AEI » Latest Content American Enterprise Institute: Freedom, Opportunity, Enterprise Fri, 28 Nov 2014 03:30:31 +0000 en-US hourly 1 Education that works Tue, 21 Oct 2014 20:49:30 +0000 AEI’s exclusive Vision Talks series convenes America’s leading scholars, thinkers, and practitioners to offer fresh perspectives on key areas of policy and public debate. These talks will be filmed and disseminated as standalone videos, such as Robert Doar’s “What works in helping the poor?” talk.

In the United States, we think of education as the key to equal opportunity. But while spending on education is higher than ever, student achievement — particularly for disadvantaged students — has not kept pace.

Myriad government efforts to improve educational attainment have shown mixed results at best. Is conventional thought on reforming education misguided? Is there a better way to foster excellence? What can parents, educators, and citizens do about it, and how can they make an effective case for change?

Please join us for four concise talks on why America needs to rethink education, what that thinking looks like in practice, and how compelling communication can turn ideas into action.

This event will not be live streamed.

If you have trouble registering, please contact

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Helping youth with disabilities flourish: Improving outcomes for children in the Supplemental Security Income program Wed, 12 Nov 2014 14:31:43 +0000 The Supplemental Security Income (SSI) program provides cash assistance to the families of low-income children with disabilities. Program enrollment has risen faster than can be explained by changes in demographics, health, or income. More concerning is that SSI youth suffer low levels of educational attainment and low work rates, and trends are similar for adults who grew up on the program. Additional steps need to be taken to understand and curb these trends.

Please join AEI and the Brookings Institution for a conference featuring researchers, SSI administrators, field staff, and youth representatives to discuss the SSI youth program, efforts to improve it, and new avenues for improving the life outcomes of youth with disabilities.

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.

If you have trouble registering, please contact

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Thanksgiving links Thu, 27 Nov 2014 17:05:46 +0000 ...]]]> 1. About Those Union-Organized Black Friday Protests at 1,600 Walmarts. From my op-ed in tomorrow’s Investor’s Business Daily, “Black Friday Wal-Mart Protests Miss Mark On Pay Gap” (with Michael Saltsman):

What is overlooked or ignored by labor unions and anti-Wal-Mart organizations is that it takes highly compensated, superstar-level managerial talent to efficiently run a retail giant like Wal-Mart. These activists then make an even bigger mistake by assuming Wal-Mart’s top leaders are highly paid at the expense of lower wages for part-time hourly workers.

Consider: Wal-Mart employs roughly 600,000 part-time employees. If we assume that Wal-Mart’s executive team takes a 100% pay cut and distributes those earnings to employees — the net benefit for the part-time workforce would be a pay bump of roughly 10 cents an hour before taxes.

There are other misguided means to boost the pay of Wal-Mart’s hourly staff. For instance, this year’s Black Friday protests will focus on creating a $15-an-hour “living wage.” But someone has to pay for that mandated raise, and Wal-Mart’s low single-digit profit margin (3.4%) suggests the company itself is ill-equipped to do so. Instead, the store’s employees would shoulder the cost of a “living wage” through reduced hours and fewer job opportunities — closing down the career pathway that allows today’s cashiers to become tomorrow’s store managers or corporate executives.

If you want to help Wal-Mart employees this year — or the employees of any other retailer, for that matter — the best thing you can do is go shopping. While labor union activists provide misleading talking points and empty solutions, you’ll be providing the sales dollars that allow these companies to create more opportunities for the people who staff and manage the stores. Unlike the Black Friday protests, that’s a tradition that’s actually worth continuing.

2. The Great Thanksgiving Hoax. From Richard Maybury writing today in Mises Daily:

The real meaning of Thanksgiving, deleted from the official story, is this: Socialism does not work; the one and only source of abundance is free markets, and we thank God we live in a country where we can have them.

3. Giving Thanks for Property Rights on Thanksgiving. From Caroline Baum, writing for the Manhattan Institute’s e21 website:

Once the colonists grasped the importance of property rights, they were quick to apply the principle. In 1624, they petitioned Governor Bradford for a “portion of land given them for continuance” instead of on a yearly basis. That way, those who worked hard to improve the soil on their land one year stood to benefit, personally, from higher crop yields the next year.

In 1623 and 1624, the Pilgrims were responding to the same incentives that, almost four centuries later, are regarded as the basis for a free, productive and prosperous society. At this time, with our personal freedom compromised by enhanced security against terrorist threats and our economic freedom challenged by government actions in the wake of the financial crisis, we must never lose sight of what it is that made this country great.

4. Map of the Day. The Most Popular Thanksgiving Recipes in Every US State, Based on Google Searches, from the NY Times.

5. Thank the Frackers, Big Oil and Evil Speculators for This. U.S. gasoline prices this Thanksgiving are the lowest since 2009, according to the EIA, and will save US motorists collectively more than $650 million on gasoline versus what they spent last Thanksgiving (from Thursday to Sunday) – or more than $160 million a day, according to Gas Buddy. As Neil Cavuto commented on FOX a month ago,

You know what is weirder than gas prices tumbling the way they have been? Not a single politician demanding to know why they have been falling. Because they sure didn’t waste a nanosecond taking to the microphone when gas prices were going in the other direction.

Don’t you find it a little odd that the same bunch that said the oil industry manipulated oil prices when they were going up aren’t saying boo when they’re coming down? Odder still, because the prices are coming down faster than they went up. Maybe the energy guys weren’t fixing prices any more on the upside than they are now apparently on the downside.

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Top 400 taxpayers paid almost as much in federal income taxes in 2010 as the entire bottom 50% Wed, 26 Nov 2014 22:28:37 +0000 ...]]]> We hear all the time that “the rich aren’t paying their fair share of taxes” (you’ll find more than 1,000,000 Google search results for that phrase). Early last year Obama reiterated his belief that the wealthiest Americans still aren’t paying their “fair share” of taxes. Here’s an analysis using recent IRS data that suggests otherwise.

1. In 2010 (most recent year available), the top 400 taxpayers based on Adjusted Gross Income earned $106 billion collectively, and they paid $19.1 billion in federal income taxes at an average tax rate of 18% (see chart above).

2. In 2010, the bottom 50% of taxpayers, a group totaling 67.5 million Americans, earned collectively almost $1 trillion and paid $22.4 billion in federal income taxes at average tax rate of 2.4% (see chart above).

Bottom Line: A small group of 400 of America’s most successful earners in 2010, about the number of residents living in a typical apartment building in Washington, D.C., paid almost as much in federal income taxes as the entire bottom half of America’s 135 million tax filers, which is a population equivalent to the combined number of residents living in America’s 29 least populated states, plus the District of Columbia. What makes this disparity possible is the fact that 41% of individual income tax returns filed in 2010 had a zero or negative tax liability, according to The Tax Foundation. And a recent CBO study (featured on CD here) found that the entire bottom 60% of American households are “net recipient households” and received more in government transfers than they paid in federal taxes in 2011.

When you have only 400 Americans paying almost as much in federal income taxes as the entire bottom 50% of Americans filing income tax returns, I think we can dismiss any notion of the rich not paying their “fair share” of taxes. In fact, maybe the IRS should publish the names and addresses of the Top 400 taxpayers (or provide a forwarding service to protect anonymity), so that we can all send them “Thank You” letters to express our gratitude for shouldering such a disproportionately large share of our collective tax burden.


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Should government compensate the taxi cartels because of Uber? Wed, 26 Nov 2014 19:29:50 +0000 What about the losers from creative destruction? I got that question yesterday on Twitter, in the context of how the rise of Uber and other ride-sharing services affects the existing owners of taxicab medallions. As is seen in the above chart, these supply-limited medallions have been an excellent investment. Over the past 80 years,  Stewart Dompe and Adam  Smith note in a must-read new Mercatus report, “taxi medallions have generated annualized 15.5 percent rate of return. Put another way, the value of a medallion doubled, on average, every four and a half years.”

And now this rent-seeking racket of artificial scarcity is under threat. Sure, all pretty good news for low-paid drivers and service-starved consumers, but what about the medallion owners who paid such big bucks? Don’t they have a valid property right that is being made worthless by government regulators? Not long ago on the EconTalk podcast, host Russ Roberts and Duke University economist Mike Munger explored this very issue: 

Munger: … But I think the cost advantage is really a problem, because it actually raises a lot of questions about the nature of due process. Suppose that we don’t take any action and the value of these medallions falls to zero. Are we obliged to offer compensation, because we in effect made a regulatory decision that is a taking? This property right, this medallion, had significant value. We made a choice, without due process, that said we are going to reduce the value of this medallion to zero. Are we obliged to compensate?

Roberts: Who is ‘we’?

Munger: The state. Just like we would if we were taking your land under eminent domain to build a road.

Roberts: Yeah, I’m just giving you a heard time. Um, I don’t think that would win. But I’ll be interested.

Munger: It would not. And one of the reasons I wanted to bring it up was my good friend Peter Van Doren had an article at Cato this past week that’s a really terrific discussion of that, and in fact gives good reasons why “we”–in quotes–would not be obliged. Because it’s something different.

This is a sort of political property right that we all recognize is contingent on policy. It changes all the time. And it’s a restriction on competition. Now, the thing that kind of bothers me is you could say all property is. So I have 35 acres of pine forest south of Pittsboro, North Carolina. And suppose I were down there one day, and I heard some chain saws, and I walked back 300 or 400 yards into the woods, and I saw some guys with chain saws cutting down my trees? I’d say, What are you guys doing? They said, We’ve had a tremendous cost to manage; because we can just take these trees and sell them, we can really undercut you! And I’d say, It’s my land! He said: ‘You need to read Rousseau: The fruits of the earth belong to all and the earth to no one. So, we can just take this. And that piece of paper that you say has property–well, the state’s going to change that. As soon as they realize that you took this land from the Indians; it’s unjust. It’s not a real property right.’ This is the same argument that people make about taxing medallions: It was unjust, it was a restriction on competition; it’s not a real property right. Once we start saying property rights aren’t real, I’m not sure I have my pine forest any more, either.

Roberts: Well, it is certainly true that if you paid a million dollars six months ago and now you find that asset isn’t paying out–first of all you can’t resell it for a million, and secondly, it’s not the cash flow that you anticipated from it. Using the medallion isn’t coming through. That’s a real unpleasant surprise. You definitely lost money.

Mumger: Isn’t it a violation of due process? Because did we make a promise? The reason that you need this medallion is we are going to force anyone who provides transportation services to have a medallion. No one else can provide this. And so when you pay for it, you can in good faith think we’re going to protect your property right. And that’s why you pay for it.

Roberts: Yeah, it’s an interesting question. It’s a dangerous slope. Because what it does, of course, is set in stone all rent-seeking victories. It’s very depressing.

Munger: I think the answer is [that] there is a difference between private property and kind of reifying rent-seeking victories. … But if it’s clearly just a restriction on competition and entry into an industry where there would be big benefits, then we shouldn’t compensate. … But in the pine forest it makes sense. We don’t want it to be a commons. We don’t want everyone coming in and overfishing, overharvesting; and so it’s a solution to an externalities problem. Whereas the medallion–maybe it’s a solution to an externalities problem. That’s the argument we make–is we don’t want too much congestion. But if you look, there probably are not enough taxis in New York, particularly at peak times. And so I think the congestion story doesn’t hold up as well.


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Giving thanks for the invisible hand, the kaleidoscopic energy and productivity of the free market, and no turkey czar Wed, 26 Nov 2014 16:24:48 +0000 ...]]]> This post has been an annual tradition at CD now for several years:

Like in previous years, most of you probably didn’t call your local supermarket ahead of time and order a Thanksgiving turkey this year. Why not? Because you automatically assumed that a turkey would be there when you showed up, and it probably was there when you showed up “unannounced” at your local grocery store and selected your Thanksgiving bird.

The reason your Thanksgiving turkey was waiting for you without an advance order? Because of the economic concepts of “spontaneous order,” “self-interest,” and the “invisible hand” of the free market. Turkeys appeared in your local grocery stores primarily because of the “selfishness” and “self-interest” (maybe even greed in some cases) of thousands of turkey farmers, truckers, and supermarket owners who are complete strangers to you and your family. But all of those strangers throughout the turkey supply chain co-operated on your behalf and were led by an “invisible hand” to make sure your family had a turkey on the table to celebrate Thanksgiving this year. The “invisible hand” that was responsible for your holiday turkey is just one of millions of everyday examples of the “miracle of the marketplace” where “individually selfish decisions must lead to a collectively efficient outcome,” as economist Steven E. Landsburg observed.

In a 2003 Boston Globe article titled “Giving Thanks for the Invisible Hand,” syndicated columnist Jeff Jacoby offered a wonderful tribute to the miracle of the invisible hand that makes affordable turkeys available so efficiently every year at Thanksgiving through the power of “spontaneous order” and without the need for any central planning or a “turkey czar”:

Isn’t there something wondrous — something almost inexplicable — in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers?

To bring that turkey to the dining room table required the efforts of thousands of people — the poultry farmers who raised the birds, of course, but also the feed distributors who supplied their nourishment and the truckers who brought it to the farm, not to mention the architect who designed the hatchery, the workmen who built it, and the technicians who keep it running. The bird had to be slaughtered and defeathered and inspected and transported and unloaded and wrapped and priced and displayed. The people who accomplished those tasks were supported in turn by armies of other people accomplishing other tasks — from refining the gasoline that fueled the trucks to manufacturing the plastic in which the meat was packaged.

The activities of countless far-flung men and women over the course of many months had to be intricately choreographed and precisely timed, so that when you showed up to buy a fresh Thanksgiving turkey, there would be one — or more likely, a few dozen — waiting. The level of coordination that was required to pull it off is mind-boggling. But what is even more mind-boggling is this: No one coordinated it.

No turkey czar sat in a command post somewhere, consulting a master plan and issuing orders. No one forced people to cooperate for your benefit. And yet they did cooperate. When you arrived at the supermarket, your turkey was there. You didn’t have to do anything but show up to buy it. If that isn’t a miracle, what should we call it?

Adam Smith called it “the invisible hand” — the mysterious power that leads innumerable people, each working for his own gain, to promote ends that benefit many. Out of the seeming chaos of millions of uncoordinated private transactions emerges the spontaneous order of the market. Free human beings freely interact, and the result is an array of goods and services more immense than the human mind can comprehend. No dictator, no bureaucracy, no supercomputer plans it in advance. Indeed, the more an economy is planned, the more it is plagued by shortages, dislocation, and failure.

It is commonplace to speak of seeing God’s signature in the intricacy of a spider’s web or the animation of a beehive. But they pale in comparison to the kaleidoscopic energy and productivity of the free market. If it is a blessing from Heaven when seeds are transformed into grain, how much more of a blessing is it when our private, voluntary exchanges are transformed – without our ever intending it – into prosperity, innovation, and growth?”

Bottom Line: As you celebrate Thanksgiving tomorrow with your family, make sure to express some thanks and gratitude to the thousands of “invisible” strangers who won’t be there in person, but who were led by the “invisible hand” of the market over the last several months to make sure your holiday feast was possible.

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Here’s what we think we know about economic opportunity in America today Wed, 26 Nov 2014 16:13:30 +0000 A great summary from Scott Winship on how tough or easy it is these days to climb the opportunity ladder:

A just-released paper examined, better than any previous study, mobility across multiple countries using administrative data for each and the same methods and income concepts. That paper reported — for the U.S., Sweden, and Canada — the probability that a man raised by a father in the bottom fifth of earnings has earnings that exceed the bottom fifth of grown sons. The figures were 68 percent in the U.S. and Sweden and 69 percent in Canada. The essentially identical rates of upward mobility — also reflected in other measures in the paper — contradict the prior consensus that the U.S. features lower upward mobility than other nations, a conclusion that now appears compromised by data inconsistencies or driven by family structure differences that affect household income.

Upward mobility rates in the U.S. differ notably by race. Among whites, 74 percent of sons raised in the bottom make it out, compared with just 49 percent of African American sons. Even among whites, however, upward mobility is arguably insufficient. Just 37 percent of sons raised in the bottom fifth end up in the top three fifths, while equality of outcomes would put that figure at 60 percent. Among black sons, the figure is just 29 percent.

And while upward mobility probably has not declined in recent decades, neither has it increased. My own estimates, for example, indicate that 63 percent of sons born in the late 1940s and raised in the bottom quarter of family income made it out of the bottom quarter of earnings in early adulthood. For sons born in the early 1980s, the figure was 60 percent.

Of course, it is impossible to directly observe barriers to opportunity since we can neither observe the potential outcomes of children under different circumstances nor identify how their preferences form and evolve. Relative mobility rates cannot even be taken as prima facie evidence of unequal opportunity. However, we do know that there are large test score gaps when children enter school, which do not diminish much, if at all, over the course of primary and secondary schooling. We also know that college graduation rates are six times higher for children born in upper-income families than for those in lower-income families. Even children with test scores in the top quartile in eighth grade have dramatically different probabilities of getting a bachelor’s degree depending on whether they come from advantaged or disadvantaged families. 

And let me add that even if mobility is stable — to me, another discouraging sign of American economic stasis — higher inequality increases the economic penalty for an inability to move up the ladder. Anyway, rather than  a neat 10-point agenda for increasing mobility, Winship recommends lots of policy experiments in key areas such as education, marriage, and safety-net programs. Terribly reasonable stuff. But my key takeaway is that faster GDP growth is necessary but not sufficient in helping enhance opportunity to create the meaningful lives we wish to live.

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AEI Politics: Experts, highlights, and headlines Wed, 26 Nov 2014 15:00:40 +0000 ...]]]>

Politics and public opinion scholars

Karlyn Bowman
Senior Fellow
Research areas: US politics, Public opinion and polls, Media


Michael Barone
Visiting Fellow
Research areas: Politics, American government, Campaigns and elections


Tim Carney
Visiting Fellow
Research areas: culture of competition


Ramesh Ponnuru
Visiting Fellow
Research areas: Health care policy, Economic policy, Constitutionalism

Norman Ornstein
Resident Scholar
Research areas: US Politics, Congress, Elections


Arthur Brooks
Research areas: Culture, politics, and economic life in America, Philanthropy


Jonah Goldberg
Research areas: US politics & culture, Conservative & Progressive movement

Headlines and Highlights

Obama’s immigration goal: Enrage Republicans
Jonah Goldberg, Los Angeles Times 
Obama’s real immigration goal is twofold: Cement Latinos into the Democratic coalition, and force Republicans to overreact.

Obama’s incoherent immigration speech
Ramesh Ponnuru, Bloomberg View  
I count three ways President Barack Obama’s speech on immigration last night contradicted itself.

Obama mows down separation of powers and limits on executive power
Tim Carney, Washington Examiner
Obama’s immigration action is based on no statutory authority, but is instead an expansion of the idea of “prosecutorial discretion” — the notion that federal government can’t catch all scofflaws, and so it must set priorities.

Gruber and Obama’s big lie 
Jonah Goldberg, National Review Online
Obama administration health-care consultant Jonathan Gruber was discovered to have boasted that Obamacare was designed to exploit the “stupidity” of American voters and elude honest accounting by hiding both its cost and the taxes necessary to pay for it.

Will Congress use executive order on immigration as excuse for more gridlock
Norm Ornstein, National Journal  
With the determination of President Obama to issue his executive order on immigration this week, the lame-duck session in Congress takes on a fascinating set of twists.

Let’s really reform immigration–to encourage high-skill immigrants
Michael Barone, Washington Examiner  
America always needs high-skilled immigrants. And we don’t need to tie them to an employer. Despite all the taxes and regulations, this is still a free enterprise system; let them make their own way.

Where the polls were wrong–and maybe, why
Michael Barone, Washington Examiner
Were the polls wrong this midterm election cycle? Nate Silver, the nation’s most assiduous polling analyst, believes it was skewed towards the Democrats this year.

Don’t bet on Jeb
Ramesh Ponnuru, Bloomberg View
It would be better for conservatives if Sen. Marco Rubio ran for president in 2016 and Jeb Bush bowed out.

Election 2014: What the voters said   
Karlyn Bowman
The November issue of AEI’s Political Report provides a comprehensive picture of what voters had to say on Election Day, featuring exit-poll data from national House races since 1986.


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AEI Education: Experts, highlights, and headlines Wed, 26 Nov 2014 15:00:08 +0000 ...]]]>

Education scholars

Frederick Hess
Director, Education Policy Studies
Research areas: K-12 and higher education, School reform


Michael Q. McShane
Research Fellow
Research areas: K-12 education, Private and religious schools


Kevin James
Research Fellow
Research areas: Quality of higher ed, Higher ed financing (student loans)

Andrew Kelly
Director, Center on Higher Education Reform
Research areas: Higher education,  Education funding, Student loans


Katharine B. Stevens
Research Fellow
Research areas: Pre-K education, Teacher tenure

Headlines and Highlights

A pivotal shift in the new Child Care and Development Block Grant
Katharine B. Stevens, AEIdeas
The most striking aspect of the newly-reauthorized CCDBG is its pivotal shift from viewing child care solely as a babysitting service for working parents to seeing it, too, as a crucial opportunity for young children’s early development and learning.

Cami Anderson and the forces of unreason
Rick Hess, Rick Hess Straight Up 
Rick Hess reflects on the point of public debate in light of Cami Anderson’s visit to AEI in November 2014.

Bigger isn’t better for New York City pre-K  
Katharine B. Stevens, AEIdeas
While adding tens of thousands of pre-K slots in a matter of months makes for good headlines, unfortunately for New York City it does not make for good pre-K.

Education: A natural issue for Republicans 
Rick Hess, Michael McShane, National Review Online
The Republicans’ wave in the midterms might have had little to do with education, but an ascendant Republican party would do well to think about a coherent reform plan going forward.

What the GOP’s win means for education 
Rick Hess, Michael McShane, U.S. News & World Report
The midterms weren’t about education, but the GOP’s wave could have a big effect on schools.

What the midterm elections mean for pre-K
Katharine Stevens, AEIdeas
The outcomes of the governors’ races will make much more of a difference for pre-K than who controls the US Senate.

Don’t want more higher-ed regulation? Then we need more transparency
Andrew Kelly, Kevin James, National Review Online
Better student outcomes data would not cure every market distortion created by government’s involvement in higher education. But it would help consumers’ market discipline. And a more competitive market would actually reduce government intervention in the sector.

Higher ed on the campaign trail
Rick Hess, Forbes
At most, higher education has been on the agenda in about half of the races for governor and senator. Where it has come up, the discussion has been more of the same crowd-pleasing themes that are all too familiar—more funding, new scholarships, lower interest rates on new student loans, and loan relief for current borrowers.

Teacher quality, not quantity
Rick Hess, National Review Online
A NYC charter school makes the case that good teachers matter more than administrators.


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AEI Defense Policy: Experts, highlights, and headlines Wed, 26 Nov 2014 15:00:00 +0000 ...]]]>

Defense scholars

Thomas Donnelly
Co-Director, Marilyn Ware Center for Security Studies
Research areas: Defense, National security


Mackenzie Eaglen
Resident Fellow
Research areas: Military readiness, Defense budget, Military personnel, Defense industrial base


William Inglee
Visiting Fellow
Research areas: Building partner capacity, Business of defense, National security policy


Jim Talent
Senior Fellow, Director, National Security 2020 Project
Research areas: Congress, US-China security relations

Gary Schmitt
Co-Director, Marilyn Ware Center for Security Studies
Research areas: Intelligence, Europe, National security, American citizenship


William Greenwalt (Bill)
Visiting Fellow
Research areas: Defense acquisition/industry, Aerospace industry, Government procurement


Phillip Lohaus
Research Fellow
Research areas: US and foreign intelligence [capabilities], Middle Eastern and South Asian insurgencies


Roger I. Zakheim
Research Fellow
Research areas: National security legal issues, Impact of Congress on defense

Headlines and Highlights

Hagel’s departure more about policy than the person
Mackenzie Eaglen, The Hill
Unfortunately, it is likely that not much will be different three months from now regarding U.S. strategy to combat Islamic extremists even after a change at the top of the Pentagon.

The legacy of Chuck Hagel 
Mackenzie Eaglen, The National Interest
While he was not a noisy regular on all the Sunday talk shows, Secretary Hagel was competently managing the largest federal agency’s drawdown at a time of great global unrest.

The Hagel Opportunity 
Thomas Donnelly, The Weekly Standard
Secretary of Defense Chuck Hagel’s resignation gives congressional Republicans the opportunity to review our declining defense budget and create a measuring stick for the next president.

Hagel’s out: 4 key points to consider 
Danielle Pletka, AEIdeas
Secretary of Defense is a terrible job for anyone with any self-respect. The administration won’t listen to the military, won’t do what’s necessary to fight ISIS, al Qaeda or other groups.

A budget road map for rebuilding US military strength
Mackenzie Eaglen, The American
There is an emerging bipartisan consensus that Congress must overturn the entire Budget Control Act and not just sequestration. In the near term, the president and the military have outlined priorities on which Congress can take immediate action.

Politics is killing the Pentagon
Mackenzie Eaglen, The Hill
As growing crises abroad build momentum for reversing America’s latest builddown, there is a real risk policymakers will spend any new money on the wrong priorities.

News flash to the new Congress: Tiered readiness is here now
Mackenzie Eaglen, Real Clear Defense
The new Congress should recognize that tiered readiness is here now, and it will be their job to fix it.

Challenges to the US rebalance to Asia
Gary Schmitt
Until Washington admits it is engaged in a strategic competition with Beijing, the pivot to Asia likely will not have sufficient political backing to be carried out as needed.

5 national security priorities for Congress
Mackenzie Eaglen, US News & World Report
There will be no shortage of pressing national security issues to address when Washington returns to business.

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Immigration is a good thing, but who pays? Wed, 26 Nov 2014 14:46:35 +0000 ...]]]> There is an important but unanswered question associated with President Obama’s executive order on immigration. Will the approximately five million undocumented immigrants covered by the President’s action be eligible to receive welfare benefits? And if so, how much will those benefits cost?

In his speech announcing the new policy, the President said not to worry. While he was clear that undocumented immigrants would not be eligible for Affordable Care Act subsidies, the President appeared to deny the new group (mostly parents of children born in the United Sates) other kinds of federal benefits. “This deal does not,” the President said, “offer the same benefits that citizens receive.”

The official policy released by the Department of Homeland Security backs up the president’s words — and lack of detail. “This memorandum confers no substantive right, immigration status or pathway to citizenship. Only an act of Congress can confer those rights,” says Jeh Johnson, Secretary of Homeland Security in the November 20 memo announcing the new policy.

But that is not the end of the story. There is a lot of wiggle room in the term “benefits” especially when some benefits are provided through the tax system. Low wage workers covered by the President’s plan are likely to be eligible for the Earned Income Tax Credit – one of our nation’s largest transfer programs for low income Americans. Even if there is an attempt to prevent eligibility for the EITC, I doubt the Internal Revenue Service, which admits that the current program has 20% payment error rate, is capable of discerning this group of non-citizen immigrants who would not be eligible from another group that is eligible.

But an even bigger question is what will happen at the state level. States are sure to come under pressure to offer state-funded benefits to the covered group. State law in New York, for example, requires that anyone residing in the state “under the color of the law” cannot be denied state funded assistance for which they are otherwise eligible. This would include the group of immigrants who will now be determined to be here legally because of the President’s new program. Receiving benefits will, of course, be contingent on whether they are otherwise eligible due to low income and other factors, but a high proportion of those eligible under the President’s plan have incomes below 200 percent of the federal poverty level which means it is likely that a significant proportion of the covered group could be eligible for means tested benefits.

In 2013, when Congress was seriously considering the proposed comprehensive immigration reform, which also expressly denied federal welfare benefits to undocumented immigrants who were to be offered a path to citizenship, New York City’s welfare agency (which I used to run) examined the cost to state and city welfare programs of including this new group in state funded welfare expenditures, an outcome we were convinced would be required by state law. The conclusion was not cheap – $540 million in annual costs by 2019 if the legislation had passed. As is always the case when examining welfare spending, the overwhelming bulk of these costs were due to higher Medicaid expenditures and since Medicaid is so expensive in New York City, the increased costs accounted for less than 2 percent of the annual Medicaid cost of more than $28 billion.

This discussion will play out in other states in different ways with different results but at least for some it will lead to higher welfare costs and caseloads, and for all, there will be great pressure to offer benefits to the covered group. “Coming out of the shadows,” as the President calls what will happen for the people he is trying to help, may also mean deciding it’s safe to apply for welfare.

The best part of the President’s speech last week was when he spoke approvingly of our country’s long history of welcoming and benefitting from immigrants, and he is right. Immigrants have clearly helped to make our nation great. I saw their contributions every day during my time as New York City’s welfare commissioner. The growth in foreign born population in New York City is, along with less crime and welfare and improved schools, one the essential keys to that city’s resurgence during the past twenty years.

But the President notably left out any mention of why immigrants would want to come to the United States in the first place — greater freedom for instance, or the rule of law, or a democratic form of government that works better than what they had lived under. That kind of pro-United States rhetoric is probably too much for the President’s lack of enthusiasm for American exceptionalism. But there is one aspect of American life that the President and his supporters would herald — the extension of government provided welfare benefits. The determination to extend government benefits is why the policy the President announced last week will lead to an increase in the size and cost of welfare.

Robert Doar is the Morgridge Fellow in Poverty Studies at the American Enterprise Institute. From 2007 to 2013, he was the commissioner of the New York City Human Resources Administration, the city agency responsible for the cash welfare, food stamp and Medicaid programs.

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AEI Foreign Policy: Experts, highlights, and headlines Wed, 26 Nov 2014 14:20:56 +0000 ...]]]>

Foreign policy scholars

Danielle Pletka
Senior Vice President, Foreign & Defense Policy Studies
Research areas: Terrorism, Middle East, Iran, South Asia


Michael Auslin
Resident Scholar & Director, Japan Studies
Research areas: Japan, US-Japanese relations, Asian maritime security


Dan Blumenthal
Resident Fellow
Research areas: China, Taiwan, East Asia, US-China relations


Sadanand Dhume
Resident Fellow
Research areas: S. Asian security, Political economy, Business, Radical Islam in
S. Asia, India & Pakistan


Frederick W. Kagan
Christopher DeMuth Chair & Dir., Critical Threats Project
Research areas: National security, US military, Afghanistan & Iraq


Michael Mazza
Research Fellow
Research areas: US Asia-Pacific defense policy, Cross-strait relations, Chinese military


Michael Rubin
Resident Scholar
Research areas: Iran, Syria, Middle East regional politics, Turkey, the Kurds, the Persian Gulf


Marc Thiessen
Research areas:  Counterterrorism issues, American presidential leadership


John Yoo
Visiting Scholar
Research areas: International law, Constitutional law


Leon Aron
Resident Scholar & Director, Russian Studies
Research areas: Russia, US-Russian relations


Roger Bate
Visiting Scholar
Research areas: Performance of aid agencies and NGOs


John Bolton
Senior Fellow
Research areas: Foreign policy, International organizations


Nicholas Eberstadt
Henry Wendt Chair in Political Economy
Research areas: Poverty, Demographics, Entitlements, North/South Korea


Ahmad Majidyar
Senior Research Associate
Research areas: Afghanistan, Rise of terrorism & religious extremism in Pakistan, Iran


Roger F. Noriega
Visiting Fellow
Research areas: The Caribbean, Latin America, Canada


Derek Scissors
Resident Scholar
Research areas: US-China economic relations, Chinese investment, international finance (Asia)


Paul Wolfowitz
Research areas: Public-private partnerships, Entrepreneurship, Development issues, Africa


Katherine Zimmerman
Research Fellow & Sr. Analyst, Critical Threats Project
Research areas: Jihadist organizations, terrorism

Headlines and Highlights

Thanksgiving week, Iran edition
Danielle Pletka, AEIdeas
From now on, all nuclear wannabes can simply say that “military dimensions” of their nuclear weapons programs are off limits. Look at the precedent.

ISIS, Israel, and nukes: Iran faces crises
Matthew McInnis, American Enterprise Institute
More fully understanding the red lines that guide Iran’s security behavior could give American policymakers an enormous advantage in anticipating, shaping, and mitigating Iranian diplomatic and military activities.

Mexico’s security crisis: Will Iguala be a wake up call?
Roger Noriega, American Enterprise Institute
The recent kidnapping and probable murder of 43 students at the hands of corrupt local officials in Iguala, Mexico, should prompt the United States to invigorate security cooperation with Mexico to fight crime and secure the border.

How to check the president
John Yoo, National Review Online
By allowing as many as 5 million illegal aliens into the United States for the remainder of his term, Obama is violating the Constitution and Congress, and the courts must respond.

Nuclear talks with Iran falling apart as deadline nears: Bolton on Fox News’ ‘America’s Newsroom’
John Bolton, Fox News
The Iranians have a strong sense that they can get more out of the Obama administration. Iran is under no sense of urgency, and the letter to Iran’s Ayatollah illustrates that President Obama is desperate to make a deal.

Foreign policy and the new Congress
Danielle Pletka, AEIdeas
The 114th Congress will have a much tougher time than it did during the Clinton era. Barack Obama doesn’t respect the Congress and doesn’t believe the legislative branch matters.

Why a good nuclear deal is so hard for Iran
Matthew McInnis, AEI Top Three
The Iranians want and need a nuclear deal, but politics and the complicated dynamics of the Iranian leadership will make this exceedingly difficult. AEI Resident Fellow J. Matthew McInnis explains why he thinks Iran’s negotiators may end up shooting themselves in the foot.

Talks with Iran failing? What? Don’t be ridiculous
Danielle Pletka, AEIdeas
Despite the initial timeline of six months to a year for nuclear negotiations, Iran talks will most likely continue to stall as a result of the policies of the current administration and its allies.

Latest media appearances from our foreign policy scholars

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