Updated daily, InsiderOnline is a compilation of publication abstracts, how-to essays, events, news, and analysis from around the conservative movement. The current edition of THE INSIDER quarterly magazine is also on the site.
August 13, 2010 Latest Studies
25 new items, including a Show-Me Institute expose on school administrator pay, and a Reason Foundation report on how to fix highway funding
Blog Entries
Got $16.1 billion? a bill with no name, get ready to read the Constitution, and more
Latest Studies Budget & Taxation
• 2010 Social Security Trustees Report Continues to Show the Urgency of Reform – The Heritage Foundation •
The Obama Tax Hikes: Killing Job Creation – The Heritage Foundation •
Rhetoric and Reality: Pension Benefits for Retired Massachusetts State Workers – Pioneer Institute for Public Policy Research
Crime, Justice & the Law
• Grokster Redux: Why the Summary-Judgment Ruling in Viacom v. YouTube Should Be Reversed – Progress & Freedom Foundation
Economic and Political Thought
• The Great Depression and Keynes’s General Theory: Chapter 5 from The Clash of Economic Ideas – Mercatus Center
• The New Deal and Institutionalist Economics: Chapter 4 from The Clash of Economic Ideas – Mercatus Center
Economic Growth
• A Prescription for Export Growth—and Economic Recovery – The Heritage Foundation
• Cronyism: Undermining Economic Freedom and Prosperity Around the World – The Heritage Foundation
• Heritage Employment Report: July Jobs Scarce – The Heritage Foundation
• The President’s Worrisome Narrative to Discourage Homeownership – The Heritage Foundation
Education
• Pay for Performance in the Pittsburgh Public Schools: Will It Pay Off? – Allegheny Institute for Public Policy
• Success from the Sunshine State: When Illinois Schools are Failing, It’s Time to Copy Florida’s Winning Strategies – Illinois Policy Institute
• Reforms with Results: What Oklahoma Can Learn from Florida’s K-12 Education Revolution – Oklahoma Council of Public Affairs
• Actual Pay: A Survey of Missouri Public School Superintendent Salary and Benefits Package – Show-Me Institute
Family, Culture & Community
• You're Teaching My Child What? The Truth About Sex Education – The Heritage Foundation
Foreign Policy/International Affairs
• The Kampala Aftermath: The U.S. Should Remain Wary of the ICC – The Heritage Foundation
• Honesty for Hire – Hoover Institution
Health Care
• Medicare Trustees Issue Report Disavowed by Chief Actuary – The Heritage Foundation
• Taking Control of the Health Care Debate: Avoiding the Mistakes of the 1990s – The Heritage Foundation
• When You Need a Hospital, Will It Be There?: The Stifling Impact of Illinois’s Certificate of Need Program – Illinois Policy Institute
National Security
• How to Defeat the Drug Lords at Last – Hoover Institution
Natural Resources, Environment, and Science
• Critical Lessons from the Federal Response to the Gulf Oil Spill – The Heritage Foundation
Regulation & Deregulation
• The Failure of Control States to Reduce Alcohol-Related Problems – Virginia Institute for Public Policy
Retirement/Social Security
• 2010 Social Security Trustees Report: Reform Needed Now – The Heritage Foundation
Transportation/Infrastructure
• Restoring Trust in the Highway Trust Fund – Reason Foundation
Blog Entries What Arabs Think of the United States President Obama’s hopes for a “new beginning” for U.S. relations with the Middle East has not produced a positive shift in Arab opinion toward the United States. In fact, the 2010 Arab Public Opinion Poll shows that only 16 percent of Arab’s polled express optimism about U.S. foreign policy, while 64 percent express pessimism. Shortly after President Obama’s Cairo speech last April, 51 percent had expressed optimism. But here is the figure that should really worry U.S. policymakers: According to the poll, a slight majority now sees a nuclear-armed Iran as positive for the Middle East. Heritage’s Helle Dale says one positive step would be for the State Department to focus a little more on the terrible human rights situation in Iran and in the Arab countries, and a little bit less on training young Arabs to use Twitter.
An Entrepreneurial Solution to Corruption
Outsourcing some government functions can help developing countries overcome corruption, suggest Kris Mitchener and Noel Maurer in the Hoover Digest. In particular, they write about the positive results that a number of countries have experienced from turning over the administration of revenue collection to foreign entities. The U.S. government actually did this for the Dominican Republic, Haiti, and Nicaragua in the early part of the 20th century. Today, the British non-profit Crown Agents has been contracted by Angola, Mozambique, Latvia, Kosovo, Macedonia, and Bulgaria to run their customs services. The results have been very positive:
In Angola, revenue jumped more than 50 percent in the first year of operation (2001), doubled in two years, and tripled by 2004, during a time when oil prices remained low and Angola lowered tariffs to meet commitments under the General Agreement on Tariffs and Trade. Mozambique saw a similar increase. In Bulgaria, revenues jumped 19 percent during the quarter in which teams led by Crown Agents began operating. Why does this work?
Crown Agents officials face a completely different set of incentives from officials in a high-corruption government. Crown Agents employees risk losing attractive, high-wage career paths and damaging the credibility of their organization should they decide to engage in or tolerate corrupt behavior. Because the agents had an incentive to maximize revenue collection and punish corrupt behavior, Angola was able to break the corruption equilibrium in customs, generate greater public revenue, and show the way to further reforms.
Aid to States Outpaces Overall Fed Spending
It’s not just the size of the federal government that should concern citizens, but the scope of its activities, too. The chart below (Bloomberg’s chart of the day, uploaded at The Big Picture blog) provides one indicator of how much that has expanded. Federal aid to the states often comes with strings attached, which has shifted states from being sovereign entities into being more or less administrative arms of the federal government. Federal aid to the states has grown even faster than overall federal spending over the last century.
Coming Up: Values Voter Summit
Don’t forget the Values Voter Summit, which is coming up on September 17 – 19. The event includes a lot of interesting panels and talks, including one on how much economic conservatives and social conservatives have in common. You can learn more about that from our post on it last month.
Goldwater Institute Sues Obamacare
The Goldwater Institute has filed a legal challenge to Obamacare. This is a private lawsuit separate from the challenge that 22 states have launched against Obamacare for intruding on state powers to regulate insurance. Here is the first part of the filing summing up the case:
The federal government does not have the constitutional power to mandate that Plaintiff Nick Coons and other American citizens purchase health insurance, much less surrender their medical privacy and autonomy, as a condition of living in the United States. Further, it is a violation of the letter and spirit of the United States Constitution to burden the legislative voting powers of Arizona state legislators … to coerce implementation of federal health care regulations. Moreover, Congress has no constitutional power to delegate nearly unlimited legislative power to any federal executive branch agency, much less to entrench health care regulations against review, debate, revision or repeal by Plaintiffs Jeff Flake, Trent Franks and John Shadegg or any other elected U.S. Representative or Senator. Such federal overreaching must be rejected if the principles of limited government and the separation of powers established by the United States Constitution mean anything.
What If Things that Have No Chance of Happening Happen? Asks Medicare’s Actuaries
As the New York Times tells it, Obamacare has added 12 years of solvency to Medicare’s financial projections. That’s on the authority of the latest set of projections by the Medicare trustees. It appears, however, that the Times reporter didn’t actually read the report very carefully, because if she had she couldn’t have failed to notice that it was a report that disclaimed the very set of projections it was offering.
Why would such a report be issued at all? Every year, the Medicare trustees are required to report on the programs’ solvency based on how the program will be run under current law. Obamacare purports to achieve savings in Medicare by reducing payments to providers. But as Richard Foster, Medicare’s chief actuary, explains in the report, those planned cuts in reimbursements cannot happen without severely restricting the supply of providers who are willing to participate in the program. Foster writes:
By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior law. Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems for Medicaid enrollees, and far below the levels paid by private health insurance. Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as Congress has done repeatedly in the case of physician payment rates, would lead to far higher costs for Medicare in the long range than those projected under current law. The projections also make unrealistic assumptions on the tax side, as James Capretta points out:
Initially, the law’s steep payroll-tax hike of 0.9 percent of wages will apply only to individual taxpayers with annual incomes exceeding $200,000 and couples with incomes exceeding $250,000. But those income thresholds will not increase with general inflation in the economy. Consequently, as the years pass, more and more Americans, including the middle class, will pay it — at least that’s the theory. Overall, the Medicare tax hikes in the new law are expected to raise about $1.4 trillion over 75 years, in present-value terms. But that assumes America’s middle class will placidly accept the return to the bad-old days of “bracket creep.” A more realistic assumption would be that elected leaders will come under pressure in short order to prevent such a massive tax hike on the middle class and respond accordingly, much as they do today in trying to minimize the tax hikes associated with the alternative minimum tax.
Read the Constitution, Especially on September 18
Do you care about what’s in the United States Constitution? Some people wonder about things like: Can the government really can force everyone to buy health insurance. If you are one of those people then you need to make sure you know what the Constitution says so that you can be informed about that debate.
On September 18, 2010, thousands of citizens across the country will participate in public readings of the U.S. Constitution. The readings are expected to take about an hour. Even if you already have a good knowledge of what the Constitution says, participating is a great way to promote greater awareness among your fellow citizens. So check out the Web site, WeReadtheConstitution.com, to sign up to host a reading, or find out where a reading is being held near you.
Senate Passes Bill with No Name
Last week the Senate was so eager to hand out another $26 billion in bailouts that it forgot to name the bill it passed to provide that funding. The version of the bill that was passed, H.R. 1586, can be seen at Thomas, Congress’s legislation tracking site, with the title “_______Act of______.” Apparently, in the process of amending the bill, placeholder text was used for a new title and was never fixed before the Senate voted on the bill. As noted by WashingtonWatch.com, which first reported the oversight on Sunday, in order to rename the bill, the Senate would have to return from its break and vote on an amended version. And if the House passes the same bill but includes a title, then the Senate will have to vote again on that version. Under the Constitution, the Senate and the House have to pass identical versions of a bill before it can be presented to the President for signing into law. So the country may well have a law titled the “_______Act of______.” These are the folks spending your money.
Got $16.1 Trillion?
In order to meet future Social Security obligations in perpetuity, the government would need an extra $16.1 trillion invested today, according to the latest report of the Social Security Trustees. That figure represents the funding gap over and above the revenues that will be generated by the payroll tax system in the future. The more commonly cited figure is the 75-year deficit which now stands at $7.9 trillion. As Heritage’s David John explains in his recent paper, the higher figure for the in-perpetuity calculation means that Social Security’s deficits continue to grow beyond 2084 and that proposals to close the 75-year gap—such as adding two percentage points to the payroll tax—are not sufficient to fix the problem. For more on what the latest trustees’ report means, see David John’s paper, “2010 Social Security Trustees Report Continues to Show the Urgency of Reform,” published by The Heritage Foundation, August 5, 2010.
Have a tip for InsiderOnline? Send us an e-mail at insider@heritage.org with "For Insider" in the subject line. Follow us on Twitter: http://twitter.com/InsiderOnline.
Looking for an expert? Visit PolicyExperts.org.
The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002-4999 phone 202.546.4400 | fax 202.546.8328 You are subscribed to this newsletter as mark.kelly@heritage.org.
If you want to receive other Heritage Foundation newsletters or opt out of this newsletter please
click here to update your subscription preferences.
Mark KellyDeputy Director, Coalition Relations
The Heritage Foundation
214 Massachusetts Avenue, NE
Washington, DC 20002
202-608-6051
heritage.org |
| It’s Coming: The Obama Tax Hike
President Obama wants to drastically raise your taxes in January 2011.
The Heritage Foundation is committed to building an America where freedom, opportunity, prosperity, and civil society flourish.. |
