issue: Economy

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
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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.

 

Marshall for The Hill: How the Diploma Divide Splits Both Parties

Posted on by The Progressive Policy Institute

By Will Marshall, President of PPI

Democrats and Republicans couldn’t be farther apart in political outlook. With distance comes fear and loathing: Each party views the other not just as misguided but as an alien menace to their idea of America.

Nonetheless, neither party is monolithic. Each has internal cleavages, varying shades of opinion reflecting differences in race, class, ethnicity, gender, religion and age. When it comes to deciding elections, the fault line that matters most is the diploma divide.

Since 2008, white voters with college degrees have gravitated steadily toward the Democrats. According to researcher Zach Goldberg, they outnumbered non-college white Democrats for the first time in 2020, and now probably also exceed the GOP share of college-educated whites.

Republicans already have a massive advantage among blue collar whites, and in recent elections cycles have made inroads among non-college Hispanics, Asians and (on the margins) Black men.

Read more in The Hill.

Statement from PPI’s Ben Ritz on CBO’s Budget and Economic Outlook 

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute released a statement from Ben Ritz, Director of PPI’s Center for Funding America’s Future, in reaction to the Congressional Budget Office’s updated Budget and Economic Outlook:

“Today’s Budget and Economic Outlook from the Congressional Budget Office should be a wake-up call for every policymaker who cares about America’s financial stability in a post-Covid economy. Since the last baseline projection in May 2022, Congress has passed legislation that, in CBO’s estimation, added $1.5 trillion to deficits over the coming decade. Now, CBO projects that the national debt is on track to break its historical record as a share of economic output by 2028 – that’s three years sooner than under the previous projection. Meanwhile, CBO expects inflation to remain above the Federal Reserve’s 2% target until 2026 even after accounting for recent rate hikes. It’s long past time for Congress to adjust to the new reality that the window for deficit-financed stimulus is shut and a pivot to responsible and anti-inflationary deficit reduction is desperately needed.”

The Center will publish more analysis of the CBO report next week.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. 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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PPI Comment on proposed Dept. of Ed rule: “Improving Income-Driven Repayment for the William D. Ford Federal Direct Loan Program”

Posted on by Alyssa Brown

PPI has long supported the expansion and reform of income-driven repayment programs that directly tie debt cancellation to a borrower’s ability to pay. Considering the high cost of a college education today, we believe policymakers ought to target relief to borrowers who are stuck with the debt of pursuing a degree without being able to reap the financial benefits of attaining one.

Accordingly, PPI was encouraged when the administration announced efforts to simplify and expand income-driven repayments. The current proposal should be commended for streamlining the array of repayment options, many of which have complicated terms and lengthy processes that deter enrollment by borrowers who would benefit, while also automatically enrolling eligible borrowers in an IDR plan. Additionally, the rule would offer new benefits for low-income borrowers with high loan balances. PPI supports efforts to make IDR more accessible, help distressed borrowers, and ensure affluent college graduates still pay their fair share for the benefits their degrees confer.

However, we are concerned that the proposed expansion is overly aggressive. Below is an analysis we submitted as part of the public comment period that shows the proposed rule will likely turn income-driven repayment from a safety net for vulnerable populations into a broad-based subsidy that Congress never intended. PPI estimates that a typical college-educated worker enrolled in the reformed program would only pay 2.5% of their income in student loan payments over 20 years, after which point the remaining balance would be forgiven. As a result, they would only end up paying three-fifths of the amount they initially borrowed, and not a dollar of interest.

With such generous terms for the average borrower, the new proposal is likely to become the new normal for most college students. Even families that can afford to save and pay for school with cash are likely to borrow money with such a generous subsidy for the vast majority of students. We are not alone in our findings: the Penn Wharton Budget Model and Adam Looney of the Brookings Institution both estimate that over 70% of college attendees would enroll in the revamped program. Whether it is through higher future taxes or inflation, workers who don’t have the opportunity to benefit from a college education will be stuck footing the bill for those who do.

By providing such a large and broad-based subsidy, the proposed changes would also encourage colleges and universities to avoid making the tough choices needed to contain costs, and would enable them to keep hiking tuition and fees faster than the growth in incomes and other prices. For these reasons, independent estimates have found that the cost increase associated with this proposal is likely to be between three and ten times as much as the $128 billion estimated by the Department of Education. It would also

Our comment urges the Department to delay implementation of this rule until it has conducted a more thorough estimate of the proposal’s cost to taxpayers and the impact it would have on the higher education financing system. It is our hope that the proposal is refined to be more carefully targeted toward those borrowers who leave college with low incomes and high debts. Insofar as higher education suffers from structural problems such as runaway tuition hikes, those are issues for Congress to address. Overly aggressive expansion of income-driven repayment is not a solution for structural financing problems, and as we have demonstrated, is likely to make them worse.

Read the comment on the proposed Department of Education rule.

PPI on the SOTU: The Economy

Posted on by The Progressive Policy Institute

Biden’s SOTU Needs a Fiscal Policy Pivot

President Biden’s State of the Union address comes at a turning point for the economy. Although fiscal stimulus was right for the economy in the depths of a pandemic recession, continuing to pursue legislation and executive actions that increase rather than reduce deficits undermines the Federal Reserve’s progress in controlling inflation. After a midterm in which a plurality of voters in exit polls ranked inflation as their number one concern and gave Democrats poor marks for their handling of it, Biden should use his speech to show that he will do the hard work to regain credibility on the issues of responsible fiscal management and inflation control. One way he could do this is by announcing a commission to review the recovery response and how policymakers can better address recessions and inflation in the future, which is an idea first proposed by PPI and endorsed in the New Democrat Coalition’s Inflation Action Plan last year.

The president also needs to lay a clear marker for the upcoming fight over the federal debt limit. He is right not to reward Republican hostage-taking with the full faith and credit of the United States. But with annual interest payments on the national debt set to eclipse defense spending by 2030 and Social Security by 2050, Biden should outline a process for better budget negotiations, such as the Responsible Budgeting Act and the TRUST Act, that he is willing to engage in good faith after Republicans take the threat of default off the table. Getting our fiscal house in order would help control inflation today and boost economic growth over the long term.

Finally, Biden should offer a real plan for making access to higher education affordable for all Americans. With the Supreme Court likely putting his attempt to enact roughly half a trillion dollars of mass student debt cancellation by executive action on ice, it’s not enough to simply blame “partisan lawsuits” for his inability to reduce costs and expand access in a responsible and sustainable way. He should challenge Congress to strike a “grand bargain” on higher education and workforce development that controls costs and expands opportunity for workers across the income distribution. This includes both forcing colleges to get more cost-effective and finding new pathways to good jobs for non-college educated workers.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here. 

PPI’s Ben Ritz on Reaching the Debt Limit 

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 in reaction to the United States officially hitting the debt limit:

“Maintaining the full faith and credit of the United States is a basic fiduciary duty of Congress that cannot be made subject to legislative haggling and horse-trading. We need to have a real conversation about bringing down inflation and the role excessive borrowing by the Federal Government played in making it worse, but that should be separate from agreeing to pay the bills policymakers have already incurred. PPI urges Congress to swiftly raise or suspend the federal debt limit and follow that up with serious bipartisan negotiations on a package of real reforms that fixes our unsustainable fiscal trajectory.“

Further Reading: 

 

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. 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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Platform Work and the Care Economy the Focus of New PPI Webinar

Posted on by The Progressive Policy Institute

Event featured a rideshare app driver from California speaking on how flexible platform work enables her unpaid caregiving 

 

Today, the Progressive Policy Institute hosted a webinar on how platform work – including companies such as Lyft, Uber, Doordash, and Instacart – can offer flexible earning opportunities for unpaid caregivers across America. The webinar also discussed the possibility that platform work may help narrow the longstanding gender gap in unpaid caregiving.

Webinar panelists included PPI’s Vice President and Chief Economist Dr. Michael Mandel, author of PPI’s “Platform Work and the Care Economy” report, and Cora Mandapat, a rideshare driver and caregiver from California. 

Watch the event livestream here:

This event discussed the Progressive Policy Institute’s (PPI) recently released report on the intersection of caregiving and the gig economy. The report shows that on the average day, 36% of working-age Americans provide unpaid care for children, parents and other loved ones. This unpaid labor is worth $980 billion per year. Report author Dr. Michael Mandel examines how the stress of this immense burden can be eased by the availability of flexible platform work, including companies such as Lyft, Uber, Doordash, and Instacart. He also explores the possibility that platform work may help narrow the longstanding gender gap in unpaid caregiving.

Read and download the report here:

Dr. Michael Mandel is Vice President and Chief Economist at the Progressive Policy Institute in Washington DC and senior fellow at the Mack Institute for Innovation Management at the Wharton School (UPenn). He was chief economist at BusinessWeek prior to its purchase by Bloomberg.With experience spanning policy, academics, and business, Dr. Mandel has helped lead the public conversation about the economic and business impact of technology for the past two decades. His work has been featured by the Wall Street Journal, New York Times, Washington Post, Boston Globe, and Financial Times, among others.

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: Aaron White; awhite@ppionline.org