AEI » Latest Content http://www.aei.org American Enterprise Institute: Freedom, Opportunity, Enterprise Fri, 30 Jan 2015 15:11:08 +0000 en-US hourly 1 Surveying the Field: Super Bowl XLIXhttp://www.aei.org/publication/surveying-field-super-bowl-xlix/ http://www.aei.org/publication/surveying-field-super-bowl-xlix/#comments Fri, 30 Jan 2015 14:58:24 +0000 http://www.aei.org/?post_type=publication&p=829782 The Super Bowl is one of the most popular sporting events of the year. But how popular is football compared to other all-American sports, such as baseball or basketball? And how popular are the teams participating in this year’s game?

Since 1937, Gallup has asked Americans what their favorite sport is to watch. Since then, football, baseball, and basketball have been Americans’ top three responses—but not always in that order. In 1937, 34 percent of Americans said baseball was their favorite sport to watch, with 23% choosing football and 8% basketball. It was not until 1972 that football surpassed baseball as Americans’ favorite, with 32% choosing football and 24% baseball. The last time Gallup asked this question in 2013, 39% of Americans said football was their favorite sport to watch, far surpassing the 14% who chose baseball and the 12% who chose basketball (see featured graph).

It comes as no surprise, then, that a strong majority of Americans say they are fans of professional football. The last time Gallup asked this question in 2012, two-thirds (67%) gave that response.

Fan of professional football poll

As for this year’s competitors, one team is leading in the pre-game polls. In Public Policy Polling’s January 2015 combined telephone and online survey, 45% of voters had a favorable opinion of the Seattle Seahawks, compared with 30% who had a favorable opinion of the New England Patriots. Although the Seahawks are further down the field, there may be room for the Patriots to make a come-back: over a third of voters said they were not sure about how they felt about either team.

2015 Superbowl poll

According to the fans, the Seahawks look closer to making a first down. Thirty-six percent of voters said they would be rooting for Seattle, 35% were not sure, and 29% said the Patriots.

Superbowl winning team poll

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Obamacare’s bad math will force insurers to downgrade earningshttp://www.aei.org/publication/obamacares-bad-math-will-force-insurers-downgrade-earnings/ http://www.aei.org/publication/obamacares-bad-math-will-force-insurers-downgrade-earnings/#comments Fri, 30 Jan 2015 14:41:32 +0000 http://www.aei.org/?post_type=publication&p=829785 Some of the biggest health insurers are baking faulty math into their earnings forecasts by factoring in payments from Uncle Sam that may never materialize.

Two events this week could force a reckoning between their wishful arithmetic and common auditing standards – forcing insures to downgrade their earnings.

At issue are risk-sharing arrangements contained in Obamacare that are meant to help offset losses insures might take as the program gets started. Collectively, these programs have become known as “the three Rs” because of their three elements.

The first component is risk adjustment — a mechanism for transferring funds from plans that enroll low-risk members to plans that attract high cost enrollees. The second piece is a reinsurance scheme. The government will cover a percentage of the losses for high cost enrollees whose medical bills fall above a certain threshold.

It’s third element – the risk corridors — that’s likely to cause the earnings woes.

The idea here is to share the financial risk with Uncle Sam. If the actual medical claims for any individual Obamacare plan fall above or below 3% of some target amount, then the health plan will keep all the gains or losses itself. Here’s the rub. For anything outside that threshold, Uncle Sam will split the money with the health plan, essentially capping their upside and protecting their downside. Specifically, for the first 5% of gains or losses, the government will split it 50/50 with the plans. For anything above that, the government will take 80% of the extra gains or losses.

The controversial wrinkle is this: By the estimation of many, the program was intended to be budget neutral – basically paying for itself by transferring money from insurers that made profits to those that did not. The problem was that there weren’t enough Obamacare plans making money to fund the kitty. So like many other parts of Obamacare, the President re-interpreted the rules, and said that the risk corridors could be funded off taxpayer money that was skimmed from other programs. In other words, the monetary obligations would become open ended.

So Republicans tacked on a measure to the stopgap “Omnibus” spending bill last month to cap that probable spending. It requires the risk corridors to be budget neutral in each of the three years that the money is available, from 2014-2016.

While most of the public health plans have told investors that they have not accrued much for risk corridors receivables in 2014, there are some notable exceptions. The biggest may be Humana. Moreover, even for the insurers that aren’t planning on getting big checks, across the board, the managed care industry’s pricing in the public exchanges was more competitive than many expected for 2015.

Analysts widely believe that the health plans drew increased comfort that their downside margins would be protected by the promise of federal funding from the risk corridors, and the willingness of the Obama team to turn this into an open ended entitlement. That money is believed to be a key reason why the insurers were able to hold down their 2015 rate increases for the Obamacare plans. If the money doesn’t materialize, those thinly priced plans could generate excess losses.

Humana provides a good example of how much this money factors into the health plans’ analysis. According to analysts at Deutsche Bank , Humana’s 2015 guidance shows a benefit from the 3Rs of roughly $325-400 million. Assuming an equal split between risk adjustment and risk corridors, the loss of federal funding comes out to about a 2% hit to the company’s earnings guidance. That’s how much Humana could stand to lose if the company is unable to access taxpayer funding as a way to subsidize these payments. The earnings hit could total as much as 4% for 2014.

Cigna and Health Net are two of the other big insurers that also seem to have bet more heavily on money from the risk corridors. Other health plans have budgeted more conservatively. United Healthcare, for example, projected very little money from the programs.

Two recent events may force all of the health plans that incorporated the risk corridor money into their earnings to issue revisions to those forecasts.

First, the Congressional Budget Office downgraded its categorization of the risk corridor program in the federal budget, changing it to discretionary from mandatory. This is a clear declaration that will reinforce the view that the money may never materialize. Auditors will have to take note of this formal change. The CBO also reduced its projected spending from the risk corridor program for 2015-2017 to $5 billion, from an earlier estimate of $9 billion. This is another explicit signal that CBO believes that potential the funding stream may be over-estimated.

The uncertainty of this funding was underscored by another event this week: the planned liquidation of the CoOportunity Health co-op in Iowa and Nebraska. In that unfolding process, auditors determined that the large risk corridor receivable that the co-op was carrying on its balance sheet was now in jeopardy of non-payment from CMS due to the statutory changes made to the program in the Omnibus.

This reckoning by audit firms could likely force the hands of other health insurers to make similar revisions to their own projections. Plans that were relying more heavily on money from the 3Rs could find that they need to lower their earnings forecasts as a result, and take a charge for 2014 on money that doesn’t materialize. In the case of CoOportunity, auditors clearly concluded that the new legislation meant that the insurer could no longer accrue for the risk corridor money.

The risk corridors were made controversial precisely because the Obama Administration seemed to change the program’s rules of math, turning it from a provision that was widely perceived as budget neutral, into an open ended subsidy.

The Omnibus measure made it harder for CMS to skirt the program’s spending rails, ending what many argued was a bailout for the health plans. Now the hopeful projections that those plans made will be squared with the normal rules of math.

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Remarks prepared for delivery: Senate Finance Committee Chairman Orrin Hatch on how America can succeed in today’s global economyhttp://www.aei.org/press/remarks-prepared-delivery-senate-finance-committee-chairman-orrin-hatch-america-can-succeed-todays-global-economy/ http://www.aei.org/press/remarks-prepared-delivery-senate-finance-committee-chairman-orrin-hatch-america-can-succeed-todays-global-economy/#comments Fri, 30 Jan 2015 14:22:50 +0000 http://www.aei.org/?post_type=press&p=829771 I really appreciate AEI for giving me this chance to share my thoughts about our nation’s trade agenda, where it is today, and where I think it should be going in the future.

This is an especially exciting time to be discussing U.S. trade policy.

With two of the most ambitious trade agreements in our nation’s history, the Trans-Pacific Partnership, or TPP, and the Trans-Atlantic Trade and Investment Partnership, or TTIP, under active negotiation, the U.S. trade agenda is truly at the precipice of opportunity. The only question is whether the administration and both parties in Congress can work together to seize this opportunity.

I know that, these days, there are many – probably even some in this audience – who view bipartisanship in the same way others view winning the lottery. Sure, it’d be nice if it happened, but there’s no use waiting around for it.

And, on many issues, they’d be right.

But, fortunately, trade is one area where there does seem to be a broad, and increasing, bipartisan consensus to get something done.

How refreshing is that?

Today I want to talk about what we need to do to get these two agreements across the finish line and what those agreements must look like to gain my active support once they’re submitted to Congress.

First, I want to assure all of you that, as the new Chairman of the Senate Finance Committee, my goal is to advance a broad and ambitious trade agenda, including renewing the Generalized System of Preferences, extending the African Growth and Opportunity Act, passing legislation to enable enactment of Miscellaneous Tariff Bills, and reauthorizing our Customs and Border Patrol.

All of these are priorities for me and for the Finance Committee in this new Congress.
Today, however, I want to focus on two things: Trade Promotion Authority, or TPA, and how it sets out what TPP and TTIP must achieve to gain my active support.

Last year, I, along with the two former chairmen – Max Baucus and Dave Camp – introduced the Bipartisan Congressional Trade Priorities Act of 2014. Our bill would have renewed TPA, and it outlined the objectives our trade negotiators must meet in order for a final agreement to be approved by Congress.

That bill, in my opinion, represents the best starting point for our efforts in this Congress. So, much of my comments today will be focused on the substance of that legislation.

As many of you know, I am currently working with Ranking Member Wyden and House Ways and Means Chairman Ryan to introduce a TPA bill for this Congress. While there may be some changes, I think the fundamentals we will be discussing today will be substantially the same.

Let’s start by discussing some of the principles that guided our efforts last year as we worked on legislation to renew TPA.

In developing the 2014 bill, I had several major objectives in mind.

First, I wanted to preserve the fundamental principles of U.S. trade and economic policy that have enabled our country to grow and thrive over the past century.

Second, I wanted to make sure we recognized and addressed new opportunities and challenges that our job creators and workers face when doing business around the globe.

And, finally, I wanted to rebalance the relationship between Congress and the Executive Branch when negotiating, implementing, and enforcing international trade agreements.

These continue to be my main objectives as I work with my colleagues on new TPA legislation in the 114th Congress.

To provide more detail, let’s delve a little deeper into each of these objectives.

Objective Number One is: Preserving the fundamental principles of U.S. trade and economic policy.

With our bill, the first fundamental principle I sought to preserve was strong intellectual property rights protection. Intellectual property is the backbone of our economy. It affects large and small companies across America.

In my home state of Utah, for example, half a million jobs and 67 percent of our exports are connected to intellectual property.

Unfortunately, intellectual property protections around the globe are continually at risk. The U.S. Government has an obligation to ensure that the creative capital of our artists and innovators is protected.

This is a long-standing principle. In fact, our Founding Fathers believed intellectual property to be so fundamental to America’s future prosperity that they explicitly granted Congress the constitutional authority to protect it.

That’s what I wanted to do with our legislation.

So I worked hard to make sure that our 2014 bill maintained the strong intellectual property standards found in the prior 2002 Trade Promotion Authority law. This included requiring that trade agreements meet the high standards found in U.S. law, particularly the enforcement obligations. It also included requiring the elimination of price controls and reference pricing, which are used by many countries to deny full market access to innovative pharmaceuticals and medical devices.

Our bill then went further than the 2002 law by calling for an end to government involvement in intellectual property rights violations, including piracy and cyber theft. This was the first time TPA legislation addressed these issues. We also sought to stop foreign-government theft of trade secrets, by including provisions that governments limit the unnecessary collection of trade secret information and protect any information that they do collect from disclosure.

Our legislation further directed the administration to ensure that regulatory reimbursement regimes that make pricing and reimbursement decisions are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for American products.

The bill also called for the elimination of measures that require U.S. companies to locate their intellectual property abroad as a market-access or investment condition.

Finally, the bill included an expanded capacity-building objective directing the administration to work with U.S. trading partners to strengthen not only their labor laws, as was provided for in 2002, but also their intellectual property rights laws.

Put simply, for any future trade agreement to win my approval, it must meet these standards. And, I expect that they will.

For TPP, I fully expect to see intellectual property provisions that are similar to the standards found in U.S. law, resulting in an agreement containing a very high standard of intellectual property rights protection. This includes twelve years of regulatory data protection for biologics and strong copyright and trademark protections.

The intellectual property provisions of TPP must also effectively address the theft of trade secrets and ensure effective implementation and enforcement of IP obligations. In addition, we must ensure that U.S. innovators are able to monetize the fruits of their labor when they export them to other markets. That is why it is critical for TPP to ensure transparency and procedural fairness in the process by which reimbursement decisions are made regarding medical devices and pharmaceuticals.

Strong intellectual property protections in the context of our TTIP negotiations with Europe are also a priority.

Most European countries already have a very high standard of IP protection. Because the U.S. and the E.U. are two of the most innovative economies in the world, any successful TTIP agreement must promote the highest standards of intellectual property protection.

In addition, our negotiators must strongly promote and protect the interests of our citizens with respect to Europe’s approach to geographical indications, the improper use of which impedes our ability to compete not only in Europe, but in many parts of the world.

As you can probably tell, intellectual property rights are a high priority for me. But they are not the only priority I have when it comes to trade.

Another fundamental principle of trade policy that I wanted to protect with our legislation was strong support of services and investment, including maintaining strong investor-state dispute settlement provisions.

Our 2014 bill sought fair, non-discriminatory treatment for U.S. investors pursuing opportunities overseas. It would have required trade agreements to ensure that U.S. investors overseas receive the same basic protections that the United States gives to investors, foreign and domestic, here at home.

All of these elements foster stronger legal regimes and more secure economic environments around the world, which is necessary for U.S. businesses to pursue opportunities abroad and to be treated fairly when doing so.

Investor-state dispute settlement provisions are subject to a lot of overheated and misguided criticism. So let me be clear: The investor-state rules I am talking about simply ensure that other countries adopt and implement the basic, fundamental protections that underpin U.S. commercial law, including protection against discrimination, protection against repudiation of contracts, and protection against expropriation without due process and compensation.

Because I believe that these principles are the foundation on which American businesses can build opportunities overseas, I will continue to insist that investor-state disciplines not be weakened in any of our trade agreements. That means both TPP and TTIP must have strong investor-state dispute settlement mechanisms.

No trading partner should be given a pass to violate these fundamental legal principles for investors without enforcement. Nor should any U.S. industry, including tobacco, be excluded from receiving these basic protections.

A third fundamental principle I sought to maintain in our bill – and the last one I’ll talk about today – was real and comprehensive market access opportunities for U.S. goods and services. That means significant reduction, and ultimately, elimination of tariffs on U.S. exports of goods, services and agricultural products.

Several countries who are parties to TPP are resisting our efforts to open agricultural markets, including Japan and Canada.

Let me be clear: If Japan, Canada and our other TPP partners are not willing to open their markets to our exports, the final agreement will never receive support in Congress.
In our negotiations with the European Union we should also strive for complete elimination of tariffs. While tariff levels may already be low, the gains to be achieved from total elimination of tariffs would be significant, as total goods trade alone between the U.S. and E.U. is over one trillion dollars a year.

We also need to see a comprehensive agreement in TTIP, with no sectors excluded from coverage, including audiovisual and financial services. The agreement should also work towards regulatory coherence of financial regulations.

I think that’ll about cover my first objective. And, I think you all get the point: It is vital that, in our future trade agreements, we preserve the fundamentals of U.S. trade and economic policy.

So, let’s turn to Objective Number Two: Recognizing and addressing the opportunities and challenges our job creators and workers face doing business around the world.

The world has changed since the last time Congress passed a TPA bill. The world of 2015 is, in many ways, vastly different than the world of 2002.

Let’s start with digital trade.

Here, we have a complete revision of the 2002 law, reflecting the increasing importance of digital trade to the U.S. economy, and the central role the internet plays as a platform in international commerce.

In our bill, we included language to ensure that all trade agreement obligations relating to trade in goods and services apply equally to goods and services traded digitally. The bill also would have directed our negotiators to ensure that foreign governments do not impede cross-border data flows and refrain from instituting other impediments to digital trade. Finally, we specifically addressed the need for the U.S. government to pursue policies that eliminate forced localization requirements, including requirements for local storage or processing of data.

Although many of these issues are new, I fully expect agreements reached through the TPP and TTIP negotiations to reflect these priorities.

Another increasingly difficult problem our companies face is unfair competition from state-owned enterprises. So, for the first time, our TPA bill sought the elimination of trade distortions and unfair competition by state-owned enterprises, and to ensure that they act based solely on commercial considerations.

I want American businesses to be able to compete anywhere in the world. But we can’t expect our businesses to go head-to-head and win against state-owned enterprises that are protected from competition and market forces by their governments. That is why it is essential for TPP, and future U.S. trade agreements, to take this issue head on and to ensure that if foreign governments are going to maintain state-owned enterprises, those entities must act on a commercial basis.

Our job creators and workers also need to have confidence that their hard work is not being unfairly harmed by currency manipulation.

The Obama Administration has done such a poor job here that many members of Congress simply don’t have confidence that this problem is being properly addressed.
Frankly, I understand their frustration.

That is why we included within our TPA bill, for the first time, a new principal negotiating objective addressing currency manipulation.

We need to see commitments from our partners in ongoing trade negotiations to avoid manipulating exchange rates to gain an unfair competitive advantage over other parties to the agreement, a standard reflecting commitments parties have made in the International Monetary Fund.

It is essential that Congress know how the administration intends to address this problem in ongoing negotiations. Pretending these concerns don’t exist will not suffice. The administration must engage much more effectively with Congress on this issue if they want to receive strong support for TPA and any subsequent trade agreements.

This brings us to the third major objective I had drafting our bill in 2014: Rebalancing the relationship between Congress and the Executive Branch in trade negotiations.

Of course, the first step here is to renew Trade Promotion Authority. Our trade negotiators and trading partners need clear objectives from Congress. The best way to communicate those objectives and give them force is TPA.

I am perplexed by arguments some make that TPA gives away Congress’ power. The reality is quite the opposite – TPA empowers Congress, expanding and enhancing its role in ongoing international trade negotiations.

I’ve just gone through a number of very specific policies that Congress should insist upon in our trade agreements – from intellectual property rights protection to protections against currency manipulation. The only way Congress can direct the administration to address these policies in their trade negotiations is through TPA.

In developing the 2014 bill, I insisted upon including a number of new provisions that substantially enhance Congress’ role without jeopardizing the ability of our country to negotiate and enact strong trade agreements.

For example, the bill tightened the scope of qualifying implementing bills to “only such provisions as are strictly necessary or appropriate to implement” trade agreements. It provided that any commitments that are not disclosed to the Congress before an implementing bill is introduced are not to be considered part of the agreement and have no force of law.

We also included new provisions to ensure that the agreements be concluded within the time frame provided by Congress and that substantial modifications or additions after that date are not eligible for approval under the trade authorities procedures provided by TPA. The bill included a number of new elements to enhance consultation and oversight throughout the negotiating and implementation process.

All in all, we crafted a very strong bill, building and improving upon decades of precedent found in prior TPA bills.

Like I said, I believe the bill we introduced in the last Congress should be the starting point for our efforts to pass TPA this year. The objectives that I’ve laid out today are every bit as relevant to my efforts to work with my colleagues to produce new legislation for this Congress. I am very hopeful that we will be able to accommodate some of the issues raised by Ranking Member Wyden and get a new TPA bill introduced in short order.

Once that is achieved, I plan to move very quickly to get the bill out of the Finance Committee and onto the Senate floor.

We have been without TPA, our most important tool to open markets, for far too long.
And, while we sit back, other countries forge ahead, cutting tariffs and other barriers for their exporters, hurting our ability to fairly compete and access opportunities.

The U.S. needs to lead on trade. We need to establish rules that hold other nations accountable for their unfair trade practices. And we need to tear down barriers that block our goods from foreign markets.

We can only do that if we renew TPA and do so soon.

It’s going to take a lot of work. As I said at the beginning of my remarks, it’s going to take no small amount of bipartisanship – from Capitol Hill all the way to the White House – to get this done.

With your help and support, I know we can be successful.

Thank you, once again, to AEI for having me here today. It’s always a privilege to be here.

And, thank you all for taking the time to listen.

God bless you all.

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Trade in 2015http://www.aei.org/publication/trade-2015/ http://www.aei.org/publication/trade-2015/#comments Fri, 30 Jan 2015 14:00:21 +0000 http://www.aei.org/?post_type=publication&p=829775 I really appreciate AEI for giving me this chance to share my thoughts about our nation’s trade agenda, where it is today, and where I think it should be going in the future.

This is an especially exciting time to be discussing U.S. trade policy.

With two of the most ambitious trade agreements in our nation’s history, the Trans-Pacific Partnership, or TPP, and the Trans-Atlantic Trade and Investment Partnership, or TTIP, under active negotiation, the U.S. trade agenda is truly at the precipice of opportunity. The only question is whether the administration and both parties in Congress can work together to seize this opportunity.

I know that, these days, there are many – probably even some in this audience – who view bipartisanship in the same way others view winning the lottery. Sure, it’d be nice if it happened, but there’s no use waiting around for it.

And, on many issues, they’d be right.

But, fortunately, trade is one area where there does seem to be a broad, and increasing, bipartisan consensus to get something done.

How refreshing is that?

Today I want to talk about what we need to do to get these two agreements across the finish line and what those agreements must look like to gain my active support once they’re submitted to Congress.

First, I want to assure all of you that, as the new Chairman of the Senate Finance Committee, my goal is to advance a broad and ambitious trade agenda, including renewing the Generalized System of Preferences, extending the African Growth and Opportunity Act, passing legislation to enable enactment of Miscellaneous Tariff Bills, and reauthorizing our Customs and Border Patrol.

All of these are priorities for me and for the Finance Committee in this new Congress.
Today, however, I want to focus on two things: Trade Promotion Authority, or TPA, and how it sets out what TPP and TTIP must achieve to gain my active support.

Last year, I, along with the two former chairmen – Max Baucus and Dave Camp – introduced the Bipartisan Congressional Trade Priorities Act of 2014. Our bill would have renewed TPA, and it outlined the objectives our trade negotiators must meet in order for a final agreement to be approved by Congress.

That bill, in my opinion, represents the best starting point for our efforts in this Congress. So, much of my comments today will be focused on the substance of that legislation.

As many of you know, I am currently working with Ranking Member Wyden and House Ways and Means Chairman Ryan to introduce a TPA bill for this Congress. While there may be some changes, I think the fundamentals we will be discussing today will be substantially the same.

Let’s start by discussing some of the principles that guided our efforts last year as we worked on legislation to renew TPA.

In developing the 2014 bill, I had several major objectives in mind.

First, I wanted to preserve the fundamental principles of U.S. trade and economic policy that have enabled our country to grow and thrive over the past century.

Second, I wanted to make sure we recognized and addressed new opportunities and challenges that our job creators and workers face when doing business around the globe.

And, finally, I wanted to rebalance the relationship between Congress and the Executive Branch when negotiating, implementing, and enforcing international trade agreements.

These continue to be my main objectives as I work with my colleagues on new TPA legislation in the 114th Congress.

To provide more detail, let’s delve a little deeper into each of these objectives.

Objective Number One is: Preserving the fundamental principles of U.S. trade and economic policy.

With our bill, the first fundamental principle I sought to preserve was strong intellectual property rights protection. Intellectual property is the backbone of our economy. It affects large and small companies across America.

In my home state of Utah, for example, half a million jobs and 67 percent of our exports are connected to intellectual property.

Unfortunately, intellectual property protections around the globe are continually at risk. The U.S. Government has an obligation to ensure that the creative capital of our artists and innovators is protected.

This is a long-standing principle. In fact, our Founding Fathers believed intellectual property to be so fundamental to America’s future prosperity that they explicitly granted Congress the constitutional authority to protect it.

That’s what I wanted to do with our legislation.

So I worked hard to make sure that our 2014 bill maintained the strong intellectual property standards found in the prior 2002 Trade Promotion Authority law. This included requiring that trade agreements meet the high standards found in U.S. law, particularly the enforcement obligations. It also included requiring the elimination of price controls and reference pricing, which are used by many countries to deny full market access to innovative pharmaceuticals and medical devices.

Our bill then went further than the 2002 law by calling for an end to government involvement in intellectual property rights violations, including piracy and cyber theft. This was the first time TPA legislation addressed these issues. We also sought to stop foreign-government theft of trade secrets, by including provisions that governments limit the unnecessary collection of trade secret information and protect any information that they do collect from disclosure.

Our legislation further directed the administration to ensure that regulatory reimbursement regimes that make pricing and reimbursement decisions are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for American products.

The bill also called for the elimination of measures that require U.S. companies to locate their intellectual property abroad as a market-access or investment condition.

Finally, the bill included an expanded capacity-building objective directing the administration to work with U.S. trading partners to strengthen not only their labor laws, as was provided for in 2002, but also their intellectual property rights laws.

Put simply, for any future trade agreement to win my approval, it must meet these standards. And, I expect that they will.

For TPP, I fully expect to see intellectual property provisions that are similar to the standards found in U.S. law, resulting in an agreement containing a very high standard of intellectual property rights protection. This includes twelve years of regulatory data protection for biologics and strong copyright and trademark protections.

The intellectual property provisions of TPP must also effectively address the theft of trade secrets and ensure effective implementation and enforcement of IP obligations. In addition, we must ensure that U.S. innovators are able to monetize the fruits of their labor when they export them to other markets. That is why it is critical for TPP to ensure transparency and procedural fairness in the process by which reimbursement decisions are made regarding medical devices and pharmaceuticals.

Strong intellectual property protections in the context of our TTIP negotiations with Europe are also a priority.

Most European countries already have a very high standard of IP protection. Because the U.S. and the E.U. are two of the most innovative economies in the world, any successful TTIP agreement must promote the highest standards of intellectual property protection.

In addition, our negotiators must strongly promote and protect the interests of our citizens with respect to Europe’s approach to geographical indications, the improper use of which impedes our ability to compete not only in Europe, but in many parts of the world.

As you can probably tell, intellectual property rights are a high priority for me. But they are not the only priority I have when it comes to trade.

Another fundamental principle of trade policy that I wanted to protect with our legislation was strong support of services and investment, including maintaining strong investor-state dispute settlement provisions.

Our 2014 bill sought fair, non-discriminatory treatment for U.S. investors pursuing opportunities overseas. It would have required trade agreements to ensure that U.S. investors overseas receive the same basic protections that the United States gives to investors, foreign and domestic, here at home.

All of these elements foster stronger legal regimes and more secure economic environments around the world, which is necessary for U.S. businesses to pursue opportunities abroad and to be treated fairly when doing so.

Investor-state dispute settlement provisions are subject to a lot of overheated and misguided criticism. So let me be clear: The investor-state rules I am talking about simply ensure that other countries adopt and implement the basic, fundamental protections that underpin U.S. commercial law, including protection against discrimination, protection against repudiation of contracts, and protection against expropriation without due process and compensation.

Because I believe that these principles are the foundation on which American businesses can build opportunities overseas, I will continue to insist that investor-state disciplines not be weakened in any of our trade agreements. That means both TPP and TTIP must have strong investor-state dispute settlement mechanisms.

No trading partner should be given a pass to violate these fundamental legal principles for investors without enforcement. Nor should any U.S. industry, including tobacco, be excluded from receiving these basic protections.

A third fundamental principle I sought to maintain in our bill – and the last one I’ll talk about today – was real and comprehensive market access opportunities for U.S. goods and services. That means significant reduction, and ultimately, elimination of tariffs on U.S. exports of goods, services and agricultural products.

Several countries who are parties to TPP are resisting our efforts to open agricultural markets, including Japan and Canada.

Let me be clear: If Japan, Canada and our other TPP partners are not willing to open their markets to our exports, the final agreement will never receive support in Congress.
In our negotiations with the European Union we should also strive for complete elimination of tariffs. While tariff levels may already be low, the gains to be achieved from total elimination of tariffs would be significant, as total goods trade alone between the U.S. and E.U. is over one trillion dollars a year.

We also need to see a comprehensive agreement in TTIP, with no sectors excluded from coverage, including audiovisual and financial services. The agreement should also work towards regulatory coherence of financial regulations.

I think that’ll about cover my first objective. And, I think you all get the point: It is vital that, in our future trade agreements, we preserve the fundamentals of U.S. trade and economic policy.

So, let’s turn to Objective Number Two: Recognizing and addressing the opportunities and challenges our job creators and workers face doing business around the world.

The world has changed since the last time Congress passed a TPA bill. The world of 2015 is, in many ways, vastly different than the world of 2002.

Let’s start with digital trade.

Here, we have a complete revision of the 2002 law, reflecting the increasing importance of digital trade to the U.S. economy, and the central role the internet plays as a platform in international commerce.

In our bill, we included language to ensure that all trade agreement obligations relating to trade in goods and services apply equally to goods and services traded digitally. The bill also would have directed our negotiators to ensure that foreign governments do not impede cross-border data flows and refrain from instituting other impediments to digital trade. Finally, we specifically addressed the need for the U.S. government to pursue policies that eliminate forced localization requirements, including requirements for local storage or processing of data.

Although many of these issues are new, I fully expect agreements reached through the TPP and TTIP negotiations to reflect these priorities.

Another increasingly difficult problem our companies face is unfair competition from state-owned enterprises. So, for the first time, our TPA bill sought the elimination of trade distortions and unfair competition by state-owned enterprises, and to ensure that they act based solely on commercial considerations.

I want American businesses to be able to compete anywhere in the world. But we can’t expect our businesses to go head-to-head and win against state-owned enterprises that are protected from competition and market forces by their governments. That is why it is essential for TPP, and future U.S. trade agreements, to take this issue head on and to ensure that if foreign governments are going to maintain state-owned enterprises, those entities must act on a commercial basis.

Our job creators and workers also need to have confidence that their hard work is not being unfairly harmed by currency manipulation.

The Obama Administration has done such a poor job here that many members of Congress simply don’t have confidence that this problem is being properly addressed.
Frankly, I understand their frustration.

That is why we included within our TPA bill, for the first time, a new principal negotiating objective addressing currency manipulation.

We need to see commitments from our partners in ongoing trade negotiations to avoid manipulating exchange rates to gain an unfair competitive advantage over other parties to the agreement, a standard reflecting commitments parties have made in the International Monetary Fund.

It is essential that Congress know how the administration intends to address this problem in ongoing negotiations. Pretending these concerns don’t exist will not suffice. The administration must engage much more effectively with Congress on this issue if they want to receive strong support for TPA and any subsequent trade agreements.

This brings us to the third major objective I had drafting our bill in 2014: Rebalancing the relationship between Congress and the Executive Branch in trade negotiations.

Of course, the first step here is to renew Trade Promotion Authority. Our trade negotiators and trading partners need clear objectives from Congress. The best way to communicate those objectives and give them force is TPA.

I am perplexed by arguments some make that TPA gives away Congress’ power. The reality is quite the opposite – TPA empowers Congress, expanding and enhancing its role in ongoing international trade negotiations.

I’ve just gone through a number of very specific policies that Congress should insist upon in our trade agreements – from intellectual property rights protection to protections against currency manipulation. The only way Congress can direct the administration to address these policies in their trade negotiations is through TPA.

In developing the 2014 bill, I insisted upon including a number of new provisions that substantially enhance Congress’ role without jeopardizing the ability of our country to negotiate and enact strong trade agreements.

For example, the bill tightened the scope of qualifying implementing bills to “only such provisions as are strictly necessary or appropriate to implement” trade agreements. It provided that any commitments that are not disclosed to the Congress before an implementing bill is introduced are not to be considered part of the agreement and have no force of law.

We also included new provisions to ensure that the agreements be concluded within the time frame provided by Congress and that substantial modifications or additions after that date are not eligible for approval under the trade authorities procedures provided by TPA. The bill included a number of new elements to enhance consultation and oversight throughout the negotiating and implementation process.

All in all, we crafted a very strong bill, building and improving upon decades of precedent found in prior TPA bills.

Like I said, I believe the bill we introduced in the last Congress should be the starting point for our efforts to pass TPA this year. The objectives that I’ve laid out today are every bit as relevant to my efforts to work with my colleagues to produce new legislation for this Congress. I am very hopeful that we will be able to accommodate some of the issues raised by Ranking Member Wyden and get a new TPA bill introduced in short order.

Once that is achieved, I plan to move very quickly to get the bill out of the Finance Committee and onto the Senate floor.

We have been without TPA, our most important tool to open markets, for far too long.
And, while we sit back, other countries forge ahead, cutting tariffs and other barriers for their exporters, hurting our ability to fairly compete and access opportunities.

The U.S. needs to lead on trade. We need to establish rules that hold other nations accountable for their unfair trade practices. And we need to tear down barriers that block our goods from foreign markets.

We can only do that if we renew TPA and do so soon.

It’s going to take a lot of work. As I said at the beginning of my remarks, it’s going to take no small amount of bipartisanship – from Capitol Hill all the way to the White House – to get this done.

With your help and support, I know we can be successful.

Thank you, once again, to AEI for having me here today. It’s always a privilege to be here.

And, thank you all for taking the time to listen.

God bless you all.

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Trade in 2015: Senate Finance Committee Chairman Orrin Hatch on how America can succeed in today’s global economyhttp://www.aei.org/events/trade-2015-senate-finance-committee-chairman-orrin-hatch-america-can-succeed-todays-global-economy/ http://www.aei.org/events/trade-2015-senate-finance-committee-chairman-orrin-hatch-america-can-succeed-todays-global-economy/#comments Thu, 22 Jan 2015 19:38:14 +0000 http://www.aei.org/?post_type=event&p=828719 Event Description

International trade and the US economy are top issues in the 114th Congress. We welcome you to join us at AEI as Senate Finance Committee Chairman Orrin Hatch (R-UT) outlines his vision for how America can succeed in today’s global economy. Sen. Hatch will speak to his longstanding efforts to renew Trade Promotion Authority and will discuss what the Obama administration must do to get ongoing trade negotiations such as the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership successfully enacted by Congress.

Read Chairman Hatch’s remarks as prepared for delivery here.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

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Gathering storm clouds over Athenshttp://www.aei.org/publication/gathering-storm-clouds-athens/ http://www.aei.org/publication/gathering-storm-clouds-athens/#comments Fri, 30 Jan 2015 13:00:33 +0000 http://www.aei.org/?post_type=publication&p=829733 It is difficult to see how Greece’s newly elected government could have got off to a worse start. In the short space of four days after being elected, it has managed to antagonize its official creditors on whom Greece still remains so highly dependent. It has also managed to roil Greece’s financial markets as well as to incur harsh warnings from its rating agencies. All of this is highly suggestive of Greece rapidly moving towards a full-blown financial crisis that could force Greece out of the Euro well before year-end.

Evidently Alexis Tsipras, Greece’s new and inexperienced prime minister, does not believe that one should not bite the hand that feeds it. As his first official act as prime minister, he chose to lay a wreath at the tomb of 200 Communist partisans, who were murdered by the Nazi’s during second-world war. Needless to say, this provocative act did not go unnoticed in Berlin, the capital city of Greece’s principal paymaster.

Nor did Mr. Tsipras’ first substantive foreign policy action play well in Berlin and Brussels. In a seeming act of defiance, the new-Greek government has made it clear that it does not share the European Union’s Russian sanction policy. Indeed, in an act that is widely being interpreted as the new Greek government cozying up to the Russians, Greece has intimated that it will veto further European Russian sanctions.

If Mr. Tsipras’ foreign policy actions are likely to cause frictions with Greece’s official creditors, his febrile actions in the area of economic policy are certain to do so. Firstly, he chose as his coalition partner the extreme-right Independent Greeks, whose only point in common with Mr. Tsipras’ far-left Syriza party is anti-austerity stance. Secondly, he chose as his Minister of Finance Yanis Varoufakis, a self-avowed “Marxist-libertarian” who is not known for restraint in his hostility to Greece’s bailout program.

Thirdly, and most importantly, he has reiterated his intention to reverse the austerity policy imposed on Greece and he has chosen to roll back key reforms requested by the much reviled troika. Among the measures that he has already announced are the scrapping of hospital and prescription fees, a 13th month pension for low income pensioners, reinstating sacked public sector employees, halting the privatization program, raising the minimum wage, and reinstalling collective bargaining.

Not surprisingly, markets have reacted with dismay to the clearest of signs that the new-Greek government is not about to make the major U-turn in policies that is required for Greece to continue enjoying ECB and IMF backing. Over the past three days, Greek bank stocks lost more than 25 percent of their value, while three-year Greek government borrowing costs have now increased to over 17 percent. More ominously still, there are now clear signs of an incipient bank run. Over the past month, the Greek banking system is reported to have lost EUR11 billion in deposits, with the pace of deposit withdrawal picking up over the past week.

The only rational explanation for Mr. Tsipras’ actions to date is that he truly believes that Greece can act with impunity and that its official creditors will continue to finance it. Sadly, this is all too likely to prove to be a gross miscalculation that will cost both Greece and the rest of the Eurozone dearly. It overlooks the fact that German Chancellor Angela Merkel risks the wrath of her electorate if Germany is seen to be caving into an unreformed Greece’s extravagant demands. It also overlooks the fact that Mrs. Merkel will be highly reluctant to make generous concessions to Greece, as she knows full well that she would then be forced to concede similar concessions to the rest of the Eurozone’s peripheral countries.

Judging by the acute unease of markets and of Greek bank depositors, Greece does not have the luxury of time on its side. Indeed, if Greece wishes to stay in the Euro its government not only needs to do a major U-turn, but it needs to do so before a full-scale bank run gets underway. Hopefully, the Greek government’s initial missteps will soon be corrected. However, I am not holding my breath.

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Friday morning linkshttp://www.aei.org/publication/thursday-night-links-8/ http://www.aei.org/publication/thursday-night-links-8/#comments Fri, 30 Jan 2015 04:59:17 +0000 http://www.aei.org/?post_type=publication&p=829748 ...]]]> usoil

1. Chart of the Day I. The EIA reported yesterday that US oil production increased last week to 9.21 million barrels per day, the highest level of domestic crude oil production since October 1973, more than 41 years ago. Peak what?

energy

2. Chart of the Day II. Largely because of the American Shale Revolution, the US produced 88.5% of the energy consumed last year (through October) which was the highest level of energy self-sufficiency since 1985, almost 30 years ago.

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3. Chart of the Day III. The US homeownership rate fell t0 a 25-year low in the fourth quarter of last year at 63.9% (seasonally adjusted) — the lowest rate since Q4 1989, according to Census data released today. So the rate of homeownerhip is back to where it started before the political obsession with homeownerhsip turned millions of good renters into bad homeowners as government housing finance policies pressured forced lenders to lower credit standards, income requirements, and down payments to what would otherwise have been unqualified home buyers. After a housing bubble, mortgage meltdown, financial crisis and a homeownership rate approaching 70%, we’ve returned to the homeownership rate of the mid-1980s.

4. Despite What You Learned in School and What You Hear from the Media: The overall impact of fossil fuels on environmental quality is tremendously positive, explains Alex Epstein in his Forbes article “How Fossil Fuels Cleaned Up Our Environment.”

5. Who’d a-Thunk It? Despite sitting on the largest oil reserves in the world, socialist Venezuela has food shortages, long lines, rationing, and rioting? Check out some amazing videos of how the Venezuelan people are suffering from chronic food shortages caused by the socialist government’s policies here, here, here and here. Total chaos and misery only begin to describe how bad it is for the people of Venezuela, who are now banned by the government from filming the long lines, empty shelves, food rioting, etc. (HT: Hitssquad)

6.  The “Uber Effect”: Since Uber started operating in Seattle in 2013, there’s been a 10% decrease in DUIs.

7. A Model for Governments Everywhere: In response to Uber ride-sharing drivers now working in the city, the Portsmouth (NH) Taxi Commission recommended the elimination of taxi medallions, regulation of taxi fares, city taxi inspections and the Taxi Commission itself. We need more of this……..

8. Significant Music Inequality: The top 1% of bands and solo artists now earn 80% of all revenue from recorded music. Wait until Oxfam and the Democrats find out….

Capture

9. Google Search Trends: Searches for the term “Peak Oil” peaked in August 2005 while searches for the word “Fracking” peaked in August 2013.

10. Video of the Day. In the latest Factual Feminist video, we learn from Christina Sommers that the United States is not a rape culture, but it is a gender propaganda culture. We are overwhelmed by false information about men and women, and nowhere is this more true than in the area of sexual violence, says Christina Sommers in the video below:

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The Pentagon’s growing army of bureaucratshttp://www.aei.org/publication/pentagons-growing-army-bureaucrats/ http://www.aei.org/publication/pentagons-growing-army-bureaucrats/#comments Fri, 30 Jan 2015 03:26:23 +0000 http://www.aei.org/?post_type=publication&p=829751 When President Obama unveils his annual budget on Monday, watch his defense priorities. His State of the Union address presented plenty of new ideas to invest in nondefense domestic programs, but the Pentagon’s budget got zero mention—even as the specter of sequestration looms again for fiscal 2016. Mr. Obama’s track record as commander in chief is not encouraging: Under his stewardship, active-duty ground forces have been slashed while Defense Department civilians have flourished. For this president, it seems, bureaucracy beats combat power every time.

Since 2009 the Pentagon’s civilian workforce has grown by about 7% to almost 750,000, while active-duty military personnel have been cut by roughly 8%. At the same time, dozens of military-equipment and weapons programs have been canceled, including a new Navy cruiser, a new search-and-rescue helicopter, the F-22 fifth-generation fighter, the C-17 transport aircraft, missile defense and the Marine Corps’ Expeditionary Fighting Vehicle.

The rest of this article is available for Wall Street Journal subscribers. It will be posted here in its entirety on Monday, February 2.

 

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My book got trolled by the Lefthttp://www.aei.org/publication/book-got-trolled-left/ http://www.aei.org/publication/book-got-trolled-left/#comments Thu, 29 Jan 2015 22:53:21 +0000 http://www.aei.org/?post_type=publication&p=829737 Every controversial author likes to know that his work has troubled those on the other side – but not so much that they band together to suppress it.

Yet that’s what has happened with my new book on the financial crisis (Hidden In Plain Sight: What Caused the World’s Worst Financial Crisis and Why It Can Happen Again). Almost immediately after its publication, the book’s Amazon.com page began to be “trolled” by opponents of my ideas.

One-star “reviews” (the lowest category) suddenly began appearing. One of the first, by an intrepid soul who hid his name behind the moniker “NYC Reader1,” appeared the day after publication, and began “How dumb does Wallison think we are? Answer: Very.” This attack was followed in the next few days by more than 50 or so other 1-star reviews, saying things like “not truthful,” “biased,” “not accurate,” and “don’t waste your money.”

None of these reviews showed any familiarity with the book, or contradicted the extensive data that shows the 2008 financial crisis was caused by the government’s housing policies – and not, as the political Left has asserted, by insufficient regulation of private sector financial firms.

Soon, the book’s publisher Encounter Books found the source of this activity: someone named Tim Howard (not the Tim Howard who was the CFO of Fannie Mae in the early 2000s).

His post on what appears to be his own website thanked all the people who had posted negative reviews of the book: “I want to praise all of you who have taken the time to do a customer review on Amazon [and] I encourage everyone to do so if you can… Please remember to click on the “was this review helpful link” for all of the 1-star reviews. This will keep them on the top.”

Clearly, the outpouring of negative reviews were nothing more than a coordinated effort by the Left to suppress the book.

From a certain perspective, this attack was simply an expression of the Left’s Stalinist impulse – the fear of information that contradicts a narrative they have confected about the financial crisis. But in a deeper sense it is an expression of the intolerance and bigotry that has begun to infect much of the Left’s attitude toward any dissent. This is an attitude so foreign to traditional American and democratic values that it poses a threat to the nation’s future. If we can’t have a civil discussion about an important public issue we are doomed to a kind of civil cold war, and maybe something worse.

Hidden In Plain Sight, for anyone who might care to actually read it, makes a data-based case that the financial crisis was caused by the government’s housing policy. Yes, this contradicts the Left’s desire to show the government as omni-competent and omniscient, but we have to understand why ithe 2008 financial catastrophe happened in order to avoid pursuing the same policies in the future. This issue needs a robust debate, with facts.

But that is not the way the Left sees it. Robust debate is apparently not going to be acceptable, even about an issue of such importance. The first indication that the Left’s tactic would not be to contradict my position with facts but to persuade people to bypass the issue came with the publication of 2011 column by Joe Nocera of the New York Times invoking Goebbels headlined “The Big Lie.”

Calling important information “the big lie” is much like the police shooing the curious away from a car wreck – “Nothing here of interest, folks, please move along.”

In one sense, I’m happy to know that my book has so disturbed the Left that they are moved to suppress it, but after a year in which sensible people with conservative views have been hooted down or forced to abandon commencement addresses at respected universities, shouldn’t liberals and others on the Left who value a free society and the free exchange of ideas be speaking up?

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Disability program needs reform, not merely revenue reallocationhttp://www.aei.org/publication/disability-program-needs-reform-merely-revenue-reallocation/ http://www.aei.org/publication/disability-program-needs-reform-merely-revenue-reallocation/#comments Thu, 29 Jan 2015 20:06:28 +0000 http://www.aei.org/?post_type=publication&p=829710 “Republicans target disability,” say the headlines. A rule passed by the newly elected Republican-controlled House prohibits a supposedly “routine” reallocation of revenues between Social Security’s retirement and disability insurance programs, threatening dramatic benefit cuts for the disabled. In reality, the House rule may force Congress to finally enact substantive reforms for the troubled Disability Insurance (DI) program.

The average new DI beneficiary in 2013 received annual cash benefits of $14,668, plus Medicare benefits worth about $9,600 per year. Federal outlays on DI and associated Medicare benefits top one-quarter trillion dollars annually, more than three times the 1990 level. The DI trust fund is projected to run dry in 2016, resulting in 19 percent across-the-board benefit cuts.

Rising disability costs are partly demographic: an older workforce is more disability-prone, while rising female labor force participation increases the number of women qualified for benefits. But even accounting for these changes, the number of disability beneficiaries has risen by about 40 percent over the past three decades, according to analysis by the Social Security Administration’s (SSA’s) actuaries.

Yet Census Data show that the share of working-age individuals who report a disability that limits or prevents them from working has remained roughly stable over the past three decades. Self-reported health status has improved, according to the National Center for Health Statistics, fewer workers hold physically demanding jobs, according to the Urban Institute, and Bureau of Labor Statistics data show that the rate of occupational injuries has fallen. The major change is that far fewer individuals with disabilities are working: in 1990, 28 percent of individuals with self-reported disabilities were employed. Today, just 14 percent are working.

Congress itself played a role: in 1984, it loosened eligibility standards, paving the way for increased applications based on more difficult-to-assess mental conditions such as depression and musculo-skeletal disorders like back pain.

A second factor is that DI benefits have become relatively more attractive for less-educated individuals who have fared poorly in the workforce. DI benefits are increased annually along with average wage growth, while earnings for less-skilled individuals have stagnated or even declined. As a result, the “replacement rate” offered by DI — that is, benefits relative to what less-skilled workers could earn in the market — has risen substantially, according to economists David Autor of MIT and Mark Duggan of Stanford. Autor and Duggan calculate that the share of high school dropouts receiving DI benefits has doubled since 1984.

While Social Security disability is ripe for reform, many progressives wish simply to shift revenues from the retirement to the disability program without enacting any other reforms. Doing so would weaken the retirement program’s finances, which have deteriorated significantly in recent years, and leave both programs underfinanced for the future.

These inter-program transfers are portrayed as “routine.” Yet, as Charles Blahous, one of Social Security’s public trustees, has pointed out, prior revenue transfers haven’t taken place in isolation from other reforms. Several revenue reallocations were scheduled as part of the comprehensive reforms passed in 1983. The most recent transfer, in 1994, was recommended by the Social Security Trustees conditioned on “a thorough policy review of the program.” Tax reallocation, the Trustees said, “should be viewed as only providing time and opportunity to design and implement substantive reforms that can lead to long-term financial stability.” We’re still waiting for those reforms to take place.

And Social Security’s current Trustees today warn that reallocation alone “might serve to delay DI reforms and much needed financial corrections for OASDI as a whole.”

It is these actions that the House rule would prohibit: relying solely on revenue reallocation and punting real reforms to the future. A broader-based reform plan that extended the solvency of both the retirement and disability programs could include revenue reallocation to address DI’s short-term financial needs.

Comprehensive reforms must recognize that it’s not enough to simply keep workers from going on DI. That’s been tried: administrative actions under the Carter and Reagan administrations cut thousands of beneficiaries from the disability rolls. But the ensuing backlash led to Congress’s loosening of eligibility standards in 1984.

Rather, reforms should be, in the words of the bipartisan Social Security Advisory Board, “directed to self-support, independence, and contribution that can help … avoid, delay, or minimize [the] need for dependence on the programs of last resort.”

One simple reform is to make workers without children eligible for the full Earned Income Tax Credit. Currently, the EITC for a childless worker working full-time at the minimum wage is just $22 per year. Increasing the reward to work would reduce financial incentives to go on disability.

Comprehensive reform proposals from across the political spectrum focus on creating incentives for employers to keep workers with disabilities on the job. One plan developed for the Center for American Progress by Autor and Duggan would require employers to cover the initial period of disability, during which time workers would receive rehabilitative services. Likewise, a proposal from Richard Burkhauser of Cornell and Mary Daly of the San Francisco Federal Reserve, published by the American Enterprise Institute, would institute “experience rating” for employers’ disability payroll taxes, such that employers who keep disabled employees on the job are rewarded with lower taxes. Both proposals draw lessons from the Netherlands, which reduced the intake of new disability cases by 60% by using similar reforms.

In difficult economic times it is tempting to let the government’s Disability Insurance become the equivalent of “long, long-term” unemployment checks or “early, early” retirement benefits. But the financial and human cost of such complacency is too high. The disabled who can work, should work, and Washington needs to enact policies that will help them do so.

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The twilight of China’s Communist Partyhttp://www.aei.org/publication/twilight-chinas-communist-party/ http://www.aei.org/publication/twilight-chinas-communist-party/#comments Thu, 29 Jan 2015 20:01:55 +0000 http://www.aei.org/?post_type=publication&p=829702 “I can’t give you a date when it will fall, but China’s Communist Party has entered its endgame.” So says one of America’s most experienced China watchers to a small table of foreign diplomats at a private dinner in Washington, D.C. The pessimism from someone with deep connections to the Chinese government is notable. Washington should start paying attention if it wishes to avoid being surprised by political earthquakes in the world’s second-largest economy.

The China scholar at my table is no conservative. Nor are the handful of other experts. Each has decades of experience, extensive ties to Chinese officials and is a regular visitor to the mainland. No one contradicts the scholar’s statement. Instead there is general agreement.

“I’ve never seen Chinese so fearful, at least not since Tiananmen,” another expert adds, referring to the 1989 massacre of pro-democracy student demonstrators in the heart of Beijing. When prodded for specifics, he mentions increased surveillance, the fear of being investigated and increased arrests.

The full text of this article will be posted on Monday, February 2.

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