issue: Economy

Weinstein for Forbes: Can The Federal Reserve Stick A Soft Landing?

Posted on by Alyssa Brown

By Paul Weinstein Jr.

The Federal Reserve recently announced it was skipping another interest rate increase for the first time in 15 months to assess the impact of its efforts to quash inflation.

Apparently, one of the reasons for the pause was disagreement among the 12 members of the Federal Open Markets Committee about what to do next. The hawks—who want to raise rates at least twice more this year—argue that inflation is still above the Fed’s target of 2% to 3%, and that core inflation (sans volatile gas and food prices), remains stubbornly high at 5.3% year-over-year.

Other committee members want to leave things where they stand for now. They point out that consumer prices rose a modest 4% in May from 12 months earlier—the smallest increase in more than two years—and that the full impact of the central bank’s 10 previous rate hikes is still not known.

But despite their differing views on interest rates, both the hawks and the doves on the FOMC think the Fed has the economy heading for a soft landing, in which inflation levels are reduced without sending the economy into a tailspin.

Read more in Forbes.

Closing the Digital Skills Gap: Unveiling Insights from Four Countries

Posted on by Alyssa Brown

INTRODUCTION

Just decades ago, the internet was an entirely new concept, but it’s become second nature for billions of people and is now embedded into daily life across the world. While the internet is old news, there are recent technologies like blockchain, artificial intelligence (AI), and the cloud that have gone from niche, specialized roles in the global economy to the mainstream. This rapid and widespread digitalization has changed the nature of work, and as a result, digital skills are now regarded as essential for the modern workforce — across Europe and the U.S., job requirements for digital skills have gone up by 50%.

While this transformation has been underway for decades, the pandemic accelerated it. Not only did the crisis change how businesses operate and the way we work, but it also influenced people’s reliance on technology. Individuals and businesses were suddenly dependent on the internet, their smartphones, and their mobile applications for critical daily activities like work, shopping, and communication with loved ones. A 2022 report from PPI found that the App Economy became an increasingly indispensable part of the U.S. economy during the pandemic. Existing mobile applications were able to respond to soaring demand without significant outages and app developers were also able to quickly create new apps to meet the human and economic needs.

Additionally, this year’s World Economic Forum Jobs report — which lifted up perspectives from 803 companies that collectively employ more than 11.3 million workers across 27 industry clusters and 45 economies across the world — found that technology adoption will remain a key driver of business transformation for the next five years, with over 85% of organizations identifying that increased adoption of new and frontier technologies and broadening digital access will be priorities for their organization. Eighty-six percent of companies surveyed also stated that digital platforms and apps are the technologies most likely be incorporated into their operations in the next five years.

It’s clear the reliance on technology from individuals and business is not going away anytime soon and will continue to grow as emerging technologies and solutions are developed and adopted. To keep pace with this demand — while also ensuring business has the skilled talent to remain competitive — digital and tech-related skills will be increasingly necessary for workers to succeed in the global labor market.

While demand for digital skills is growing, unfortunately supply is lower than it needs to be. Workforce shortages persist across the tech industry with employers struggling to find skilled talent that is prepared for digital roles. And this gap continues to widen. A 2021 Rand Corporation report found that the global digital skills gap was widening due to the following factors: tech talent outpacing an already short supply (in fact, 54% of American workers believe technology will advance faster than workforce skills); high costs and disorganized approaches to traditional education that increase barriers to learning; access to digital infrastructure and skills limited by socio-economic status (76% of global workers don’t feel they have the resources needed to learn digital skills).

These findings highlight the barriers confronting workers who want to acquire digital skills. The report also estimates that because of digital skills gaps, 14 of the G20 countries could miss out on $11.5 trillion in cumulative GDP growth. Policymakers around the world need to tackle this problem, both to ensure their industries and businesses can keep pace with the rate and scale of technological innovation, but also to ensure current and future workers will have more opportunities to develop the skills needed to succeed in changing labor markets.

READ THE FULL REPORT.

The SEC’s Approach of Regulation by Enforcement for Crypto Assets

Posted on by Alyssa Brown

As crypto assets have gained mainstream popularity, most industry leaders have been vocal about the need for a defined regulatory framework for decentralized finance in the United States. Now, in lieu of a successful legislative effort from Congress, the SEC has taken matters into its own hands. Crypto exchange platforms Coinbase and Binance are both facing lawsuits filed by the SEC as of last week, with the agency alleging that the companies are guilty of operating unlicensed securities trading platforms in the United States.

The suits represent a sort of regulation by enforcement, penalizing exchange platforms that have struggled to find where they exist in the current financial system. It is the responsibility of the SEC to protect investors where necessary and, with a robust history of fraud, the industry has not done its credibility any favors. However, considering the dynamism of still-developing crypto markets, the SEC must ensure that their aggressive enforcement efforts, absent clear laws or guidance from Congress, don’t throttle the entire crypto industry, effectively punishing good actors alongside the bad ones while paralyzing innovation.

The cases against Coinbase and Binance rest on a hotly disputed question: Do crypto assets qualify as a security under U.S. financial regulation, and if so, which ones? The SEC seems to think yes in many cases, with Chair Gary Gensler leading the charge toward defining them as such. But even in the eyes of the SEC not every crypto asset is a security, and the lack of clear legal definitions makes it impossible for exchanges to ensure complete compliance laws not written with crypto in mind.

In the past, courts have applied the Howey test, a common framework for determining whether an asset is a security, to crypto assets. The test has four basic requirements. A security is defined in instances in which there (1) must be investment of money, (2) in a common enterprise, (3) with reasonable expectation of profit, (4) derived from the efforts of others. Under this test, it is generally agreed upon that Bitcoin and Ethereum are decentralized enough — meaning that they are detached from any collective effort or organization promoting them — that they are not considered securities. But in other cases, such as Balestra v. ATBCOIN LLC, courts have determined that certain crypto coins do in fact qualify as securities, because the model of the organization behind the coin acted more like a centralized investment fund than a decentralized system.

Though they have lost momentum since the last congressional session, efforts have been made to codify the differences between an asset’s classification as a security or commodity. Senators Lummis and Kirsten Gillibrand’s Responsible Financial Innovation Act, for example, established that under the Howey test some assets should qualify as securities based on their level of decentralization. But the bill did not pass–and without clear lines being drawn by Congress, it has been up to companies and the SEC to provide their own guesses as to which is which. While the SEC’s stance has been made clear, there is also currently no way for crypto exchanges to register with the SEC, meaning these companies couldn’t avoid these suits even if they happen to independently arrive at the same conclusions as the agency.

Within this uncertain environment, Coinbase has been adamant that based on the Howey Test crypto assets are not securities, as explained in their February 2023 blog post on the matter. This is consistent with the company’s many statements insisting their compliance with the law to the best of their abilities, though this a moot point if their legal interpretation doesn’t match the one now touted by regulators.

With legislation stalled in the United States and slow rollout of regulation in the European Union, the recent filings by the SEC represent some of the first widespread attempts for a government to act on defining crypto assets around the globe. As such, the SEC should do so in a way mindful of the impact it will have on crypto’s ability to innovate in U.S. markets. Without policy changes, crypto exchanges will be left with three options if the SEC finds success with its recent filings: shut down crypto exchanges in the US entirely, find another legal avenue to register with the SEC, or only allow trading of coins which have been accepted as being decentralized enough to not qualify as a security–likely excluding everything but Bitcoin and Ethereum.

The crypto space has not been without its problems, but current efforts by the SEC may undermine the ability for an honest, robust industry to thrive in the United States. Though crypto trading platforms should be held to a high level of scrutiny to protect investors, the SEC must balance this with an approach that still allows Congress to move forward with legislative efforts to regulate the industry in a way that both provides guidance and preserves crypto’s innovative potential.

How Student Debt Forgiveness Widens the Diploma Divide

Posted on by Alyssa Brown

INTRODUCTION

In August of last year, President Biden announced an ambitious plan to wipe out more than $400 billion of student loan debt for the nation’s borrowers. Individuals with incomes below $125,000 (and couples with combined incomes below $250,000) could receive up to $10,000 of loan forgiveness, with former Pell Grant recipients receiving up to $20,000. Speaking about his plan less than a week before the midterm elections, the president made it clear who he was trying to help.

“I want to state again who will benefit most: working people and middle-class folks,” he declared in a speech at Central New Mexico Community College (CNMCC).

Given the skyrocketing costs of higher education, some borrowers — particularly those with low incomes and those who were scammed by for-profit colleges — genuinely need assistance. But portraying student loan forgiveness as a working-class issue is highly misleading. In fact, data on student borrowing shows that debt relief benefits few working-class families, most of whom never attended college in the first place.

This paper dives deeply into the evidence on the economic impact of student loan forgiveness. As the paper shows, proposals from political progressives to forgive all student loan debt (or large amounts such as $50,000 of debt) overwhelmingly benefit affluent Americans. President Biden departed from these more elitist proposals, yet his decision to forgive even a more limited amount is still puzzling. At a time when the economic returns to education are rising and the Democratic Party is losing noncollege voters, it makes little sense to target government aid to people who attended college.

The noncollege workers who do not benefit from the President’s plan are certainly in greater need of support than student loan borrowers.

The paper goes on to examine the question of why the Democratic Party — traditionally the party of working-class people — has become so focused on canceling student loans. One possibility is that Democratic lawmakers are ensconced in a D.C. bubble. The nation’s highest student loan balances are found in Washington, and these borrowers would benefit more from President Biden’s forgiveness plan than borrowers in 49 out of 50 states. In short, many in the party establishment seem to be conflating the problems of highly educated college graduates — an elite class of Americans — with those of working-class people.

This is not to deny that the cost of college has become a significant problem in recent decades. Over the past 19 years, consumer prices have risen 59%, and per capita personal incomes have doubled (in nominal dollars). By contrast, prices for college textbooks have risen 122%, and college tuition (net of grant aid) has gone up 124%.6 This means that a typical family would have found it more difficult to finance a college education in 2022 than in 2003. Some students understandably forego college entirely, while those who attend are stuck with high bills.

Unsurprisingly, many households have turned to the student loan system. Between the first quarter of 2003 and the fourth quarter of 2022, student loan debt held by consumers increased from $392 billion to $1.6 trillion (in inflation-adjusted dollars).7 Student loans also rose from 3.3% of all consumer debt to 9.4% over the same period.

However, the financial burdens of college do not justify widespread student debt relief. If funded through higher taxes, the costs of student loan cancellation will be borne by taxpayers; if funded through higher borrowing, loan cancellation will increase economic demand, thereby raising prices for consumers. Either way, the cost of student debt cancellation will fall on members of the general public, most of whom do not have four-year degrees.

There are better ways of helping working-class Americans. As the Progressive Policy Institute (PPI) has advocated, the government should invest more in apprenticeships, job training, and career pathways for noncollege workers, who generally have lower wages than college-educated workers. Lawmakers should also dramatically increase the size of the Pell Grant (thus helping students from low-income families) and craft policies aimed at reducing administrative bloat at universities (which would reduce expenses and thus tuition). These policies would boost the employment and wages of noncollege workers while also making college more affordable for ordinary families.

It’s no secret that Democrats have lost support among working-class voters in recent elections. Forgiving student debt only reifies the image of Democrats as beholden to the interests of the educational elite. Until the party puts forth pragmatic solutions to the pocketbook issues facing ordinary people, they are likely to continue losing ground among the exact voters Democrats claim to support.

READ THE FULL REPORT.

Digital Trade 2023: The Declaration, the Debates and the Next Global Economy

Posted on by Alyssa Brown

INTRODUCTION

In the single generation since the launch of the internet, a generation’s worth of scientific research and technological innovation, infrastructure deployment, and generally good policymaking has taken a small set of computer networks operated by academics, business researchers, and government scientists, and turned into a global digital world of 5.3 billion people. Associated with this has been an enormous leap forward in individual liberty, in global prosperity, and in new policy challenges. Looking ahead with its allies and partners last year, the Biden administration helped produce a vision of the future. This is the “Declaration on the Future of the Internet,” which, in a brief two and a half pages, illuminates a possible version of the next the digital world: one of freer flows of information, higher-quality consumer protection, enhanced economic growth, and liberty preserved.

Their vision is right, but it is highly contested — in part by authoritarian governments seeking to restore or strengthen controls over their publics (or even, at least in part, other countries’ publics), and in part by often friendly countries mistakenly believing that their own technological leadership might depend on diminishing that of the U.S. tech industry. The administration can help achieve its vision, and in doing so contribute to the realization of the Declaration’s vision, through four steps: 

1. An idealistic and ambitious approach in the 15-country “Indo-Pacific Economic Framework” (IPEF), that provides a future vision more attractive than authoritarian alternatives resting on free flows of data, opposition to forced localization of server and data, strong consumer protection, non-discriminatory regulation, anti-spam and anti-disinformation policies, cyber-security, and broad-based growth through encouragement for open electronic commerce.

2. A strong response in the U.S.-EU Trade and Technology Council (TTC) to European Union attempts to create discriminatory regulations and taxes targeting American technologies and firms.

3. Defense of U.S. values in the U.N., WTO, and other venues against “digital sovereignty” campaigns by China and others that endanger the internet’s multi-stakeholder governance, normalize large-scale censorship and firewalling, and generally place the political fears and policy goals of authoritarian government above the liberties of individuals.

4. Supporting responsible governance of technology and politely but firmly pushing back on attempts either at home or internationally to demonize technological innovation and American success.

READ THE FULL REPORT

PPI Urges Congress to Swiftly Pass President Biden’s Debt Ceiling Compromise

Posted on by The Progressive Policy Institute

Ben Ritz, Director of the Progressive Policy Institute’s Center for Funding America’s Future, released the following statement on the reported agreement-in-principle to raise the debt ceiling:

“Congress should immediately pass the debt limit increase and budget compromise negotiated by President Biden and Speaker McCarthy.

“On the one hand, this package does not represent our ideal policy. The decision to freeze spending only on domestic discretionary programs is backwards. This part of the budget funds critical long-term public investments in infrastructure, education, and scientific research. Meanwhile, taking both increased revenues and any cuts to other programs that comprise 85% of non-interest spending off the table in negotiations leaves our budget on a clearly unsustainable path. It is, at best, a punt on tackling our fiscal challenges.

“But on the other hand, this compromise is currently the only plausible way to take the threat of defaulting on the national debt off the table for the remainder of President Biden’s first term. Congress must pass it now, and in the future, lawmakers should seek out a better mechanism for encouraging fiscal discipline without calling into question our government’s constitutional obligation to repay its debts.”

PPI has consistently condemned the GOP’s efforts to take the full faith and credit of the United States hostage to extract ideological policy concessions. It has also supported the bipartisan Responsible Budgeting Act to end debt limit brinkmanship and create more sensible mechanisms for encouraging fiscal discipline.

PPI’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. It tackles issues of public finance in the United States and offers innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. 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 the Progressive Policy Institute.

Find an expert at PPI.

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Media Contact: Amelia Fox – afox@ppionline.org

The U.S. Must Act to Protect Transatlantic Data Flows

Posted on by Alyssa Brown

Despite its role in supporting a $7.1 trillion transatlantic digital economy, the legal mechanism which allows for U.S.-EU data flow continues to face a high level of scrutiny by the European Union. The result has been the excessive targeting of American companies which — in order to preserve the ability of American businesses to operate in European markets at all — must be swiftly addressed by the Biden Administration by carrying out the steps outlined in President Biden’s October 2022 Executive Order.

A decision by the European Data Protection Board this week creates a fresh sense of urgency for implementing a new U.S.-EU data flow agreement. Following an inquiry into American company Meta’s compliance with European data protection standards, the Board ordered Meta to cease data transfers between the U.S. and EU. It also levied a retroactive fine of 1.2 billion euros for the period in which data transfers were occurring under a legal mechanism that, until this decision, had been deemed valid by the EU.

The decision further complicates an already tricky legal landscape for companies that transfer data across the Atlantic. Prior to 2020, American businesses relied on the Privacy Shield agreement to legally transfer personal data compliant with EU law. But that year, the EU’s Court of Justice declared the Privacy Shield to be invalid. Among other concerns, the Court held that the agreement gave too much leeway to the U.S. government to access data while failing to provide European citizens with appropriate redress should they want their personal information erased. This decision left more than 5,300 companies, large and small, which relied on the agreement, to conduct transatlantic trade without a clear path to compliance with the EU’s data protection rules.

However, the 2020 decision did leave intact the ability for companies to use an alternative legal mechanism called Standard Contractual Clauses (SCCs) — pre-approved, standardized data protection clauses in compliance with the EU’s data privacy law, GDPR. Though the Biden administration wants to replace the Privacy Shield with an updated Data Privacy Framework, a deal negotiated with the European Commission in March 2022, SCCs have provided a legal means for businesses to continue data transfers in the meantime. Still, it is essential that the Framework be quickly implemented so that the United States can receive an adequacy decision from the EU, which would provide a broad legal basis for data transfers between the United States and the EU, rather than relying on a business-by-business basis.

That’s why this week’s Meta decision is so troubling. The European Data Protection Board determined that the SCC mechanism failed to address the risks to the fundamental rights and freedoms of data subjects identified by the Court of Justice in striking down the Privacy Shield. This creates a monumental risk for other American companies, thousands of which currently engage in data transfers supported by SCCs. Though Meta was the first to face investigation, this decision opens the door for a litany of ex-post fines for adhering to agreements that are currently recognized by the EU as valid.

Equally troubling is the potential impact on the European digital sector. The Court’s decision continues a pattern of layer after layer of new EU regulations that seem almost intentionally designed to discourage U.S. digital companies from investing and operating in Europe. But in the modern global economy, cross-border transfers of innovation and risk capital are essential for boosting productivity growth. From this perspective, systematic barriers to transatlantic data transfers will likely undercut tech innovation in Europe, with no evidence that the regulation of American companies has spurred growth of European tech firms.

Making matters worse is that this decision makes it unclear whether any company using SCCs is acting in compliance with GDPR, since the issues cited are a matter of the United States’ lack of data protection laws and concerns about the intelligence communities’ access to personal information. This means any company currently transferring personal data to and from the EU could be exposed to large ex-post fines.

There are immediate actions that could be taken by the Biden Administration to address this risk. In October, President Biden signed an Executive Order outlining steps the U.S. must take to implement U.S. commitments under the proposed European Union-U.S. Data Privacy Framework. Given this week’s decision by the European Data Protection Board and its severe implications for American companies, the Biden Administration must prioritize the implementation of the Framework. Without U.S.-EU data flows, we risk a fractured global market for digital services and the deterioration of U.S. companies’ ability to participate in transatlantic digital trade.

 

 

 

Ritz for Forbes: New June 1st Deadline Creates Pressure For A Two-Step Debt Limit Solution

Posted on by The Progressive Policy Institute

By Ben Ritz

Both the Congressional Budget Office and the Treasury Department warned Monday that the federal government is likely to exhaust its authority to pay its bills on June 1st if Congress fails to raise or suspend the federal debt limit before the end of this month. The fast-approaching deadline, which previous projections placed far later in the summer or early fall, creates new urgency for President Joe Biden and House Speaker Kevin McCarthy to strike a deal. Republicans will either need to abandon their attempt to extract meaningful policy concessions in exchange for a debt limit increase or offer President Biden a short-term increase that creates room for a realistic negotiation process. Refusing to do so would be the height of irresponsibility and place the blame for causing the first-ever default on America’s national debt squarely on the GOP’s shoulders.

 

Read more in Forbes.

Ritz for Forbes: A Two-Step Solution Can Defuse The Debt-Ceiling Crisis

Posted on by Alyssa Brown

By Ben Ritz

After months of dithering, Washington is finally beginning to grapple with the need to raise or suspend the federal debt limit. The White House has said for months it would not entertain negotiations until House Republicans laid out a coherent negotiating position. Speaker Kevin McCarthy sought to do just that on Monday with a speech at the New York Stock Exchange outlining his party’s vision and urging Wall Street titans to back him up. But it’s becoming apparent that his plan is half-baked and a backup is needed.

McCarthy proposes to make steep reductions in some categories of spending in conjunction with a $1.5 trillion debt-limit increase that should last through March 2024. Although some reductions in spending make sense at a time when loose fiscal policy has contributed to record-high inflation and our nation’s debt remains on an unstainable trajectory, many of the specific cuts McCarthy proposes would be deeply harmful to economic growth. Moreover, the House GOP’s decision to use the threat of defaulting on our nation’s debts if they don’t get their way threatens global financial stability at a precarious point for our economy.

The most aggressive of McCarthy’s proposed policies is a spending cap that would reduce discretionary programs by more than $3 trillion over the next decade. Depending on how these cuts are structured to comply with the GOP’s previous commitments not to reduce spending on Republican priorities, including national defense and veterans benefits, they could result in a real reduction of nearly 60% for most domestic discretionary spending. A majority of that spending is for critical public investments in infrastructure, education, and scientific research, meaning McCarthy’s cuts would likely reduce long-term economic growth. Among other misguided cuts, McCarthy also proposes to “save” money by reversing a recent funding boost to the IRS — but this move will actually increase deficits by making it easier for wealthy Americans to cheat on their taxes.

Read more in Forbes.

Weinstein for Forbes: More Bank Failures If Congress And Biden Can’t Cut A Debt Deal

Posted on by The Progressive Policy Institute

By Paul Weinstein

Treasury Secretary Janet L. Yellen recently tied the failure to raise the debt limit in time to the prospect of more bank failures. The Secretary is absolutely right that if Congress wants to prevent more government bailouts of banks in the short-term, it can ill afford to wait to enact a clean debt limit increase. But in order to help bring down the inflationary pressures that helped undermine Silicon Valley Bank (SVB), President Biden and Democrats must find common ground with Republicans to stabilize the national debt.

While liberal Democrats point to the 2018 banking regulatory relief law and MAGA Republicans to so-called “woke” investments as the culprit of SVB’s collapse, the reality is that neither were to blame. First, SVB’s commitment to investments in renewable energy, community development, and affordable housing was about $16.2 billion, only 8% of its total assets. And these assets were not the ones “underwater.”

Read more in Forbes

Marshall and Ritz for New York Daily News: A French lesson for American pols

Posted on by The Progressive Policy Institute

By Will Marshall and Ben Ritz

France has one of the most generous — and fiercely guarded — welfare states in the Western world. No one knows that better than President Emmanuel Macron, who recently won a six-year battle to raise France’s retirement age from 62 to 64.

That may not sound draconian to Americans since the normal retirement age for Social Security is 67. But in France, Macron’s move has ignited a furious wave of violent protests and paralyzing strikes that have shut down railways and airports and left mountains of uncollected garbage festering in the streets of Paris.

There’s a warning here for U.S. policymakers, who also confront ballooning costs of a public retirement and health system designed when there were many more young workers per retiree. Last Friday, Social Security’s and Medicare’s trustees warned that major parts of both programs will run out of money within a decade.

Read more in New York Daily News.

Marshall for The Hill: Democrats need a post-populist economics

Posted on by The Progressive Policy Institute

By Will Marshall

It’s been 15 years since the 2008 financial meltdown plunged America into the Great Recession. Our economy has bounced back, but the populist fury the crisis ignited has yet to burn itself out.

It manifests itself on the far left and right as general hostility to big business and, more recently, to Big Tech in particular. Fortunately, the populists’ reckless drive to break up America’s most innovative and globally competitive enterprises seems to be sputtering.

That could prove liberating for Democrats, who will never outcompete rightwing demagogues when it comes to stoking economic grievances. Instead, Democrats need a post-populist economics that inspires hope in America’s ability to innovate rapidly, generate abundant growth and opportunity and outpace China in the race to master frontier technologies.

Read more in The Hill.

PPI Statement on President Biden’s FY 2024 Budget Proposal

Posted on by The Progressive Policy Institute

Ben Ritz, Director of the Progressive Policy Institute’s Center for Funding America’s Future, released the following statement on President Biden’s new budget proposal:

“With inflation still running high and the national debt on track to break its historical record as a share of economic output three years sooner than projected last year, both parties should be working together to improve our nation’s finances. We thus applaud President Biden’s decision to call for nearly $3 trillion of deficit reduction over the next decade in his Fiscal Year 2024 budget proposal to Congress — a target that’s three times as ambitious as the one he set in his proposal last year.

“However, we are concerned that this budget does not really tackle the financial challenges facing Social Security and Medicare. The budget’s proposed reforms are largely limited to improving the solvency of Medicare Part A Hospital Insurance, which only finances about 40% of Medicare spending. They do so in part by diverting savings from the other components of Medicare, such as Part D prescription drug benefits, thereby making the broader budget’s financial problems harder to solve. And the proposal makes no meaningful attempt to improve the solvency of Social Security, which faces automatic benefit cuts of over 20% when its trust funds are exhausted in roughly a decade.

“If the president’s preferred approach — one on which he hasn’t even had to try to compromise with Republicans yet — can only close part of the projected funding shortfall for 40% of the smaller of our two biggest underfunded entitlement programs, that’s a clear sign more options must be put on the table. To strengthen the foundation of American retirement security and put our budget on a more sustainable trajectory, we urge the president to reconsider his blanket opposition to benefit reforms and tax increases that may hit some folks earning under $400,000 per year.

“We also challenge House Republicans to counter the president’s proposed budget with their own vision for our fiscal future. If they continue to rule out reasonable revenue increases and heed Donald Trump’s calls to take Social Security and Medicare off the table, Republicans will have no way to produce a plausible plan for reining in the growth of our national debt. Combined with their threats for debt-limit brinkmanship, such an approach would prove the GOP to be far more fiscally irresponsible than the administration.”

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.

Launched in 2018, PPI’s Center for Funding America’s Future  works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. We tackle issues of public finance in the United States and offer innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.

Follow the Progressive Policy Institute.

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Media Contact: Tommy Kaelin – tkaelin@ppionline.org

Adrienne Elrod of Dept. of Commerce’s CHIPS Program Office Joins PPI’s Mosaic Project to Discuss Implementation of Historic CHIPS and Science Act

Posted on by The Progressive Policy Institute

Last week, Director of External and Government Affairs for the CHIPS Program Office Adrienne Elrod and Head of Government Affairs at ASML Maryam Cope joined the Women Changing Policy Luncheon Series, hosted by the Progressive Policy Institute’s (PPI) Mosaic Project and moderated by Jordan Shapiro, Director of the Innovation Frontier Project at PPI.

Ms. Elrod discussed what the long-lasting impact of the historic Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act will mean for communities across the country, and what the Administration is doing to ensure a smooth and effective implementation of the law’s many provisions. Ms. Cope explained what the law will mean for companies like ASML and how it will bring the United States to the forefront of global competition in the semiconductor industry. The CHIPS and Science Act was signed into law by President Biden in August, 2022.

“Number one, first and foremost, we passed this legislation and we’re implementing the CHIPS and Science Act all around national security and economic security…Right now we basically make no leading edge chips in the United States, and we have got to change that trajectory,” said Adrienne Elrod, Director of External and Government Affairs for the CHIPS Program Office.

“I think governments around the world are recognizing that there is a need to have this resiliency, looking at the U.S. CHIPS and Science Act, and [asking], what’s our target? What’s our part of this equation? And how can we contribute our expertise and our comparative expertise to this global system? So I think that it’s really a balance between domestic resiliency and globalization that we have to continue to look at,” said Maryam Cope.

“Mosaic was honored to have set the stage for such an important and timely conversation. It’s not everyday you get to hear from two of the country’s leading women working to advance the future of semiconductor manufacturing and paving the way for countless women in tech,” said Jasmine Stoughton, Director of PPI’s Mosaic Project.

 

Left to right: Jordan Shapiro, Director of the Innovation Frontier Project, Progressive Policy Institute; Maryam Cope, Head of Government Affairs, ASML; Adrienne Elrod, Director of External Affairs for the CHIPS Program Office at the Department of Commerce.

 

The Mosaic Project is an initiative of the Progressive Policy Institute that aims to put more women at the forefront of policymaking. The same handful of well-known men have dominated key policy conversations for decades, resulting in legislative outcomes that fail to reflect the richness of our society. It is the project’s mission to empower expert women with the tools and connections needed to engage with the media and lawmakers on today’s toughest policy challenges.

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 the Progressive Policy Institute.

Follow the Mosaic Project.

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Media Contact: Tommy Kaelin – tkaelin@ppionline.org

New Report from PPI’s Metro Federalism Caucus and Prosperity Now Calls for Inclusive Entrepreneurship to Unlock Access to the American Dream

Posted on by The Progressive Policy Institute
…

Today, the Progressive Policy Institute’s Metro Federalism Caucus and Prosperity Now released a new report outlining steps federal and local policymakers — and other stakeholders in the small business ecosystem — can take to best target resources to business owners of color. The report also spotlights three organizations across America that have used pandemic relief funds from the federal government to support entrepreneurs of color in their communities. The report is titled “Inclusive Entrepreneurship Is Key to Unlocking Equal Opportunity,” and is authored by Myrto Karaflos of Prosperity Now.

This report examines the creative initiatives supporting inclusive entrepreneurship from Baltimore BASE (Business Assistance and Support for Equity) Network in Baltimore, Maryland; the Pierce County Business Accelerator in Tacoma, Washington; and West Side Grows Together in Wilmington, Delaware. All three organizations have used Coronavirus State and Local Fiscal Recovery Funds from the American Rescue Plan Act (ARPA) to support entrepreneurs of color, who were hit hardest by the pandemic.

“Given this timely opportunity of federal funding dedicated to recovery and growth post-pandemic, the time to act is now. With more targeted support from policymakers, financial institutions, and local leaders, entrepreneurs of color can have a chance to thrive, which will not only benefit themselves but also the economy and society as a whole,” writes Myrto Karaflos, Policy Manager of Prosperity Now, in the report.

“Local and Federal partnerships are essential to our local economies. Innovative support for small businesses, entrepreneurs, and communities of color is vital as we recover,” said Congresswoman Marilyn Strickland (WA-10), Former Mayor of Tacoma, WA and Co-Chair of PPI’s Metro Federalism Caucus. “The report highlights how federal funding can help communities in crisis, and that local leaders know where to strategically and equitably invest in sectors that need it most.”

“As a former Mayor, I know firsthand how critical federal resources are to our communities during — and long after — a crisis. The COVID-19 pandemic took a toll on small businesses in cities and towns across America, and continued support for entrepreneurs will be necessary to keep the lights on and the ‘open’ sign up on the front door,” said Sly James, Former Mayor of Kansas City, MO and Co-Chair of PPI’s Metro Federalism Caucus. “This report from the Progressive Policy Institute and Prosperity Now shows how important the American Rescue Plan Act funds are, and the organizations featured are a shining example of the work that should be done from coast to coast.”

Read and download the paper here:

Myrto Karaflos serves as Policy Manager at Prosperity Now. In this role, she works to identify and advance policies that help entrepreneurs of color launch and grow their small businesses. Myrto previously provided policy research and analysis for several racial economic justice issues, including tax and savings policy, and also supported the implementation of technical assistance projects. Before coming to Prosperity Now, Myrto worked at Galloway & Associates, a small law firm, where she undertook research projects and provided financial and administrative support. She holds a Bachelor of Arts in International Studies from American University. Myrto is a cohort member of PPI’s Mosaic Project.

The Progressive Policy Institute, in partnership with the Kauffman Foundation, has launched the Metro Federalism Caucus to advocate for a more direct and empowering relationship between national and local government leaders. The Caucus consists of former local officials who now serve in Congress, as well as accomplished mayors and former mayors from around the country, whose governing experience and insights can help U.S. policymakers reimagine the division of labor among national, state, and local governments. Its mission is to open a direct channel of communication that does not run through state governments, aimed at forging a stronger partnership between Washington and metro leaders. Organized and supported by PPI and Co-Chaired by Representative Marilyn Strickland (WA-10) and former Mayor of Kansas City Sly James, the Caucus will champion a new approach to federalism that channels resources and decision making directly to metro leaders. PPI calls this decentralizing dynamic “Metro Federalism.”

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. Find an expert at PPI and follow us on twitter.

Since 1979, Prosperity Now (formerly CFED) has been a persistent voice championing economic opportunity, innovating outside of and beyond existing systems to build power for all communities. We advance racial and ethnic economic justice by investing in bold new ideas, and we work deeply at both the grassroots and national level to impact the entire ecosystem. By setting goals for our economy and following through with targeted approaches based on need, we are equipped to drive forward and cement big structural solutions. Join Prosperity Now in creating a new, transformed economy that works for all of us. Visit us at www.prosperitynow.org.

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Media Contact: Aaron White; awhite@ppionline.org

Inclusive Entrepreneurship is Key to Unlocking Equal Opportunity

Posted on by The Progressive Policy Institute

This paper is a collaboration between the Progressive Policy Institute (PPI) and Prosperity Now

By Myrto Karaflos, Prosperity Now

Introduction

America’s entrepreneurial ethos is widely touted as a cornerstone of our culture and one of the ways to achieve the “American Dream.” It is true that small businesses play a critical role in the economy, as they account for 99% of American employers. Business ownership can also be a source of wealth creation for many, with self employed individuals being wealthier, on average, than those who work for an employer.

However, the path towards becoming an entrepreneur and growing a successful business is fraught with obstacles for large segments of the population. Entrepreneurs of color, particularly Black and Latine, face many barriers that result in them having smaller, less profitable businesses when compared to those owned by White entrepreneurs.

In recent years, the COVID-19 pandemic put a strain on many small businesses. It forced many of them to close in the early months of the crisis. It has also contributed to lingering societal and economic forces, such as inflation and the pivot to doing business online, that have changed the way small businesses operate. Black- and Latine owned businesses were particularly hard- hit. As government leaders focus on lessons learned from the pandemic, rising prices, and ways to strengthen U.S. economic resilience, they should seize the opportunity to invest in small business development that works to level the playing field for entrepreneurs of color.

This report will describe the pandemic’s effects on businesses of color and the broader, structural inequities that have limited these businesses’ growth long before the pandemic began. It will also explore how organizations in three cities across the country have used pandemic relief funds from the federal government to support entrepreneurs of color in their communities. Finally, the report will offer recommendations for how federal and local policymakers, as well as other entities in the small business ecosystem, can best target assistance and resources to business owners of color.

Read the Full Report.