainty. Under the circumstances, while Federal Reserve Chairman Ben Bernanke’s urge to “do something” is understandable, even commendable, the economy would be better off today—and in years to come—if he were to remember the expression “when you’re stuck in a hole, stop digging.”

  
  
  
• Foreign Policy/International Affairs
  

  U.S. Should Challenge Huge U.N. Funding Disparities

  By Brett Schaefer, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  It is well established that the vast majority of United Nations member states pay far less in dues than the United States pays, but the disparity is greater than most realize. Taking U.N. travel subsidies into account, two dozen countries pay roughly $1,000 or less in net contributions to the U.N. regular budget each year while enjoying the same voting privileges as the U.S., which pays nearly $567 million. No sovereign nation, no matter how poor, should pay so little. Worse, it undermines the incentives for these nations to oversee the U.N. budget properly. The U.S. should call for the elimination of the travel subsidy and for more equitable allocation of U.N. expenses among member states.

  
  
  
• National Security
  

  Congress Should Not Enable Executive Orders on Cybersecurity

  By Paul Rosenzweig, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  The discussion over improving U.S. cybersecurity has moved from a debate over different pieces of legislation to speculation and expectation that President Obama will issue an executive order. Congress repeatedly declined to adopt a regulatory approach to cybersecurity, yet the Administration has drafted an executive order that begins the development of a regulatory system. There is language in the pending continuing resolution (H. J. Res. 117) that appropriates funds that might be used to fund implementation of the cybersecurity executive order. This is a case of stealth government. Congress should be careful not to provide a blank check for an executive order that has not been published yet and could implement measures that Congress refused to put into law. That is the wrong approach to deciding Washington’s appropriate role in strengthening the nation’s cybersecurity.

  
  
  
• Foreign Policy/International Affairs
  

  Spring Fever: The Illusion of Islamic Democracy

  By Andrew C. McCarthy, Encounter Books
  
  E-Book, 09/13/2012
  

  Every human heart does not yearn for freedom. In the Islam of the Middle East, “freedom” means something very nearly the opposite of what the concept connotes to Westerners – it is the freedom that lies in total submission to Allah and His law. That law, sharia, is diametrically opposed to core components of freedom as understood in the West – beginning with the very idea that man is free to make law for himself, irrespective of what Allah has ordained. It is thus delusional to believe, as the West’s Arab Spring fable insists, that the region teems with Jamal al-Madisons holding aloft the lamp of liberty. Do such revolutionary reformers exist? Of course they do … but in numbers barely enough to weave a fictional cover story. When push came to shove – and worse – the reformers were overwhelmed, swept away by a tide of Islamic supremacism, the dynamic, consequential mass movement that beckons endless winter.

  
  
  
• Economic Growth
  

  Defending the Dream: Why Income Inequality Doesn’t Threaten Opportunity

  By David Azerrad, Rea Hederman Jr., The Heritage Foundation
  
  Special Report, 09/13/2012
  

  Today, on the Left and on the Right, everyone talks about rebuilding, saving, restoring, defending, or rescuing an American Dream that is slipping, fading, eroding or vanishing. The loudest voices, all coming from the Left, fulminate against the top 1 percent of earners and blame an unfair system that benefits the rich at the expense of the poor. To protect the American Dream, these critics call for greater government involvement to make things more equal and ensure that everyone gets their “fair share,” and in doing so misunderstand the nature of free-market economics, which attempts to expand rather than divide the economic pie. Those who focus on income inequality have embraced a very different American Dream from the one that is familiar to most Americans. They still use the traditional language of opportunity, but their new dream has very little in common with the real American Dream.

  
  
  
• Economic Growth
  

  Not Looking for Work: Why Labor Force Participation Has Fallen During the Recession

  By James Sherk, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  The post-recession economy has undergone the slowest recovery in 70 years. In addition to more than 8 percent unemployment, labor force participation has fallen sharply since the recession began in December 2007. Today, nearly 5 million fewer Americans are working or searching for work. The drop in unemployment since 2009 is almost entirely due to the fact that those not looking for work do not count as unemployed. Demographic factors explain one-fifth of the decreased labor force participation. The rest comes from increased school enrollment and more people collecting disability benefits. Six percent of U.S. adults are now on disability insurance. This is no time to make it more difficult for businesses to create jobs.

  
  
  
• Foreign Policy/International Affairs
  

  International Security Advisory Board’s Misplaced Focus a Cause for Concern

  By Baker Spring, Michaela Bendikova, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  The U.S. and its allies face many grave dangers today, including the spread of ballistic missiles and nuclear know-how. The International Security Advisory Board (ISAB), designed to provide independent analysis and advisement regarding such issues for the Secretary of State, recently published a report titled “Mutual Assured Stability: Essential Components and Near Term Actions.” The report’s recommendations, however, are almost exclusively focused on improving relations with Russia and largely ignore the risks associated with a nuclear North Korea and Iran. Such an omission is dangerous.

  
  
  
• Foreign Policy/International Affairs
  

  The U.S. Should Withdraw from the U.N.’s “Programme of Action” on Small Arms

  By Theodore Bromund, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  On August 27, Review Conference began for the U.N. “Programme of Action to Prevent, Combat, and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects” (PoA). The program originated with a U.N. General Assembly resolution in 1996 that established a Group of Governmental Experts on small arms and light weapons. The Group’s reports culminated in the creation of the PoA in 2001.The PoA contains a range of commitments on which participating nations have agreed to report biennially. It is not a treaty process: It is, in theory, a mechanism for encouraging voluntary cooperation. In practice, it has achieved little. On August 29, the U.N. released its International Small Arms Control Standards (ISACS), which epitomizes the PoA’s promotion of gun control norms. Since the PoA is ineffective and seeks to constrain freedoms protected by the Constitution, the time has come for the U.S. to withdraw from it.

  
  
  
• Foreign Policy/International Affairs
  

  The U.S.-U.K. Extradition Treaty: Fair, Balanced, and Worth Defending

  By Theodore Bromund, Andrew Robert James Southam, The Heritage Foundation
  
  Backgrounder, 09/13/2012
  

  The 2003 Extradition Treaty between the United States and Great Britain is intensely controversial in the United Kingdom. The treaty resulted from a British process and is a modern and praiseworthy approach to extradition that is based on an objective evidentiary test, requires dual criminality in all cases, and has a proportionality standard. The European Union’s European Arrest Warrant does not have these virtues and therefore urgently needs reform, as does Britain’s participation in the Council of Europe’s European Convention on Extradition and acceptance of the jurisdiction of the supranational European Court of Human Rights. While Anglo–American cooperation on the treaty and on extradition and international criminal justice can be improved, the 2003 U.S.–U.K. Extradition Treaty is fair, balanced, and worth defending.

  
  
  
• Welfare
  

  Welfare Work Requirements: Vague Replacement of Work for Welfare

  By Robert Rector, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  In July, the Obama administration waived the core work requirements of the historic welfare reform law of 1996, which law required a portion of the able-bodied recipients in the Temporary Assistance for Needy Families (TANF) program work or prepare for work as a condition of receiving aid. The new bureaucratic directive from Obama’s Department of Health and Human Services (HHS) declared that in the future, neither states nor TANF recipients would have to obey these workfare requirements. It replaces those work requirements with new, vague standards devised by HHS without any congressional input, such as “employment exits” and “universal engagement.” Contrary to the claims of the mainstream press, this illegal waiver not only does not merely “tweak” the work provisions of the law, but often allows requirements to be bypassed entirely.

  
  
  
• Budget & Taxation
  

  Clinton Tax Hikes Slowed Growth

  By Curtis Dubay, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  President Obama argues that President Clinton’s economic record is proof that the current economy would grow if Congress passed the tax hikes he has long proposed. The American public should not fall for this misleading argument. The historical record is clear: The economy grew slower than it should have in the years after Clinton’s 1993 tax hike. The strong economic growth that is associated with his presidency occurred only after he agreed with Congress to cut taxes in his second term. President Obama’s cursory and errant analysis of recent history has serious implications for policymaking today. If Congress raises taxes based on the faulty notion that tax hikes have no ill effects on economic growth, it will impede the still-struggling recovery and keep millions of Americans on the unemployment rolls far too long.

  
  
  
• Economic Growth
  

  Marriage: America’s Greatest Weapon Against Child Poverty

  By Robert Rector, The Heritage Foundation
  
  Special Report, 09/13/2012
  

  Child poverty is an ongoing national concern, but few are aware that its principal cause is the absence of married fathers in the home. Marriage remains America’s strongest anti-poverty weapon, yet it continues to decline. As husbands disappear from the home, poverty and welfare dependence will increase, and children and parents will suffer. Since marital decline drives up child poverty and welfare dependence, and since the poor aspire to healthy marriage but lack the norms, understanding, and skills to achieve it, it is reasonable for government to take active steps to strengthen marriage. Just as government discourages youth from dropping out of school, it should provide information that will help people to form and maintain healthy marriages and delay childbearing until they are married and economically stable. In particular, clarifying the severe shortcomings of the “child first, marriage later” philosophy to potential parents in lower-income communities should be a priority.

  
  
  
• Foreign Policy/International Affairs
  

  The U.N. Human Rights Council Does Not Deserve U.S. Support

  By Brett Schaefer, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  The lack of membership standards for the U.N. Human Rights Council (HRC) is a key reason behind the Council’s poor record and, sadly, there is little chance for establishing such standards. While the African Union’s nomination of Sudan for membership on the HRC caused justified outrage and eventually lead to Sudan’s withdrawal from the nomination, notorious human rights violators like Cuba, China, and Russia nonetheless currently sit on the Council, while other African countries with dismal human rights records remain virtually assured of election. The Administration’s current strategy of focusing limited diplomatic capital on annually blocking a particularly egregious country while other, only slightly less objectionable states win election is a losing game. Instead of lending credibility to this flawed institution, the U.S. should seek to eliminate it and work to establish a more effective human rights body with rigorous membership standards.

  
  
  
• Education
  

  No Child Left Behind Waivers: Bogus Relief, Genuine Overreach

  By Lindsey Burke, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  NCLB’s blunt attempt to drive accountability from Washington has resulted in many schools being labeled failing while doing little to improve results. However, waivers from selected provisions of the law create a bad precedent that provides neither long-term relief for states nor solves the underlying problem with NCLB: an accountability system directed toward bureaucrats, not parents. The Obama Administration does not need to abrogate proper legislative process in order to provide relief from NCLB. Proposals such as the Academic Partnerships Lead Us to Success (A-PLUS) would allow states to completely opt out of NCLB and direct dollars and decisions to the state’s most pressing priorities. State leaders should reject these waivers and demand genuine relief from NCLB. Options exist to provide that relief and create a path toward fundamentally reducing federal intervention in education.

  
  
  
• Health Care
  

  State Lawmaker’s Guide to Evaluating Medicaid Expansion Projects

  By Edmund Haislmaier, Drew Gonshorowski, The Heritage Foundation
  
  Issue Brief, 09/13/2012
  

  In its opinion on the Obamacare case, the Supreme Court found Congress exceeded its Constitutional authority by conditioning existing Medicaid funding on state adoption of the Medicaid expansion in Obamacare. The ruling effectively made the expansion optional. Supporters of Obamacare, as well as some health care stakeholders—particularly hospitals and clinics—have since contended that states should voluntarily adopt Obamacare’s Medicaid expansion. They claim that expanding Medicaid will entail little to no cost to state governments, since the federal government will fund the vast majority of the additional costs. Indeed, some analyses project states achieving savings from adopting the expansion. However, state lawmakers should be wary of accepting such analyses at face value.

  
  
  
• Budget & Taxation
  

  Cutting up the Credit Cards: Seven Ideas to Reform the Culture of Debt in State and Local Government

  By Stephen Slivinksi, Goldwater Institute
  
  Policy Report, 09/13/2012
  

  While Arizona’s constitution stipulates a state debt limit of roughly $8 million dollars, this has not been effective in actually limiting debt. Today, state-level bonded indebtedness equals $13.7 billion. All levels of government in Arizona have outstanding debt in one form or another of somewhere between $44 and $51 billion. This report proposes seven solutions to the problem of limiting Arizona’s debt-level, including the creation of a debt cap of no more than 6% of net assessed value of private property in the state, and applying the same cap to cities and counties, as well as requiring voter approval of all debt at the local level, and forbidding issuance of government-grade, tax-exempt bonds by non-elected bodies. If these as well as other suggested reforms are enacted, Arizona can move towards reclaiming its historic title as a state forged in the understanding that excessive public debt can trap future generations.

  
  
  
• Education
  

  Turning the Tides: President Obama and Education Reform

  By Michael Q. McShane, American Enterprise Institute
  
  Education Outlook, 09/13/2012
  

  By promoting choice, data, evaluation, and new pipelines of teachers, President Obama has signaled that reform is no longer strictly the purview of Republicans, and that Democrats can stand up to teachers unions and survive. In fact, both the NEA and the AFT have already endorsed his reelection bid, showing that a popular Democratic politician does not always have to do what is most favorable to the unions in order to get their vote. By taking these stands, the president has moved the left flank of the education debate toward embracing more dramatic reform of the American education system and has challenged common assumptions about reformers and what they hope to accomplish. Even if the substance of his reforms fails to live up to their hype, the resulting change in the politics of education will have positive effects on the education debate for the foreseeable future.

  
  
  
• Foreign Policy/International Affairs
  

  A Quest for Democratic Citizenship: Agendas, Practices, and Ideals of Six Russian Grass-roots Organizations and Movements

  By Leon Aron, American Enterprise Institute
  
  Report, 09/13/2012
  

  Although limited in scope, inductive, and decidedly qualitative, this study nevertheless suggests several important tendencies in the development of Russian civil society and its potential impact on the country’s politics. Its exploration of the agendas and ideals of the mostly young and mostly middle-class leaders and activists of six grassroots organizations and movements provides considerable evidence that a proactive civil society might be emerging. A free, democratic, and prosperous Russia, at peace with its own people, its neighbors, and the world, is among the most important geostrategic objectives of the United States. Thus, America’s stakes in the consolidation and expansion of a vibrant Russian civil society, the emergence of which we may have observed and recorded in this study, are undeniable and high. Ultimately, it is the only assured way of securing the attainment of this objective, so obviously and immensely beneficial to the peoples of Russia and the United States.

  
  
  
• Budget & Taxation
  

  FY 2013 Continuing Resolution: Spends Every Dollar and More

  By Patrick Louis Knudsen, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  The stopgap funding measure is just another omnibus, spend-as-you-go measure that extends Washington’s incoherent fiscal policy. To regain control of spending Congress needs to commit to an orderly, responsible process in which budget resolutions, schedules, deadlines, and fiscal years still matter. The breakdown of budgeting in recent years is not the product of a broken process. It reflects a lack of will on the part of lawmakers to do what the law requires: to budget and to govern.

  
  
  
• Budget & Taxation
  

  Congress Should Finish Its Summer Job: Stop Taxmageddon

  By Curtis S. Dubay, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  The mounting evidence shows that the economy cannot withstand a major tax increase in a few months. Rather than continue to subject the economy to Taxmageddon’s uncertainty, Congress should take that burden off America’s job creators now. Until it does so, we can expect further troubling economic data, including weak job numbers.

  
  
  
• National Security
  

  Annual Compliance Report: Lack of Clarity Damaging to U.S. Security

  By Michaela Bendikova, Lisa Curtis, Jessica Zuckerman, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  The State Department’s Annual Compliance Report fails to verify and address other countries’ compliance with treaties. This paper proposes changes that are essential for keeping the U.S. and its allies safe. The implementation of these changes would mitigate the chance that the U.S. public finds itself geopolitically surprised by developments in other countries.

  
  
  
• National Security
  

  Eleven Years Later: U.S. Should Not Lose Momentum in the War on Terrorism

  By Michaela Bendikova, Lisa Curtis, Jessica Zuckerman, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  Both at home and abroad, America needs an enduring counterterrorism enterprise capable of responding to future emerging threats. This analysis offers some suggestions to that end.

  
  
  
• International Trade/Finance
  

  Trade Freedom: How Imports Support US Jobs

  By Derek Scissors, Charlotte Espinoza, Terry Miller, The Heritage Foundation
  
  Issue Backgrounder, 09/12/2012
  

  It is a common misperception that importing goods to America comes at the cost of American jobs. In fact, imports contribute to job creation on a large scale. The increased economic activity associated with every stage of the import process helps support millions of jobs in the U.S. This Heritage Foundation analysis shows that over half a million American jobs are supported by imports of clothes and toys from China alone. These jobs are in fields such as transportation, wholesale, retail, construction, and finance. Understanding the positive role of imports with respect to jobs, in addition to their other benefits, is critical to adopting the correct trade policy and thus to bolstering the economy.

  
  
  
• Budget & Taxation
  

  Government Employees Work Less than Private-Sector Employees

  By Jason Richwine, The Heritage Foundation
  
  Backgrounder, 09/12/2012
  

  The stereotype of the underworked government employee is frequently invoked in criticisms of public-sector employment. But does the average public employee really work less than the average private employee? To provide an objective answer, this paper uses the American Time Use Survey, which produces a detailed listing of personal activities on a given day for each respondent. Based on this dataset, government employees work around three fewer hours per week and roughly one less month per year than private-sector workers. Substantial differences in work time persist even after controlling for occupational and skill differences between sectors. The underworked government employee should be of concern to taxpayers who expect private-sector levels of work in the public sector in exchange for private-sector levels of compensation.

  
  
  
• Foreign Policy/International Affairs
  

  Politics Over Security: Homeland Security Congressional Oversight in Dire Need of Reform

  By Jessica Zuckerman, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  Over the past decade, numerous organizations and individuals have cited the folly of Congress’s sprawling web of oversight over Department of Homeland Security and implored Congress to act. Though consolidation of oversight has bipartisan and widespread support in the policy realm, many in Congress still resist these efforts, placing power, prestige, and politics above security. The Heritage plan for reform would help remedy the situation. On the 11th anniversary of 9/11, the nation should not have to wait for another attack to shock Congress into action.

  
  
  
• Health Care
  

  Why Traditional Medicare Must (and Will) Be Reformed

  By Robert Moffit, Alyene Senger, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  Today, Medicare enrollment and the demand for medical services is manageable. Tomorrow it is not. The massive baby boomer generation (77 million strong) and its demand for medical services over the next two decades will put unprecedented strains on Medicare’s creaky bureaucratic structure. The doubling of beneficiaries is also accompanied by longevity increases of nearly 10 years by 2020. Worse, the growing Medicare population will be supported by a relatively smaller number of workers, rendering Medicare unsustainable. Today’s Medicare program is structurally flawed and fiscally unsustainable. Obamacare’s projected savings from its Medicare payment cuts will not secure Medicare’s financial future, including the Hospital Insurance (HI) trust fund. Replacing Obamacare with structural reform based on “premium support,” like the defined-contribution financing of Medicare Part D, would update Medicare’s insurance program and improve its financial condition.

  
  
  
• Economic Growth
  

  Heritage Employment Report: Dog Days of August Howl in the Labor Market

  By Rea Hederman Jr., James Sherk, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  The August report shows that the labor market is continuing its non-recovery. Average job growth for 2012 is worse than average job growth in 2011. The labor market should simply be stronger at this point in the recovery than it is right now. Instead, several indicators are not recovering at all or even continuing to decline. Fiscal policies from Washington have made the situation worse. While President Obama has promised to reduce regulations, which would help job creation, his largest initiative—Obamacare—will harm employment. The Obamacare tax hikes coincide with the expiration of the 2001 and 2003 tax cuts in January 2013. This will throw the economy into another deep recession, and businesses are already delaying investment and hiring as a result.

  
  
  
• Health Care
  

  Medicaid Expansion Will Become More Costly to States

  By Drew Gonshorowski, The Heritage Foundation
  
  Issue Brief, 09/12/2012
  

  The Administration is selling the Medicaid expansion as a great benefit to the states, since the federal government foots a majority of the bill in the first years of implementation. However, even under the Affordable Care Act, the expansion will begin putting pressure on state budgets as early as 2019. State legislators cannot afford to be myopic when assessing the costs and benefits of expanding Medicaid. Aside from problems already apparent in Medicaid, such as patient access, states must also face uncertainty in how much the expansion will actually cost. The Medicaid expansion represents a giant increase in federal spending of $642 billion, according to the Congressional Budget Office. Instead of adding millions to Medicaid, Washington should reform the program. The Heritage Foundation’s Saving the American Dream does just that.