Cigarette smoking by Americans declined steadily from the mid-1960s to around 2005, when this progress began to slow. From 2013 to 2017, however, cigarette smoking rates fell sharply, during a period in which the use of electronic cigarettes or e-cigarettes increased sharply. This study examines the connection between these two developments and the implications.
Among adults, cigarette smoking rates fell from 18.0% in 2013 to 14.0% in 2017, while the use of e-cigarettes increased from 1.9% to 2.8%.
Over the same years, cigarette smoking rates among high school students fell from 12.7% to 7.6% while their rates of e-cigarette use increased from 4.5% to 11.7%. Among adolescents, the association between declining smoking rates and rising e-cigarette use was even stronger than among adults.
Statistical analysis of the changes in smoking rates and e-cigarette use by age, gender, race and ethnicity suggests that about 70 percent of the increased decline in cigarette smoking from 2013 to 2017 was associated with the rising use of e-cigarettes. The remaining 30 percent was associated with higher cigarette taxes, bans on cigarette sales by the CVS pharmacy chain, and increased use of anti-smoking prescription drugs.
Statistical analysis also strongly suggests that e-cigarettes are not a gateway to smoking cigarettes.
Rather, statistical analysis and numerous studies establish that e-cigarettes are an effective tool to help people stop smoking or avoid starting to smoke cigarettes.
Based on these analyses, we estimate that pre-existing trends and factors other than e-cigarettes can explain a decline in smoking rates by people ages 18 to 44 from 20.2% in 2014 to 17.9% in 2017. However, the rate fell from 20.2% to 14.6% in 2017, and the rising use of e-cigarettes can explain the additional 3.3 percentage-point decline in cigarette smoking rates.
By this account, e-cigarette use is closely linked to a reduction in cigarette smoking from 2014 to 2017 by 922,301 people ages 18 to 24 and 2,922,540 people users ages 25 to 44, or a total of 3,844,840 people.
We also calculated the healthcare savings and costs and the productivity benefits associated with the reductions in cigarette smoking and the increased use of e-cigarettes from 2014 to 2017 by those 3,844,840 people ages 18 to 44. These calculations are based on healthcare costs, life expectancy, and the differences in the incidence of illnesses that interfere with work for smokers, ex-smokers, nonsmokers and e-cigarette users.
E-cigarette use lowers people’s annual per capita healthcare costs, compared to cigarette smokers and ex-smokers, for all age groups up to age 75.
For people ages 25 to 44, the annual per capita healthcare costs of cigarette smokers are 9.8 percent greater than those of e-cigarette users, and the average annual per capita healthcare costs for ex-smokers are 19.8 percent greater than for e-cigarette users.
For people ages 45 to 64, annual per capita healthcare spending for cigarette smokers is 8.8 percent greater than for e-cigarette users, and average per capita healthcare costs for ex-smokers are 34.4 percent greater than for e-cigarette users.
Treating cigarette-smoking-related diseases accounts for an estimated 8.7 percent of annual healthcare spending, or $303.8 billion in 2017.
By reducing the number of people who smoke cigarettes, e-cigarette use also extends the lifespans of millions of people, raising their lifetime medical costs across all age groups except those 18 to 24.
We calculate that the use of e-cigarettes by the 922,301 people ages 18 to 24 in 2017, who otherwise would have started smoking cigarettes, should reduce their lifetime healthcare costs by $11.3 billion.
However, the use of e-cigarettes by the 2,922,540 people ages 25 to 44 in 2017,
who otherwise would have started smoking cigarettes, increases their lifetime healthcare costs by $284.5 billion.
Those higher lifetime healthcare costs reflect spending for 330,489 people whom we would expect to have died before their mid-to-late 60s if they started smoking cigarettes in 2014- 2017, and for 500,865 people whom we would expect to have died before their mid-to-late 80s if they had started smoking instead of using e-cigarettes.
E-cigarette users (and nonsmokers) also are more productive than smokers, because smokers miss more work due to illness, come to work still impaired by illness more often, and take smoking breaks. We found that e-cigarette users are on average $820 more productive per-year than ex-cigarette smokers and $2,371 more productive per-year than current smokers, and that ex-smokers who shifted to e-cigarettes are on average $1,554 more productive per-year than current smokers.
The additional productivity of the share of the 922,301 e-cigarette users ages 18 to 24 in 2017 who worked from 2017 on, and who otherwise would have become smokers in 2014-2017, would be worth $14.7 billion over the 10 years from 2017 to 2027;
The additional productivity of the share of the 2,922,540 e-cigarette users ages 25 to 44 in 2017 who worked from 2017 on, and who otherwise would have continued to smoke in 2014-2017, would be worth $29.2 billion over the years from 2017 to 2027.
WASHINGTON – Electronic cigarettes or e-cigarettes offer the most effective means currently available for reducing cigarette smoking, according to economist Rob Shapiro, President of Sonecon, in a new analysis for the Progressive Policy Institute.
Center for Disease Control data show that cigarette smoking by Americans declined steadily from the mid-1960s to around 2005, when this progress slowed. Yet, from 2013 to 2017, the rate at which Americans use of e-cigarettes accelerated sharply.
“The rate at which Americans have successfully stopped smoking cigarettes has accelerated substantially since 2013,” said Robert Shapiro, President of Sonecon in his report for PPI, “and our statistical analysis of the CDC’s data in this area shows that increased use of electronic cigarettes can account for 70 percent of that acceleration.”
Among adults, cigarette smoking rates fell from 18.0% in 2013 to 14.0% in 2017, while the use of e-cigarettes increased from 1.9% to 2.8%.
“This groundbreaking research makes clear that vaping is not a gateway to cigarette smoking but an exit from it. Innovations like “heat not burn” and vape are proving to be highly effective in helping U.S. smokers kick the harmful habit of burning tobacco,” said Lindsay Lewis, Executive Director of PPI.
Lewis continued, “Concerns about nicotine addiction among the young are valid, but Congress should address them by quickly passing laws banning sales of all tobacco products to people under 21, not by making it harder for adult smokers to transition to less harmful products. “
Among adolescents, the association between declining smoking rates and rising e-cigarette use was even stronger than among adults. From 2013 to 2017, cigarette smoking rates among high school students fell from 12.7% to 7.6% while their rates of e-cigarette use increased from 4.5% to 11.7%.
The report also found no evidential basis for concerns that e-cigarettes could be a gateway to cigarette smoking among adolescents. Finally, the study also found that by reducing cigarette smoking rates, e-cigarettes lower people’s annual healthcare costs, enhance productivity, and extend people’s lives.
During the most recent Facing the Future, Ben Ritz discussed PPI’s latest policy proposal, “A Progressive Budget for Equitable Growth.” The blueprint addresses a variety of issues, such as the national debt, taxes, health care, infrastructure, climate change, and more.
Lakisha Young is no stranger to education reform. A former Teach For America corps member and founding member of a KIPP Charter School, Young knows the power parents can wield when they demand educational options for their children. The daughter of a single mother who enrolled her in a traditional public school, a Catholic school, and later a private high school, Young expected to have the same power to make choices for her children when she became a mother.
A single mother of three, Young is satisfied with the choices she’s made: Her sons attend a charter school, and her daughter attends a selective high school. However, successfully securing places in these schools was no easy feat. Young knows firsthand the aggravation of dealing with the Oakland school lottery. She also understands the anxiety parents feel not knowing whether their children will have to enroll in a low-performing neighborhood school should there not be enough seats available at quality schools. Her personal experience led her to organize other parents and teach them how to advocate for their children.
To avoid the expense and stress of going to court, Americans are turning to arbitration to settle workplace, and other, disputes. Free enterprise depends on businesses, employees, and consumers to be able to resolve disputes quickly and fairly. Plaintiffs’ lawyers, who file lawsuits for a living, are trying to convince Congress to take that option away.
The House recently held a hearing to ban pre-dispute arbitration agreements in employment, consumer, and anti-trust matters. Their supporters are attaching anti-arbitration clauses to various bills, including the National Defense Authorization Act this month, and want action on a comprehensive ban (the “FAIR Act”) before recess. They also are trying to leverage the #MeToo movement, which is critical to the success of women in the workplace, to suggest that courts are the only places for protecting people’s rights.
PPI’s Progressive Budget for Equitable Growth gives the next administration a framework for investing in our country that doesn’t stick young Americans with the bill. It powers the engines of American innovation by increasing investments in infrastructure, education, and scientific research by more than 70 percent relative to what they would be under current law. We tackle the greatest challenges facing our society, from rising economic inequality to climate change, through dynamic tax and spending policies that also help smooth the business cycle. And we pay for all of it, giving future policymakers the fiscal space necessary to respond to other unforeseen challenges and demonstrating that fiscal responsibility and investing in the American people are not contradictory – they are in fact complementary. By supporting both equity and growth, our blueprint would once again make fiscal policy an instrument of national progress.
WASHINGTON—The Progressive Policy Institute and House Blue Dog Coalition will host a lunchtime discussion today at the Longworth House Office Building about what leaders in Congress can do to invest in equitable growth while reducing our national debt.
America suffers from a shortsighted fiscal policy that promotes consumption today instead of investing in tomorrow. The federal government now spends more to service our growing national debt than it does on public investments in education, infrastructure, and scientific research combined. Meanwhile, a perfect storm of fiscally irresponsible tax cuts and an unwillingness to tackle escalating health and retirement spending are feeding trillion-dollar deficits as far as the eye can see. This is not a fiscal policy for strengthening America’s future – it’s blueprint for American decline.
At the event, PPI will release a comprehensive budget plan with over 50 policy recommendations for the next administration to make room for public investments in education, and infrastructure, and scientific research; modernize federal health and retirement programs to reflect an aging society; and create a progressive, pro-growth tax code that raises the revenue necessary to pay the nation’s bills.
Lunch will be provided. This event is open to the press.
Who:
Rep Stephanie Murphy (D-FL), Co-Chair of the House Blue Dog Coalition
Rep. Ed Case (D-HI), Co-Chair of the Blue Dog Task Force on Fiscal Responsibility and Government Reform
Rep. Ben McAdams (D-UT), Co-Chair of the Blue Dog Task Force on Fiscal Responsibility and Government Reform
Ben Ritz, Director of PPI’s Center for Funding America’s Future
Marc Goldwein, Senior Vice President at the Committee for a Responsible Federal Budget
Emily Holubowich, Executive Director of the Coalition for Health Funding and Co-Founder of NDD United
Will Marshall, President of PPI, Moderator
When: Thursday, July 25, 2019
12:00 PM – 1:30 PM
Where: Longworth House Office Building, Room 1302
15 Independence Ave, SE
Washington, D.C. 20515
For press inquires, please contact Carter Christensen, media@ppionline.org or 202-525-3931.
In the first half of 2019, the consumer price index for prescription drugs fell by 0.8% compared to the first half of 2018. That’s the first year-over-year decline in prescription drug prices since the mid-1970s, according to BLS data.
Looking at five-year inflation rates, the consumer price index for prescription drugs rose at a 2.7% rate from 2014 to 2019, based on the first six months of this year (see chart below). This represents the slowest rate of prescription drug inflation in forty years, according to BLS data.
We also note that prescription drug inflation is now only slightly above core CPI inflation, which is running at a 2.0% pace from 2014-2019.
That doesn’t let the pharma industry off the hook for the behavior of bad actors, especially as we learn more about the opioid epidemic. But it does suggest that the problem of drug pricing may be a bit more complicated than it seems.
The budget deal scheduled for a vote tomorrow gets two things right and nearly everything else wrong. The main thing it gets right is the need to unshackle domestic public investment that would be subject to an across-the-board cut known as “sequestration” in the absence of legislative action. It also suspends the federal debt limit for two years, which will allow the Treasury Department to continue paying the bills America has already incurred without risking the prospect of a catastrophic default on our debts. What it gets wrong is charging $320 billion in new spending to our national credit card, which will further grow those debts and so perpetuate Washington’s governing dysfunction.
The Progressive Policy Institute’s Health Care 2020 panel relayed the overwhelming opinion that the American health care system is broken and in desperate need of reform.
Americans need health care reform to achieve timely access to effective, affordable, and quality medical care. The Progressive Policy Institute (PPI) hosted a panel discussion on Wednesday, July 24th featuring the Honorable John Kitzhaber, MD, Tara O’Neill Hayes, Anand Parekh, MD, and Arielle Kane on the often forgotten elements of comprehensive health care reform.
The panelists discussed how to get to universal coverage, how to transition to an accountable delivery system, the need for a global budget, and, most importantly, how to reinvest savings to address social determinants of health. Governor Kitzhaber said that “at 18 percent of GDP, we know that health care has huge opportunity costs. When you look at the things that have long term impacts on health, it’s housing, safe communities, maternal care, and other social determinants of health.”
This conversation, with over 80 people in attendance, focused on crucial elements of holistic health reform rather than the more frequent discussions around “repeal-and-replace” or “Medicare-for-all.” Anand Parekh, MD, MPH, the chief medical advisor of the Bipartisan Policy Center noted that: “A lot of the oxygen in the debate surrounds increasing access to affordable health insurance and access to affordable prescription drugs. Those are critical — but it’s also important to focus on what happens beyond the four walls of a health center.” This focus on health beyond the hospital included a discussion of preventative care and improving health in a financially sustainable way.
Tara O’Neill Hayes, the deputy director of Health Care Policy at the American Action Forum, said “Medicare and Medicaid already account for 26.5 percent of the federal budget, with a percentage that’s grown each year. By 2027, these two programs alone will cost the federal government over $2 trillion.”
The overwhelming sentiment was that the American health care system is broken and in desperate need of reform in a manner that is both financially sustainable and prioritizes patient outcomes.
“Health care and poverty are inseparable issues and no program to improve the nation’s health will be effective unless we understand the conditions of injustice which underlie disease. It is illusory to think that we can cure a sickly child and ignore his need for enough food to eat.” Robert Kennedy, 1968
Reframing the 2020 Health Care Debate by the Honorable John A Kitzhaber, M.D.
Last month’s Democratic debates demonstrate how central health care will be in the 2020 election. Indeed, health care, more than any other issue, propelled the Democrats to regain control of the House of Representatives in 2018. Whether the upcoming election leads to meaningful relief for the millions of families struggling under the escalating financial burden of medical care, however, depends largely on how the issue is framed and on the clarity with which we see our policy goal and the steps necessary to achieve it.
Today the vast majority of dollars in our health care system are spent on the after-the-fact treatment of acute and chronic medical conditions rather than on investments that could prevent these conditions in the first place.
If we could reduce our health care spending from the current 18 percent of the GDP to the 12 percent average of most other industrialized nations, it would free up well over a trillion dollars a year for the social investments that actually improve health (1).
What concerns voters most about health care and, by a wide margin, is the cost — but, and this is important — not the cost of the overall U.S. health care system, but the cost to them as individuals (2). Most voters believe, to some extent in the abstract, that everyone should have access to affordable health care, but they are far more concerned that they as individuals have access to affordable health care. This is understandable because, at the end of the day, health care is intensely personal.
And yet, it is fair to say that nobody wants to need medical care or to be a “patient.” When you are sick or injured it is important that you have timely access to care at a cost you can afford, but we also know that among the factors contributing most to lifetime health status, our medical system is a relatively minor contributor. Far more important are things like healthy pregnancies, affordable housing, nutrition, stable families, good jobs, safe communities and the other “social determinants of health” (3),(4).
Therefore, our policy goal should be to improve the health of our people through a system that is financially stable, ensures that all Americans have timely access to effective, affordable, quality medical care; and also makes, strategic long-term investments in the social determinants of health. A system that can achieve this goal must include five core elements: 1. Universal coverage; 2. an affordable defined benefit; 3. a delivery system that assumes risk and accountability for quality and outcomes; 4. a global budget indexed to a sustainable rate of growth; and 5. savings reinvested upstream in the community to address the social determinants of health.
A system that incorporates these elements can take many forms, but without all five we cannot achieve our goal of improving health care in a financially sustainable way.
The most significant obstacle to achieving this goal is the total cost of care and the structure of the delivery system that is driving it. Health care is the only economic sector that produces goods and services none of its consumers can afford. Such a system only works because the care for individuals is heavily subsidized—increasingly with public resources—either directly through public insurance programs like Medicare and Medicaid; or indirectly through the tax exclusion for employer sponsored health insurance; and the public subsidies for those purchasing insurance through the Affordable Care Act (ACA) exchanges.
For decades, the national health care debate has been focused on these subsidies—on who pays them and how much they pay—rather than on why health care costs are so much in the first place. The political paralysis around this issue is due largely to the fact that neither Republicans nor Democrats assume any change in the health care delivery model: we either pay for it or we don’t, creating a false choice between cost and access. Republicans want to spend less on health care (e.g. “repeal and replace” the ACA) while Democrats want to spend more (e.g. Medicare for All). Neither approach directly addresses the total cost of care.
The burden of rising health care costs on individuals manifests itself in a variety of ways: rising insurance premiums and deductibles, short-term insurance policies that actually cover very little, the denial of coverage based on preexisting medical conditions, surprise billing, and the high cost of prescription drugs. It is not surprising, then, that most Democratic voters blame insurance companies and drug companies for the high cost of care. Generally, consumers do not blame health care providers, the delivery system itself, or the many new health care related startups and huge private equity firms that are making a profit off the $3.5 trillion health care budget (5).
And while Democrats are right to go after short-term junk health insurance policies, huge drug price increases, and surprise health care bills, these fixes only address shortcomings with health insurance rather than the total cost of medical care. The total cost of care is the primary driver of increases in insurance premiums as well as the increase in copayments and deductibles.
Since none of the current proposals address the systemic cost of care, they cannot prevent cost shifting onto individuals. All of these short-term fixes are worth making, but they are treating symptoms of the problem, not the problem itself.
The problem is illustrated by viewing our health care system through the lens of five questions or “variables”: 1. who is covered (eligibility); 2. what is covered (benefit); 3. how much is covered (cost-sharing—e.g. premiums, copayments, deductibles); 4. how much are we paying (reimbursement); and 5. how much is borrowed (debt financing).
When the total cost of care exceeds the ability/ willingness of the major third-party payers (government and private sector employers) to pay for it, instead of seeking to reduce the cost of care, payers use one of five strategies to shift the cost to individuals who cannot afford it; or to future generations. These strategies include: reducing eligibility, reducing benefits and/or raising premiums, copayments and deductibles— all of which shift cost to individuals; reducing provider reimbursement which often results in efforts by providers to avoid caring for those who cannot pay; and pushing the cost of care into the national debt, shifting cost to future generations.
Cost shifting is the way we avoid directly confronting both the reality of fiscal limits and the fact that health care in the United States has simply become unaffordable for individuals, employers and the government. Cost shifting does not reduce the total cost of medical care. Furthermore, at 18 percent of our GDP, the cost of medical care, more than anything else, is undermining our ability to invest in children and families, housing, economic opportunity and the many other things that contribute to health. This is the primary reason why the U.S. has such embarrassingly poor population health statistics when compared to other industrialized nations that spend far less on medical care and far more on the social determinants (6).
The one indispensable step in moving toward a realistic and effective solution is to cap the total cost of care through a global budget indexed to a sustainable annual growth rate, while requiring providers to assume financial risk and accountability for quality and outcomes within that budget. Taking this step will fundamentally shift the debate from the subsidies to the delivery system. As long as we allow an ever-increasing share of our public resources to be spent paying whatever prices are demanded—whether for prescription drugs, hospital care or to grow profits of private equity funds—American families will continue to struggle under the burden of medical costs and this crisis will deepen.
Capping the total cost of care will allow us to expand coverage for a basic benefit package to all Americans (universal coverage); and to begin to invest upstream in the social determinants of health. The only way to expand access and to make room in the federal budget for serious investment in the social determinants of health is to reduce the total cost of care.
We already have two very successful examples of how global budgets work to bring down the total cost of care: Oregon’s Coordinated Care Organizations, which manage the state’s Medicaid program, and Medicare Advantage, that today serves more than 20 million seniors. Under these care models, providers receive a fixed amount of money for a defined population, without sacrificing quality (7). If the global budget is exceeded in any given year, the providers are at financial risk for the difference. In short, these care models begin to change the system incentives from rewarding sickness to rewarding wellness.
Extending these models more broadly across the U.S. health care system will reduce the total cost of care and free up resources to invest in the social determinants of health. It’s not necessary at this point in the 2020 election cycle to be prescriptive about how providers, insurers and other stakeholders in the current system will operate under a global budget cap indexed to a sustainable growth rate, but setting a target effective date for such a cap would fundamentally change the nature and the focus of the health care debate from where we want to go to how we are going to get there.
That is exactly what President John F. Kennedy did in 1962, when he challenged the nation to put a man on the moon. He did not give us a roadmap, he gave us a destination and, in so doing, unleashed American ingenuity and technological innovation to serve a common cause. Fifty years ago, this month, we achieved that goal. We succeeded in going to the moon because we were clear on our destination and because we imagined it; because the story preceded the accomplishment.
Surely, we can imagine linking the total cost of medical care to a sustainable growth rate within the next few years, then work backwards to create a health system that meets the objectives of both Democrats and Republicans: expanding coverage and improving health and quality; while reducing the rate of medical inflation through fiscal discipline and responsibility.
That’s the challenge. It’s not a challenge of technology—it is a challenge of political will and human compassion. And it’s not nearly as difficult as going to the moon.
Stuart M. Butler, Dayna Bowen Matthew, and Marcela Cabello, “Re-balancing Medical and Social Spending to Promote Health: Increasing State Flexibility to Improve Health Through Housing,” February 2017. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2017/02/15/re-balancing-medical-and-social-spending-to-promote-health-increasing-state-flexibility-to-improve-health-through-housing/
Ashley Kirzinger, Cailey Muñana, Bryan Wu, and Mollyann Brodie, “Data Note: Americans’ Challenges with Health Care Costs,” The Henry J Kaiser Family Foundation, June 11, 2019, https://www.kff.org/health-costs/issue-brief/data-note-americans-challenges-health-care-costs/
Len M. Nichols and Lauren A. Taylor, “Social Determinants as Public Goods: A New Approach to Financing Key Investments in Health Communities,” Health Affaits, August 2018,https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.0039
Ara Ohanian, “The ROI of Addressing Social Determinants of Health,” American Journal of Managed Care, January 11, 2018, https://www.ajmc.com/contributor/ara-ohanian/2018/01/the-roi-of-addressing-social-determinants-of-health
Rabah Kamal and Cynthia Cox, “Total health expenditures have increased substantially over the past several decades,” Peterson-Kaiser Health System Tracker, December 10, 2018, https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changedtime/#item-total-health-expenditures-have-increased-substantially-over-the-past-several-decades_2017
Carlyn M. Hood, Keith P. Gennuso, Geoffrey R. Swain, Bridget B. Catlin, “County Health Rankings: Relationships Between Determinant Factors and Health Outcomes,” American Journal of Preventive Medicine, 2015. https://www.countyhealthrankings.org/sites/default/files/Hood_AmJPrevMed_2015.pdf
The Institute of Medicine defines quality as “the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.”
The U.S. economy recently marked 10 years of economic expansion – its longest in history – but there’s an important exception: new business creation. In recent decades, the American entrepreneurial engine has decelerated. Regulatory reform could help revive American entrepreneurship, reducing the burden on new businesses and realizing gains in economic growth. That doesn’t necessarily mean deregulation, but rather streamlining and updating old or obsolete rules to provide entrepreneurs with flexibility in today’s fast-changing world.
New and young businesses are the foundation of the United States’ economy, creating jobs and spreading wealth across our society. “Together, startups and high-growth firms (which are disproportionately young) account for about 70 percent of firm-level gross job creation in a typical year,” write entrepreneurship researchers Decker et al. Many of these young companies go on to become the next generation of small businesses, which employ 48 percent of private sector employees.
Unfortunately, the rate at which new businesses are being created has fallen off in the wake of the Great Recession. While firm deaths have returned to their pre-recession levels, firm births are down 22 percent compared to 2006 levels. And, for the first time since the Census Bureau began collecting data, firm deaths exceeded firm births from 2009 to 2011.
Smart policy can help increase the number of new businesses that are created and the number that scale up, though. Regulation is one area where policy can be made more efficient. A 2017 National Small Business Association survey estimated that the average small business owner spends at least $12,000 every year on compliance, with nearly one in three spending more than 80 hours every year dealing with federal regulation.
We know from research by Victor Bennett and Ronnie Chatterji that many people have entrepreneurial aspirations, but fail at many steps along their path to move to actual business formation. While many fail at early stages, such as basic market research, others undoubtedly run up against these mountainous regulatory costs and say, “not worth it.”
One way to reduce these costs is to focus on the steady buildup of regulation, or regulatory accumulation. The Code of Federal Regulations, where rules promulgated by the federal government are published annually, swelled by 17 percent from 2008 to 2018 alone. While Washington has dozens of agencies that issue new rules, not one institution is dedicated to streamlining the accumulated body of regulations. That’s why PPI proposed the Regulatory Improvement Commission (RIC). The RIC would fill an institutional vacuum in regulation policy by creating a mechanism for the periodic clearing out of obsolete rules.
Modeled on the Base Realignment and Closure Commission (BRAC) and comprised of a bipartisan group of highly qualified stakeholder appointees, the RIC would be an independent commission of eight members, appointed by the President and Congress, with regulatory expertise across industry and government. It would meet as authorized by Congress to review and, following a public comment period of 60 days, draw up a list of 15 to 20 rules for elimination or modification. The package would be sent to Congress for an up-or-down vote, and the RIC would be disbanded. If the proposed changes pass Congress, they would go to the president’s desk for signature or veto.
In 2015, bipartisan groups of lawmakers introduced bills in the House and Senate to establish the RIC based on the BRAC model. House cosponsors included Mick Mulvaney (R-SC), now acting White House Chief of Staff, and Kyrsten Sinema (D-AZ), now a Democratic Senator from Arizona.
Startup-friendly policies such as the RIC can help reduce compliance and opportunity costs, catalyzing a rebound in America’s startup rate and spurring economic growth. Streamlining regulation would help inventors and entrepreneurs spend less time and resources on regulatory compliance and focus instead on delivering goods and services and scaling their enterprises.
Research assistance was provided by Roman Darker, economics intern at the Progressive PolicyInstitute.
How much do the Apple App Store and Google Play, the two major mobile application stores, charge? The short and obvious answer is that Apple and Google levy a fee of 30% of the revenue from downloading paid apps; 30% of revenue from in-app purchases of digital goods and services; and a lower charge of 15% for renewed subscriptions.
But this answer is at best incomplete, and perhaps wrong. The two major app stores also provide a distribution and download service for millions of “free” apps—including testing them for malware—while charging only a minimal fixed fee to each developer. These free apps can potentially generate a big benefit for consumers and a large return for their owners.
To put it more precisely, the app stores provide a distribution, search and validation service to all app developers and app owners for nearly nothing. This service is the equivalent of a major retailer like Walmart providing free shelf space to millions of different goods owned and sold by other companies.
The average price charged by Apple and Google is therefore much less than the face value of 30%, if we take into account the large number of free apps. Our preliminary scenario analysis suggests that the revenues collected by the app stores could be in the range of 4-7% of the value generated by all apps in the app stores, including both free and paid.
Bombarded by all-over-the-map questions by no less than five NBC interlocuters, the 10 candidates didn’t have time to go deep on anything.
Nonetheless, the low-key encounter was revealing. On the plus side, all those on the stage showed they are better qualified by intellect and temperament to be president than Donald Trump. On the minus side, the conversation highlighted four large political vulnerabilities Democrats must confront if they are serious about evicting Trump from the White House.
In 1901, a Colorado Springs dentist named Frederick McKay noticed many of his patients had peculiarly mottled brown teeth — but far fewer cavities than the norm. The cause, Dr. McKay determined after years of investigation, was high levels of natural fluoride in the town’s water. His discovery eventually led to the widespread fluoridation of public water systems across America and a dramatic decline in tooth decay over the past 70 years.
Numerous studies have shown the protective effects of adding fluoride to water, especially for kids, and the Centers for Disease Control and Prevention hails community water fluoridation as one of the 20th century’s top 10 public health achievements. State and local budgets have benefited too, thanks to lower public expenditures for dental care.
For many Americans, one traffic ticket could be all it takes to derail their financial security — and perhaps even their livelihood.
Loathe to raise taxes, many states and cities are increasingly relying on fines and fees — whether for traffic offenses, court costs or misdemeanors such as littering — to fill their coffers. The amounts demanded are often exorbitant, and fall disproportionately on low-and moderate-income Americans who can least afford to pay. In California, for instance, the Lawyers’ Committee for Civil Rights found that a $100 traffic ticket can ultimately cost a motorist as much as $815 after various surcharges, “administrative” fees and late penalties are factored in — a cripplingly large figure even for someone who is relatively wealthy.
