PPI Sends Memo to Congressional Democrats on Must-Pass Legislative Priorities Before the August Recess

Progressive Policy Institute President Will Marshall and Center for Funding America’s Future Director Ben Ritz today urged Congressional Democrats to focus on four top legislative priorities ahead of the looming August recess break.

In a memo to Democrats, Marshall and Ritz argue Congress should seize the opportunity to:

  • Protect our democracy with Electoral Count Act reform;
  • Tackle inflation, energy, and health care costs through reconciliation;
  • Help America outcompete China by passing the bipartisan U.S. Innovation and Competition Act (USICA); and
  • Fill all 77 judicial vacancies

 

With control of both the House and Senate up for grabs in the fall, this could be the last chance to pass these crucial reforms before the usual midterm losses put MAGA extremists in a position to block any national progress for the remainder of President Biden’s first term,” Will Marshall and Ben Ritz write. “By taking action before the August recess on these four urgent priorities, Congressional Democrats could compile an impressive record of progressive reform and governing competence to run on in November.

Read the memo below:

 

MEMORANDUM


TO:                Congressional Democrats
FROM:          Will Marshall and Ben Ritz, PPI
RE:                Four Legislative Priorities Before the August Recess

Under Democratic leadership, the 117th Congress has produced major wins for the American people. Nearly 70% of Americans are “fully vaccinated” against COVID and 80% have had at least one dose. The United States is enjoying its strongest job recovery ever and wages are rising. The bipartisan infrastructure law increased domestic infrastructure spending by $550 billion, the largest investment in America’s productive capacity in a generation. Congress approved President Biden’s request for military aid to help Ukraine defend itself against Russian aggression. The U.S. Senate confirmed Ketanji Brown Jackson as the first Black woman on the Supreme Court. And a determined Congress just passed the bipartisan Safer Communities Act — the first national gun safety bill in over 30 years.

Before they leave for August recess, Congressional Democrats should seize the opportunity to build on this solid record of accomplishment by acting to safeguard our democracy, ease inflationary pressure, expand America’s high-tech lead, create new jobs in clean energy, and lower health care premiums. With control of both the House and Senate up for grabs in the fall, this could be the last chance to pass these crucial reforms before the usual midterm losses put MAGA extremists in a position to block any national progress for the remainder of President Biden’s first term.

Therefore, we urge Congressional Democrats to focus on these four vitally important priorities over the next month:

PROTECT DEMOCRACY WITH ELECTORAL COUNT ACT REFORM

The top priority should be to reinforce the guardrails around America’s Constitutional democracy. Although his violent Jan. 6 coup attempt failed, ex-president Donald Trump continues to undermine the integrity of U.S. elections. In a blatant bid to rig future elections in advance, he’s backing MAGA election deniers running for Congress as well as governor and secretary of state in the key battleground states he lost in 2020. Congress must update the Electoral Count Act to make it impossible for defeated presidents and their accomplices to overrule American voters and steal a national election.

TACKLE INFLATION, ENERGY, AND HEALTH CARE COSTS THROUGH RECONCILIATION

Americans across the political spectrum agree that inflation is the greatest economic challenge we face today. The new, more focused reconciliation bill Democratic leaders are crafting with Sen. Joe Manchin could help reduce the cost of living while also salvaging some key elements of last year’s overreaching Build Back Better blueprint. It would cut budget deficits by roughly $500 billion, making it easier for the Federal Reserve to rein in rising prices without triggering a recession.

The new reconciliation bill also should include an ambitious set of consumer and business tax incentives for dozens of clean energy technologies, based on a $325 billion, 10-year package of clean energy tax incentive bill approved by the Senate Finance Committee last year, a version of which has already passed the House. These measures would stimulate hundreds of billions of dollars in private sector clean technology investment throughout the economy while creating millions of new jobs. They are also very popular with voters.

Congress made health insurance more affordable for over 13 million Americans this year when it increased the subsidies for plans purchased through the Affordable Care Act exchanges as part of the American Rescue Plan. But the increase was temporary, and if lawmakers let it expire, premiums will increase 53% on average. To make matters worse for Democrats, rate increase notices will be sent out in October, even if they don’t go into effect until January. It is unlikely that the full increase can be made permanent because of its high costs, but Democrats can blunt the pain and permanently fix the ACA “subsidy cliff” that existed before this year for less than $150 billion over 10 years as part of a sustainably financed reconciliation bill.

It’s essential that Democratic leaders and Sen. Manchin get to “yes” on a radically pragmatic reconciliation bill that unites their ideologically diverse party and delivers a major win for President Biden’s domestic agenda. They should resist pressure from the progressive left to enact other gimmicky giveaways that would squander these savings and undermine the bill’s inflation-fighting potential.

HELP AMERICA OUTCOMPETE CHINA BY PASSING THE BIPARTISAN INNOVATION BILL 

Lawmakers have yet to finish conferencing the U.S. Innovation and Competition Act (USICA) passed last year by the Senate with the House-passed America COMPETES Act. This bipartisan innovation bill would make an historic investment in semiconductor manufacturing capacity, research and development, STEM workforce development, and supply chain resilience. By passing it, Congress would signal its determination to keep America ahead of China in the race for scientific and technological leadership.

USICA also presents an opportunity for Congress to set up a more robust and equitable system of career pathways for non-college workers. The COMPETES Act, for example, would expand apprenticeship opportunities to reach historically underserved populations, including youth and people re-entering their community after incarceration. It would also promote apprenticeships in non-traditional industries, creating nearly one million additional opportunities in new and emerging fields over the next five years.

But the House version of the bill unfortunately was larded with extraneous trade provisions that are unrelated to the bill’s core emphasis on boosting U.S. innovation and competitiveness. These should be set aside and argued out in some other legislative context. Meanwhile, Senate Minority Leader Mitch McConnell has vowed to pull his party’s support from the conference as long as Democrats continue work on passing a budget reconciliation bill. Although there are elements of the Senate bill that could be improved in a conference committee, the best way to circumvent McConnell’s blatant obstructionism may be for House Democrats to simply vote to send the Senate-passed USICA to President Biden’s desk, negating the need for further negotiations.

FILL COURT VACANCIES FASTER

The Supreme Court’s recent flurry of deeply polarizing decisions underscores the perils of allowing Republicans to pack federal courts with far-right ideologues. Although President Biden has nominated and confirmed more temperate federal judges at a record pace, it hasn’t been fast enough to keep up the rate of judicial retirements. To fill all 77 vacancies, he and Senate leaders must pick up the pace.

By taking action before the August recess on these four urgent priorities, Congressional Democrats could compile an impressive record of progressive reform and governing competence to put before the voters in November.

Will Marshall is the President and Founder of the Progressive Policy Institute.

Ben Ritz is the Director of PPI’s Center for Funding America’s Future.

 

Download the memo here.

###

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

Follow PPI on Twitter: @ppi

Find an expert at PPI.

###

Media Contact: Aaron White; awhite@ppionline.org

 

Memo to Congressional Democrats: Four Legislative Priorities Before the August Recess

MEMORANDUM


TO:                Congressional Democrats
FROM:          Will Marshall and Ben Ritz, PPI
RE:                Four Legislative Priorities Before the August Recess

Under Democratic leadership, the 117th Congress has produced major wins for the American people. Nearly 70% of Americans are “fully vaccinated” against COVID and 80% have had at least one dose. The United States is enjoying its strongest job recovery ever and wages are rising. The bipartisan infrastructure law increased domestic infrastructure spending by $550 billion, the largest investment in America’s productive capacity in a generation. Congress approved President Biden’s request for military aid to help Ukraine defend itself against Russian aggression. The U.S. Senate confirmed Ketanji Brown Jackson as the first Black woman on the Supreme Court. And a determined Congress just passed the bipartisan Safer Communities Act — the first national gun safety bill in over 30 years.

Before they leave for August recess, Congressional Democrats should seize the opportunity to build on this solid record of accomplishment by acting to safeguard our democracy, ease inflationary pressure, expand America’s high-tech lead, create new jobs in clean energy, and lower health care premiums. With control of both the House and Senate up for grabs in the fall, this could be the last chance to pass these crucial reforms before the usual midterm losses put MAGA extremists in a position to block any national progress for the remainder of President Biden’s first term.

Therefore, we urge Congressional Democrats to focus on these four vitally important priorities over the next month:

PROTECT DEMOCRACY WITH ELECTORAL COUNT ACT REFORM

The top priority should be to reinforce the guardrails around America’s Constitutional democracy. Although his violent Jan. 6 coup attempt failed, ex-president Donald Trump continues to undermine the integrity of U.S. elections. In a blatant bid to rig future elections in advance, he’s backing MAGA election deniers running for Congress as well as governor and secretary of state in the key battleground states he lost in 2020. Congress must update the Electoral Count Act to make it impossible for defeated presidents and their accomplices to overrule American voters and steal a national election.

TACKLE INFLATION, ENERGY, AND HEALTH CARE COSTS THROUGH RECONCILIATION

Americans across the political spectrum agree that inflation is the greatest economic challenge we face today. The new, more focused reconciliation bill Democratic leaders are crafting with Sen. Joe Manchin could help reduce the cost of living while also salvaging some key elements of last year’s overreaching Build Back Better blueprint. It would cut budget deficits by roughly $500 billion, making it easier for the Federal Reserve to rein in rising prices without triggering a recession.

The new reconciliation bill also should include an ambitious set of consumer and business tax incentives for dozens of clean energy technologies, based on a $325 billion, 10-year package of clean energy tax incentive bill approved by the Senate Finance Committee last year, a version of which has already passed the House. These measures would stimulate hundreds of billions of dollars in private sector clean technology investment throughout the economy while creating millions of new jobs. They are also very popular with voters.

Congress made health insurance more affordable for over 13 million Americans this year when it increased the subsidies for plans purchased through the Affordable Care Act exchanges as part of the American Rescue Plan. But the increase was temporary, and if lawmakers let it expire, premiums will increase 53% on average. To make matters worse for Democrats, rate increase notices will be sent out in October, even if they don’t go into effect until January. It is unlikely that the full increase can be made permanent because of its high costs, but Democrats can blunt the pain and permanently fix the ACA “subsidy cliff” that existed before this year for less than $150 billion over 10 years as part of a sustainably financed reconciliation bill.

It’s essential that Democratic leaders and Sen. Manchin get to “yes” on a radically pragmatic reconciliation bill that unites their ideologically diverse party and delivers a major win for President Biden’s domestic agenda. They should resist pressure from the progressive left to enact other gimmicky giveaways that would squander these savings and undermine the bill’s inflation-fighting potential.

HELP AMERICA OUTCOMPETE CHINA BY PASSING THE BIPARTISAN INNOVATION BILL 

Lawmakers have yet to finish conferencing the U.S. Innovation and Competition Act (USICA) passed last year by the Senate with the House-passed America COMPETES Act. This bipartisan innovation bill would make an historic investment in semiconductor manufacturing capacity, research and development, STEM workforce development, and supply chain resilience. By passing it, Congress would signal its determination to keep America ahead of China in the race for scientific and technological leadership.

USICA also presents an opportunity for Congress to set up a more robust and equitable system of career pathways for non-college workers. The COMPETES Act, for example, would expand apprenticeship opportunities to reach historically underserved populations, including youth and people re-entering their community after incarceration. It would also promote apprenticeships in non-traditional industries, creating nearly one million additional opportunities in new and emerging fields over the next five years.

But the House version of the bill unfortunately was larded with extraneous trade provisions that are unrelated to the bill’s core emphasis on boosting U.S. innovation and competitiveness. These should be set aside and argued out in some other legislative context. Meanwhile, Senate Minority Leader Mitch McConnell has vowed to pull his party’s support from the conference as long as Democrats continue work on passing a budget reconciliation bill. Although there are elements of the Senate bill that could be improved in a conference committee, the best way to circumvent McConnell’s blatant obstructionism may be for House Democrats to simply vote to send the Senate-passed USICA to President Biden’s desk, negating the need for further negotiations.

FILL COURT VACANCIES FASTER

The Supreme Court’s recent flurry of deeply polarizing decisions underscores the perils of allowing Republicans to pack federal courts with far-right ideologues. Although President Biden has nominated and confirmed more temperate federal judges at a record pace, it hasn’t been fast enough to keep up the rate of judicial retirements. To fill all 77 vacancies, he and Senate leaders must pick up the pace.

By taking action before the August recess on these four urgent priorities, Congressional Democrats could compile an impressive record of progressive reform and governing competence to put before the voters in November.

Will Marshall is the President and Founder of the Progressive Policy Institute.

Ben Ritz is the Director of PPI’s Center for Funding America’s Future.

PPI’s Trade Fact of the Week: ‘Globalization’ is not so new

FACT: ‘Globalization’ is not so new 

 

THE NUMBERS: Merchandise trade as share of GDP –

 

2022       22.1%
1790       22.7%?

 

WHAT THEY MEAN:

After the Fourth, Yorktown, the Treaty of Paris, and the Constitution, they began to argue …

Nobody really knows how large America’s early-republic economy was. The website www.measuringworth.com, an economic history project at the University of Illinois, nonetheless makes an admirable try, estimating a U.S. GDP of $189 million in 1790. We do know trade figures, though: that year, Alexander Hamilton’s newly hired Customs agents counted $23 million in imports and $20 million in exports.

Assuming the GDP estimate is about right, goods trade would have been equal to a bit less than 23% of the economy. Today’s trade and GDP stats, counted in trillions rather than millions of dollars, are about 100,000 times bigger. But measured against one another, they make the 21st-century and 18th-century economies look eerily similar. With the Bureau of Economic Analysis estimating U.S. GDP at $25 trillion this year and Census trade data suggesting $3.5 trillion in goods imports and $2.1 trillion in exports, the 2022 goods-trade-to-GDP ratio is just above 22%, almost identical to that of 1790.

Similar circumstances can elicit similar ideas and responses. In this post-Fourth week, here are some post-Independence perspectives, each with its own contemporary echoes and advocates:

1. Alexander Hamilton’s Report on Manufactures (1791) the first U.S. government paper on trade policy, was also the first on the topic now termed “competitiveness.” Then serving as Treasury Secretary, Hamilton rebuts arguments that low-wage foreign competition (from textile, machinery, and other factories in Industrial Revolution Britain and Europe) made it impossible for the U.S. to compete in manufacturing:

“While in the article of wages the comparison certainly turns against the United States … the degree of disparity is diminished in proportion to the use which can be made of machinery. To illustrate this last idea: let it be supposed that the difference in price in two countries of a given quantity of manual labor requisite to the fabrication of a given article is as ten, and that some mechanic power is introduced into both countries which, performing half the necessary labor, leaves only half to be done by hand, it is evident that the difference in the cost of the fabrication of the article in question, as far as it is connected with the price of labor, will be reduced from ten to five.”

The balance of the Report calls for a program of importing labor-saving machines, passage of a patent law to stimulate American inventors, incentives for high-skilled immigration, cash prizes for innovative American factories, and an infant-industry trade protection scheme using temporarily high tariffs or exclusions for products ranging from starched wigs, bell-metal, and glue to whiskey, whale-oil, pewter cups and bowls, furniture, chocolate, rifles, and books. Hamilton’s former Federalist Papers partner, James Madison, was by then leader of an opposition party in the House of Representatives, and made sure the program got nowhere.

2. Thomas Jefferson’s Report on Foreign Commerce (1793), from a different angle two years later, is the first U.S. government catalogue of foreign trade barriers. Reviewing tariff rates, product exclusions, state trading monopolies, and shipping (“navigation”) restrictions in the U.K., France, Spain, Portugal, Denmark, Sweden, and the Netherlands along with their colonial possessions in Latin America, Canada, and the Caribbean, Jefferson as Secretary of State combines theoretical support for open markets with reciprocity in practice:

“Instead of embarrassing commerce under piles of regulating laws, duties, and prohibitions, could it be relieved from all its shackles in all parts of the world, could every country be employed in producing that which nature has best fitted it to produce, and each be free to exchange with others mutual surplusses for mutual wants, the greatest mass possible would then be produced of those things which contribute to human life and human happiness; the numbers of mankind would be increased, and their condition bettered. Would even a single nation begin with the United States this system of free commerce, it would be advisable to begin it with that nation; since it is one by one only that it can be extended to all. … But should any nation, contrary to our wishes, suppose it may better find its advantage by continuing its system of prohibitions, duties and regulations, it behooves us to protect our citizens, their commerce and navigation, by counter prohibitions, duties and regulations, also. Free commerce and navigation are not to be given in exchange for restrictions and vexations; nor are they likely to produce a relaxation of them.”
A sample of the findings:

“Our bread stuff is at most times under prohibitory duties in England, and considerably dutied on re-exportation from Spain to her colonies. Our tobaccoes are heavily dutied in England, Sweden and France, and prohibited in Spain and Portugal. Our rice is heavily dutied in England and Sweden, and prohibited in Portugal. Our fish and salted provisions are prohibited in England, and under prohibitory duties in France. Our whale oils are prohibited in England and Portugal. And our vessels are denied naturalization in England, and of late in France. … Spain and Portugal refuse, to all those parts of America which they govern, all direct intercourse with any people but themselves. … We can carry no article, not of our own production, to the British ports in Europe, nor even our own produce to her American possessions.”

3. Thomas Paine and economic integration as a support for peace: And from a non-government, dissenting-intellectual perspective, Paine argues in The Rights of Man (1790) for international economic integration as a deterrent to war:

“I have been an advocate for commerce, because I am a friend to its effects. It is a pacific system, operating to cordialise mankind, by rendering nations, as well as individuals, useful to each other. If commerce were permitted to act to the universal extent it is capable, it would extirpate the system of war, and produce a revolution in the uncivilised state of governments. … Commerce is no other than the traffic of two individuals, multiplied on a scale of numbers; and by the same rule that nature intended for the intercourse of two, she intended that of all. For this purpose she has distributed the materials of manufactures and commerce, in various and distant parts of a nation and of the world; and as they cannot be procured by war so cheaply or so commodiously as by commerce, she has rendered the latter the means of extirpating the former.”

FURTHER READINGS:

 

Quick postscript: Advocates looking to enlist the Founders on their sides of today’s global-economy debates should do so with care. As first-generation policymakers, they were learning on the job and changed their minds a lot. Hamilton’s take on the 1794 “Jay Treaty” with the U.K., the first post-Constitution U.S. trade agreement, diverged radically from the proposals he made in the Report on Manufactures.  Jefferson likewise took at least three irreconcilable positions over a 30-year career in politics, from a Paine-like unilateral free-trade view as Ambassador to France in the 1780s, to the reciprocity-minded policies of the Report on Foreign Commerce in the 1790s, and an ill-fated enthusiasm for trade sanctions as a foreign policy tool as President in the 1800s.

 

Policy then and now 

Hamilton’s Report on Manufactures, 1791.

… and Commerce Secretary Gina Raimondo on U.S. supply chains, 2022.

Jefferson’s 7-country Report on Foreign Commerce.  

… and the U.S. Trade Representative’s 2022 National Trade Estimate, covering 64 partners (counting the European Union and the Arab League as one each).

Paine’s The Rights of Man, 1790, with the commerce passage in chapter 5.

And some data  

Census’ 1970 collection of trade data from the Colonial era and the early republic.

“Measuring Worth” tries to track GDP, wages, per capita income, and other stats for the U.S., Australia, the United Kingdom, and Spain back to the 1790s. Australia in 1790, two years after the Botany Bay colony foundation, has a GDP of 23,000 pounds.

And how exactly did we get modern economic macro-stats? BEA looks back on pre-GDP government economics, the giant brain of Simon Kuznets, and the invention of national economic measurement in the Commerce Department of the 1930s.

 

ABOUT ED

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

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

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

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

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

Marshall for The Hill: The Issue That Trumps Them All

By Will Marshall

As the July 4 holiday approaches, Americans can be forgiven for taking a break from today’s incendiary politics of partisan hatred and performative outrage. But it’s also the right occasion for citizens to think about their duty to reinforce the rules that make our democracy work.

Polls show rampant inflation is the voters’ top concern in this midterm election year. But it won’t be the most important issue on the ballot.

More consequential than soaring prices, crime, climate change or any other pressing national problem is the resilience of our constitutional framework for self-government. If it cracks under pressure from political extremists, we can kiss our liberties and democracy goodbye.

Read the full piece in The Hill. 

Pankovits for Medium: The Furor Over Choice Isn’t Limited to Abortion

By Tressa Pankovits

This Independence Day, America doesn’t feel so free. The Supreme Court’s decision to overturn Roe v. Wade is already causing real harm to go along with the widespread anguish.

It’s also causing political fallout. At least three new congressional polls show support for Democrats is soaring. That’s good news for the Party, but it also offers a cautionary lesson.

While the marquee debate around choice leading up to November will center on reproductive choice, there are signs that more U.S. parents are rallying in favor of a different kind of choice: The right to choose the best school for their child. And, it’s not just parents. About 72% of registered voters support school choice.

Read more on Medium.

PPI Statement on Supreme Court Ruling to Undermine EPA and Climate Crisis

Paul Bledsoe, Energy and Climate Fellow for the Progressive Policy Institute, released the following statement in reaction to the U.S. Supreme Court ruling limiting the EPA’s authority to regulate greenhouse gases from power plants:

“The Supreme Court decision today significantly undermines the regulatory authority of the Environmental Protection Agency and Biden Administration to limit carbon dioxide, the main greenhouse gas. Yet the Court ignores the fact that climate change increasingly represents a clear and present danger to American public safety, our economy and national security, and should be addressed by all reasonable means.

“The ruling means Congress must act, once and for all, to provide certainty regarding U.S. and global climate protection so it is never again subject to the whims of a radical right-wing court.

“For three decades, Republicans have opposed all serious action, while Democrats have failed to create the broad-based political coalition needed to pass comprehensive climate legislation through Congress.

“In response to previous failures, the Biden Administration and Democrats in Congress have created new clean energy tax incentives and a positive agenda of economic opportunities for both workers and consumers.

“This approach is not about demonizing fossil fuels we will need for years or feeding a culture war. Instead, these policies would jumpstart innovation and our energy economy, creating millions of jobs. And these policies are very popular with Americans, since they do not involve politically challenged energy taxes, and will in fact reduce long-term consumer energy prices.

“This approach has already passed the House, and is reflected in legislation pending in the Senate. The Senate should adopt these measures with all deliberate speed to protect the American people from the increasing prospect of climate calamity, and prevent the radical right from endangering our nation and the world.”

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org

LISTEN: PPI Talks New Bipartisan Breakthrough on Curbing Gun Violence with Everytown for Gun Safety

On a new episode of the Progressive Policy Institute’s Radically Pragmatic podcast, PPI’s Director of Health Care Arielle Kane sits down with Everytown for Gun Safety’s Legal Director Jonas Oransky to discuss the latest developments in the bipartisan movement to pass gun safety legislation. The episode, titled “Dueling Decisions in the Fight for Gun Safety,” comes as President Biden signs a new bipartisan gun safety bill into law — the first in almost 30 years — against the backdrop of horrific mass shootings and a dangerous reversal of commonsense gun laws from the U.S. Supreme Court.

“These are provisions in the concealed carry laws of several states that SCOTUS struck down last week, that have helped those states have some of the lowest gun violence rates nationwide. New York’s law was on the books for over a century. It’s just a really disturbing turn of events also, that the Supreme Court is rewriting the process for how you evaluate whether common sense laws are allowed under the Constitution,” said Jonas Oransky.

Listen to the podcast here:

Read PPI’s full statement on the passage of the bipartisan gun safety bill here.

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

Follow PPI on Twitter: @ppi

Find an expert at PPI.

###

Media Contact: Tommy Kaelin; tkaelin@ppionline.org

Dueling Decisions in the Fight for Gun Safety

On a new episode of Radically Pragmatic, PPI’s Director of Health Care Arielle Kane sits down with Everytown for Gun Safety’s Legal Director Jonas Oransky to discuss the latest developments in the bipartisan movement to pass gun safety legislation. Their conversation comes as President Biden signs a new bipartisan gun safety bill into law — the first in almost 30 years — against the backdrop of horrific mass shootings and a dangerous reversal of commonsense gun laws from the U.S. Supreme Court.

Learn more about Everytown for Gun Safety here.

Learn more about the Progressive Policy Institute here.

PPI’s Trade Fact of the Week: The U.S. collects about as much tariff money on Pakistani goods as on British goods

FACT: The U.S. collects about as much tariff money on Pakistani goods as on British goods. 

 

THE NUMBERS:

Imports from U.K., 2021  $56.6 billion
Imports from Pakistan, 2021    $5.3 billion
Tariffs on U.K. goods, 2021  $566 million
Tariffs on Pakistani goods, 2021  $523 million

 

WHAT THEY MEAN:

Looking at the U.S. tariff system as domestic tax policy for an International Trade Commission hearing last week, PPI’s Ed Gresser found much to dislike. In this role, it turns out to be mainly a way to tax cheap clothes, shoes, and other consumer goods, many of them not made in the United States for decades. As such, it is a remarkably regressive way to raise money, and not obviously effective as a job or production protector.

How does it look from the other side of the border? The complicated answer is, it basically depends where you are on the other side. For most countries U.S. tariffs turn out to be pretty modest, in a range from close to zero to about 5%. For low-income Asian countries reliant on clothing and textile exports, it is very restrictive; for China and to some extent for the world, it has changed a lot since 2017. As a starting point, a quick list (using trade-weighted averages, i.e., tariff payments divided by the value of goods imports) illustrates the world averages of 2017 and 2021, and the variation among countries:

Bangladesh 14.7%
China, 2021 11.3%
Sri Lanka 10.9%
Pakistan   9.8%
Cambodia   8.3%
Vietnam   4.8%
Indonesia   4.5%
World, 2021       3.0%
Ukraine   2.8%
China, 2017        2.7%
Thailand   1.9%
Egypt   1.7%
Samoa   1.5%
Japan   1.5%
World, 2017       1.4%
Brazil   1.0%
Philippines   1.5%
Germany   1.4%
European Union, 2021   1.4%
European Union, 2017    1.3%
El Salvador   1.2%
United Kingdom   1.0%
Argentina   0.9%
New Zealand   0.7%
Lebanon   0.6%
Uzbekistan   0.6%
Norway   0.5%
Haiti   0.4%
Jordan   0.3%
Kenya   0.3%
Ghana   0.2%
Kuwait   0.2%
Fiji   0.2%
South Korea   0.2%
Jamaica   0.1%
Canada   0.1%
Colombia   0.1%
Liberia 0.01%

 

What explains these patterns?

High tariffs on low-income Asia: The low-income Asian countries at the top of the list — Bangladesh, Cambodia, Pakistan, and Sri Lanka — specialize in exports of clothing and home textiles. Tariffs on these goods average over 11%, and spike to 32% (as one example, for polyester shirts). By comparison, IT goods, medical equipment, natural resources like oil and fish, and primary agricultural commodities are zero, while heavy-industry and sophisticated consumer goods generally get low tariffs.  Thus the startling fact that buyers of Pakistan’s modest $5.3 billion worth of shirts, towels, and similar goods pay almost as much as buyers of $56.6 billion in British medicines, aircraft parts, automobiles, and art auction prizes. Likewise, buyers of struggling Sri Lanka’s underwear and clothing paid $325 million last year; the bill for buyers of Norway’s $6.7 billion in salmon, oil, and pharmaceuticals was $34 million, an order of magnitude smaller.

Low-to-medium rate on others: If the highest rates show up in low-income Asia, the lowest are for countries of several different types: (a) energy and natural resource exporters (oil for Kuwait, fish for Fiji, and so on); (b) the 20 U.S. FTA partners, where Canada, Jordan, El Salvador and Colombia stand in for the larger group; and (c) countries enrolled in the African Growth and Opportunity Act or the Caribbean Basin Initiative, such as Kenya, South Africa, Liberia, Haiti, and Jamaica.  Larger wealthy and middle-income countries (the U.K., Germany, Brazil, Argentina, Thailand, Japan, etc) have diversified export mixes, typically with a lot of zero-tariff products, a lot of mid-tariff products, and some high-tariff goods, and typically wind up in a range from 1% to 3%.

Changing rates for the world and China: Finally, the system has changed substantially over the last five years, with the worldwide average rate doubling from 1.4% in 2017 to 3.0% in 2021.  This is principally due to the Trump administration’s “301” tariffs on Chinese goods. The “232” tariffs on steel and aluminum, though equally controversial, affect only about 1.5% of imports, and changed overall averages only very modestly for the world or large partners like the EU or Japan. For Chinese goods specifically, average rates have jumped from 2.7% in 2017 to 11.3% in 2021 – very high in comparison to the vast majority of countries, but still actually below the normal, permanent rates for products from Bangladesh.

FURTHER READINGS:

Gresser on the tariff system and American underserved and underrepresented communities.

A long view: The U.S. International Trade Commission tracks U.S. tariff rates from the McKinley Tariff of 1890 to 2020.

… and analyzes the 11,414 U.S. tariff lines — How many are zero? How many duty-free under FTAs and preferences? How many are “specific duties,” or flat fees, instead of percentages? — etc.

The U.S. tariff system.

International comparisons

The World Bank’s interactive table of average tariff rates worldwide and by country uses “simple averages” (the rates for each single tariff line in a country’s “schedule” added up, then divided by the total number of tariff lines) rather than the “trade-weighted” averages above. This approach has grown less useful as a gauge generally (as more countries use FTAs and other special programs), and especially for the U.S. since the 301 and 232 tariffs.

This noted, the table reports a worldwide average of 5.2% as of 2017, down by about 2/3 from the 15.6% average of 1993, and by about half from the 10.8 percent world average of 2000. The world’s highest rate is the Bahamas’ 23.7%, with a few other small islands and countries (the Cayman Islands, Bermuda, and Djibouti) next. The lowest are the zeroes for Hong Kong and Macao, with very slightly higher 0.1% averages in Brunei and Singapore.

The WTO’s World Tariff Profiles 2021 has a much more detailed look, with simple averages, trade-weighted averages, “tariff peak” counts, ag vs. non-ag., and more for 151 countries.

 

ABOUT ED

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

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

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

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

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PPI Releases New Report Rethinking Transparency in Health Insurance

The Progressive Policy Institute (PPI) released a new paper today arguing United States policymakers should consider more aggressive ways to obtain health care pricing information from hospitals, which could effectively boost price transparency for patients. The paper is titled, “Rethinking health insurance: Can price transparency and cash pay help consumers?” and is authored by Arielle Kane, Director of Health Care for the Progressive Policy Institute.

“For price transparency rules to work, they need to be enforced,” writes report author Arielle Kane. “When people have a serious accident or medical emergency, they aren’t inclined to comparison price shop. But most medical visits are for less than urgent care. When people do have time and inclination to compare prices, they should be able to do so. And allowing researchers and journalists to review pricing data can help expose the predatory billing practices that some providers engage in. Public scrutiny could help the industry move toward ethical, and transparent, billing practices.”

Only 14% of hospitals are in compliance with a 2021 rule from U.S. Center for Medicare and Medicaid Services (CMS) requiring hospitals post the prices for 300 so-called “shoppable” services, online. This rule, which was intended to encourage competition between hospitals and provide price transparency for consumers, has limited enforcement mechanisms. As the next chapter of this rule goes into effect this week, requiring insurers to disclose the rates they pay hospitals, there is the potential to improve the shopping experience for consumers – but only if it is enforced.

Kane’s report reviews the history and status of the price transparency regulation and finds that greater enforcement is needed to achieve the full potential of price transparency. After reviewing cash-pay data from 14 of the 300 “shoppable” billing codes, PPI finds that on average, hospitals charge 120% of the commercial insurance rates to patients paying with cash. However, there is evidence to suggest that hospitals are inflating their publicly reported “cash-pay” rates.

Read and download the full report here

 

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

Follow PPI on Twitter: @ppi

Find an expert at PPI.

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org

Rethinking Health Insurance: Can price transparency and cash pay help consumers?

EXECUTIVE SUMMARY

Democrats have been taking incremental steps toward universal health insurance coverage for nearly a century. The latest Affordable Care Act (ACA) subsidy expansions have pushed the U.S. closer to universal coverage than ever before. But skyrocketing health care costs — which makes coverage more expensive for individuals, employers, and the government — continue to hamstring the goal of universal coverage.

In 2021, the average premium for a family of four with employer-sponsored coverage was $22,221. In response to exponentially growing increases in premiums, employers have been shifting costs onto their workers, with the result that roughly half of those with employer-sponsored coverage now are enrolled in high-deductible health plans. The average deductible for a family plan in 2021 was $5,969. No wonder that Americans who don’t have coverage cite high costs as the reason.

U.S. policymakers would like to bring down these high out-of-pocket costs, but don’t have many policy levers to pull. However, in an effort encourage price competition between hospitals, in 2021, the U.S. Center for Medicare and Medicaid Services (CMS) began requiring hospitals post the prices for 300 so-called “shoppable” services, online. They are required disclose “standard charges, including the rates they negotiate with insurance companies and the discounted price a hospital is willing to accept directly from a patient if paid in cash … in a consumer-friendly display” so that patients can view them in advance. The idea is to help patients who haven’t hit their deductibles or don’t have full insurance coverage to shop around for care.

In reality though, only 14% of hospitals are in compliance with the regulation. The Biden administration has increased the maximum non-compliance penalty to $2 million per hospital. But even with the stiffened penalty, many hospitals have decided that with limited enforcement, the fine is worth the risk of non-compliance.

But if the rule were more effectively enforced, would price transparency alone really give consumers a break on their health care expenses? This report looks at how the price transparency rule could reduce health care costs through two mechanisms. First, will the price transparency regulation encourage competition between providers and reduce costs? And secondly, does posting the cash price for shoppable services reduce costs for patients?

This report reviews the status of the price transparency regulation and finds that greater enforcement is needed to achieve the full potential of price transparency. After reviewing cash-pay data from 14 of the 300 “shoppable” billing codes we find that on average, hospitals charge 120% of the commercial insurance rates to cash pay patients. However, there is evidence to suggest that hospitals are inflating their publicly reported cash-pay rates from the rates they charge cash-pay patients at the point of service.

Policymakers need to consider more aggressive ways of obtaining health care pricing information. For example, they could consider requiring all-payer claims databases and even adopting price caps if hospitals refuse to comply with price transparency rules.

READ THE FULL REPORT

Applying Antitrust Law to the U.S. Tech Sector: A critique of the American Innovation and Choice Online Act

EXECUTIVE SUMMARY

In 2019, the House Judiciary Committee initiated an investigation into the state of competition in digital markets, looking particularly at the dominance of America’s biggest online platforms. Three years later, a slew of bills have been introduced at both federal and state level intended to curb the power of “Big Tech.” The driving force behind many of these efforts is the claim that companies like Google, Amazon, Facebook (Meta), and Apple are simply too big, with their size posing a competitive threat to smaller tech companies. A handful of these bills are being introduced with the purpose of updating America’s antitrust laws to meet the challenge of today’s supposed tech monopolies.

The American Innovation and Choice Online Act (S. 2992) sponsored by Senators Amy Klobuchar, D-Minn., and Chuck Grassley, R-Iowa, for example, is being sold to Congress and the American public as being comprehensive antitrust legislation to rein in the power of “Big Tech.” Whatever its merits, however, the bill isn’t really based in antitrust law and policy. Rather, it’s an ad hoc set of new rules which replace the current standards for antitrust enforcement based on market power and consumer welfare with a more generalized approach which targets just one industry — online platforms. The Senate bill looks at platforms with a large number of users and assumes excessive market power as a result of size, forgoing the need for economic analysis required to prove illegal monopoly power. The bill then imposes additional competitive requirements onto this predetermined set of companies.

A genuine antitrust analysis would examine not just firm size, but the conditions of the market in which a company operates, the presence of direct competitors, and its potential for consumer harm. Instead, the Senate bill takes a cookie cutter approach to antitrust enforcement: An online platform that hosts third party business users with over 50 million U.S. monthly active users (or 100,000 business users) and a market capitalization or net annual sales over $550 billion should be subject to different rules regarding competition. Essentially, a company-specific carveout without precedent in antitrust law.

There is a demonstrated need for changes in how antitrust law is enforced in order to encompass the business models of today’s digital platforms and e-commerce sites. However, the Senate bill fails to offer a rigorous economic analysis of digital markets, fundamentally changing enforcement methods in ways unacknowledged by the bill’s supporters.

This report explores three ways in which the Senate bill falls short:

• For the past 40 years, U.S. antitrust enforcement has been based on the assessment of quantifiable harm resulting from a firm’s market power, which most often takes the form of price effects. Supporters of the Senate bill, however, make no such assessment.

• In addition to being incompatible with current antitrust law and practice, the American Innovation and Choice Online Act’s size-based model would put American companies at a competitive disadvantage against other big competitors in global markets.

• Businesses such as internet platforms with low costs and significant network effects require a more sophisticated approach to examining consumer harm which accounts for damage to consumers other than rising prices. This might include adverse changes to company policies or reduction in accessibility of a service and may, in the end, warrant additional regulation. The current proposed legislation does not make such a case.

Today’s dominant technology companies may warrant scrutiny under antitrust law, but to investigate the merits of this claim it is critical that assessment of an illegal monopoly is based on market power rather than size. By considering metrics of consumer harm beyond price effects, it is possible to evaluate harmful market power in a way that considers the nature of these growing industries without discounting the additional value to the consumer presented by companies with large network effects.

READ THE FULL REPORT

Keep Eyes on the Prize: Skip the Small and Controversial and Pass USICA/Competes Act

The chapters on trade included in the Senate and House COMPETES Act/USICA raise some good ideas, but also some very questionable ones. A good principle here is: “simpler is better.” If the good can be salvaged, fair enough. But overall, the trade chapters’ contentious elements are not important enough to justify slowing the CHIPS Act, support for R&D and STEM workforce development, supply chain resilience, and the bill’s other major benefits.

On the positive side, the Senate’s renewal of an “exclusion” program for the Trump administration’s China tariffs is appropriate, helping to ease the burden these tariffs place on U.S. manufacturers and farmers. Likewise, it’s good that Congress is committed to renew the Generalized System of Preferences, though as PPI noted before, both the Senate and House bills overreach in adding many new eligibility criteria; these should be pared back to a more focused list and balanced with additional benefits as Reps. Stephanie Murphy and Jackie Walorski have proposed. Other ideas are best dropped.

For example, giving businesses wider openings to file trade lawsuits of the type that have recently derailed U.S. investment in solar energy, and banning families from getting “de minimis” tariff waivers for packages originating in China, are questionable on the merits, and also likely to put some additional upward pressure on prices when we need to do the opposite. They should be dropped in the interest of speeding the conclusion of the larger bill.

More fundamentally, the bills’ trade chapters seem to be missing the forest for the trees, or even the shrubs. Is it, for example, acceptable that the Biden administration is not seeking market access for American exporters, or more generally, designing a program ambitious enough to match China’s RCEP and Belt and Road (in its European, Asian, and Latin American trade “initiatives”?).

With the “301” tariffs having failed to change the direction of the U.S.-China relationship, is there a justification for continuing to ask American businesses and families to keep paying them? Did Congress surrender its rights by allowing presidents to personally impose tariffs through the “Section 301” and “Section 232” laws, and if so, should they be changed? And, as the administration investigates the effects of trade and trade policy on America’s low-income workers and communities, is there a role for pro-poor reform of the U.S.’ own trade regime?

These are the trade policy questions we hope Congress will begin asking, once it completes its competitiveness bill work.

Senate AICOA Bill Falls Short in Analyzing the Reality of Digital Markets, Argues New Report from PPI

Today, the Progressive Policy Institute released a new report exploring how antitrust law and policy applies to the modern U.S. technology sector and examining the issues at play in the debate over the Senate’s broad and potentially harmful antitrust legislation. The report is titled “Applying Antitrust Law to the U.S. Tech Sector: A Critique of the American Innovation and Choice Online Act,” and is authored by PPI Technology Policy Analyst Malena Dailey.

“The American Innovation and Choice Online Act is not based on sophisticated economic analysis of how digital markets work. The size-based, company-specific approach fails to account for the reality of the global market for online platforms, and is a departure from the precedent of assessing market power prior to imposing rules associated with competition,” writes Malena Dailey in the report.

The report dives deep into the history of U.S. competition policy, and outlines the shift in theories surrounding antitrust enforcement since the 1970s. The ways in which the Klobuchar-Grassley-led S. 2992 — the American Innovation and Choice Online Act — misaligns with current antitrust enforcement could have unintended consequences if enacted, such as limiting U.S. technology leadership, overregulating a fluctuating global market, and unfairly singling out four of America’s most successful companies.

“There is a demonstrated need for changes in how antitrust law is enforced in order to encompass the impact of digital platforms and e-commerce. However, the Senate bill fails to offer a rigorous economic analysis of digital markets, fundamentally changing enforcement methods in ways unacknowledged by the bill’s supporters,” Ms. Dailey argues about S. 2992.

The report explores three ways in which S. 2992 falls short in responding to concerns regarding competition, arguing that this bill fails to assess “Big Tech’s” market power and alleged quantifiable harm to consumers, puts American companies at a competitive disadvantage against other big competitors in global markets — notably, giving China the upper hand in technology leadership — and establishes overly broad, potentially damaging standards.

Read and download the full report:

 

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

Follow PPI on Twitter: @ppi

Find an expert at PPI.

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org

Tech-Ecommerce Job Growth in the Midwest: Leaders and Laggards

The Bureau of Labor Statistics has just released detailed state and local job numbers for 2021, which allows us to calculate tech-ecommerce job growth by state. We analyzed the five-year period from 2016 to 2021.

Nationally, the tech-ecommerce sector, as defined by PPI, generated 2.045 million jobs from 2016 to 2021. That’s compared to private sector job growth of 2.188 million over the same period. Nationally, tech-ecommerce accounted for 93% of private sector job growth from 2016 to 2021.

For this blog item, we focus on the 12 states in the Census Midwest region: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. Overall, these states showed a gain of 26.6% for tech-ecommerce jobs from 2016 to 2021 (see table at the end of the item).

Ohio is the big Midwestern winner for tech-ecommerce jobs, with a 39.1% gain from 2016 to 2021, which translates into a mammoth employment increase of 73.2 thousand. Workers in Ohio’s tech-ecommerce sector were paid $69,000 on average in 2021, slightly higher than the average pay of $67,000 received by Ohio manufacturing workers (these figures include all workers in the sector, both managerial and production).

Among Midwest states, Kansas had the second highest growth rate for tech-ecommerce workers, with Illinois showing the second highest absolute gain of 59.5 thousand (both following Ohio). Workers in the tech-ecommerce sector in Illinois received an average of $95,000 in 2021, compared to average manufacturing pay of $79,000 in the state.

The biggest tech-ecommerce laggard in the Midwest is, surprisingly, Minnesota. Minnesota has a history as a mainframe computer manufacturing leader, but it has not been able to convert that legacy to tech-ecommerce jobs. From 2016 to 2021, the number of tech-ecommerce jobs in Minnesota rose by 8.4%, the second slowest in the country (after Vermont). The number of “tech industry” jobs (software publishing, data processing, internet publishing and other information services, and computer systems design) only rose by 4.4% in Minnesota, compared to a 25% gain nationally, and a 14% gain for all Midwest states overall.

In an April 2021 report, the Minnesota Chamber Foundation acknowledged the state’s weakness in tech.

…sluggish growth in Minnesota’s high-tech industries and tech occupations has been a source of underperformance in the state’s economy for almost a decade, and forecast data projects an underwhelming future if Minnesota does not change.

The chapter on Minnesota’s tech sector drives home the point:

…Our relative under-performance in some fast-growing high-tech subsectors, such a software publishing and data hosting/processing, also explains why Minnesota has lagged faster growing states in GDP and employment growth in the last decade. Our comparative lack of high-flying tech successes this decade may also act as a reputational drag on growth, as fast-growing companies and startups have tended to cluster in tech growth clusters, such as Silicon Valley, Seattle, Austin, or Boulder.

Finally, it is perhaps ironic that Minnesota, a state which has barely participated in the tech boom, is home to Senator Amy Klobuchar, the main sponsor of legislation designed to hobble the large tech companies that have created so many jobs nationally and in other Midwest states. Perhaps if Minnesota catches up and embraces investment from technology leaders, she would better understand the damage her poorly designed legislation would have.

 

Tech-Ecommerce Jobs in the Midwest: Leaders and Laggards

Change in tech-ecommerce jobs, 2016-2021
percent thousands
Ohio 39.1% 73.2
Kansas 36.9% 17.0
Missouri 32.0% 30.8
Indiana 31.4% 34.9
South Dakota 28.6% 2.1
Michigan 28.0% 33.5
Illinois 26.6% 59.5
Wisconsin 18.6% 19.7
Iowa 18.2% 8.8
Nebraska 16.0% 5.4
North Dakota 10.3% 0.9
Minnesota 8.4% 10.5
Midwest 26.6% 296.4
Data: BLS, PPI. Based on NAICS 334, 4541,492, 493, 5112, 518, 519, 5415

 

PPI Statement on Passage of Bipartisan Gun Violence Prevention Bill

Aaron White, Spokesperson for the Progressive Policy Institute, released the following statement in reaction to the Senate and House passage of the Bipartisan Safer Communities Act:

“In 2022 alone, there have been 281 mass shootings in America. The senseless tragedies in Uvalde, Texas, and Buffalo, New York, have forced Congress’ hand to act and protect Americans in their schools, groceries stores, churches, and homes.

“The Senate and House took a historic vote this week that will help curb gun violence and save lives. This rare moment of bipartisanship is welcome news for the millions of Americans who have long demanded action from their representatives. Though not a perfect or comprehensive bill, this is a positive step forward – one that breaks a 30-year blockade on progress.

“PPI congratulates Senators Murphy and Cornyn for working together in a bipartisan way to enact real change, and also thanks Senators Sinema and Tillis for their leadership within their respective caucus to get this over the finish line.”

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Media Contact: Aaron White; awhite@ppionline.org