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PPI’s Trade Fact of the Week: U.S. farm export losses as shipping companies decline cargoes, as of mid-year 2021: $1.5 billion?

Posted on by Alyssa Brown

FACT:

U.S. farm export losses as shipping companies decline cargoes, as of mid-year 2021: $1.5 billion?

THE NUMBERS: 

Containers* arriving at Port of Los Angeles:

4.72 million:      January-October 2021
3.48 million:      January-October 2020
3.97 million:      January-October 2019

* Counted in TEUs (“twenty-foot equivalent units”, for the standard 20’ x 8’ x 8.5’ shipping container)

WHAT THEY MEAN:

D.C.’s taxi cabs and their dispatchers obey a public-interest rule:  If you wish to serve the lucrative routes — say, Dulles-to-Mayflower Hotel and back — you must also agree to pick up fares from the neighborhoods. Representatives John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.), in their proposed Ocean Shipping Reform Act, pose a question: Shouldn’t the world’s container ships live by a similar rule, requiring them to carry American export cargoes as well as inbound containers?

Statistics put out monthly by American container ports suggest why they ask this question.  From January through October, the Port of Los Angeles — the busiest U.S. container port — took in 4.72 million containers (again in TEUs). This is a bigger total than all but one of LA’s full-year incoming container counts, and based on a daily average of about 15,500 arriving containers, the 4.87 million-TEU record set in 2018 probably fell two weeks ago.  Statistics are much the same at the second-busiest port — Long Beach, ten minutes’ drive east on the Seaside Freeway — which likely broke its own annual record last weekend.  Meanwhile, truckers and warehouse workers have been leaving their jobs all year for better options: 1.4 million workers in the Bureau of Labor Statistics’ transport/warehousing/utility sector have quit through September, easily breaking the 1.1 million full-year record set in 2002.  So with record arrivals on one hand and bottlenecks on the other, the ports have clogged up. The resulting worries about Christmas inventories and intra-U.S. supply bottlenecks are intense enough to worry even the President of the United States.

A less publicized consequence of the incoming-container surge is a perverse incentive for shipping companies:  they’re tempted to ignore U.S. exporters. Fees to ferry a container from Asia to the West Coast, normally between $2,000 and $3,000, have run at $15,000 for much of this year and at times hit $20,000.  With import income so high, a ship can often earn more money by turning around empty to refill in Asia than by loading a waiting U.S. export cargo for $3,000 or so.  September’s Port of Los Angeles container report provides a vivid illustration: it counted 434,294 outbound containers, of which 358,351 traveled empty, and only 75,713 carrying U.S. cargo — the Port’s lowest count of full export containers since the autumn of 2002.

This hits farm exporters who use containers especially hard, as producers of meats, dairy, wines, tree nuts, and specialty crops often require quick pickup of perishable goods.  As of mid-year they reported losing $1.5 billion in exports. To put this in perspective, calculations by the Department of Agriculture’s Economic Research Service done for 2019 suggest that each $1.5 billion in agricultural exports meant about $1.7 billion in economic activity for the U.S., including about 12,000 jobs and $500 million in farm income.

Hence, the bill Reps. Garamendi and Johnson propose.  Returning to the taxicab analogy, a D.C. taxi company fielding a request for dispatch must accept the fare (unless the customer is belligerent, intoxicated, etc.) or face a $250 civil penalty.  Maritime shipping operates on an obviously different scale — a single medium-sized container ship could carry all 7,151 D.C. cabs if it wanted to**, and there are 6,293 such ships on the water — but also has some similarities.  Like taxicabs, the mighty vessels run by Maersk, Evergreen, COSCO, MSC et al. are “common carriers” given a right to serve U.S. ports. Under the bill, this right would come with a complementary responsibility to serve American exporters and could not “unreasonably decline export cargo bookings if such cargo can be loaded safety and timely and carried on a vessel scheduled for such cargo’s immediate destination” without becoming liable to penalties by the Federal Maritime Commission.

** Yes, we know, not a likely real-world scenario.  Cars aren’t easy to squish into containers (though it can be done if necessary), and usually travel on roll-on/roll-off ships. Just meant as a visual.

 

 

FURTHER READING

Legislation

From Reps. Garamendi and Johnson, read the Ocean Shipping Reform Act.

A supportive White House post can be read here.

The Federal Maritime Commission, tasked with regulating ocean carriers and (should the Garamendi/Johnson bill pass) enforcing new rules.

Agriculture and the export economy

Farm Bureau economist Daniel Munch on the West Coast port challenges and their impact on American agriculture, read the piece here.

The New York Times’ Ana Swanson (subs. req.) has the view from the California dairy farm, read the piece here.

And the USDA’s most recent investigation of ag exports and their economic impact at home can be read here.

Ports and ships

Container statistics from the Port of Los Angeles can be found here.

UNCTAD’s 2021 Review of Maritime Transport, with examinations of the impact of COVID-19 on 2020 shipping and cargo, the 2021 rebound, and some glum detail on U.S. ports.  The three busiest U.S. container ports – Los Angeles, Long Beach, and New York – handle 25 million containers per year, about as many as China’s 4th-busiest port (Shenzhen) does all by itself.  The world’s top two — Shanghai and Singapore — manage 44 million TEU and 37 million TEU, respectively.

Help on the way — The White House summarizes the maritime investment sections of the bipartisan Infrastructure Investment & Jobs Act.

And last …

What are container ships really like?  Horatio Clare’s Down to the Sea in Ships (2015) recounts a trip on the Gerd Maersk, a 6,600-TEU ship built in 2006, on a UK-through-Suez-to-Malaysia-Vietnam-China-to-Los Angeles rout. Detail on crew life (Filipino ratings, European and Indian officers; no alcohol at any time), cargo loading, rules for avoiding piracy, the approach to the Port of L.A., etc. The average (mean) capacity of a container ship this year is about 4,000 TEU, placing Gerd Maersk in the larger-than-average class able in theory to carry *nearly* all of D.C.’s taxicabs. The biggest current ships are the three Japanese-built 23,992-TEU Ace series delivered to Taiwan’s Evergreen line this year; 1,312 feet long, 212 feet wide, and 108 feet deep, they could carry the whole D.C. cab fleet and still be two-thirds empty.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

 

Johnson for New York Daily News: Give Biden credit for going big

Posted on by The Progressive Policy Institute

By Jeremiah Johnson

Left-wing pundits have created a narrative around Biden’s presidency — small-time actions, disappointment and betrayals. The Young Turks’ Cenk Uygur calls Biden a “corporate Democrat” and claims that the Build Back Better bill is “trash” that contains “nothing for progressives.” Some progressive groups claim that the bipartisan infrastructure bill “makes things worse,” compared to doing nothing. This is a long-running theme with left-wing criticism. Progressive darling Nina Turner compared Donald Trump to eating a bowl of excrement, then compared Biden to eating half a bowl — as though the two were remotely comparable. These critics paint Biden as unwilling to take bold actions, to break from Trump or to go big.

These criticisms are fundamentally wrong. Far from playing small ball, Joe Biden is having one of the most impressive and transformative first years of any president in generations. Biden deserves far more credit for going big and getting things done.

Read the full piece in New York Daily News.

Solving the 5G/Altimeter Conundrum

Posted on by The Progressive Policy Institute

The headline of a November 18 article in Ars Technica says it all: “FAA forced delay in 5G rollout despite having no proof of harm to aviation: US delays even as 40 countries use C-band with no reports of harm to altimeters.”

What’s the story here? An interagency squabble between the FAA and the FCC could damage the US ability to implement 5G service, just as the economy is starting to accelerate. 5G provides essential new capabilities for businesses in areas from digital manufacturing to logistics to agriculture. A 2020 PPI report projected that 5G-enabled enterprises could create 4.6 million jobs over the next 15 years, and hundreds of thousands of jobs in the near-term. The Biden Administration must step in and make sure that this issue is settled as quickly as possible, in a way that accounts for safety without holding back growth.

Mobile providers have just spent $80 billion on licenses for what is known as C-band spectrum, which has very desirable characteristics for 5G service, in terms of speed and coverage. The issue is that aircraft altimeters, which measure the altitude of a plane, utilize frequencies that are close to the C-band spectrum used for 5G. Aware of this problem, the FCC put in a large “guard band” of unused spectrum between the 5G frequencies and the altimeter frequencies.

The FAA decided that the FCC’s actions weren’t good enough, and warned of “potential adverse effects on radio altimeters.” This forced Verizon and AT&T to delay their planned roll-out of the new 5G capabilities for at least a month while the agencies duked it out.

But here’s the thing. This C-band spectrum is already in use in 40 other countries which have experienced no problems with altimeters. Moreover, US airlines continue to fly to these countries As Roger Entner wrote, if the interference problem is as dire as the FAA says, “why have the airlines and aeronautics manufacturers not grounded planes” in those countries?

Moreover, the FAA is relying on studies which appear to be using unrealistic assumptions. Based on these assumptions, existing systems would already be interfering with altimeters. For example, Peter Rysavy writes that

Navy radar, such as the AN/SPN-43 radar, operates in mid-band frequencies at extremely high power with ground transmitters pointing at aircraft in geographical areas where U.S. planes operate. Such potential interference, however, has not been a problem in the real world.

This is not the time for agency parochialism. The Biden Administration has to make sure that this problem gets resolved quickly and in accordance with science and good engineering practice.

Bledsoe for The Hill: Can America prevent a global warming cold war?

Posted on by The Progressive Policy Institute

By Paul Bledsoe

At the 11th hour of climate negotiations in Scotland last week, the U.S. and China released a “Joint Glasgow Declaration on Enhancing Climate Action in the 2020s” outlining increased cooperation on a wide range of climate and clean energy topics. The communique’s careful language was redolent of Cold War détente documents, increasing a sense that climate change bargaining with China, Russia and other adversaries is becoming like Cold War nuclear nonproliferation negotiations: failure could be catastrophic, so enhanced cooperation is crucial, but often slow-going.

Yet, the climate crisis doesn’t permit the luxury of time. Leading science finds that to limit devastating near-term climate impacts, and reduce risks of runaway warming, China especially must cut its emissions as soon as possible this decade, not just in the long-term.  So far, however, despite the new declaration, and climate discussions this week between President Joe Biden and Chinese President Xi Jinping, Beijing has made no such commitment. In fact, Chinese coal use just reached an all-time high.

Read the full piece in The Hill. 

Marshall for The Hill: Popping the progressive bubble

Posted on by The Progressive Policy Institute

By Will Marshall

For Virginia Democrats like me, the odd-year elections earlier this month were like a gruesome coda to Halloween. Republicans swept the top three statewide offices, took over the House of Delegates and knocked the Old Dominion back into swing state status.

As painful as they were, however, the Democratic losses in Virginia and close shave in New Jersey have had one salutary effect: They seem to have popped the progressive bubble — the activist left’s claims, credulously accepted by many media commentators, to be the authentic voice and future of the Democratic Party.

Post-election analysis has highlighted the pitfalls for Democrats of heeding only that voice. The protracted battle in Washington over progressives’ big social spending demands has reinforced public doubts about President Biden. Republicans also made notable gains among parents angry over school closures, falling standards and academic “antiracism” theories promoted by progressive social justice warriors.

Read the full piece in the Hill.

Is American Technological Leadership Under Attack?

Posted on by The Progressive Policy Institute

The Progressive Policy Institute’s Innovation Frontier Project released a comprehensive research deck on the threats facing American innovation. The authors of the deck, innovation experts Ashish Arora and Sharon Belenzon of Duke University, found the United States has lost a substantial amount of corporate research since the 1980s, with only a handful of present-day U.S.-based companies investing in research at a meaningful level.

The deck also lays out clear political implications for lawmakers. The Biden Administration’s top strategic economic priorities are based on a foundation of strong U.S. competitiveness and innovation, yet Congress’s percolating anti-tech antitrust legislation would undermine these priorities by impairing the ability of America’s few leading R&D performers to develop new products and enter new markets. The restrictions on these companies will reduce our national investment in R&D and hurt American economic prosperity and national security.

Jack Karsten, Managing Director of the Innovation Frontier Project, and Michael Mandel, Vice President and Chief Economic Strategist at PPI break down the deck’s research and discuss how antitrust legislation in Congress would devastate American technological leadership and innovation.

Check out the research deck here.

Learn more about the Progressive Policy Institute here.

Drug pricing compromise will protect seniors

Posted on by Alyssa Brown

While the overarching Build Back Better package remains in limbo until Congress receives a score from the Congressional Budget Office (CBO), it appears that the Democrats have reached a deal on drug pricing. The compromise abandons H.R. 3’s more aggressive components and instead pulls from Senators Ron Wyden and Chuck Grassley’s drug pricing framework.

Democrats worked to thread the needle between progressives’ ambitions to protect seniors from high drug prices and moderates’ desires to protect the incentives to innovate new life savings therapies. They have moved away from initial plans to export drug pricing decisions to other countries — setting a formula based on what other countries had decided drugs are worth. This could have been easily gamed by drug makers but also would have left price decisions up to foreign policymakers instead of making the hard decisions at home.

Instead, the new drug pricing deal would:

      • Cap seniors’ out-of-pocket costs at $2,000 per year, spread across the year.
      • Cap insulin costs at $35 per month.
      • Allow Medicare to negotiate the cost for 10 of the most expensive drugs starting in 2025 increasing to 20 drugs per year by 2028.
      • Only allow Medicare to negotiate on drugs that have passed an initial market exclusivity period — 9 years for small molecule drugs and 12 years for biologics — addressing market failures when generics don’t create competition and drive down prices.
      • Use inflation caps in Medicare and the commercial market to limit drug price increases.
      • Subject insurance middlemen called, pharmacy benefit managers, to additional transparency requirements.
      • Change incentives for Part D insurers to negotiate drug prices more aggressively.

 

Because these policies will be phased in and are not as draconian as earlier proposals, they may not make a measurable difference to every consumer. But they will undoubtedly help the most vulnerable: seniors with exceptionally high-cost drugs. As PPI has explained in the past, capping out-of-pocket costs and spreading the costs across the year rather forcing seniors to pay huge deductibles up front will make it easier for vulnerable seniors to access lifesaving therapies. PPI has also pushed for reforming incentives for insurance middle-men but those provisions were watered down in the final agreement — instead policymakers settled for increased transparency requirements for pharmacy benefit managers.

This year, the whole world was reminded of the promise of pharmaceutical innovation. Because of the incentives in the U.S. market, Americans had widespread access to COVID-19 vaccines before much of the world. The United States rewards innovation and though the U.S. health care system is worse off on many health are metrics, it out performs other high-income counties on cancer care because of widespread access to new therapies.

Democrats worked together to form a package that preserves incentives to innovate while protecting seniors. We are hopeful that the CBO will provide realistic estimates of the impact the compromise deal that Democrats have coalesced around.

American Innovation Under Threat

Posted on by The Progressive Policy Institute
Restrictive Legislation and Global Competition
SUMMARY

A package of antitrust legislation recently introduced in Congress aims to improve competition in the U.S. technology sector. The proposed provisions in these bills would limit digital platforms’ ability to integrate product features, promote new products, or even compete in new market segments.

We conclude that such restrictions will harm U.S. scientific and technological leadership, hurting U.S. competitiveness and living standards.

Antitrust regulations that reduces commercial scale and product scope weaken incentives for corporate research and undermine the ability to innovate.

We highlight how these limitations may affect American scientific and technological leadership in the world. We also consider the role of information technology firms in advancing U.S. technology, the foreign competition they face, and the fragile nature of the U.S. innovation ecosystem.

You can download and view the entire slide deck by visiting the Innovation Frontier Project’s website.

American Innovation is Under Attack and America is Losing Ground in Research and Development, according to new Innovation Frontier Project Research

Posted on by The Progressive Policy Institute

Today, the Innovation Frontier Project (IFP), a project of the Progressive Policy Institute, released a comprehensive research deck on the threats facing American innovation. The authors of the deck, innovation experts Ashish Arora and Sharon Belenzon of Duke University, found the United States has lost a substantial amount of corporate research since the 1980s, with only a handful of present-day U.S.-based companies investing in research at a meaningful level.

This deck also lays out clear political implications for lawmakers. The Biden Administration’s top strategic economic priorities are based on a foundation of strong U.S. competitiveness and innovation, yet Congress’s percolating anti-tech antitrust legislation would undermine these priorities by impairing the ability of America’s few leading R&D performers to develop new products and enter new markets. The restrictions on these companies will reduce our national investment in R&D and hurt American economic prosperity and national security.

“America’s technological leadership is being challenged, and if we undermine our business research leaders we risk losing this fight with China. The Biden Administration has identified key priorities in emerging technologies, but Congress’s anti-tech antitrust legislation would hurt these priorities. Our policymakers need to get smart about the steps needed to regain our footing as a technological leader,” said Dr. Michael Mandel, Chief Economist for the Progressive Policy Institute.

The deck findings issue a stark warning:

    •  America’s technological leadership is under challenge.
    •  The United States has lost a substantial amount of corporate research since the 1980s.
    •  Corporate research is the source of many breakthrough innovations.
    •  American leadership in emerging technologies depends on corporate research and only a few companies continue to invest in research at a meaningful level.
    •  The antitrust proposals will impair the ability of these few leading R&D performers to develop new products and enter new markets.
    •  The loss of tech companies with scale and scope would reduce U.S. investments in R&D and hurt American economic prosperity and security.

View the full 67-page deck here:

This deck was authored by Ashish Arora and Sharon Belenzon of Duke University. Mr. Arora is the Rex D. Adams Professor of Business Administration at the Duke Fuqua School of Business. He received his PhD in Economics from Stanford University in 1992, and was on the faculty at the Heinz School, Carnegie Mellon University, where he held the H. John Heinz Professorship, until 2009. Mr. Belenzon is a professor in the Strategy area at the Fuqua School of Business of Duke University and a Research Associate at the National Bureau of Economic Research (NBER). His research investigates the role of business in advancing science and has been featured in top academic journals, such as Management Science, Strategic Management Journal and American Economic Review. Mr. Belenzon received his PhD from the London School of Economics and Political Science and completed post-doctorate work at the University of Oxford, Nuffield College.

Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jack Karsten. Learn more about IFP by visiting innovationfrontier.org.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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PPI’s Trade Fact of the Week: ‘Squid Game’ outdrew the World Series this year – Nov. 17, 2021

Posted on by The Progressive Policy Institute

FACT:

“Squid Game” outdrew the World Series this year.

THE NUMBERS: 

111 million:  Squid Game viewers, September/October 2021
70 million:    World Series viewers, October/November 2021

WHAT THEY MEAN:

Korea-made drama Squid Game, which premiered Sept. 17 on Netflix, centers on a contest in which 456 impoverished and debt-ridden players compete for a ₩45.6 billion prize (~$38 million) in a series of children’s games. The losing players are ruthlessly executed. (Shot, stabbed, thrown off a bridge, etc.; more variety presumably in Season 2.) The show’s 9-episode Season 1 run logged over 111 million views, a count not only well above Netflix’s earlier 82-million-viewer record (the 2020 scheming-18th century-Brit-aristocrat series Bridgerton), but outpacing the Atlanta-v.-Houston World Series.  Americans weren’t alone in their enthusiasm: Squid Game was also Netflix’s top show in Denmark, Bolivia, Kuwait and Bahrain, India, Bulgaria, and 44 other countries.

Not a unique triumph for Korean arts, Squid Game is an especially visible example of the much larger “Hallyu Wave” phenomenon. Hallyu, translated as “Korean Wave,” is shorthand for the international appeal of South Korean pop culture, first in Japan, China, Taiwan, and Southeast Asia and more recently in the U.S., Europe, Latin America, and the Middle East.  At the cultural high end, last year’s Parasite — a satire on class disparity and wealth inequality, pitting scheming low-income moochers against a greedy and clueless rich family — was the first Asian and first non-English-language film to win a Best Picture Oscar.  At the somewhat less-high end, five of Billboard’s 10 non-English No. 1 albums since 1958 have come since 2018 from K-Pop boy-band groups BTS and SuperM. In between are clothing styles, video games, cosmetics, band and artist merchandise, and other cultural and lifestyle products.

Korean government economists calculate the value of Hallyu exports at $12 billion in 2020.  This would still be well below the $36 billion in exports from Korea’s mighty auto factories, but within sight and growing by 22 percent per year. More is presumably ahead; as one 2021 indicator, Netflix invested nearly $500 million in the Korean entertainment industry and opened two studio facilities in South Korea.

What explains Hallyu’s success?  Some analysis credits Korean government support and organization.  The Korea Herald, reporting on the creation of a “Hallyu Department” in the Ministry of Culture, Sports, and Tourism last year scoffs at this idea: “it is not the first time that the government is attempting to play a role in the promotion of the Korean wave, each time against resistance from the industry who feared government meddling in what is essentially a private sector initiative may have the opposite effect”.  Rather, the success of Korean culture looks organic, matching (a) appealing plotting, cliffhanger endings, and striking visuals with (b) new forms of access as widespread Internet use, secure financial services, and open data flow enable online streaming services such as Netflix and Hulu to compete to offer their subscribers an array of films, music, and TV, and (c) devoted and highly organized international fan bases using social media to evangelize and market to one another.

 

 

FURTHER READING

 

Read Squid Game ratings and rankings by country from Netflix, here.Read more background about Hallyu Wave, here.

Policy or not?

The Carnegie Endowment looks at Korean government support for cultural industry and Hallyu as soft-power policy, read more here.

The Korea Herald is skeptical, read more here.

The Korea Economic Institute sides with the Herald, viewing government promotion Hallyu as largely “mistargeted,” “ineffectual,” and annoying to fans, read more here.

Fans and artists

Time on U.S. K-pop fans as a 2020 political force, read here.

Navigating through K-pop fandom with fan clubs and fan cafes, read here.

For insight on Korean filmmaking and its international appeal, read here.

And for the Korean Cultural Center/DC’s October Hallyu & K-Pop demo, click here.

 

Special note: Research and drafting for this Trade Fact by Lisa Ly, Social Policy Intern for the Progressive Policy Institute. Lisa is currently a Master of Public Policy candidate at The George Washington University. 

 

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

Mortimer for Newsweek: The House’s SALT Cap Proposal Is Bad Policy and Bad Politics

Posted on by The Progressive Policy Institute

The tax bill passed by Republicans in 2017 mostly made our tax code worse, increasing the federal debt by up to $2 trillion and delivering the bulk of its tax cuts to corporations and the rich. But the bill contained one very good, very progressive provision: capping the State and Local Tax (SALT) deduction at $10,000 per household. Unfortunately, House Democrats just made a proposal that would compound the GOP tax bill’s regressiveness: increasing the SALT cap and giving multimillionaires a $25,000 per year tax cut. The Senate must not follow their lead.

The SALT deduction has been around in some form for a long time, dating all the way back to the Civil War. It allows taxpayers to deduct what they pay in state and local income, property and sales taxes from their federal taxes. But not all taxpayers get to reap the benefits of the SALT deduction. Taxpayers must itemize their tax returns to be able to claim the SALT deduction—and only the richest taxpayers tend to itemize. Most taxpayers tend to take the standard deduction rather than itemize, unless they make at least $500,000 in a single year. And as one becomes richer, and consequently pays more in state and local taxes, the dollar benefit of the SALT deduction becomes larger.

Until the 2017 Republican tax bill capped the SALT deduction at $10,000, there was no limit on the amount that could be deducted. The cap amounted to a tax hike that applied almost exclusively to the richest Americans. It raises about $85 billion each year, 90 percent of which comes from the richest 10 percent of Americans.

Read the full op-ed in Newsweek.

PPI Attends Signing Ceremony for President Biden’s Bipartisan Infrastructure Investment and Jobs Act

Posted on by The Progressive Policy Institute
Legacy bipartisan achievement will help rebuild our communities and create jobs across America

 

Lindsay Mark Lewis, Executive Director of the Progressive Policy Institute, attended the signing ceremony this afternoon for President Biden’s Infrastructure Investment and Jobs Act and released the following statement:

“The Progressive Policy Institute’s policy team is grateful to the White House and Congressional leaders for the opportunity to have contributed to the deliberations around the bipartisan Infrastructure Investment and Jobs Act. This landmark bill at last ends a generation of chronic underinvestment in the public goods that make the great American jobs and innovative machine run.

“Congratulations to President Biden for succeeding where his predecessor failed, and we thank him and his team for including PPI in today’s historic bill signing.

“It is finally infrastructure week in America.”

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Aaron White – awhite@ppionline.org

 

Ritz for Wall Street Journal: Build Back Better Must Adjust to Address Inflation Concerns

Posted on by The Progressive Policy Institute

With inflation rising to its highest levels in over 30 years, Democrats must make sure they don’t exacerbate the problem. But the Build Back Better bill currently being considered by Congress would pour roughly $200 billion of deficit-financed fuel on the fire in its first year alone. Even worse, the bill threatens to turn potentially transformative policies into something temporary that angers voters and returns Republicans to power.

The solution isn’t to abandon President Biden’s agenda. There’s still time for Democrats to give priority to a few key programs in a focused and sustainably financed “kids and climate” bill, like the moderate New Democrat Coalition and many others have long advocated doing.

Sen. Joe Manchin and House moderates do their progressive colleagues a favor by demanding a bill that is fully funded without shell games and budget gimmicks. Pivoting to such a bill would shield Democrats from inflation risks and allow them to make permanent progressive policies that otherwise might vanish.

Read the full piece in the Wall Street Journal. 

Saving Money and Lives: How Telehealth Revolutionized Health Care During the Pandemic

Posted on by The Progressive Policy Institute

The COVID-19 pandemic forced Americans inside their homes and restricted access to critical services, including health care. However, telehealth technology that was previously only used by a fraction of patients turned out to be a reliable way for all Americans to access health care services from the safety of their homes.

A new bipartisan report by the Progressive Policy Institute (PPI) and Americans for Prosperity (AFP) found that over the duration of the pandemic, the costs of telehealth care fell, suggesting that in a post-pandemic world telehealth could help increase access to medical care without increasing costs.

The report, authored by PPI Director of Health Care Arielle Kane and Americans for Prosperity Health Policy Analyst Charlie Katebi, found that at the outset of the pandemic, telehealth use skyrocketed, as did costs for those who utilized it versus those who didn’t. But as time went on, the average telehealth patient spent less on health care services than the average in-person patient. In the final month of the study, telehealth patients spent 26% less than the average in-person patient. Further, when excluding the first three months of near complete lockdowns, telehealth patients had lower overall health care utilization.

Read the report here.

Learn more about the Progressive Policy Institute here.

Learn more about Americans for Prosperity here.

The Biden Administration, Congress Must Allow Adult Smokers to Choose Better

Posted on by The Progressive Policy Institute

I used to smoke cigarettes. I don’t anymore. I completely stopped smoking and switched to an electronic inhalable tobacco product called IQOS. It’s the only one of its kind authorized by the Food and Drug Administration as a modified risk tobacco product and the only product that let me leave cigarettes behind. In less than two weeks this product could disappear from American stores and I’ll likely go back to smoking cigarettes and I won’t be alone.

The White House must not let this happen.

The U.S. International Trade Commission (ITC) ignored the tremendous promise IQOS offers to promote public health and recommended banning sales because of a dispute involving antiquated patents.  This decision completely ignores the public health needs of adult smokers.

In reaching its conclusion, the ITC discredited a years-long scientific review of IQOS by the Food and Drug Administration (FDA). With the stroke of a pen a patent court invalidated the conclusions of the only federal agency with the authority and the expertise to make public health decisions that can reduce smoking in this country.

The ITC’s decision is now working its way through what’s known as a “Presidential Review Period,” basically the Biden Administration has the power to reject the sales ban handed down by the ITC on public interest grounds—and there is a massive public interest issue at the heart of their decision. Many of the thousands of American adult smokers who have switched completely to IQOS, like me, will likely switch back to cigarettes, also like me, if they are no longer able to choose a better alternative that works for them.

So much progress has been made to reduce cigarette use in the United States, but there is still a long way to go. That journey only gets longer if patents prevail over health and smokers lose choice. We need to focus on reducing the harms caused by tobacco, not maintaining the status quo.

However, the clock is ticking. The Office of the U.S. Trade Representative (USTR) will soon make a recommendation to the White House on whether to reject the ITC’s ban or let it stand.  It is imperative that the FDA make its voice heard and make the case for letting its scientific acumen and public health mission prevail—and it is imperative that the Administration side with science.

As uncomfortable as the tobacco industry might be to USTR, and others in the Biden Administration, this is not about tobacco companies. This is about real people who must be put first.

Unfortunately, real people don’t seem to be on the mind of Congress, either.

Right now, the House of Representatives’ latest Build Back Better bill contains a truly bizarre proposal to dramatically hike taxes on better choices to cigarettes, like e-vapor and nicotine pouches, making them more expensive than cigarettes.

The Wall Street Journal this week reported that Sens. expressed by Sens. Catherine Cortez Masto (D-Nev) and Joe Manchin (D-WV) oppose the proposed tax—and they are right. I hope others join them.

According to research from Georgia State University, increasing the tax on e-vapor products would raise the number of daily adult cigarette smokers by 2.5 million nationally and reduce adult e-cigarette users by a similar number.  For every e-vapor pod eliminated by making it more expensive than a cigarette, an additional 5.5 extra packs of cigarettes will be sold.

This is not a science-driven path to lessening the public health burden of tobacco use.

My message to the White House and Congress is simple: let smokers choose better options to cigarettes.  Denying them that choice is also a simple matter: it’s not good government.

 

Mandel for The International Economy Magazine: Important political and economic forces can limit how often the cannons can be shot

Posted on by The Progressive Policy Institute

By PPI Chief Economist Dr. Michael Mandel.

 

The United States is not likely to run out of ammunition for its “fiscal stimulus cannons” in the immediate future. However, important political and economic forces can limit how often the cannons can be shot. Moreover, fundamental changes in the global economy—in particular, the increased emphasis on supply chains and data-driven consumption, investment, and trade—make it harder than ever before to determine how close the fiscal cannons are to overheating.

From a fiscal perspective, the U.S. government is in the enviable position of being a safe haven for investment in a very uncertain world even as the country’s debt-to-GDP ratio climbs. Even if a large unnamed country decides that it wants to stop buying U.S. Treasury securities, plenty of other foreign investors are ready to shift money to the United States to take up the slack.

 

Read the full piece in The International Economy Magazine.