Category: Uncategorized

$300 Billion in Investment by Tech and Broadband Companies Over the Past Two Years Has Created a Strong Digital Infrastructure

Posted on by The Progressive Policy Institute

It turns out that the digital infrastructure was far more ready for disaster than the health infrastructure. Led by Google, AT&T, and Amazon, the top ten American tech and broadband companies have spent over $300 billion in capital investment in the past two years (the rest of the top ten, in alphabetical order, includes Apple, Charter, Comcast, Facebook, Intel, Microsoft, and Verizon).  These companies have been building data centers,expanding wired and wireless networks, constructing ecommerce fulfillment centers, and otherwise. And it’s a good thing they did, as the coronavirus crisis forces millions of Americans to move their entire lives online.

Note: These are the top ten tech and broadband providers in our latest Investment Heroes report. However, this number represents all capital expenditures by these companies, both U.S. and foreign. As such, it is not directly comparable to the domestic capital spending numbers presented in our Investment Heroes report.

 

 

House Democrats Have The Right Coronavirus Response

Posted on by The Progressive Policy Institute

The outbreak of COVID-19 (commonly known as coronavirus) has created a global market downturn and raised the prospect that the United States could enter its first recession since the 2008 financial crisis. Last night, President Donald Trump and U.S. House Speaker Nancy Pelosi offered two competing approaches for securing both the health and economic security of the American people. While the president’s proposals would arguably do more harm than good, Speaker Pelosi and House Democrats should be commended for swiftly developing a comprehensive and serious plan to effectively tackle the crisis.

During the last recession, Speaker Pelosi passed a stimulus bill that used a combination of deficit-financed tax cuts and government spending increases to boost the economy. With interest rates on government debt now below projected inflation, many are calling for her to now take similar action. The problem is that commerce is currently being constrained by proactive measures people are taking to limit the spread of a pandemic, not a lack of money in consumers’ pockets. Additionally, the coronavirus has disrupted global supply chains, which no amount of demand-side stimulus can alleviate in the short term. A unique economic problem requires a unique solution.

Read the full piece on Forbes.

The EARN IT Act Is the Wrong Answer to the Right Problem

Posted on by The Progressive Policy Institute

Senators Graham, Blumenthal, Hawley, Feinstein introduced the EARN IT Act last week and the Senate Judiciary Committee held a hearing on the bill this morning. The goal of the EARN IT Act is to “encourage the tech industry to take online child sexual exploitation seriously.” The senators have identified a real problem that needs to be addressed at the policy level. Stopping the distribution of child sexual abuse material (CSAM) and child sexual exploitation (CSE) content should be a top priorirty for both law enforcement officials and technology companies. Without close cooperation between these two stakeholders, ending the scourge of abusive and exploitative material will be impossible. 

It is also important to keep in mind the tough position platform providers are in when it comes to policing user-generated content (UGC) and private communications. Technology companies must strike a difficult balance between false positives (i.e., taking down and reporting content that is not actually CSAM) and false negatives (i.e., leaving up and not reporting dangerous or harmful content). The former restricts users’ privacy and their ability to express themselves while the latter risks harming vulnerable populations. Given these considerations, new legislation in this area must be carefully considered.

The bill makes Section 230 immunity conditional on interactive computer service (ICS) providers affirmatively certifying that they are in compliance with “best practices” as determined by a newly-created National Commission on Online Child Exploitation Prevention. While its intent is hard to argue with, the EARN IT Act would fail to achieve its goal of protecting children online due to its flawed approach. At the same time, the law would cripple innovative business models and centralize power in the attorney general’s office. Many observers have noted that Attorney General William Barr has been pushing for these powers for some time now and critics say the bill is “effectively a backdoor to a backdoor” on encryption. If that’s really what this law is about, then the co-sponsors should be explicit about it and allow for public discussion about the costs and benefits of encryption.

Furthermore, conditioning Section 230 immunity on following a vague “best practices” standard would constitute a de facto mandate on the tech industry and therefore violate the spirit of the Fourth Amendment. Section 230 immunity is so essential to the viability of business models involving user-generated content (UGC) that any conditions put on that protection are not optional for ICS providers in any practical sense. Large companies will endure billions of dollars in compliance cost and tolerate extremely high rates of false positives in order to meet whatever best practices the Commission dictates. Many startups simply won’t allow user-generated content at all. The suggested best practices will in fact be requirements for companies that host any UGC.

In addition, lowering the standard of evidence for violating 18 U.S. Code § 2252 (“Certain activities relating to material involving the sexual exploitation of minors”) from needing to show “actual knowledge” of CSAM/CSE material to only “recklessness” would make the new legal liability too broad. Depending on how the courts and enforcement officials interpret “recklessness,” ICS providers could be held liable for being innovative in how they approach policing and reporting CSAM content on their platforms (if they do not also narrowly meet the required best practices set forth by the Commission). Attempts by ICS providers to protect user privacy might also conflict with some of these yet-to-be-determined guidelines.

A real solution to the CSAM/CSE problem would be for Congress to approve the full funding that it had previously authorized for state and regional investigations. According to DOJ data, “Annual funding for state and regional investigations was authorized at $60 million, but only about half of that is regularly approved.” 

Source: NYT

Under-resourcing of agencies and under-commitment to fixing this issue has been an increasing problem in recent years. The Trump Administration reappropriated funding from the Department of Homeland Security’s cybercrime budget for immigration enforcement. The DOJ has failed to produce three of the five biennial reports on CSAM/CSE since it was first required to do so by Congress in 2008. It is unclear what passing new legislation would accomplish if law enforcement already doesn’t have the resources to respond to the increasing number of CSAM/CSE reports. The EARN IT Act is far too flawed to move forward in its current state and legislators have much more pressing priorities at the moment given the ongoing public health emergency and unfolding economic crisis.

Helping Older Americans: The Role of Point-of-Sale Rebates

Posted on by The Progressive Policy Institute

This paper discusses possible solutions to the problem of excess out-of-pocket drug costs. We argue that allowing consumers to receive drug rebates directly at the “point-of-sale,” rather than indirectly and opaquely through insurers and pharmacy benefit managers, will help make the healthcare system simpler and fairer.

Like clockwork, Congress holds hearings featuring Americans, both young and old, who are being hit hard by sky-high out-of-pocket drug costs. Surveys uniformly show that pharmaceutical companies are hugely distrusted. Many Americans regard drug costs as one of their biggest problems.

Even while politicians fume about the high prices of prescription drugs, solid statistics derived from multiple reliable sources show that out-of-pocket spending on prescription drugs as a share of household disposable income has fallen to a record low of only 0.3% (see Figure 1). By comparison, in 2005 out-of-pocket spending on prescription drugs was almost 0.6% of household disposable income, almost twice as much.

Nevertheless, some Americans find themselves with astronomical spending on drugs. We analyzed 2017 Medical Expenditure Panel Survey (MEPS) survey data on out-of-pocket prescription drug spending. Our results show that about 1% of Americans each year pay more than $2000 per year in out-of-pocket drug costs. That’s more than ten times the average, and a level that is clearly unacceptable.

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Good Politics and Good Policy: Why Progressives Should Support A “Flexible” Domestic Manufacturing Initiative

Posted on by The Progressive Policy Institute

It’s the S-word–shortages. The greatest manufacturing nation in the world, but we can’t make enough masks and other protective gear for our frontline healthcare workers? The coronavirus crisis points out what many of us already knew–globalization is not enough to provide the flexibility and surge response that the U.S. needs. Apparently in medical emergencies,  countries do what you would expect–cut off exports and keep supplies of critical medical equipment for their own people. And it’s not just China–France and Germany are also restricting exports of medical supplies.

Medical supplies are just the tip of the iceberg here. As has become clear, the U.S. needs a more flexible and diverse manufacturing sector, able to pivot when needed and quickly handle surges in demand and shortfalls in supply. Strategic inventories are all well and good, but you can never predict exactly what is going to happen, whether it’s an environmental disaster or the unfortunate specter of war.

As I wrote in a new column in Forbes, the coronavirus epidemic “has illustrated the fragility of global supply chains, and the potential problems with having too much global production concentrated in China. In February, for example, Coca-Cola, for example, warned of possible disruptions in the supply of sweeteners coming from China. Other industries, from steel to pharmaceuticals, face similar potential problems.”

But we don’t need investment in conventional factories,  which in ordinary times can’t compete. What’s needed is a sustained push for digital manufacturing, which is potentially far more flexible than conventional manufacturing. It’s like the difference between a point-to-point telephone system and an Internet built on general purpose routers and processing node.  The conventional telephone system, built on copper wires, worked very well for making voice calls, but was hard to reposition for other uses.  The Internet can not only handle voice calls, but excels at all sorts of new tasks.

Luckily, here’s one case where good policy is good politics. PPI recently released a new poll conducted by Pete Brodnitz. The poll surveyed 1500 registered voters in Michigan, Pennsylvania and Wisconsin in early-to-mid February, three swing states that will be critical for the 2020 presidential election in November.

The poll showed that  73% of the respondents in these three states favored a federal role in promoting manufacturing-related jobs in the United States, an overwhelming majority. Moreover, the support was stronger among Republicans and independents than among Democrats. Such a program could be crucial in a tight race.

We’re not talking about a conventional industrial policy that picks winners and losers.  Rather, progressives should support the development of a flexible digital manufacturing sector that can quickly adapt to changing circumstances, whether it’s a medical emergency, an unexpected growth in demand for electric vehicles, or political hostilities.  The program would provide short-run demand stimulus to keep people working, medium-term incentives for digital investment (which we wrote about here), and a long-term research program for flexible digital manufacturing processes. Good policy–and good politics.

 

 

 

 

 

 

 

 

 

 

Bledsoe for The Hill: “Biden must first unite the party to defeat Trump”

Posted on by The Progressive Policy Institute

While Super Tuesday’s dramatic results have boosted former Vice President Joe Biden more than anyone predicted, it’s still not enough, not yet. Nothing less than Biden going into the convention in Milwaukee with a sizable majority will convince most supporters of Sen. Bernie Sanders (I-Vt.) to rally around “Uncle Joe” as the nominee.

Fortunately, Biden’s current 70-delegate lead is certain to grow, since he will likely win by large margins — 30 points or more — in the South, giving him huge net delegate gains in Louisiana, Mississippi, Georgia, Florida, and other states. Even if Sanders wins a few primaries, it will be by very narrow margins, so he will gain only a few net delegates more than Biden in those contests, and likely never catch up.

Still, healing the rift between centrist and far-left Democrats is important to driving Biden’s turnout in the fall — and will not be that easy. After all, Sanders is a Democratic Socialist who has made it clear for many years that he believes he is leading a cause — a movement — rather than just a campaign. On the stump, Sanders is sounding increasingly paranoid, railing against the “political establishment… coming together, and they will do anything and everything” to stop him, he says.

Read the full op-ed here.

Mandel for Forbes: “Voters In Key States Support An Active Manufacturing Policy”

Posted on by The Progressive Policy Institute

Does the United States need a new manufacturing policy? The answer is yes, according to a new poll commissioned by the Progressive Policy Institute, where I am chief economic strategist. The poll, conducted by Pete Brodnitz, surveyed 1500 registered voters in Michigan, Pennsylvania and Wisconsin in early-to-mid February, three swing states that will be critical for the 2020 presidential election in November.

The poll covered high-profile issues such as healthcare, climate change, and budget deficits. But it also probed the attitude of voters towards trade and government-led manufacturing policy, with some surprising results.

These questions were especially timely in light of recent events. The coronavirus epidemic, of course, has illustrated the fragility of global supply chains, and the potential problems with having too much global production concentrated in China. In February, for example, Coca-Cola, for example, warned of possible disruptions in the supply of sweeteners coming from China. Other industries, from steel to pharmaceuticals, face similar potential problems.

Read the full piece here.

Winning Where it Matters: A Survey of Three Battleground States

Posted on by The Progressive Policy Institute

 

In the 2016 presidential election, Donald Trump lost the popular vote to Hillary Clinton by nearly three million votes. He won in the Electoral College by flipping states Barack Obama carried in 2012: Michigan, Wisconsin, Ohio, Iowa, Pennsylvania and Florida.

But while Florida and Ohio are bellwether states that swing back and forth, the bigger shock for Democrats was losing three states long considered part of their “blue wall” in presidential elections: Michigan, Wisconsin and Pennsylvania. These states put Trump over the top and could again play the decisive role in this November’s elections.

The battle for the Democratic nomination has revolved around the question of which candidate has the best chance of beating Trump. The more pertinent question is, which candidate can beat him in these critical battleground states – and thereby deny Trump the opportunity to steal another win in the Electoral College.

Because of their pivotal status, the Progressive Policy Institute commissioned a leading Democratic pollster and strategist, Pete Brodnitz, to conduct a poll of these three key states. His Expedition Strategies poll also focuses on swing voters (14 percent of all voters) in these states. These include those (8 percent of the electorate) who voted for Obama in 2012 and Trump in 2016, as well as those who voted for Mitt Romney in 2012 but voted for Clinton in 2016 or Democrat Congressional candidates in 2018.

This deep dive into three frontline states suggests that Democrats have an edge in Michigan and Pennsylvania, while Trump has an edge in Wisconsin. This conclusion is not based solely on looking at current matchups.

It is based on looking at the political dynamics that will shape the race, depending on whom Democrats nominate.

Up to this point, Trump has had the wind of a strong economy at his back, while a distracting debate over Medicare for All has blunted the sharp edge of the Democrats’ strongest issue – health care.

Among all voters in the battleground states, Trump scores positively on the economy and jobs and keeping America safe from foreign threats, and negatively on trade, his conduct as President and handling relations with U.S. allies.

The poll was conducted Feb. 6-18, before the dramatic stock market plunge triggered by fears of the Coronavirus pandemic. A bare majority of 53 percent then expressed confidence that the United States was prepared to deal with the virus. Obviously, public anxiety has intensified since then, as have worries about the economy.

Our poll finds that Democrats have yet to persuade 2016 swing voters to swing back in their direction. In matchups against Trump, three current candidates – Vice President Joe Biden, Sen. Bernie Sanders, and former Mayor Mike Bloomberg – have slender leads among all voters. Swing voters, however, generally favor Trump, with two exceptions: Bloomberg narrowly leads among swing voters in Michigan (42/40) and is tied in Pennsylvania (43/43). Trump strongly leads Bloomberg among swing voters in Wisconsin (32-47 Trump).

And while Trump’s job approval numbers among all voters are 12 points underwater (44-56 percent), swing voters split 50-50, and by 55-45 say that on the economy they trust Trump more than a generic Democratic nominee.

Who are the swing voters in these states? According to our survey, they are overwhelmingly white (83 percent); skew older (60 percent are 50 or above); and, are substantially more Republican and independent than Democrat-leaning. About half have college degrees and 53 percent identify as moderate, compared to 31 percent conservative and 16 percent liberal.

Like all voters, they say America is on the wrong track, rather than moving in the right direction (54-46), and by a substantial margin they identify health care as their most important issue. Our poll suggests there is room for Democrats to make inroads among these voters – with a pragmatic nominee who understands their outlook and interests.

What follows are key insights and takeaways for Democrats and progressives that emerge from this intensive battleground survey.

IT’S HEALTH CARE, STUPID

The poll’s findings on health care are particularly striking, and instructive for presidential and Congressional candidates.

Health care remains the top concern of all voters and swing voters. But the Democratic advantage on health care – so critical to the party’s gains in the 2018 elections – has been dissipated by the push for Medicare for All.

While all voters in these frontline states still credit Democrats with having a better approach (54-46), swing and undecided voters (11 percent of the electorate) pick Republicans by equal or larger margins. This suggests that the Democratic nominee faces an uphill climb here, especially if he or she is pushing single-payer or Medicare for All.

By better than 2-1 (69-31%), battleground voters favor changes that build on the current, public-private health insurance system to a single, government-run health plan.

That’s true too of Democrats, who favor the former by a solid, 18-point margin.

Voters are clearly troubled (78-22) by a switch to a government-run health care system that eliminates all private insurance plans, and they grow even more concerned when they learn it would require new taxes.

Most believe that having the government provide everyone’s health care would mean long waiting lists for medical treatment, a reduction in health care quality, and a rise in health care costs.

In 2018, Democrats campaigned successfully on protecting Obamacare from a Trump Republican campaign of sabotage. Remarkably, however, our poll finds that voters fear Democratic efforts to switch to a government-run plan more than (52-48) Republican attempts to kill Obamacare. In other words, months of argument among Democratic presidential candidates over Medicare for All has been turning what had been the party’s greatest strength into a political liability.

This fear is driven by voters’ assumptions about how their health care will be affected by Medicare for All. When asked if they expect the quality of care to get better, worse or not change under a federal health care plan, just 17% expect the quality of care to get better, 56% expect it to get worse and 27% expect no change. Senator Sanders tells voters that taxes will rise on some, but health care costs will go down.

But when we asked if “the cost of the healthcare you receive” would get better, worse or not change under a Federal plan, 29% believe it will get better, 51% expect it to get worse and 20% do not expect a change. Even among Democrats, 35% expect costs to get worse and 24% expect no change (42% expect costs to get better).

All voters express a strong preference (74-26) for giving everyone the choice between government coverage or private insurance over Medicare for All. By similar margins, voters also prefer an idea PPI has proposed – capping the prices that doctors and hospitals can charge for medical services – to Medicare for All.

In short, what stands out in this poll is a public leery of banning private coverage and lacking confidence in the government’s ability to manage a universal Medicare program effectively and efficiently. This poses a special challenge to Sen. Sanders, the idea’s most fervent proponent. His supporters point to exit polls in small turnout caucus states like Iowa and Nevada that showed Democrats favoring Medicare for All. But those electorates were small and dominated by left-leaning activists.

Our poll shows that Medicare for All is more likely to run into a wall of voter skepticism in the battleground states.

ECONOMIC REFORM BEATS REVOLUTION

Voters strongly approve Trump’s handling of the economy, 58-35. Swing voters are even more upbeat, approving by a 38 point-margin. Just 6% of Democrats approve of the job Trump is doing but 25% approve of his handling of the economy.

Asked how they feel about the U.S. economy’s future, or their own, only 9 and 8 percent of voters respectively say they are “angry.” While slightly more say they are anxious than optimistic, it’s hard to find evidence in this poll that voters are interested in the socialist “revolution” promised by Sen. Sanders or even the “bold, structural change” Sen. Elizabeth Warren calls for.

Nonetheless, the poll does reveal a strain of economic populism in the battleground states. Asked to name the biggest economic risk if Trump wins re-election, most voters choose “the wealthy will get richer and the rest left out” over concern about slowing economic growth or the impact of Trump’s trade wars. Here Republicans are outliers, with only 12 percent expressing concern about the rich getting richer.

When it comes to tax reform, these voters by a wide margin say “making sure the wealthy and companies pay their fair share” should be a higher priority than even cutting taxes on working people. The poll also finds majority support for substantial tax increases on billionaires, and for requiring large U.S. companies to pay their workers enough that they do not qualify for food stamps.

By 53-47, voters choose “reducing the power of corporations and the wealthy” over expanding opportunity to people and places left behind. A higher percentage of swing voters take that view, as does a whopping 69 percent of Democrats.

Release: Winning Where it Matters: New Survey Probes Opinion in Michigan, Wisconsin and Pennsylvania

Posted on by The Progressive Policy Institute

Washington, D.C. – Michigan, Wisconsin and Pennsylvania put Donald Trump over the top in the Electoral College in 2016. Turning those states blue again should be a top strategic priority for those working to unseat Trump in 2020.

In recognition of their pivotal status, the Progressive Policy Institute commissioned Democratic pollster and strategist Pete Brodnitz to take a deep dive into voter attitudes in these three battleground states. His Expedition Strategies poll also focuses on swing voters, including those who voted for Barack Obama in 2012 and Trump in 2016.

The report sheds light on key issues likely to be on the minds of Michigan voters in next Tuesday’s presidential primaries. It finds that progressives have some arguments that resonate in Michigan and the other two states — particularly their critique of how wealth is accumulating at the top and the need for wealthy individuals and companies to pay more in taxes. 

On the other hand, battleground voters approve of Trump’s handling of the economy, with swing voters being especially positive. And the progressive push for Medicare for All is generally unpopular in these states, and has the potential to turn what should be the single best Democratic strength into a liability. To illustrate the danger here – one in four Democrats (24%) “fear” a Democratic push for a government-run health care system more than they fear Republican efforts to “kill Obamacare.”

“It’s health care, stupid,” said PPI President Will Marshall of the issue voters in these states identify as their top concern. “The key for Democrats is to shift voter attention from the Medicare for All sideshow to the Trump Republicans’ continuing assault on Obamacare and Medicaid,” he added. 

By better than 2-1 (69-31%), battleground voters favor changes that build on the current, public-private health insurance  system to a single, government-run health plan. That’s true of Democrats too, who favor the former by a solid, 18-point margin. 

Among voters generally, Democrats have an eight-point advantage on handling health care. Among swing voters, however, they have an eight-point deficit. And by 52-48, all voters say they are more worried about Democratic calls for a government-run health care system than Republican efforts to kill Obamacare.

Here are other relevant findings as the presidential contest moves to Michigan and then Wisconsin and Pennsylvania:  

  • By a whopping 72 points, (86-14%), all battleground voters say the U.S. is better off when we encourage trade, and by more than 2-1, they say the same about trade agreements. 
  • In Michigan, voters by a 24-point margin agree that trade agreements make the United States better off. 
  • Only eight percent of voters in the three battleground states consider climate change the most important issue.
  • Only 30 percent of voters favor an immediate ban on fracking for natural gas, while 70 percent do not favor such a ban.
  • Asked to name the biggest economic risk if Trump wins re-election, most voters choose “the wealthy will get richer and the rest left out.”
  • Battleground state Voters here strongly favor a national industrial strategy to create more manufacturing jobs in the United States
  • By a huge margin, (70-30%), voters see tech companies “as examples of America’s great strengths in innovation and entrepreneurship” rather than as companies that have “grown too big and powerful and need to be broken up.”
  • Voters strongly prefer tougher regulation to dismantling big tech companies.
  • By a wide margin (69-31%), battleground voters would prefer to spend more to help Americans without college degrees get higher skills and better jobs rather than making all colleges tuition-free
  • Voters favor an innovative PPI idea — a change in Social Security that would award benefits based on how many years a person worked rather than how much they earned throughout their career (69-31%)

This poll surveyed 1,500 registered voters in Michigan, Pennsylvania, and Wisconsin, and was conducted February 6-18, 2020.

Read the full analysis from PPI President Will Marshall here. 

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Full polling results can be found here. 

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Contact: media@ppionline.org, 202-525-3926

Op-Ed: Pragmatic Democrats come roaring back: Joe Biden’s the one who’s got people turning out

Posted on by The Progressive Policy Institute

Joe Biden’s stunning Super Tuesday victories underscore a timeless truth about American politics: For presidential candidates, intensity of support matters, but breadth of support matters even more.

Biden swept nine of the 14 states that held contests yesterday. With strong support from African-American, moderate and suburban voters, he rolled up big margins across the South and Southwest. But he also managed to capture states in the Midwest and the Northeast.

Read the full op-ed here.

Trump charter school funding shake-up worries school choice supporters

Posted on by The Progressive Policy Institute

The Education Department’s fiscal 2021 budget request highlighted a dramatic new program: a block grant that would allow states to determine how they spend a major chunk of their federal education dollars.

But some advocates for charter schools worry it could hurt  them, an irony given Education Secretary Betsy DeVos’ support for the tuition-free, privately run, but publicly funded schools that are popular in many cities. The schools, notably, aren’t as popular with teachers’ unions because they are not normally unionized, or with progressives, who see them as a threat to traditional public schools.

The Education Department proposal would eliminate 29 existing programs that support priorities like migrant education, 21st century learning, academic enrichment, English language acquisition and school safety, allowing states to choose which priorities they support, and with how much funding.

DeVos says this would give states freedom to allocate money to suit their specific needs, including to charter schools.

But supporters of charter schools — often touted by conservative school-choice advocates — have concerns about the idea.

“While I tend to support block grants to states….I do have some concerns with consolidating some programs such as the charter school program,” Appropriations Labor-HHS-Education Subcommittee ranking Republican Tom Cole of Oklahoma told DeVos at a Feb. 27 hearing. “There’s a risk here that some states are welcoming to charter schools, others frankly are not.”

DeVos pushed back. “I totally support charter schools and think we don’t need fewer of them, we need many more of them,” she said. “I view our consolidation and block grant proposal as one that is additive and positive for charters.”

The Charter Schools Program, which in fiscal 2020 received $440 million to support new charter schools and the expansion of existing ones, would be eliminated and replaced with the block grant program.

Tressa Pankovits, associate director of the Reinventing America’s Schools project at the Progressive Policy Institute, worries states might not maintain funding for charter schools. The institute is a moderate Democratic group.

Read more here.

Ritz for Forbes: “Biden’s Agenda Most Closely Aligns With Buttigieg’s Millennial Vision”

Posted on by The Progressive Policy Institute

Pete Buttigieg ran an unprecedented presidential campaign, starting the race as a small-town mayor and going on to win the most delegates from the Iowa caucus and effectively tie in the New Hampshire primary. Buttigieg was both the first openly gay and first millennial candidate to win either of these contests. Perhaps informed by his age, Buttigieg campaigned on an economic agenda that would position the United States for long-term prosperity. For his supporters now looking to support one of the remaining candidates, which offers the most similar vision?

Of the leading Democrats running for president, Buttigieg had a unique appreciation for the long-term challenges facing the country. He more than anyone else sought to hold the Trump administration accountable for plunging the federal government into trillion-dollar deficits as far as the eye could see, and made a compelling case for why Democrats should seize the mantle of fiscal responsibility abdicated by Washington Republicans in the age of Trump.

Read the full piece here.

McDermott for Medium: “Klobuchar and Bloomberg’s Plans Lack Important Details”

Posted on by The Progressive Policy Institute

Klobuchar and Bloomberg’s Plans Lack Important Details

Tomorrow, voters in 15 jurisdictions will tell the Democratic Party which candidate they want to see go against Donald Trump in November and lead the nation for the next four years. In January, PPI published an estimate of what four candidates’ agendas would cost over 10 years and how each candidate would offset those costs to shed light on how those candidates would lead. That estimate included Senator Bernie Sanders, Senator Elizabeth Warren, Mayor Pete Buttigieg (who ended his campaign yesterday), and Vice President Joe Biden, but it did not include two other prominent candidates – Senator Amy Klobuchar and Mayor Mike Bloomberg. Both of these candidates’ agendas would affect federal spending and revenue, but PPI decided that these candidates’ agendas could not be fairly compared to their rivals’ at this time, both because many of their proposals were not specific enough to score and there were not enough independent estimates of their proposals. All candidates should continue to provide detail on what they want the country and federal budget to look like during the next administration so that voters understand the decision they will make in the voting booth. 

Senator Amy Klobuchar (D-MN) 

Senator Amy Klobuchar provides offsets and pay-fors for many of her proposals, but her agenda lacks many key details, making it difficult to fairly assess its cost at this time. For example, Klobuchar says her public option for health insurance would let people buy into “Medicare or Medicaid,” but federal spending on this public option could vary considerably depending on which health care program it was based on. To tackle climate change, Klobuchar explains some of the policies she would spend money on to “[expand] renewable energy and [transform] the energy sector,” but she has not given specific dollar figures for most of these policies. PPI found few independent estimates of Klobuchar’s proposals, which made it difficult to fairly compare her agenda to those of her competitors. 

Klobuchar has committed to “lowering the debt to GDP ratio by the end of her first term” – an admirable goal, but one for which the numbers do not add up. Klobuchar would raise $300 billion over 10 years for a deficit reduction “fund” by increasing the corporate income tax by 2 percentage points (on top of other plans to raise the tax) and conducting a “government-wide budget review” to identify duplicative spending. But according to the Committee for a Responsible Federal Budget, it would take about $3.5 trillion of deficit reduction over the next 10 years to hold debt steady at the end of the next President’s term, and $5.2 trillion to hold debt to what it will be at the start of the next President’s term. Whichever of these goals Klobuchar were to pursue, a $300 billion investment would not come close to achieving it. 

Former Mayor Mike Bloomberg (D-NY)

Like Klobuchar, some of Bloomberg’s proposals lack important details that make it difficult to assess what they would cost, and independent sources have assessed fewer of his plans than those of other candidates.  He has committed to increasing tax credits that benefit low income people, but has not explained how much he would expand them by. Like the four candidates PPI scored, he says he would create a “minimum benefit” for Social Security, but he has not specified what that benefit would be, as Sanders, Warren, Buttigieg, and Biden all do. And unlike his opponents, Bloomberg has yet to articulate a single policy to improve Social Security’s solvency, promising only to “consider options for preserving and strengthening Social Security’s long-term finances” even as he embraces costly benefit expansions. His campaign claims that the tax plans he has proposed would raise $5 trillion over 10 years and that these tax increases would fully pay for his new spending, but there are not enough independent estimates of his plans to verify his revenue estimate, let alone whether it would cover his equally ambiguous spending amounts.

Other Candidates Have Produced Far More Detailed Plans

The other four leading Democratic presidential candidates at the time of our estimate (Sanders, Warren, Biden, and Buttigieg) all provided enough details to at least generally estimate the fiscal impact of their agendas, and outside sources estimated at least some of their plans independently. Even without these details, it is relatively safe to say that Klobuchar’s and Bloomberg’s agendas will not be nearly as expensive as those of Sens. Bernie Sanders and Elizabeth Warren, who have proposed to increase spending by $53 trillion and $35 trillion, respectively. PPI estimates that Warren has proposed $8 trillion more in new spending than new revenue, while Sanders’ deficit is a whopping $25 trillion – neither of which Klobuchar or Bloomberg are likely to exceed. But their proposed spending could exceed what Pete Buttigieg campaigned on (less than $8 trillion of new spending), and their shortfalls may exceed those of Joe Biden (who has offset all but $2 trillion of new spending – the entirety of which would be for long-term public investments).

Any of these limiting factors may change: candidates are regularly proposing new policies, independent analysts are still releasing new estimates of their impacts, and small changes in publicly-available details could have big effects on a policy’s estimated cost (or the ability to make an estimate at all). But candidates should provide enough detail to estimate the general impact that their plans will have on the government’s finances so voters can make informed decisions. 

Blog: The Bogus “Concentrated Labor Market” Claim

Posted on by The Progressive Policy Institute

As economists who care about inequality, we cheer when Amazon and other ecommerce sellers open up new fulfillment centers in areas where job growth has been slow and opportunities limited. In fact, we have pointed out in the past that because these mammoth centers require large amounts of land and good road connections, they are well-suited for outlying areas that may have been left behind by the tech boom and the decline of American manufacturing.

Oddly enough, a coalition of labor unions disagree. In a new petition presented to the Federal Trade Commission (FTC), the coalition accuses Amazon, in particular, of choosing to “knowingly distance its warehouses from tighter local labor markets” and place them instead in looser labor markets where workers have a “paucity of options.” According to the petition, siting fulfillment centers in economically weak areas represents “anti-competitive” employment practices.

My reply: If I could, I would have all of corporate America follow the strategy of putting new job-creating operations in places where people actually need the jobs! Note that I am not talking about moving existing operations—that’s just a zero-sum game. Rather, expanding into new areas is an important way of closing the economic gap between the thriving cities and the left-behinds.

Looking at the petition in more detail, it argues that Amazon is driving down wages by expanding into what it calls “concentrated” labor markets. In particular, the petition focus on three counties: Mercer in New Jersey,; Lexington in South Carolina; and Chesterfield in Virginia. The petition claims that these examples show that Amazon is using its size to hold down wages.

But here’s the problem with that argument: in all three counties, warehousing jobs are only 3-4% of the local labor market, and Amazon is only a portion of those. For example, Mercer County is a huge and tremendously diverse labor market situated between, containing major employers such as Princeton University, Bristol-Myers-Squibb, and the state of New Jersey. In February 2020, job aggregator Indeed.com reported almost 3000 job postings for Mercer County. (Lexington County and Chesterfield County both had about 1000 job postings that month,). These are hardly “concentrated” markets where one company can have monopsony power hiring workers.

The petition cites BLS data on average weekly and annual pay in the warehousing industry as evidence that Amazon drives down wages. For example, in Lexington County weekly average wage and salaries in the warehousing industry fell from $849 in 2010 to $697 in 2012, after Amazon opened up its fulfillment center.

But in order to interpret this change, it’s important to understand the background. In 2010, there were only 147 workers employed in Lexington’s warehousing industry, down from 261 in 2007. That’s 147 with no zeroes at the end, including all the managers, and forklift drivers who had managed to outlast the deep recession.

This tiny warehousing employment was economically irrelevant for the Lexington county economy, which included 75,000 workers in 2010. And the shrinkage of the warehousing industry presumably meant that no young (and relatively cheap) managers and workers were being hired. To put it in economics terms, no warehousing jobs were available at the average wage in 2010.

Now there are more than 3000 warehousing jobs in the county. And to get there, a company like Amazon didn’t have to compete for workers with the existing warehousing operations in Lexington, which weren’t growing. Instead, the real competition was the broader labor market, and there the Lexington warehousing industry, led by Amazon, has been paying far better wages than retailers, and department stores and supercenters in particular. The same is true for Mercer and Chesterfield counties (Chart below based on averaging 2019 quarters 1 and 2. Data for quarter 3 will be released as of March 4).

To summarize: There’s precisely zero evidence that Mercer, Lexington and Chesterfield are concentrated labor markets. And the broader argument that companies engage in anti-competitive behavior by locating new operations in areas that need jobs is simply specious. For both political and economic reasons, we need more jobs spread across the country.

Blog: You Don’t Have to be Young to Be Stupid – Tales From the Land of Prohibition

Posted on by The Progressive Policy Institute

The House is poised to vote on a bill tomorrow that is a poster child for how Congress can’t seem to let reason and facts – rather than moral posturing and virtue signaling – drive policy.

The bill is H.R. 2339, advertised as a vaping bill meant to address the real problem of high underage vaping rates.  A noble cause that already received Congressional action with a 21+ law passed late last year.

The current version of this bill is so much more.  It would impose a full-on, total prohibition of any flavored tobacco products despite the fact that apart from e-cigarettes, underage use of every tobacco product category in the U.S. is at all-time lows with a downward trajectory.  Government data on menthol cigarettes, for example, shows teen use of menthol cigarettes at 1.3%. You read that right – 1.3%.

Pragmatic progressives oppose this bill because it goes in exactly the wrong direction on reduced-harm products.  Rather than working to give addicted smokers more options for switching to flavored non-combustible alternatives, it outlaws them — end of discussion.  For oral nicotine products, the ban is permanent – even the FDA can’t override the ban no matter the science or the evidence.  Indeed, there are several flavored products on the market right now that the FDA has already found are a less harmful alternative for smokers. This counterproductive legislation tells folks looking for alternatives simply, “Too bad.”  

But we in the pragmatic progressive community are not alone.

A growing chorus of objections from some of the most progressive members of Congress, along with a coalition of civil justice groups like the ACLU and National Drug Policy Alliance, are joining this fight. 

Here’s how the ACLU put it: “With a criminal legal system that incarcerates Blacks at nearly six times the rate of white Americans and a prison population that is 67 percent Black and Latinx, any prohibition on menthol and flavored tobacco products promises continued over-criminalization and mass incarceration of people of color. We hope we can work together to avoid repetitions of policies that are intended to protect youth and communities of color, but instead, only further engrain systemic criminalization and racism.”

None of these issues would be dogging this bill if the proponents had stuck to the plan as advertised – reversing underage e-vapor use.  Instead of narrowing the bill so that the solution fits the problem, proponents go after legal products for adults 21 and older, and on a

scale that’s hard to fathom.  Consider this:  flavored tobacco products on the market today have a larger retail market than the entire U.S. cannabis market, legal and illegal.  This leads to the question: If the criminal prohibition of cannabis has caused incalculable harm for social justice, and alcohol prohibition too was determined as a colossal failure, why on earth would we expect a different outcome with flavored tobacco products?

I am a progressive — a “stupid” progressive — according to Mr. Pallone, but I along with 40 million adult smokers in the United States deserve hope that comes from innovative products — not condescension — and our progressive communities should not be subjected to adults being arrested for smoking a cigarette.  The current version of this bill should be rejected by all, especially those of us in the progressive community. 

Long for Morning Consult: “Patchwork of State Crew Size Proposals Would Slow Interstate Commerce”

Posted on by The Progressive Policy Institute

Policymakers often overlook a critical component of the nation’s infrastructure: railroads. Indeed, the Bureau of Transportation Statistics estimates 25.5 billion tons of freight will be moved by 2045, a 37 percent increase compared to 2018.

But states are now trying to legislate a labor mandate best left to negotiations between workers and the rail industry. By our count, 23 states introduced bills during the 2019 legislative session requiring two crew members to be on freight trains at all times, with proposals now moving in the 2020 legislative session. The effect of the bills is a double whammy — getting legislators in the business of micromanaging labor allocation and freezing innovation in its tracks.

The bills stem from labor’s fear of automation. The Rail Safety Improvement Act of 2008 mandated the nationwide adoption of Positive Train Control (PTC), a technologically advanced system of hardware and sensors designed to automatically stop a train before accidents related to human error occur. PTC’s implementation came at a hefty price to the railroads, estimated to cost more than $10 billion by completion. While expensive, it’s a small price to pay considering there were 881 rail-related casualties in 2019.

Read the full op-ed here.