Recent Policy Studies

• Budget & Taxation
  

  Travel Promotion: Brand USA Marked by Waste and Abuse

  By Jessica Zuckerman, The Heritage Foundation
  
  Issue Brief, 10/10/2012
  

  America’s share of international travel is declining, and Brand USA, the corporation established by Congress to promote the U.S. as a premier travel destination, does not seem to be helping. A recent report by Senators Jim DeMint (R–SC) and Tom Coburn (R–OK) “reveals a history of waste, abuse, patronage, and lax oversight” on the part of Brand USA and the Department of Commerce, which is charged with its oversight. Rather than continuing government-led travel promotion measures, Congress should leave the promotion of tourism to the private sector. Instead, Congress and the Administration should focus on making it easier, safer, and more efficient for travelers to come to the U.S by improving U.S. visa services and expanding the Visa Waiver Program, the very program that is helping to fund Brand USA’s misguided efforts.

  
  
  
• Education
  

  Can Teacher Evaluation Improve Teaching?

  By Eric S. Taylor, John H. Tyler, Education Next
  
  Education Next, 10/10/2012
  

  American public schools have been under new pressure from regulators and constituents to improve teacher performance. To date, the discussion has focused primarily on evaluation systems as sorting mechanisms, a means to identify the lowest-performing teachers for selective termination. This work suggests optimism that, while costly, well-structured evaluation systems can not only serve this sorting purpose but can also enhance education through improvements in teacher effectiveness. In other words, if done well, performance evaluation can be an effective form of teacher professional development.

  
  
  
• Education
  

  Florida Defeats Skeptics

  By Marcus Winters, Education Next
  
  Education Next, 10/10/2012
  

  The evidence presented here shows that Florida’s elementary-school students did in fact make large improvements in reading proficiency in the 2000s. As critics contend, the state’s aggregate test-score improvements on the 4th-grade FCAT reading exam—and likely on the NAEP exam as well—are inflated by the change in the number of students who were retained in 3rd grade in accordance with the state’s new test-based promotion policy. Large test-score improvements are also observed, however, among students whose scores were not influenced by changes in the sample selected. Though somewhat smaller than what is apparent on the NAEP test, the portion of Florida’s reading test-score improvements during this time period that cannot be attributed to changes in the sample of students tested due to the retention policy is nonetheless substantial. Identifying the causes of these improvements remains an important task for future research.

  
  
  
• Education
  

  Whose School Buildings Are They, Anyway?

  By Nelson Smith, Education Next
  
  Education Next, 10/10/2012
  

  The school district monopoly over public education facilities is an accident of history. The policy and practice of public education facilities would look far different today if there had been more than one choice of provider when the laws were being written. There may be 100 ways of accomplishing the transformation away from monopoly, but the best path will involve policy and finance reform at the state level; municipal rather than district oversight; and a combination of entrepreneurial energy with appropriate public accountability. While the exact way forward may vary from one district to another, there should be no further delay in creating state laws and regulations that level the playing field between charters and other public schools. Even with existing rules of ownership, there is no excuse for bolting the doors to unused school buildings. There is no excuse for ignoring the fact that charter schools must take dollars out of classrooms to pay the rent.

  
  
  
• Education
  

  Exam Schools from the Inside

  By Chester E. Finn, Jr., Jessica Hockett, Education Next
  
  Education Next, 10/10/2012
  

  At a time when American education is striving to customize its offerings to students’ interests and needs, and to afford families more choices among schools and education programs, the market is pointing to the skimpy supply of exam schools. Moreover, if the best of such schools are hothouses for incubating a disproportionate share of tomorrow’s leaders in science, technology, entrepreneurship, and other sectors that bear on society’s long-term prosperity and well-being, the United States would be better off as a country if it had more of them. This challenge, however, goes far beyond the specialized world of selective high schools. It’s evident from multiple studies that our K–12 education system overall is doing a mediocre job of serving its “gifted and talented” youngsters and is paying too little attention to creating appealing and viable opportunities for advanced learning.

  
  
  
• Education
  

  Solving America’s Math Problem

  By Jacob Vigdor, Education Next
  
  Education Next, 10/10/2012
  

  America’s lagging mathematics performance reflects a basic failure to understand the benefits of adapting the curriculum to meet the varying instructional needs of students. Recently published results from policies such as Chicago’s “double dose” of algebra support differentiation as the best way to promote higher achievement among all students. Not all children are equally prepared to embark on a rigorous math curriculum on the first day of kindergarten, and there are no realistic policy alternatives to change this simple fact. Rather than wish differences among students away, a rational policy for the 21st century will respond to those variations, tailoring lessons to children’s needs. This strategy promises to provide the next generation of prospective scientists and engineers with the training they need to create jobs, and the next generation of workers with the skills they need to qualify for them.

  
  
  
• Budget & Taxation
  

  Fannie and Freddie’s Huge Profits Raise Questions for Future of Mortgage Finance

  By e-21: Economic Policies for the 21st Century, e21: Economic Policies for the 21st Century
  
  Commentary, 10/10/2012
  

  Through June 2012, the GSEs (Fannie Mae and Freddie Mac – and also including Ginnie Mae) accounted for an incredible 100% of the mortgage market. It is remarkable to consider that the government’s 95% share of the mortgage market in 2008 has turned out to be the low-water mark of the past five years. Rather than a temporary phenomenon in the wake of the worst housing crisis since the Great Depression, GSE dominance of mortgage finance continues to grow in strength. The great irony is that this is occurring as officials in Congress and the Administration seem to agree that GSEs should be wound down. The problem is that winding them down requires a comprehensive plan for mortgage finance reform that allows for a seamless transition from the current regime so as to avoid any disruption to the nascent housing recovery. To date, the Administration has offered little more than brainstorming sessions, which makes it more likely that GSE dominance could continue well into the middle of this decade.

  
  
  
• Immigration
  

  When Tragedy Is the Hallmark of Failed Policy: The Death of Agent Nicolas Ivie

  By Janice Kephart, Center for Immigration Studies
  
  Memorandum, 10/10/2012
  

  The ambush of Nicholas Ivie illustrates how political leadership that protects lawbreakers at the expense of law-abiding citizens and law enforcement officers produces tragic results. The President has muzzled investigations of wrongdoing in Operation Fast and Furious to hide the violence and harm it produced, including the death of agents in the field. Nicholas Ivie’s name is now added to the large and growing list of individuals killed on both sides of the border as a result of failed and corrupt policies. But the border can be made secure. It takes a combination of infrastructure, technology, personnel, and policy. The first three are at the fingertips of the President and Congress if they choose to create a secure border. Yet the administration has turned its back on the border in order to enable illegal entry, leaving the borders of the southwestern states unsecured, as illegal aliens stream in and drug cartels become increasingly violent in U.S. borders.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Green Pipeline

  By Brian Seasholes, Capital Research Center
  
  Green Watch, 10/10/2012
  

  The Keystone XL pipeline to transport Canadian oil to U.S. refineries along the Gulf Coast would significantly help American workers and our national security, yet major American donors like the Pew Charitable Trusts have piped millions of dollars to Canadian environmental groups that fight any development of that nation’s oil sands resources. The mainstream media have largely ignored this meddling in Canada’s politics, but the lack of transparency and the possible conflicts of interest involved deserve scrutiny.

  
  
  
• Labor
  

  Knox v. SEIU

  By Patrick Semmens, Will Collins, Capital Research Center
  
  Labor Watch, 10/10/2012
  

  One woman’s refusal to let union bosses take her money to spend on their political agenda has been vindicated by the U.S. Supreme Court after nearly a decade of legal battles. Even better, the Court suggested it is open to further restraints on union money grabs.

  
  
  
• Economic Growth
  

  Boom, Bust, and Beyond: A Look at Housing Market Data in California

  By Doug Houltz-Eakin, Andrew Winkler, American Action Forum
  
  Report, 10/10/2012
  

  Following characteristically different boom and busts, the state of housing recoveries in California are equally varied from housing market to housing market. High unemployment around the state remains a significant barrier to uniform house price increases. Well-intentioned measures like the Homeowners Bill of Rights and recent proposals to use eminent domain to seize mortgages may have the unintended consequences of delaying the recovery, and in the case of eminent domain, jeopardizes investor backing of mortgage finance in those areas.

  
  
  
• Health Care
  

  The State by State Impact of ACA Regulations

  By Sam Batkins, American Action Forum
  
  Report, 10/10/2012
  

  Since passage of the Affordable Care Act (ACA), the American Action Forum (AFF) has tracked the state of its regulatory implementation. To date, the ACA has imposed a total of $27.6 billion in new regulations – at least $20.4 billion in lifetime costs on private entities and $7.2 billion in increased burdens on state budgets. In this paper AAF examines how this $27.6 billion in new costs break down on a state-by-state level. The data show that five states will endure at least $1 billion in ACA regulatory costs.

  
  
  
• Budget & Taxation
  

  A Nation of Takers: America’s Entitlement Epidemic

  By Nicholas Eberstadt, Templeton Press
  
  Book, 10/09/2012
  

  Nicholas Eberstadt details the exponential growth in entitlement spending over the past fifty years. Today, entitlement spending accounts for a full two-thirds of the federal budget, up from less than one-third in 1960. Drawing on an impressive array of data and employing a range of easy-to-read, four color charts, Eberstadt shows the unchecked spiral of spending on a range of entitlements, everything from Medicare to disability payments. But he does not just chart the astonishing growth of entitlement spending, he also details the enormous economic and cultural costs of this epidemic. He powerfully argues that while this spending certainly drains our federal coffers, it also has a very real, long-lasting, negative impact on the character of our citizens. Also included in the book is a response from William Gaston, in which he questions Eberstadt’s conclusions about the corrosive effect of entitlements on character and offers his own analysis of the impact of American entitlement growth.

  
  
  
• Crime, Justice & the Law
  

  State High Court Rulings Indicative of Alabama’s Civil Justice Turnaround

  By Forrest Latta, Washington Legal Foundation
  
  Legal Opinion Letter, 10/09/2012
  

  Alabama’s tort system is winning attention again, except this time for reasons opposite twenty years ago when it earned a dangerous reputation. The distance traveled can be seen in a recent decision by the Alabama Supreme Court, Sandoz, Inc. v. State of Alabama , 2012 WL 2866764 (July 13, 2012), which reversed a $78.4 million verdict against a pharmaceutical manufacturer. The Sandoz decision is a victory for the rule of law, as well as another cautionary tale for states who would consider hiring outside contingency-fee lawyers to aggressively pursue “regulation by litigation.” It also is a healthy sign of Alabama’s turnaround, paralleled—not coincidentally—by major business growth in the state including the announcement of Airbus’s recent decision to locate a U.S. manufacturing facility there.

  
  
  
• Crime, Justice & the Law
  

  Patent Suit Pleading Standards Must Be Conformed to Supreme Court Precedents

  By J High, Washington Legal Foundation
  
  Legal Backgrounder, 10/09/2012
  

  In June, a divided panel of the U.S. Court of Appeals for the Federal Circuit held that the heightened pleading standards of Twombly and Iqbal do not apply to claims of direct patent infringement. This decision clarified pleading issues for now, but leaves, going forward, incongruent pleading standards that require correction. Because Form 18 in the appendix to the Federal Rules of Civil Procedure is the cause of these disparate standards, it should be modified or eliminated without further delay.

  
  
  
• Budget & Taxation
  

  States Moving Away From Taxes on Tangible Personal Property

  By Joyce Errecart, Ed Gerrish, Scott Drenkard, Tax Foundation
  
  Background Paper, 10/09/2012
  

  Compared to real property ad valorem taxation, tangible personal property (TPP) taxation creates greater economic distortions due to the inherent mobility of unat¬tached property. TPP taxation also has other unfavorable aspects such as greater complexity and higher compliance costs as compared to real property taxation. Fortunately, TPP tax levies have decreased nationwide in the past decade, and there are avenues for states to address some of the uncompetitive aspects of tangible personal property ad valorem taxation. For the seven states that continue to tax inventory, exempting inven-tory is an essential first step to reducing economic distortions, compliance burdens, and competitive disadvantages with states with no inventory tax. Second, since TPP is usually taxed locally, offering localities the option to exempt all or new property will create incentives for other localities to reduce or eliminate their reliance. Finally, a number of states have successfully demonstrated that all or most TPP can be exempted from the property tax base.

  
  
  
• Transportation/Infrastructure
  

  Solving the Problem of Traffic Congestion

  By Randal O’Toole, National Center for Policy Analysis
  
  Brief Analysis, 10/09/2012
  

  With increasingly fuel-efficient cars, gas taxes are an ineffective way to pay for roads. Gas taxes are also collected mainly by federal and state governments, requiring local governments to find nearly $30 billion per year in general funds to subsidize roads. Mileage-based fees would eliminate congestion and solve these problems, as well as allow private parties to build or take over some roads. In any case, the growing use of tolls means the federal government has a declining role in highway funding.

  
  
  
• Transportation/Infrastructure
  

  Privatization and Competition in New York City Transit

  By E.S. Savas, National Center for Policy Analysis
  
  Brief Analysis, 10/09/2012
  

  To be effective and held accountable, managers of decentralized transit units will require autonomy and authority. These managers will need to operate outside the typical civil service titles and regulations and the original constricting union agreements. Competitive contracting is neither a heretical notion nor an untested scheme. Many cities do it, and they have much experience to draw upon. It is time for New York to catch up and start saving hundreds of millions of dollars.

  
  
  
• Information Technology
  

  The Impact of Data Caps and Other Forms of Usage-Based Pricing for Broadband Access

  By Daniel Lyons, Mercatus Center
  
  Working Paper, 10/09/2012
  

  In recent years, broadband providers have introduced data caps and other plans that charge customers based on use. While regulators have generally approved of this shift, some consumer groups fear that usage-based pricing will lead to higher prices and deteriorating service. They also fear data caps allow companies like Comcast to protect their cable businesses from upstarts like Netflix. This article evaluates the merits of data caps and other usage-based pricing strategies. Usage- based pricing shifts more network costs onto heavier Internet users. This can reduce costs for others and make broadband more accessible to low-income consumers. Usage-based pricing can also reduce network congestion. While data caps can be used to hurt competition, antitrust law teaches that regulators should intervene only if consumers suffer harm and cannot switch Internet providers. Otherwise, broadband providers should be free to experiment with different pricing strategies to compete for customers and fund future network upgrades.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Liberating the Energy Economy: What Washington Must Do

  By Mark P. Mills, Manhattan Institute
  
  Report, 10/09/2012
  

  In a complete reversal of the widely accepted energy paradigms of declining domestic hydrocarbon production, dependence, and shortage, it is now realistic for America not just to feed the world but to fuel it as well. Policies that accelerate hydrocarbon production could create at least 3 million jobs and $3–$7 trillion worth of economic benefits, radically resetting energy geopolitics, and allowing the United States to make its way out of the current economic and jobs malaise. But it can do so only if the nation adopts new energy policies that reflect the technological, economic, and demographic realities of 2012. This report offers a number of policy prescriptions to facilitate the United States’ development of its enormous energy reserves, such as making the R&D tax credit permanent to encourage innovation, and establishing a single federal portal for approval of all major energy projects.

  
  
  
• Crime, Justice & the Law
  

  Done With “Creative” Government Lawyers

  By James Huffman, Hoover Institution
  
  Defining Ideas, 10/09/2012
  

  The result of creative interpretation of common law rules is the same as of creative interpretation of statutes. Ambiguity becomes a good thing because it leaves room for bureaucrats and judges to solve problems legislatures have failed to address. But ambiguity means uncertainty and bureaucratic and judicial discretion compromise the rule of law. Modern government lawyers may think it antiquated, but Chief Justice Hughes’s admonition to “Uncle Sam’s” lawyers attending the 1931 Federal Bar Association bears repeating: “You are the servants of the laws and not of men. It is not your privilege to bend or distort the law to serve either public or private ends.” Nor should it be the privilege of today’s government lawyers to rummage through the vast accumulation of Congressional enactments for some obscure law that a creative judge might be persuaded to apply to ends never imagined by Congress.

  
  
  
• International Trade/Finance
  

  Countervailing Calamity: How to Stop the Global Subsidies Race

  By Scott Lincicome, Cato Institute
  
  Policy Analysis, 10/09/2012
  

  The world is awash in trade-distorting subsidies, and trade reform is badly needed. By curtailing federal subsidies to favored industries and by reforming countervailing duty procedures to ensure that they serve the rule of international trade law—rather than protectionist objectives—the U.S. government can reduce market distortions, restore some faith in free markets, and lead national and international subsidy reform initiatives.

  
  
  
• The Constitution/Civil Liberties
  

  U.S. v. Jones: Fourth Amendment Law at a Crossroads

  By Jim Harper, Cato Institute
  
  Policy Report, 10/09/2012
  

  The Court should abandon Caballes and no longer use its parent, the “reasonable expectation of privacy” test, in Fourth Amendment cases. Instead it should use the plain meanings of terms like “search” and “seizure” and the actual holding of Katz v. United States, which turned on physical protection of information—not “expectations”—to administer the Fourth Amendment.

  
  
  
• Budget & Taxation
  

  2013 State Business Tax Climate Index

  By Scott Drenkard, Joseph Henchman, Tax Foundation
  
  Background Paper, 10/09/2012
  

  The Tax Foundation’s 2013 edition of the State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare.

  
  
  
• Budget & Taxation
  

  Fiscal Policy Report Card on America’s Governors 2012

  By Chris Edwards, Cato Institute
  
  Special Report, 10/09/2012
  

  This year’s 11th biennial fiscal report card on the nation’s governors examines state budget actions since 2010. It uses statistical data to grade the governors on their taxing and spending records—governors who have cut taxes and spending the most re¬ceive the highest grades, while those who have increased taxes and spending the most receive the lowest grades.

  
  
  
• Health Care
  

  Prioritizing Malaria Control in a Time of Foreign Aid Austerity

  By Roger Bate, Kimberly Hess, American Enterprise Institute
  
  Health Policy Outlook, 10/09/2012
  

  While America’s global health budget consumes only a fraction of one percent of total government spending, these funds can mean life or death for thousands around the globe. In straightened financial times, budget cuts should be based on an assessment of which programs work best and an evaluation of how to strengthen the most successful interventions while trimming the fat from less effective ones. This Outlook assesses the impact and effectiveness of the President’s Malaria Initiative (PMI) and finds that PMI has been remarkably successful in its management and control practices, cutting malaria incidence and child mortality rates, compensating for failures in other global health programs, and keeping corruption levels low. Despite all these strengths, PMI faces nearly 5 percent budget cuts (or even termination by the end of 2013), while other multilateral programs that are widely acknowledged to be less effective are picking up new money.

  
  
  
• Budget & Taxation
  

  The Romney Tax Plan: Not a Tax Hike on the Middle Class

  By Alex Brill, American Enterprise Institute
  
  The American, 10/09/2012
  

  The Democrats’ attacks that Romney wants to raise taxes on the middle class are false. The real story, however, should be about the substantive policy visions of each of the candidates. Romney has proposed a bold tax reform that would broaden the tax base and lower statutory tax rates across the board. While maintaining preferential rates for savings and investment, his proposal repeals the tax expenditures that distort economic decisions and add complexity to tax returns. There is plentiful economic evidence that tax reform could result in measurable economic growth. Although Obama has no such plan for tax reform, his vision for the tax system appears clear. He has refused to endorse the recommendations of the Simpson-Bowles Commission, which would also have lowered statutory tax rates and broadened the tax base. Instead, his near-singular focus has been to raise statutory tax rates for high-income households and to leave untouched hundreds of special tax breaks for various political constituencies.

  
  
  
• Foreign Policy/International Affairs
  

  Al Shabaab After Kismayo

  By Katherine Zimmerman, American Enterprise Institute
  
  AEI Critical Threats Project, 10/09/2012
  

  Al Shabaab as an organization will likely have to adapt after the loss of the city of Kismayo. The fall of Kismayo may intensify divisions within the group’s leadership over whether al Shabaab should pursue a national agenda to establish an Islamic state in Somalia or whether al Shabaab should pursue a regional, or global, agenda of jihad. There is already evidence that al Shabaab leaders focused on establishing an Islamic state in Somalia are beginning to splinter away from the group. The core leaders who believe in regional and global jihad will be strengthened should these nationalist leaders continue to peel away from the group. Resources that would otherwise be devoted toward financing a local fighting force and governing areas could instead go toward funding terrorist operations. Though the overall strength of the group may be weakened, the resolve of its leaders to pursue regional and global jihad has not been weakened.

  
  
  
• Monetary Policy/Financial Regulation
  

  All That Glitters: A Primer on the Gold Standard

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 10/09/2012
  

  The periodic debate around whether the United States should adopt a gold standard—a monetary system tied to the value of gold—has heated up again recently. Though some see such a system as a way to prevent inflation and excessive government debt accumulation, history has proven that it can lead to instability and sharp periods of inflation or deflation, as seen during the Great Depression and in the failure of the Bretton Woods monetary policy system in the early 1970s. Serious consideration of a widespread return to a gold standard would be warranted only if the Federal Reserve’s recent QE3+ quantitative easing measures and economic stability around the world lead to prolonged periods of high inflation and if a major world economic player—such as the United States or Great Britain—is willing and able to peg its currency to gold to provide a benchmark for price stability.

  
  
  
• Budget & Taxation
  

  A Simple Measure of the Distributional Burden of Debt Accumulation

  By Aspen Gorry, American Enterprise Institute
  
  Working Paper, 10/09/2012
  

  This paper proposes a simple measure to compute the distributional burden of federal debt. The measure is the real annual cost for servicing the debt and can easily be computed using the nominal value of government debt and expected real interest rates. The distributional impact can then be computed using assumptions about the method by which debt service is financed. Using this method, the author computes the average annual cost for each income group for one trillion dollars of debt and then apply the methodology to the historical accumulation of debt and to projected accumulations of debt under current law, current policy, and the Administration’s budget. Given high levels of deficit financing under nearly all policy outlooks, understanding the distributional burden of servicing debt is important.

  
  
  
• Foreign Policy/International Affairs
  

  NATO Must Refocus on Afghanistan

  By Luke Coffey, The Heritage Foundation
  
  Issue Brief, 10/09/2012
  

  On October 9–11, the North Atlantic Treaty Organization’s 28 defense ministers will meet in Brussels. The top priority for the United States at this ministerial meeting should be ensuring that NATO demonstrates resolve and commitment to Afghanistan—especially in light of the recent “green on blue” attacks. The Alliance needs to realize that reforms such as Smart Defense will be meaningless and the credibility of the Alliance will be in doubt if it is not successful in its current operations.

  
  
  
• Economic Growth
  

  Heritage Employment Report: September Job Creation Still Slow

  By James Sherk, Salim Furth, The Heritage Foundation
  
  Issue Brief, 10/05/2012
  

  The Bureau of Labor Statistics (BLS) September payroll survey finds that employers added a net 114,000 new jobs, continuing the trend of slow employment growth during the recovery. The substantially divergent job growth reported in the household survey and the associated drop in the unemployment rate is inconsistent with other economic indicators and may represent statistical sampling error. Part of this sluggishness is due to the sharp decline in employment at start-up companies, which has hit record lows. Impending tax increases make it more risky to hire, and excessive regulations make it more expensive to start up new businesses. Congress and the Administration should reduce barriers to starting a business instead of increasing them.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope

  By John A. Allison, McGraw-Hill
  
  Book, 10/05/2012
  

  Not only is free market capitalism good for the economy, says industry expert John Allison, it is America’s only hope for recovery. As the nation’s longest-serving CEO of a top-25 financial institution, Allison has had a unique inside view of the events leading up to the financial crisis. He has seen the direct effect of government incentives on the real estate market. He has seen how government regulations only make matters worse. And now, in this controversial wake-up call of a book, he has given a solution. Readers will learn how government incentives helped blow up the real estate bubble to unsustainable proportions, how financial tools such as derivatives have been wrongly blamed for the crash, and how Congress fails to understand it should not try to control the market—and then completely mismanages it when it tries. In the end, readers will understand why it’s so important to put “free” back in free market.

  
  
  
• Monetary Policy/Financial Regulation
  

  A Housing Market Without Fannie Mae and Freddie Mac: The Effect on Housing Starts

  By Nahid Anaraki, The Heritage Foundation
  
  Special Report, 10/04/2012
  

  This empirical study tries to identify the main determinants of housing starts by measuring the responsiveness of housing starts to the mortgage interest rate compared with economic fundamentals at the national and regional levels. If housing starts are not responsive to changes in the mortgage interest rate, then interventions by government-sponsored enterprises in the housing market that lower mortgage interest rates would not significantly affect housing starts. Econometric analysis of the supply side of the housing market suggests that economic fundamentals, not mortgage interest rates, drive housing starts. Therefore, shutting down Fannie Mae and Freddy Mac would likely have little effect on the housing starts.

  
  
  
• Budget & Taxation
  

  Citizen’s Guide to Senate Joint Resolution 8221: To Reduce Washington’s Constitutional Debt Limit

  By Jason Mercier, Washington Policy Center
  
  Policy Note, 10/04/2012
  

  Washington is a high-debt state and has seen a growing percentage of the operating budget going to pay for debt service instead of funding other public services. SJR (Senate Joint Resolution) 8221’s proposed phase down of the state’s constitutional debt limit from 9% to 8% by 2034 would help reduce this problem while providing a more predictable capital budget cycle. Washington Policy Center recommends adopting reforms like those proposed by SJR 8221 that would help reduce the state’s debt burden on taxpayers. SJR 8221 would strengthen the state’s finances by implementing the recommendations of the Commission on State Debt and would free up more of the state’s operating budget in the future for education spending and other important public programs.

  
  
  
• Education
  

  Citizens’ Guide to Initiative 1240: To Allow Public Charter Schools in Washington

  By Liv Finne, Washington Policy Center
  
  Policy Brief, 10/04/2012
  

  Initiative 1240 would allow 40 public charter schools to open over five years, eight schools each year. A charter school is a community-based public school that operates independently of central district management and administrative rules. Charter schools are tuition free and open to all students. Charter schools must comply with the same civil rights, nondiscrimination and public safety laws that apply to all schools. This Citizens’ Guide provides an overview of schools, summarizes Initiative 1240’s main provisions, reviews the academic success of charter schools in other states, and reviews the main arguments made against charter schools. Based on these findings, this study concludes that allowing a limited number of charter schools within public education would improve learning outcomes, reduce the dropout rate and open new learning opportunities for children, especially in communities that are underserved by the current education system.

  
  
  
• Labor
  

  Did Your Teen Find a Summer Job?

  By Eric Shannon, Washington Policy Center
  
  Policy Note, 10/04/2012
  

  For 10 years Washington has had one of the highest youth unemployment rates of any state. Washington also has had the nation’s highest minimum wage. Numerous studies show there is a cause-and-effect relationship between the two. Washington Policy Center has long recommended lawmakers allow employers to pay a training wage of 85% of minimum wage for young workers up to age 25. The law currently allows this temporary wage only for 14 and 15 year olds, but given Washington’s high unemployment rate for 16- to 24-year-olds, it is obvious a much larger segment of young workers is in need of relief. It should be noted that this policy enjoys broad support. A time-limited training wage would expand youth employment by making it economical for employers to hire low-skill workers just entering the work force. The result would be more young adults being hired, and reducing the long-lasting “wage scarring” and other long-term consequences created by prolonged periods of unemployment for young workers.

  
  
  
• Health Care
  

  Biosimilars: The Precarious Struggle Between Cost-Driven Health Care Policy and Patient-Centered Care

  By Peter J. Pitts, Roger Stark, Washington Policy Center
  
  Policy Brief, 10/04/2012
  

  Biosimilar drugs offer the very real possibility of providing patients with quality alternative medicines and enhanced treatments at better prices. But bringing biosimilar drugs to patients depends on achieving a transparent, predictable, competitive marketplace, protected by strong intellectual property and regulatory systems. As the key issues highlighted in this paper are addressed by policymakers, regulators, physicians, payers and others, then as a consequence, high-quality, safe and effective biosimilars will provide patients and prescribers additional treatment options and expand access by offering lower-cost alternatives for biologic medicines. The emphasis, however, must stay laser focused on “high-quality, safe and effective.”

  
  
  
• Transportation/Infrastructure
  

  There’s More Than One Way to Pave a Road: A Study of Alternatives for Tennessee Transportation Funding

  By Paul C. Stumb, Kaleigh Walker, Alexandria Wood, Beacon Center of Tennessee
  
  Policy Report, 10/04/2012
  

  With the intent of improving public policy in the state of Tennessee, this policy report examines alternative funding techniques for transportation infrastructure that have been considered or adopted by other states, and explores the benefits and shortcomings of each. These include: public-private partnerships (PPPs); tax increment financing (TIF); tolling; vehicle miles traveled (VMT) taxes; congestion pricing, vehicle weight-mile taxes; state infrastructure banks (SIBs); vehicle C02 emissions, taxes, and fees; mass transportation; debit instruments; and increasing the fuel tax. In the end, this report concludes that the solution set that appears most desirable includes a VMT tax in which the vehicle owners and operators who benefit most from the road system bear the largest burden for maintain it.

  
  
  
• Budget & Taxation
  

  Sales Tax Pooling Should Be Expanded in Missouri

  By David Stokes, Show-Me Institute
  
  Testimony, 10/04/2012
  

  Many key Missouri counties should carefully consider sales tax pooling. While it may sound great that cities compete with each other for retail development, the reality is that the effects of that government competition have been devastating for Missouri. It has resulted in tax giveaways and home takeaways, all for the sake of bureaucrats trying to plan our local economies. The government planning and the abuse of TIF have failed to benefit our state’s economy. It has not grown jobs or opportunity. There is a better way; a more free-market oriented way. Sales tax pools are a more free market change that encourages growth for the whole region instead of having cities fight with each other for retail development. Missouri counties need to move in that direction.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Limits of Wind Power

  By William J. Korchinski, Julian Morris, Reason Foundation
  
  Policy Study, 10/04/2012
  

  Environmentalists advocate wind power as one of the main alternatives to fossil fuels, claiming that it is both cost effective and low in carbon emissions. This study seeks to evaluate these claims. The analysis reported in this study indicates that 20% would be the extreme upper limit for wind penetration. At this level the CO2 emissions reduction is 90g of CO2 equivalent/kWh, or about 18% of total emissions from electricity generation. Using wind to reduce CO2 to this level costs $150 per metric ton (i.e. 1,000 kg, or 2,200 lbs) of CO2 reduced. Very high wind penetrations are not achievable in practice due to the increased need for power storage, the decrease in grid reliability, and the increased operating costs. Given these constraints, this study concludes that a more practical upper limit for wind penetration is 10%. At 10% wind penetration, the CO2 emissions reduction due to wind is approximately 45g CO2 equivalent/kWh, or about 9% of total.

  
  
  
• Elections, Transparency, & Accountability
  

  Restoring Federalism: Compendium of Winning Entries, 21st Better Government Competition

  By Pioneer Institute, et al., Pioneer Institute for Public Policy Research
  
  White Paper, 10/04/2012
  

  Past Competitions have often focused on specific policy areas. This year’s theme is “Restoring Federalism,” a seemingly more abstract notion that should interest you for three reasons: First, the explosion in the federal government’s scope has reached into minute aspects of how states and localities provide services. In some cases necessary to protect the rights of individuals, this federal mission creep into health care, education, and other services, is a recipe for sclerosis and poor quality service. Second, federal overreach minimizes policy experimentation and innovation; Justice Brandeis did not speak of a single “laboratory of democracy.” We no more think of the federal government as a hub of innovation than we do monopolistic companies. Finally, an ever expanding federal mandate has lowered an “accountability fog” on state and local government. With multiple government players involved in delivering services, who is accountable when there is a problem? Who do you call?

  
  
  
• The Constitution/Civil Liberties
  

  Individual, Community, and State: How to Think About Religious Freedom

  By Matthew J. Franck, Hillsdale College
  
  Imprimis, 10/04/2012
  

  Individuals of faith, joined in communities of faith, forming a civil society imbued with the many faiths of those many communities, own this country. The state’s authority comes from the people, and its power—the power of its elected employees—cannot be greater than what they can rightfully give it. The people cannot give the state power over the conscience of men and women, because they do not themselves have any right to come between God and our fellow citizens. The sooner the nation’s elected employees remember these foundational truths, the sooner the nation may begin to recover a healthy notion of religious freedom.

  
  
  
• Health Care
  

  Coordinated Care Management for Medicare and Medicaid Beneficiaries

  By Grace-Marie Turner, Robert Helms, Galen Institute
  
  Studies, 10/04/2012
  

  Doctors and patients, not government, should control health care decisions. Changes are needed at the federal level to loosen regulatory reins and give states more flexibility and control over resources so they can develop programs to better serve patients who are dually-eligible for Medicare and Medicaid. The policies outlined in this paper intended to provide better care for dually-eligible patients already are beginning to be tested in demonstration programs around the country, and learning from these programs can help provide a roadmap to state and federal officials to improve the programs for the future. States are ready to take the lead.

  
  
  
• Health Care
  

  Part D Is Still Working

  By Grace-Marie Turner, Galen Institute
  
  Galen Reports, 10/04/2012
  

  Private competition in Medicare Part D has led to lower prices and more choices for seniors, and the program is saving money for taxpayers as well. Part D represents the first significant initiative to rein in health spending by restoring personal responsibility and incentives for savings to Medicare beneficiaries. In doing so, it shows that government can leverage free-market forces to cut costs while giving seniors more choices. The average basic premiums for Medicare prescription drug plans are half what they were expected to be at this point when the program was enacted in 2003 – about $30 a month vs $60 a month from the initial estimates. Congress would be well-advised to apply the Part D model of competition and consumer choice to modernization of the overall Medicare program in the future.

  
  
  
• Information Technology
  

  Spectrum Rules for Reducing Uncertainty Must Reject Unduly Regulatory FCC Precedents

  By Seth L. Cooper, Free State Foundation
  
  Report, 10/04/2012
  

  New FCC (Federal Communications Commission) rules regarding spectrum license acquisition and use offer the promise of a more predictable and certain administrative process. Reducing regulatory uncertainty will better incentivize wireless providers to engage in efficient and output-enhancing market transactions to obtain and use spectrum licenses. But a pro market emphasis in new FCC spectrum rules is critical to ensuring that regulatory uncertainty is reduced and that improved efficiency is realized. The restrictive, pro-regulatory approach taken in prior FCC orders reviewing transfers of spectrum licenses must be curbed. New FCC spectrum rules must reflect the dynamism of the wireless marketplace and the potential economic benefits flowing from heavy investment in next-generation wireless networks.

  
  
  
• Education
  

  The Way of the Future: Education Savings Accounts for Every American Family

  By Matthew Ladner, Friedman Foundation for Educational Choice
  
  Studies, 10/04/2012
  

  Nobel Prize-winning economist Milton Friedman proposed a system of school vouchers more than 50 years ago as a method for improving education outcomes and efficiency. Technological advances allow today’s school choice advocates to design programs that replace state-funded vouchers redeemable at a school of a parent’s choice with actual accounts parents can manage down to the last penny. Through ESAs, parents can choose between a much wider gamut of instructional approaches, including private schools, private tutors, online educational programs, or higher education. This key design feature creates an incentive for parents to judge education service providers both on quality and cost—a unique and crucial trait in publicly financed K-12 education. An ESA (Education Savings Account) approach will create powerful incentives for education service providers to provide the largest possible bang for the education buck.

  
  
  
• Health Care
  

  The Price of Public Health Care Insurance: 2012 Edition

  By Nadeem Esmail, Milagros Palacios, Fraser Institute
  
  Research Study, 10/04/2012
  

  Canadians often misunderstand the true cost of their public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care, and partly because Canadians cannot readily determine the value of their contribution to public health care insurance. In 2012, the estimated average payment for public health care insurance ranges from $3,418 to $11,401 for six common Canadian family types, depending on the type of family. For the average Canadian family, between 2002 and 2012, the cost of public health care insurance increased more than twice as fast as the cost of shelter, roughly four times as fast as food, more than five times as fast as clothing, and 1.6 times faster than average income. The 10 percent of Canadian families with the lowest incomes will pay an average of about $487 for public health care insurance in 2012. The 10 percent of Canadian families who earn an average income of $55,271 will pay an average of $5,285 for public health care insurance, and the families among the top 10 percent of income earners in Canada will pay $32,628.