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Policy Brief: How a Competitiveness Audit Can Help Create Jobs

Posted on by The Progressive Policy Institute

America is deep in a jobs crisis. The unemployment rate is stuck around 9 percent nationally, with states such as Florida, Nevada and South Carolina in double digits. Real wages for educated workers are still plunging, while new college graduates are squeezed between rising student loans and the toughest labor market in recent memory.

Against this backdrop, the global economy looms large as both threat and promise. There’s a justifiable fear that America has lost its competitiveness, that our jobs are being siphoned to China and India, that the wages of our young people are being depressed by a global education glut. At the same time, the rapidly growing markets of the developing world could be a potent target for U.S. exports of goods, services, and intellectual capital, creating good jobs here.

In this global economy, we need to know which industries are internationally competitive, which ones aren’t, and whether the gaps are closing or widening. Unfortunately, the reality is this data currently does not exist. And what we don’t know hurts us, because it prevents us from pursuing effective strategies for boosting US jobs.

Although the government collects reams of economic data, it doesn’t measure what’s most vital to our ability to reverse America’s jobs decline: how our goods and services stack up against those of China and other competitors in terms of price.

You can’t fix what you can’t measure. We need a new national jobs strategy that begins with an accurate way of measuring America’s competitive prowess, on an industry-by-industry basis.

This policy brief proposes that the Bureau of Labor Statistics undertake a “Competitiveness Audit.” The Competitiveness Audit will compare the price of selected imports with the comparable domestically produced goods and services. That will tell us the size of the ‘price gap’ between imports and domestic production.

Read the entire brief.

Wingnut Watch: GOP Revenue Rejection Goes Beyond Intransigence

Posted on by The Progressive Policy Institute

It was a relatively quiet week in Wingnut World, with the loudest mouths probably conserving energy for cries of “betrayal” in the unlikely case that the congressional “super-committee” actually reaches a deficit reduction agreement in time to meet its November 23 deadline.

Believe it or not, there have already been “sellout” charges aimed at super-committee conservatives based on their dubious offer to accept $300 billion in loophole-closing revenue enhancements in exchange for reductions in the top marginal income tax rate and permanent extension of the Bush tax cuts (an offer Democrats summarily rejected as “unserious”). But beyond rejecting anything that remotely looks like a tax increase, conservative activists do not seem to have a very clear party line about what their congressional allies ought to do, with some welcoming a “sequestration” of domestic and defense funds as harmless, others demanding a “back-to-the-drawing-board” cold war against domestic appropriations (with specific venom being spewed at a pending appropriations bill boosting FHA funding), and still others following Newt Gingrich’s lead in treating the entire exercise as meaningless since any defense spending “sequestrations” could be quickly reversed after a presumed GOP landslide next November. Indeed, Gingrich favors dropping the sequestration trigger altogether.

On a less murky topic, predictably enough, municipal police actions against Occupy protests around the country have been greeted with much satisfaction in Wingnut World. Some conservative commentators, like Michelle Malkin, have been liveblogging the clashes in New York with something of the air of Romans watching the Christians versus the lions. Others, like Washington Times commentator Charles Hurt, took a less playful view of the protesters:

[R]ight about when their parents were sick and tired of them stinking up their basement playing video games all day, they realized there was an economic crisis going on.

So they gathered up their tents and sleeping bags, drifted to government property, took it over as if it were their own and gave themselves a name that perfectly reflects their ideology. “Occupiers.” As in Occupied Europe when it was being defiled by the Nazi Empire. The rampant anti-Semitism at their rallies has been shocking to behold, especially since these protesters profess to be the “open-minded” liberal types.

And ever since, they have been advancing their syphilitic cause, spreading disease, stealing, allegedly raping young women, leaving their trash around. And always quick to snap up any free services such as the chow line or testing for venereal diseases.

All righty, then!

Meanwhile, out on the 2012 presidential campaign trail, the much-predicted slowdown of the Cain Train has finally begun showing up in polls, alongside an equally-predictable rise in the fortunes of Newt Gingrich, who is now actually in the national lead according to at least one new survey (by PPP). And despite an ever-growing chorus of pundits deeming Mitt Romney the certain nominee, Romney continues to show little or no direct benefit from the serial collapses of his rivals.

Since actual voting will begin in Iowa in less than seven weeks, that is where the strange dynamics of this strange nominating contest will first begin to sort themselves out. At the moment, it’s anybody’s game: a new Bloomberg survey of likely caucus-goers showed a virtual four-way tie among Cain, Gingrich, Romney and Ron Paul (who has been running TV ads in the state for quite some time). Gingrich has pledged to spend 30 of the next 50 days in Iowa. But the big question remains what Romney does in that state; just yesterday, Gov. Terry Branstad warned him that he’d better start spending quality time in Iowa, or caucus-goers will punish him with a humiliating low finish. And that shot may in part be attributable to Romney’s decision to skip the next big Iowa event, this weekend’s “Thanksgiving Family Forum” sponsored by a trio of hard-core social conservative organizations (Iowa’s own FAMiLY Leader, the anti-gay marriage group the National Organization for Marriage, and CitizenLink, a Focus on the Family affiliate). Moderated by message-meister Frank Luntz (who will follow up the forum with a focus group of “Iowa moms”), the event will not be a traditional debate, but instead an interrogation of the candidates aimed at divining their “worldviews,” a buzz-word in Christian Right circles indicating their willingness to adopt of a rigorous “biblically-based” approach to every issue.

The “Thanksgiving Family Forum,” which will be held in a Des Moines megachurch, is transparently designed to provide a focal point for a consolidation of social conservative support around a single candidate of the kind that lifted Mike Huckabee to an unlikely victory in 2008. Since only two candidates, Rick Santorum and Michelle Bachmann, agreed to sign the FAMiLY Leader’s controversial “Marriage Vow” pledge document earlier this year, the odds are good that one of them will get the nod, though Gingrich has long-standing ties to Iowa social conservatives as well.

The candidate who not that long ago was thought to represent the best conservative option for denying Mitt Romney the nomination, Rick Perry, has adopted an interesting tactic to regain his own mojo. He’s made a large ad buy on Fox TV, apparently aimed at convincing a national conservative audience that he hasn’t been beaten down by his latest debate disaster. And he’s also released a new package of proposals to radically change all three branches of the federal government, including a shutdown of three major cabinet agencies (the subject, of course, of his debate “brainfreeze”) and elimination of lifetime appointments for federal judges (a very old wingnut hardy perennial). Perry’s campaign also made it clear he supported “personhood” constitutional amendments (banning all abortions and some types of contraception) like the one just overwhelmingly defeated by Mississippi voters. Clearly, Perry thinks the only way to get back into this turbulent race is to re-establish himself as the favorite candidate of Wingnut World.

 

Photo Credit: Kynan Tait

Italy Boots Berlusconi

Posted on by The Progressive Policy Institute

BerlusconiA funny thing happened on my way to an international forum on democracy and human rights in Rome last week: the Italian government fell. It was hard to concentrate on the business at hand with crowds gathering in piazzas to demand the head, figuratively speaking, of the man who has dominated Italian politics since 1994—Silvio Berlusconi.

What sparked the crisis was a sharp spike last week in Italian bond yields, which raised doubts about Italy’s ability to service its $2.6 trillion debt. The prospect of a default by Europe’s fourth-largest economy sent tremors throughout the euro zone. Forget about Greece: If big countries like Italy and Spain can’t pay their debts, European banks that hold all that sovereign debt will fail. Then someone—most likely Germany—will have to finance a massive bank bailout just like the United States did in 2007. Otherwise, a financial collapse would likely throw Europe, and probably the United States, into a bona fide depression.

Fortunately, this prospect seems to have concentrated minds in Italy. Arriving in Rome on Thursday, I found its usually fractious political class galvanized by the crisis and resolved to put a new government in place before the markets open today.

On Friday, the Italian Senate passed a budget with an initial set of reforms (including a hike in the retirement age) tailored to European Union specifications. On Saturday, Berulsconi resigned, as gleeful crowds chanted “Bye Bye Silvio” and sang the “Hallelujah” chorus outside the Quirinal palace. And on Sunday, Mario Monti, a widely respected technocrat, agreed to form a unity government.

As our own Congress dithers endlessly over debt reduction, it was nice to see democratic politicians somewhere acting purposefully and with dispatch. How long the Monti government will last, however, is anyone’s guess, especially since it must pass painful reforms aimed at paring down bloated state bureaucracies and stimulating private enterprise. But Rome’s tumultuous weekend seems to have made several things clear.

First, Italy’s sovereign debt crisis probably has driven a stake through the political heart of Berlusconi. In recent years, he has presided more than governed as Italy’s once-vibrant economy slowed down and its borrowing soared. Like a latter-day Nero, the 75-year-old Berlusconi, Italy’s richest man, seemed more interested in fiddling with underage girls in “bunga-bunga” parties than tackling structural reform of Italy’s economy.

Second, Berlusconi’s fall and Monti’s government of national unity have the potential to rescramble Italian politics in useful ways. Beneath a top layer of supposedly apolitical technocrats, Monti is expected to fill key sub-cabinet level posts with leaders from the center and center-left, shutting out the right-wing Northern League as well as the left’s unreconstructed Communists and Socialists. This could spur the emergence of a new coalition of the progressive center dedicated to reviving Italy’s global competitiveness rather than rehearsing old ideological arguments. Such a coalition might include pragmatic progressives like Rome’s former Mayor, Francesco Rutelli and Gianni Vernetti, whose Alliance of Democrats organized a fascinating, if overshadowed, conference featuring democracy activists from the Middle East, North Africa, China, and elsewhere.

Third, the imbalance between the power of global markets and the weakness of European governance has reached a sort of tipping point. The markets are now punishing spendthrift governments like Greece and Italy that have borrowed massively to cover the growing gap between public spending and anemic private sector growth. For these and other European countries, joining the euro-zone in 2002 was an opportunity to relax fiscal constraints, because such profligacy would no longer lead to currency devaluations. It turns out, however, that a common monetary union also requires common fiscal policies, and the 17 members of the euro-zone have no institutions for setting or enforcing such policies.

At its heart, then, the euro crisis is really a political crisis. I heard many Italian political leaders over the weekend argue that the salvation of the euro lies in “more Europe.” This means a resumption of the stalled march toward more comprehensive economic and political integration, which of course means EU members must surrender more sovereignty. This won’t be easy, especially if to average Europeans it means the pain and sacrifice of a thorough-going fiscal retrenchment, or bailouts for countries that have evaded the consequences of irresponsible policies by free-riding on the euro.

Italians, nonetheless, seem ready to cast their lot with Europe, even as they search for more effective political leadership to revitalize their economy.

Photo credit: Downing Street

Wingnut Watch: Ballot Initiatives Reject GOP Ideology

Posted on by The Progressive Policy Institute

Yesterday was Election Day in scattered parts of the country, and it was not a terribly successful election night in Wingnut World. Two ballot initiatives of special importance to hard-core conservative activists—Ohio’s Issue 2, an effort to overturn the state’s anti-public-union legislation, and Mississippi’s ballot item #26, an initiative to define legally protected human “personhood” as arising at the moment of conception—both went pretty solidly the wrong way from their perspective. Another less-visible initiative, in Maine, aimed at restoring same-day voter registration, which conservatives invariably oppose, passed easily, though Mississippi voters did approve a new voter ID law.

Statewide elections went as expected. Democratic KY Governor Steve Beshear was comfortably re-elected despite last minute charges by his Republican opponent that his presence at a Hindu ceremony connected to an Indian company plant opening indicated he didn’t love Jesus. In Mississippi, Republican Lt. Gov. Phil Bryant, a strong supporter of the Personhood initiative and a wingnut in good standing, nonetheless easily won the governorship over Hattiesburg mayor Johnny DuPree, the state’s first African-American gubernatorial nominee.

Downballot, Democrats easily won an Iowa special election to hold onto control of the state Senate (Republicans control the House and the governorship), but in Virginia, lost enough Senate seats to throw control of that chamber into a deadlock (there, too, GOPers control the governorship and the House), probably compelling a power-sharing arrangement.

But the big national news of the night involved the ballot initiatives in OH and MS. Repealing Gov. John Kasich’s S.B. 5, which radically limited collective bargaining rights for public employee unions, was a major national priority for labor, and also attracted a high-dollar pushback from out-of-state business and conservative groups, especially in the last few days before the vote. The margin of victory for the “No on 2” forces, 61-39, exceeded most expectations, and could affect anti-labor initiatives in other states. Given Ohio’s pivotal position in presidential elections, the vote will also be viewed by some as a trial heat for GOTV efforts in 2012, and as a reminder that the GOP’s success in 2010 was not necessarily part of a multi-cycle trend.

Mississippi’s Personhood ballot initiative also had considerable national implications, representing the most audacious goals envisioned in the anti-choice movement’s ongoing drive to undermine abortion rights at the state level. Aimed at defining human life as beginning at the moment of fertilization, Personhood initiatives are broadly understood as aimed not only at a total, no-exceptions abortion ban, but at an ultimate ban on birth control methods (the day-after pill, IUDs, and arguably oral contraceptives) that act after fertilization. A Personhood ballot initiative in Colorado failed dismally in 2010, but its proponents figured a state like Mississippi would be (if you will excuse the expression) more fertile ground, and succeeded in obtaining overwhelming support from GOP elected officials in the state, and even some Democrats. The 58-42 margin of defeat for the initiative on what was otherwise a fine day for Mississippi conservatives showed significant defections by GOP voters. In Harrison County (Biloxi), for example, a county where John McCain won 63 percent of the vote in 2008, and where voters yesterday gave a conservative voter ID initiative 64 percent, only 35 percent voted for the Personhood initiative.

While Personhood initiatives may continue to pop up, the Mississippi results will probably convince anti-choice activists to refocus on the more incremental strategy of “fetal pain” legislation and other restrictions based on the timing and nature of abortions, which are still in a constitutional limbo until court challenges are heard, along with an intensified effort to elect a Republican president in 2012.

The interest in yesterday’s elections provided a small and probably insignificant respite for presidential candidate Herman Cain, whose political condition has worsened dramatically thanks to the emergence of one of his two original sexual harassment accusers, and the appearance of a third woman who claims Cain committed what amounts to sexual assault. The Cain campaign’s poor handling of the allegations has continued, with the candidate holding a widely derided press conference yesterday to issue a series of wild conspiracy accusations, and a potentially self-destructive offer to take a polygraph exam. The saga shows no signs of ending soon, and although Cain has maintained his national and early-state first- or second-place standing in most of the scattered polling conducted after the allegations first emerged last week, there are signs it’s beginning to take a toll. Just as importantly, Cain’s erratic handling of the mess is beginning to embolden conservative opinion-leaders to break ranks and either challenge his account of his behavior, or simply write him off as too politically inept to be taken seriously as a presidential candidate.

Assuming Cain either weakens or crashes, the big question is whether that development will (a) cause Republicans to begin to unite around Mitt Romney as the safest choice in an exceptionally unstable field, (b) fuel a comeback by Rick Perry, from who Cain harvested the bulk of his October polling surge, or (c) lead to a late pre-Iowa surge by some other candidate with Tea Party appeal, such as Newt Gingrich or even Rick Santorum (whose monomaniacal grassroots campaign in Iowa is drawing some positive attention).

The only candidate who seems to have been gaining in the polls during Cain’s unraveling is Gingrich; a battery of new PPP polls in Mississippi, Ohio, and the Iowa state senate district holding a special election yesterday, all showed something of a Gingrich surge (he’s actually leading the field in MS).

The prospect of what he called “The Newtening” was so shocking to shrewd political analyst Jonathan Chait that he concluded: “It is probably time for me to stop making predictions of any kind about this race.” At a minimum, the pre-election candidacy crisis in Wingnut World should deter us all from betting the farm on any specific outcome.

Photo Credit: bjmccray

Can Unions Open Burma?

Posted on by The Progressive Policy Institute

PPI Special Report

The following is a guest column from PPI friend and sometime contributor Earl Brown, Labor and Employment Law Counsel for the American Center for International Labor Solidarity.

BurmaIf you want to see what a society without law or civic space looks like, go to Burma. A half century of military misrule has devastated this once fertile center of Asian science, scholarship, law, commerce and civic debate. But in this desert, Burmese activists are preparing to seize the potential democratic space recently opened up by the new regime. Last month, it issued a new labor law, the Labor Organization Law, which appears to allow independent unions to register and function legally for the first time in memory.

The new law allows the creation of new unions, with a minimum of 30 members. Burmese trade union activists are now using this new labor law and filing papers to establish free trade unions. In the past few weeks, groups of woodworkers, garment workers, hatters, shoemakers, seafarers and other trades, including agricultural workers, have registered openly as trade unions. After decades of unceasing international pressure and sanctions to little discernable effect, outside watchers of Burma are eager to see positive movement and are praising this new law. They see the new labor law as part of other highly publicized initiatives by the regime to open up Burmese society. For example, Burma’s new president has recently received the leader of the Burmese democracy movement, Daw Aung San Suu Kyi, in a highly publicized audience. The Burmese regime released 200 political prisoners in October and has also cancelled a huge dam project with Chinese construction firms that was fiercely opposed by villagers.

Whether these apparent openings—including the new labor law—are real is a matter of debate by those following events in Burma. All are watching to see the reaction of the Burmese regime to the efforts by Burmese industrial workers as they organize under the Labor Organization Law. Will the regime actually allow free unions?

Autonomous unions were once among the pillars of the robust civil society in Burma that had grown up in the face of British rule, fueled by a fierce desire for independence and democracy. Unions helped build this vibrant and diverse civil society by giving voice to industrial workers. Alongside associations of scholars, students, professionals in various disciplines, including lawyers, religious folks in temples and churches, ethnic and political parties, unions laid the basis for Burmese democracy. So did the Burmese bar.

True, many of Burma’s laws were repressive imports from colonial India. But the independent and anti-colonial Burmese bar was populated by talented advocates and drafters, employing both Burmese and British traditions and languages. In this bar, a skilled group of labor lawyers waged vigorous advocacy for both sides of the industrial relations equation, for unions and employers.

When General Ne Win seized power in the 1960s, however, he launched an attack on the diversity and vigor of Burmese civil society. Using the slogans of socialism, General Ne Win sought to replace peaceful debate about and advocacy of divergent interests with the dreary and artificial “harmony” of military rule. The honest articulation of any interests beyond those of the military was suppressed in the name of order. In this imposed order, unions, and lawyers as vehicles of advocacy and debate became targets. After 50 years of suppression, these once proud traditions of democratic trade unionism, of legal advocacy, and of civil debate eroded and eventually disappeared.

The demise of a vigorous civil society and civic debate did not steal the impulse for democracy. But it did eliminate robust traditions of independent trade unionism and law. Unions and legal institutions, such as independent lawyers, could have helped check the repressive hand of Burma’s military junta. That is why they, and most other independent civil society organizations, became targets of the military.

In her 2010 speech to the Community of Democracies on civil society, Secretary of State Hilary Clinton explained why dictators are impelled to suppress unions, lawyers and the other building blocks of that civic pluralism and robust advocacy so essential to sustaining democracy beyond elections:

Our democracies do not and should not look the same. Governments by the people, for the people, and of the people will look like the people they represent. But we all recognize the reality and importance of these differences. Pluralism flows from these differences. And because crackdowns [to civil society] are a direct threat to pluralism, they also endanger democracy.[1]

Freedom of association and expression is the air that union movements and lawyers must have to breath. Guaranteeing those rights is thus one first step to rebuilding the pluralistic Burmese civil society so necessary to democracy and economic development. Unions and lawyers are clearly key to recreating the vigorous democratic civic world and discourse that have been suppressed and degraded for so long inside Burma, and so necessary to any Burmese revival.

If you worry, like so many Americans, about excessive regulation, just check out recent Burmese history—where military officers can get a piece of your enterprise or endeavor at their whim. Talk to the Burmese entrepreneurs who without consent, compensation or process acquired new and rapacious military “partners” in their businesses. That’s what a world without rules and regulations looks like. A world without law, process, or lawyers does not have the diversity of interests needed to insure governmental accountability.

The International Confederation of Trade Unions (ITUC) has just completed an analysis of the new labor law, pointing out its many defects. It allows for the complete suppression of strike activity for wages, hours and working conditions. This important economic law was issued without any consultation with unions, independent scholars or employers. It is poorly drafted, and not harmonized with other Burmese laws or the new Burmese Constitution. It lacks clarity and important detail, and sadly reflects the deterioration of Burmese legal traditions such as draftsmanship. But, despite all these negative features, this new law seems to allow for registration of autonomous trade unions. The woodworkers and other workers who are registering under the Labor Organization Law will give the outside world, and Burma itself, a real test of whether this initiative in the direction of a freer civil society is genuine.

We, on the outside, will not only be able to see if the apparent opening of civil society is real, we may also see the recreation of a robust civil society with unions and other civic associations as new soil for the growth of democracy and the rule of law inside Burma. All concerned with the rule of law and democracy in Burma and Asia should keep their eyes on the efforts of the Burmese woodworkers, garment workers, seafarers and others to register free unions. Their efforts will tell us all if the openings are cosmetic for outside consumption or real for use by Burmese civil society.

[1] Clinton, H. (2010, July). Civil Society: Supporting Democracy in the 21st Century. Speech presented at the Community of Democracies, Krakow, Poland.

Wingnut Watch: Cain’s Latest Problem

Posted on by The Progressive Policy Institute

Herman CainAs the November 23 deadline for congressional action on a “supercommittee” package to reduce budget deficits by $1.2 trillion and avoid automatic domestic and defense cuts approaches, conservative activists have been steadily ramping up the pressure on supercommittee Republicans to hold a hard line against any tax increases. This missive from Heritage Action for America is pretty representative of the drumbeat:

Unfortunately, the “super committee” is veering off course and the odds are growing that massive tax hikes will be part of a final deal. Even worse, not all Republicans are willing to take massive tax hikes off the table. According to news reports, more than 100 House members–Republicans and Democrats alike–sent a letter to the “super committee” urging a “big, grand bargain–taking nothing off the table.” In Washington, that is code for a tax increase.

A few anti-supercommittee conservatives are willing to come right out and say that allowing across-the-board defense cuts to be enacted is an acceptable price to pay for avoiding tax increases. The most common rationalization is that these “sequesters” would not take effect until 2013, and a newly triumphant Republican president and Congress could fix the problem after the 2012 elections. Using the same kind of arguments, many activists have long claimed that a “grand bargain” that included major changes in federal retirement programs in exchange for tax increases would be unacceptable on grounds that Democrats would never keep their promises on spending in the future.

At an earlier point in the process, it appeared conservatives might allow some “wiggle room” for the supercommittee on taxes by considering the idea of a package that includes base-broadening “tax reforms” without raising actual rates on the wealthy or any major category of corporations. But the renewed popularity of sweeping, radical tax system overhauls, as reflected in the adoption of variations on the regressive “flat tax” idea by presidential candidates Herman Cain, Newt Gingrich and Rick Perry, has undermined what little support existed on the Right for revenue-raising elimination of “loopholes” under the general framework of the current tax code.

The same wingnuts who are having little trouble sticking to their no-compromise guns on deficit reduction are having a bit more trouble settling on a presidential candidate. A week ago, the big debate in Republican political circles was whether presidential polling front-runner Herman Cain would transform himself into a serious if unconventional candidate with a real organization and a consistent presence on the campaign trail, or instead would fade in the wake of either a comeback by Rick Perry or a sort of resigned acceptance, first by conservative elites and then by the rank-and-file, of Mitt Romney as the nominee. The betting line was not in Cain’s favor.

Then came Politico’s October 30 bombshell story revealing that the National Restaurant Association had settled two claims of sexual harassment against Cain during his presidency of the trade group in the last 1990s, and a couple of days of shifting stories from Cain and his campaign in reaction to the allegations.

Although the mainstream media has concluded from almost the very beginning that the Politico story means curtains for an already implausible Cain candidacy, it looks very different from Wingnut World. Though a few conservative opinion-leaders (mostly those thought to be friendly to Mitt Romney) have either kept their mouths shut or suggested Cain should come clean, the general reaction has been to defend him, with varying degrees of heat. The most common conservative media meme, one that Cain himself has encouraged, is to compare him to Supreme Court Justice Clarence Thomas as an outspoken African-American conservative who is being smeared by the “liberal media” and “the Left” generally, who are fearful that he will liberate his people from the “plantation” of subservience to Big Government and the Democratic Party.

Beyond the chattering classes, the very initial evidence is that rank-and-file conservatives are inclined to give Cain the presumption of innocence, and perhaps of innocence persecuted. Politico itself posted a headline today reading: “Iowa yawns at Herman Cain allegations.” The story attached to it had this very revealing passage:

Gregg Cummings, the Tea Party Patriots’ Iowa state coordinator, said among tea partiers the story of Cain’s sexual harassment allegations pales in comparison to the desire to have a conservative—“not Romney”—win the caucuses and the nomination.

“Hardly anybody is talking about it,” he said. “It’s not a big issue, in other words. I think the urgency of making sure that we get a conservative candidate to win the primaries is of greater concern to most of the tea party folks right now.”

More tangibly, the first poll taken entirely after the original Politico story broke, by Rasmussen in South Carolina, showed Cain with a ten-point lead over Mitt Romney and the rest of the field, his best showing to date in any South Carolina poll.

Sometimes damaging information about candidates just takes a while to build up steam in an array of media outlets and then penetrate the public’s consciousness. So Cain is hardly out of the woods, aside from the fact that more graphic details of his behavior, or indications of a cover-up, could soon emerge. But given the impulsive reaction in Wingnut World, it’s also possible, ironically, that this is exactly what the Cain campaign needed to distract attention from his lack of interest in world affairs, his waffling on abortion, or the details of his tax plan, and instead make him a martyr to the “constitutional conservative” cause that is still in search of a champion against Mitt Romney.

Photo credit: roberthuffstutter

It’s About (the) Time: Ending the Nonstop Campaign

Posted on by The Progressive Policy Institute

Somewhere in the last two decades, politicians began to believe that the way to win an electoral majority is not to prove that you can govern well, but to prove that you can campaign.

Today, politicians are caught in an ever-escalating, never-ending, 24-hour, 365-day campaign cycle dominated by the burden of raising enough money to wage a campaign creditably. For incumbents, the heft of a candidate’s war chest is what keeps potential challengers at bay—which means that even the safest members need the insurance of a sizeable sum of cash on hand. And for every candidate, last quarter’s results are just about the only proxy by which a candidate’s viability is judged.

The constant horserace over money (not ideas) has taken its toll on the quality of governance. For example, the Rasmussen report released a poll in July finding that 85 percent of Americans view members of Congress as “just out for their own careers.” Almost every poll finds Congress’s approval rating in the single digits.

Second, serious debate about any issue—e.g., the federal budget or taxes—is virtually impossible because there is no “safe period” in which an issue can’t be turned into a political football. Moreover, politicians simply have no time to devote to learning the arcana of policy. They are too busy attending fundraisers. As Republican freshman Richard Nugent said, “As soon as I got to Congress, people started asking me if I had started fund-raising,” Nugent said. “I was amazed at that. It seems to me that a person ought to get some results first before you start getting too focused on re-election. Otherwise, what on earth are the voters sending you to Washington to do?”

 

Supercommittee Puts GOP on Spot

Posted on by The Progressive Policy Institute

Is the supercommittee President Obama’s revenge?

After last summer’s showdown over raising the debt ceiling, Obama was roundly criticized for agreeing to a deficit-reduction deal that was all spending cuts and no tax hikes. Democrats, disconsolate over this seeming capitulation to House Republicans, saw it as the low-water mark of his presidency.

Yet the deal also created the bipartisan supercommittee, which was charged with finding at least $1.2 trillion (over 10 years) in additional cuts by Nov. 23. The supercommittee has a strong incentive to succeed, since its failure will trigger an automatic, equivalent cut in domestic and defense spending.

Now, as the supercommittee spars over dueling Democratic and Republican plans for meeting the target, Republicans are on the hot seat.

Democrats this week reportedly proposed a $3 trillion package over the next decade, including $1.2 trillion in revenue increases. Republicans came back with a smaller counteroffer of $2.2 trillion. The reason, of course, is that the GOP’s anti-tax fanaticism prevents it from matching the Democrats’ debt-reduction plan without proposing truly punishing cuts in federal spending.

The Republicans claim their package includes revenues ($640 billion worth) but much of it seems to come not from actual changes in the tax code, but from increased fees and co-pays in Medicare. The rest is supply side fairy dust—around $200 billion from the higher growth supposed to be generated by future tax reform.

The upshot is that Democrats now look like they are more serious about getting the nation’s debt under control, and in a way that spreads the pain of fiscal retrenchment more equitably. Republicans look like their top priority isn’t restoring fiscal discipline, but shielding the wealthy from higher taxes.

If they refuse to deal on taxes, they’ll likely be blamed for the supercommittee’s failure and subsequent trigger of automatic spending cuts. The GOP may not care about slashing domestic spending—even though it includes critical public investments in science and technology, infrastructure and education—but they do care about defense spending, which would take a whopping, half-trillion-dollar hit.

Of course, Republicans could offer a minimum bid of $1.2 trillion in spending cuts to avoid across-the-board cuts, and call it a day. Supercommittee Democrats, however, shouldn’t let them off the hook without substantial concessions on taxes. Democrats don’t want to trigger big domestic and defense spending cuts either, but it’s better to force the issue of GOP intransigence on taxes now than during the debt ceiling debate, when America stood on the brink of default.

Even if the supercommittee does its job and approves a bipartisan debt reduction plan by Thanksgiving, it’s by no means clear that Congress will pass it. Members of Congress hate nothing more than being “shut out of the process,” and many bridle at the idea of delegating power to 12 supercommittee members to craft a massive plan and present it for an up or down vote.

Complaining that he has “no stake” in the outcome, Democratic Rep. Henry Waxman added, “I find it an outrageous process, that 12 people could rewrite the laws of the United States and come up with ideas just setting there and getting into some mood that might influence them at the moment.”

Over on the right, there’s little love for the supercommmittee. Nothing is more predictable than that Tea Party zealots will rise in righteous condemnation of any plan that includes higher tax revenues, thus breaking the party of Lincoln’s solemn covenant with anti-tax gadfly Grover Norquist.

More favorable are congressional moderates, whose main concern is that the supercommittee won’t go far enough. Nearly 100 Members from both parties signed a letter urging the supercommittee to cut $4 trillion over the next decade, the amount most budget experts believe is necessary to stabilize the debt. For pain-averse lawmakers, the logic of “going big” and not having to keep repeating these excruciating political battles over spending and taxes is pretty compelling.

If the supercommittee fails, the economic and political consequences won’t be pretty. Fresh evidence that the nation’s political leaders are incapable of coming to grips with the debt crisis will no doubt cause the markets to nosedive, and could even lead ratings agencies like Standard & Poor to downgrade the nation’s credit again. This could cast a pall over the economy, just as it’s finally showing some signs of life.

Worst of all, it would deepen the public’s already explosive anger at Washington. A mere nine percent of the voters approve of the job Congress is doing, and 89 percent say they don’t trust the government to do the right thing. By going big on debt reduction, Congress could start earning back that trust.

Photo credit: DonkeyHotey

Weinstein on Overhauling the Federal Tax Code

Posted on by The Progressive Policy Institute

PPI Senior Fellow Paul Weinstein and Committee for a Responsible Federal Budget’s Ed Lorenzen argue for overhauling the federal tax code again after 25 years in The Atlantic:

Today marks the 25th anniversary of the Tax Reform Act of 1986, the last major overhaul of the federal tax code. Signed into law by Republican President Ronald Reagan and championed by Democrats such as Bill Bradley and Richard Gephardt, the enactment of the law was a remarkable bipartisan achievement. It dramatically lowered marginal rates with a top rate of 28 percent, removed millions of working poor off the tax rolls, and simplified the tax code by closing a myriad of tax loopholes.

Unfortunately, many of the loopholes that the 1986 reform eliminated have returned, with a few extra ones slipped in for added measure. Since the law’s enactment, more than 15,000 changes have been made resulting in a tax code that is several volumes longer than The Bible and requires 71,684 pages to spell out the rules. Because of this complexity, 80 percent of American households use a tax preparer or tax software to help them prepare and file their taxes.

But complexity is only part of the problem. The other is cost. Year-after-year, elected officials in Washington shovel more tax breaks into the trough (tax breaks now account for $1.1 trillion) causing both deficits and marginal tax rates to be higher than is necessary or optimal for the economy.

Despite the obvious need for tax reform, some in Washington are advocating that congressional Super Committee charged with finding a balanced deficit reduction package not tackle tax reform. They claim it’s too complicated, too hard, or too long-term.

Read the entire article.

Wingnut Watch: Flat Tax Fanatacism

Posted on by The Progressive Policy Institute

Plans to reduce the taxes of wealthy “job creators” remained on the minds of conservatives this last week, with Rick Perry harnessing the reboot of his floundering presidential campaign to a “flat tax” proposal that’s really an alternative maximum tax for people currently in the higher brackets. In an effort to get conservative voters to think about everything and anything other than immigration policy in considering him, Perry nestled his tax plan in a larger package that includes total suspension of federal regulations for a period of time, uninhibited exploitation of fossil fuel resources, and a balanced budget constitutional amendment that includes a permanent limitation on spending as a percentage of GDP (this last item is an item beloved of SC Sen.–and Wingnut Generalissimo–Jim DeMint, whose endorsement Perry would surely love to secure prior to next January’s Palmetto State primary).

Perry’s tax plan and the optional nature of its rates raise a lot of questions, but its shape-shifting features are politically convenient, particularly as compared to Herman Cain’s 9-9-9 proposal, with its unambiguously regressive thrust and its reliance on an unpopular national sales tax. With Newt Gingrich also hawking a flat tax scheme, the conquest of the Republican Party by cranky tax schemers is now very far advanced.

More generally, the GOP presidential contest is revolving around the broadly shared expectation that the campaign of Herman Cain, who now actually leads Mitt Romney in a plurality of national polls, and is attracting three and four times as much support as Rick Perry, will soon collapse. Cain added to that expectation last week with an unforced error of considerable magnitude: a rambling series of remarks in an interview by CNN’s Piers Morgan suggesting the candidate thinks of abortion as a private matter in which government should not interfere. By the time Cain realized his mistake and reiterated his position favoring a ban on all abortions without exception, a lot of damage had been done to his reputation for competence and ideological reliability, particularly among the social issues activists who exert disproportionate power in the Iowa Caucuses. Iowa social conservative kingmaker Bob Vander Plaats summed up the general impression by saying Cain was beginning to sound like the John Kerry of 2004 (not a compliment). It probably wasn’t a coincidence that Cain’s long streak of wowing conservative audiences at joint candidate events came to a decided end in Iowa over the weekend, when he was distinctly underwhelming in a speech to the annual banquet of Ralph Reed’s Faith and Freedom Coalition.

With Cain’s support levels in Iowa (and other states) already being called into question because of his lack of organization in the state and his low number of visits, it remains to be seen who would benefit from a theoretical Cain collapse. While many observers think the situation in Iowa is ripe for Mitt Romney to swoop in and score a knockout blow over a divided conservative opposition, he’s not exactly showing signs of doing so (he skipped the FFC event, for example, even though he had just made his first brief visit to Iowa since April). Perry is definitely plotting an Iowa comeback, beginning TV ads this week and spending time on such potentially productive activities as a pheasant-hunting jaunt with congressman Steve King, perhaps the only political figure with the power to absolve Perry from his heresies on immigration policy.

You’d think the potential vacuum on the Right would provide an opening for a comeback by Rep. Michele Bachmann, the winner of the August Iowa GOP Straw Poll. But Bachmann’s campaign is visibly struggling, and attracting media attention only for such negative developments as the mass resignation of her NH staff.

Rick Santorum continues to seek to outflank the field on social issues (Cain’s abortion gaffe was a major gift to him), and is totally devoted to an Iowa-centric campaign that will eventually take him to all 99 counties in that state. But the only also-run candidate showing forward momentum in polls in Iowa, or indeed in other early states, is none other than Newt Gingrich, whose strategy of using candidate debates to show off his policy chops and attack the moderators has lifted him ahead of Perry in most surveys. Gingrich and Cain recently accepted a Texas Tea Party invitation to hold a “Lincoln-Douglas”-style one-on-one debate in the Lone Star State next month. Texas is hardly a competitive state so long as Perry is running, and isn’t an early state, either, so this debate decision has reinforced suspicions that both Gingrich and Cain are “business plan candidates” who are in the race to promote their books and television careers rather than to secure the nomination.

But it is clear there will remain for the immediate future strong demand for a “true conservative” candidate who can keep Mitt Romney from running away with the nomination. Just yesterday Romney provoked fresh outrage from conservatives by refusing to take sides in the red-hot Ohio referendum on Gov. John Kasich’s legislation to cripple public-sector unions, SB 5. Romney was almost immediately forced to recant, but that step, of course, simply reinforced his reputation as a flip-flopper.

When you add it all up—Perry’s terrible mispositioning on immigration, Cain’s sloppy campaigning and unnecessary abortion gaffe, and Romney’s incurable tin ear for conservative sensibilities—this is a presidential candidate field with an abundant ability to take a bold step forward onto a garden rake. Like a football game decided by the “turnover margin,” the GOP nomination could ultimately go to the candidate who manages to go for a few crucial weeks at a time without coughing up the ball.

Photo Credit: Mays Business School

Another One Bites the Dust

Posted on by The Progressive Policy Institute

Unlike the dictators of Tunisia and Egypt, Muammar el-Qaddafi refused to go peaceably when the Arab spring uprisings migrated next door to Libya. Last week he paid for that defiance with his life; an outcome that should rattle other regional tyrants, especially Syria’s Basher al-Assad.

Qaddafi’s ouster was a triumph not only for Libya’s rebels, but also for NATO, which turned the tide of battle in their favor. It also vindicated President Obama’s decision to let Europe take the lead and limit U.S. forces to a supporting role in enforcing the U.N.-sanctioned “no fly zone” over Libya.

I was skeptical that NATO airpower alone would be sufficient to defang Qaddafi, and wanted the allies to arm the rebels. It turns out, however, that NATO—in a very liberal interpretation of its mandate to protect Libyan civilians—worked closely with the opposition in a combined air and ground offensive that methodically wore down regime forces.

With a little help from their friends, Libyans liberated themselves, and some are now waving French and U.S. flags in gratitude. What we’ve witnessed in Libya, in fact, could be a new model for collective security in which the United States no longer bears a disproportionate share of the risks and costs of intervention. “We’ve demonstrated what collective action can achieve in the 21st century,” Obama declared last week. “Without putting a single U.S. service member on the ground, we achieved our objectives, and our NATO mission will soon come to an end.”

Unfortunately, the new model probably isn’t applicable to Syria, where another ruthless dictator confronts a popular revolt.

Basher al-Assad is busy doing in Syria what NATO prevented Qaddafi’s forces from doing in Libya—slaughtering civilians. Even though his henchmen reportedly have killed between 3,000–5,000 civilians, courageous Syrians still take to the streets daily to challenge the regime.

The regime’s brutality has prompted thousands to defect from the Syrian army and join the opposition. Syria thus appears headed toward the same kind of armed insurrection that convulsed Libya. This time, however, there’s little chance that NATO will play deus ex machine to Syria’s rebels.

Western military intervention in Syria is unlikely for three main reasons. First, Syria is bigger and better armed than Libya, and lies in the Arab heartland rather than on its periphery. Second, while Libya’s erratic “Brother Leader” had few friends in the world, Assad has an important regional patron in Iran, whose Revolutionary Guard reportedly is helping him put down the protests. Third, Russia and China vehemently object to the principle of humanitarian intervention, presumably because they fear it could be invoked someday against them. Earlier this month they vetoed a U.N. Security Council resolution condemning Assad for the violent suppression of peaceful protests.

The political and humanitarian stakes in Syria are growing. Qaddafi’s fall and probable execution by vengeful rebels will likely reinforce Assad’s determination to bludgeon Syrian demonstrators into submission. If he succeeds in resurrecting what was among the grimmest police states in the region, Assad will have delivered the most serious check to date to the Arab spring’s revolutionary momentum. It will also bind Damascus more tightly to Iran, and boost morale among the radical rejectionists in Hezbollah and Hamas. Assad’s survival could also push Iraq, which is apprehensive about a Sunni takeover in Syria, closer to its Shia brethren in Tehran.

Having abetted Libya’s liberation, the United States and its European partners obviously have an interest in encouraging its Transitional National Council to set up an effective and representative central government. This won’t be easy in a relatively backward (despite its oil and gas riches) Arab state rent by tribal and regional divisions and, thanks to 42 years of despotic rule by Qaddafi, lacking in strong civic and national institutions.

The council’s weekend announcement that it is imposing Sharia law throughout Libya has provoked “I told you so” reactions from U.S. “realists” and other critics of NATO’s intervention. But as Obama said, Libya’s road to self-government will be long and winding, and thanks to NATO’s intervention, the West will have some influence over the course of events there.

What’s crucial now is for the U.S. and Europe to turn their attention to Syria’s incipient civil war. Even as Assad’s jets hammer unarmed civilians, there’s no chance of a U.N. sanctioned no fly, no drive zone there. But the West has other means at its disposal to buttress the rebellion, and thereby help sustain the momentum of Arab demands for freedom and justice.

Policy Brief: All of the Above: What to do about Housing-Now

Posted on by The Progressive Policy Institute

In the immediate aftermath of the financial crisis in 2008, housing was at the top of policymakers’ priorities. Congress saw a flurry of proposals to deal with the mounting wave of defaults and foreclosures, and the collapse of Fannie and Freddie led first to intensive federal intervention and then to one round of full-fledged debate on what the future of these agencies should be.

Today, with housing in at least as bad a shape as it was in 2008, housing is now the forgotten debate. The conversation over Fannie and Freddie has stalled, if not died altogether; the government’s efforts to stem foreclosures have been largely unsuccessful; and with a handful of bold exceptions, few policymakers are putting forward ideas to restore homeowner equity, cope with burgeoning inventory and spark new demand in the market.

But with the economy continuing to sputter, housing is a problem that policymakers can’t afford to ignore any longer.

While some may debate the chicken-and-egg issue of whether housing can lead the recovery or whether a recovery can stabilize housing, there’s no dispute that the health of the housing market and the broader economy are inextricably intertwined. Housing and its related industries account for roughly 19 percent of the American economy.1 Since the housing crash, housing—especially construction—has shed 2.9 million jobs2 since the start of the recession. Not coincidentally, the states with the highest unemployment rates—California, Nevada, Rhode Island, Michigan3—are among the states that have been hit hardest by the housing crisis. Moreover, Americans
have lost $7 trillion in equity,4 which is dampening consumer confidence as well as forcing many families to rethink their future plans and expectations of financial security.

Read the entire brief.

Senate Guts School Accountability

Posted on by The Progressive Policy Institute

The U.S. Senate is finally getting around to reauthorizing the controversial No Child Left Behind Act (NCLB), something that was supposed to happen in 2007. Unfortunately, instead of fixing NCLB’s evident flaws, there’s a bipartisan push to fatally weaken the law as a credible tool for educational accountability.

A bill to renew the bill (known again by its historic title, the Elementary and Secondary Education Act) crafted by Sens. Harkin (D-Iowa) and Enzi (R-Wyo.) is being widely panned by education reformers. As Michelle Rhee points out, “by removing meaningful evaluations, the country would be taking huge step backward in the effort to reform our schools.”

In a rare moment of bipartisanship, Congress passed NCLB in 2002. It was designed to tie federal support to education (mostly through the Title I program of aid to schools in low-income areas) to improvements in student performance. Its signal achievement was to require local school authorities to measure the academic achievements of all students, including racial and ethnic subgroups. This provision meant that schools could no longer hide their failure to educate all students behind averages.

But NCLB’s critics pointed to several glaring flaws. One was the requirement that 100 percent of public school students reach proficiency in reading and math by the 2013-2014 school year. Not only is this standard deemed unattainable, but it puts too much weight on standardized assessments of widely varying quality.

Another problem with NCLB is its requirement that schools have “highly qualified teachers”. That sounds innocuous, but in practice it has led schools to hire teachers based on their academic credentials rather than their actual ability to teach. An abundance of data has shown that one of the quickest ways to achieve student growth is through an effective teacher. A “highly qualified teacher” by NCLB definition is one that is simply “certified and proficient” in the subject matter taught—regardless of how well those credentials translate into student learning, achievement, or growth.

The Harkin-Enzi bill kills the “100 percent proficiency” target, but doesn’t replace it with a better yardstick. Instead, it vaguely charges states to strive for “continual growth.” The bill is thus a throwback to NCLB’s predecessor, 1994’s weak Improving America’s Schools Act (IASA). This toothless measure paved the way for such lax accountability standards as Tennessee’s goal to “improve mean performance level(s) across grades by [an] average of .05” for grade-levels three through eight—hardly a worthy goal for true reform.

Harkin’s original draft required the states to adopt teacher and principal evaluations which would focus on both in-class observations and student achievements. Unfortunately, it was watered down in a redraft on Monday.

After the rewrite all the meaningful elements—save perhaps the mandate that states enforce a college-readiness standard—went by the wayside. The weaker version of the bill closely tracks a letter sent to the senators by teacher and principal advocacy groups, including the National Education Association. The gist of their message to the Senate was, “We appreciate the great reform ideas you’re proposing here but just please don’t implement them.” Also, the new version is clearly intended to assuage the “federal overreach” fears of GOP local control advocates.

In short, the bill not only omits concrete accountability standards, it also disregards the policy prescription that effective teachers—effective in the sense that the teacher actually impacts the student—are the key to true education reform. This ESEA reauthorization does nothing to positively impact an education system that is consistently failing the future of this country. The redrafting effort headed by Sen. Enzi on Monday is a clear message to reform-minded advocacy groups that the letters they are sending urging the federal government to do more in the way of education standards—such as the ones published by EdWeek and EdTrust—are not as effective as those sent by the teachers’ unions. In other words, you can speak loudly but you better carry a larger voting contingency.

Wingnut Watch: A Fair Tax?

Posted on by The Progressive Policy Institute

One of the more exotic policy tendencies of Wingnut World is a history of strong and pervasive support for replacing income taxes with higher consumption taxes. Many conservatives support this step on grounds that it will promote savings and investment, which is another way of saying that they believe capital should not be taxed at all. Others like the idea of getting rid of the compliance costs and “bureaucracy” associated with income taxes, and still others are attracted to the “flat” nature of consumption taxes, which do not vary based on the taxpayer’s personal circumstances (whether it’s income, or the various characteristics that earn deductions and credits against income tax liability).

The so-called “Fair Tax”—the general term used for any number of schemes for shifting from federal income to consumption taxes—has been a hardy perennial for years among conservative activists and talk show hosts. Among the latter was Herman Cain, whose so-called 9-9-9 (replacing current federal income, capital gains and estate taxes with a 9 percent national sales tax, a 9 percent VAT on corporations, and a 9 percent income tax with no deductions or credits) plan is explicitly advertised as an intermediate step towards a “Fair Tax.” Like the “Fair Tax,” Cain’s plan seems to have great curb appeal for rank-and-file conservatives, but less so for opinion-leaders.

Cain’s recent surge in the polls as a presidential candidate has suddenly put 9-9-9 and the broader movement to get rid of progressive income taxes under a microscope. On the eve of Tuesday night’s candidates’ debate in Las Vegas, the Urban Institute/Brookings Tax Policy Center published an analysis of the distributional implications of Cain’s proposal that immediately became fodder for his rivals and for critics generally. Faced with claims that 9-9-9 would boost total taxes for most American households with annual income under $200,000, Cain was reduced to repetitive denials without much in the way of explanation. Even among conservatives who are not troubled morally or politically by the idea of making federal taxes massively more regressive, the argument that 9-9-9 would give Uncle Sam a new instrument for confiscating private dollars (the national sales tax) is getting some traction. One of 9-9-9’s designers, the ubiquitous Steven Moore, is already urging Cain to replace the sales tax proposal with a 9 percent payroll tax.

There is virtually no broad-based polling of 9-9-9 available (figuring out how to describe it in a survey question is a real challenge, particularly since Cain and his advisers are not always very precise). But a new HuffPo/Patch survey of activist leaders in early caucus and primary states (whom they call “Power Outsiders”) shows lukewarm support at best.

The timing of the intra-party assault on Cain’s signature domestic policy proposal is no coincidence. It is based on the belief that he is a flash-in-the-pan phenomenon whose lofty support levels represent a “parking place” for conservatives who don’t like Mitt Romney but haven’t been sold on any of his competitors, and find Cain interesting and refreshing, not to mention his usefulness as an all-purpose antidote to suspicions that conservative hatred of Obama is at least partially racial in origin.

Tuesday night’s debate represents a transition point from a six-week stretch of frequent debates, to the run-up to actual voting events. Earlier this week another important piece of the nominating contest puzzle fell into place when Iowa set a firm date of January 3 for its “First-in-the-Nation Caucus.” There remains a not-insignificant chance that New Hampshire will schedule its primary for early in December in order to avoid too-close proximity to Nevada Caucuses currently planned for January 14, though it’s more likely that Nevada will move a few days in order to let NH have its event on January 10. Any way you slice it, though, candidates have a relatively brief window of time to get their act together before voters in the early states begin to become distracted by the holidays, which will also make negative campaigning problematic on grounds that it conflicts with the “spirit of the season.”

With Mitt Romney presumed to have a commanding lead in two of the five January events (NH and Nevada), developments in Iowa, South Carolina and Florida are of particular interest at this juncture. New NBC/Marist polls in SC and FL show Cain and Romney basically tied with just under a third of the vote each, with Perry mired in the high single-digits. This state of affairs is close to where the most recent polling in Iowa has placed the race there as well. If, as the conventional wisdom suggests, Cain soon begins to lose support because of attacks on 9-9-9, his lack of policy sophistication generally, or simply the fading novelty of his candidacy, the big question is whether those votes go back to Rick Perry, are scattered among various candidates, or even go in significant numbers to Mitt Romney. In any event (barring a December NH primary), media coverage of the campaign will now focus ever-increasingly on Iowa, where the picture is complicated by the relative importance of the “ground game” and Romney’s decision so far not to seriously compete in the state. Cain’s organizational weakness in Iowa is perhaps best illustrated by the fact that his former state director (who quit because her candidate seemed to be ignoring the state) just signed up for a less elevated job with Rick Santorum. So in the place where the 2012 nominating contest formally begins in less than eleven weeks, the two front-runners in that state and nationally are not really running at all. Something’s got to give, and soon.

Photo Credit: Gage Skidmore

Policy Brief: HomeK Accounts: A Down Payment on Homeownership and Retirement

Posted on by The Progressive Policy Institute

Two years after the meltdown in the nation’s housing market, housing re- mains weak. Home prices fell to a new low in the first quarter of this year— confirming a feared “double-dip” in the market. Prices are now down nearly 33 percent from their high five years ago.

With housing and its related industries—construction, home retail, etc.— constituting almost 19 percent of the nation’s economy over the last 40 years,2 restoring the housing market will be essential to a sustained eco- nomic recovery. And key to this will be ensuring a robust market for first- time home sales.

Yet, even with home prices as low as they currently are, many potential homebuyers may face more—not fewer—obstacles in their path to home- ownership. In the aftermath of the crisis, credit is tighter, as are down pay- ment requirements. At the same time, the stresses of the economy have meant that potential homebuyers are in worse shape financially than they once were.

The creation of a new, tax-preferred mechanism for down payment sav- ings—a “HomeK”—could help first-time homebuyers navigate these new hurdles while also promoting more savings. And if structured as a carve-out from existing retirement planning mechanisms, not as a new type of ac- count, the HomeK would have the added benefit of promoting retirement savings and will not contribute to further tax code complexity.

Read the entire brief.

Will Marshall Talks CLASS in Politico’s Arena

Posted on by The Progressive Policy Institute

PPI President Will Marshall today discussed the CLASS Act in a post for Politico’s Arena.

“The Obama administration’s decision to jettison CLASS is no setback. On the contrary, it removes a fiscal time bomb that Congress unwisely embedded in the Accountable Care Act, and, following previous changes aimed at easing reporting burdens on small businesses, attests to the president’s willingness to keep streamlining and strengthening his reform blueprint.”

Read the full post here.